New Age Developers and Construction Construction Company Ltd v Sidian Bank Limited [2018] KEELC 4288 (KLR)
The bottom line
#The High Court in Nyeri refused to stop Sidian Bank from selling a borrower's charged properties, ruling the borrower showed no arguable case against the bank.
What this practically means
#Executive summary
#Key legal issues
#Compliance with Rule 9 of the Oaths and Statutory Declarations Rules regarding exhibits to affidavits
The affidavits and annexures were not struck out because the bundle was paginated and sealed by the Commissioner and the applicant suffered no demonstrated prejudice
The applicant relied on Rule 9 and the Juja Coffee Exporters decision urging striking out of the respondent's affidavits for unmarked, unsealed annexures. The court accepted the mandatory nature of Rule 9 but, in the special circumstances where the documents formed a paginated bundle identified and sealed by the Commissioner, held that striking out without proof of prejudice would abdicate the court's duty to dispense substantive justice.
Whether the applicant had a contractual relationship with the defendant notwithstanding the change of name from K-Rep Bank
The respondent is the same entity as K-Rep Bank following a gazetted change of name, and the applicant dealt with it after the change; the applicant's denial was dishonest
Evidence showed the change of name was gazetted and a banking licence issued; the charge documents included successor-in-title clauses; Section 66(2) of the Companies Act provides a change of name does not affect rights and obligations; and the applicant corresponded with and admitted arrears to the respondent after the name change. The court found the denial of the relationship untenable.
Whether the charges were void for want of land control board consent
No consent was required for the Nyeri Municipality properties as municipal land is exempt under Section 2 of the Land Control Act; the applicant failed to prove that no consent was issued for the Kajiado property
Section 2 of the Land Control Act excludes land within a municipality from the definition of agricultural land, so consent was unnecessary for the Nyeri properties. As for KJD/Kaputiei North/914, the party alleging that no consent was issued bore the burden of proving that fact and failed to discharge it; the respondent's documentary evidence of consent stood unrebutted.
Whether the statutory notices were issued before exercise of the statutory power of sale
Evidence of postage of the statutory notices through the applicant's known address established service
The respondent's further affidavit introduced certificates of postage of statutory notices. The court was satisfied that the applicant was served with the requisite notices, relying on the principle that once proof of posting is established, the burden of proving non-receipt shifts to the addressee, which the applicant did not discharge.
Whether the applicant established the Giella v Cassman Brown criteria for an interlocutory injunction
No prima facie case was established; damages would be adequate as the properties were commercial security and the respondent is a bank; the balance of convenience favoured the respondent
Applying Giella v Cassman Brown, the court found the applicant's allegations (no contractual relationship, want of consent, no statutory notices, illegal interest) controverted and unproven. Following Nyanza Fish Processors, property offered as security is commercial property compensable in damages, and the respondent, being a bank, could satisfy any loss. With the debt escalating and no repayments, the balance of convenience favoured the respondent.
Legal principles established
#- A court will not restrain a mortgagee from exercising its power of sale merely because the amount due is in dispute
- Where property offered as security is a commercial property and the respondent is a bank able to pay damages, an injunction will be refused on the adequacy-of-damages limb
- A change of company name does not affect rights and obligations or invalidate legal proceedings, so a party cannot deny a contractual relationship with a renamed entity
- Land within a municipality is exempt from the land control consent requirement under Section 2 of the Land Control Act
- Court documents in a paginated bundle sealed by the Commissioner for Oaths will not be struck out for want of individual serial exhibit markings absent proof of prejudice
Court orders
#- 1.The applicants' notice of motion dated 24th May, 2017 is dismissed
- 2.Costs of the application awarded to the respondent
- Jurisdiction invoked
- Original civil jurisdiction of the High Court (suit by plaint seeking declarations and injunction); no specific provision cited
Key timeline
#Practical implications
#Frequently asked questions
#Later judgments citing this (1)
#Judgments in the corpus that rely on this one. Where the Court said how it treated the authority, that is shown.
- EDDS DESIGNERS LIMITED v JOSEPH M GIKONYO T/A GARAM AUCTIONEERS[2020] KEHC 8307 (KLR)13 Feb 2020
Cite this brief
#Cite this brief
Caselaw, "New Age Developers and Construction Construction Company Ltd v Sidian Bank Limited [2018] KEELC 4288 (KLR)", Case Analysis (2018). Not stated in the judgment (plaint dated 24th May, 2017). Source: https://new.kenyalaw.org/akn/ke/judgment/keelc/2018/4288/eng@2018-02-26
Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.