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ELCDismissedELC Suit - Application dated 10th October, 2016 (Meru)· [2018] KEELC 4801 (KLR)

Tarsisio Kinyuru M’mukindia v Barclays Bank of Kenya Limited [2018] KEELC 4801 (KLR)

Environment and Land Court
24 January 2018
LML. N. Mbugua
2,944 words in judgment
View original judgmentRead on Kenya Law Watch case
AI-assisted case brief
·~12 min to read original · ~4 min brief

The bottom line

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The Environment and Land Court in Meru refused to stop a bank auction, ruling that a borrower who defaulted and received proper notices cannot rely on an injunction.

What this practically means

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Executive summary

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The plaintiff applied by Notice of Motion dated 10th October 2016 for a temporary injunction restraining the defendant bank from auctioning L.R. Numbers Nkuene/Mitunguu/1366 and 1367, offered as collateral for loans advanced through the bank's Meru branch. He argued he had repaid over half the loan, that no statutory notice of sale was served, that his loan ran to 2018, and that a fire had destroyed his documents. The bank, through its Corporate Recoveries Officer, asserted the plaintiff was a serial defaulter, that the loan of Sh.4,200,000 plus an asset finance facility of Sh.1,923,400 was secured by a charge dated 24th March 2011, and that all statutory notices under Sections 90 and 96 of the Land Act, plus auctioneers' notices, were issued and posted to the applicant's address. The court framed three issues: loan advancement and default, service of notices, and merits of the injunction. It found the loans were advanced, that default accrued by May 2015, and that all requisite notices were served. Applying the Giella principles, the court held there was no prima facie case with probability of success; any loss was compensable in damages since the land was knowingly offered as security; and the balance of convenience did not favour a defaulting chargor who showed no commitment to repay. The application was dismissed with costs to the Respondent on 24th January 2018.

Key legal issues

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01

Loan advancement and default

Holding

The loan was advanced and the applicant defaulted

Reasoning

The applicant admitted the 4,200,000 facility; the statement of account showed principal disbursal of Sh.1,923,400 for asset finance which he never denied. Demand letters from May 2015 and absence of regular payments after April 2015 demonstrated arrears.

p. 6
02

Service of statutory notices

Holding

All requisite notices were served at the applicant's correct address

Reasoning

The statutory notice under Section 90 of the Land Act, the notice to sell under Section 96(1), the 45-day redemption notice and notification of sale were all issued and posted to the address the applicant used when obtaining the loan.

p. 6
03

Giella test for injunction

Holding

All three limbs failed for the applicant

Reasoning

No prima facie case was established since funds were disbursed and notices issued; loss was compensable in damages given land was offered as security; and the balance of convenience did not favour a defaulting chargor who showed no commitment to repay.

p. 8

Legal principles established

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  • Courts cannot re-write contracts for the parties
  • Where a chargor defaults, loss arising from exercise of the statutory power of sale is compensable in damages, even where the property is a family residence

Court orders

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  1. 1.The Notice of Motion dated 10th October, 2016 is dismissed.
  2. 2.Costs of the application to the Respondent.
Jurisdiction invoked
Environment and Land Court jurisdiction over land charges and injunction applications (statutory power of sale under the Land Act)

Key timeline

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Practical implications

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Frequently asked questions

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Cite this brief

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Cite this brief

Caselaw, "Tarsisio Kinyuru M’mukindia v Barclays Bank of Kenya Limited [2018] KEELC 4801 (KLR)", Case Analysis (2018). ELC Suit - Application dated 10th October, 2016 (Meru). Source: https://new.kenyalaw.org/akn/ke/judgment/keelc/2018/4801/eng@2018-01-24

Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.