Andrew Katan Mwaeba v Equity Bank Kenya Limited & 3 others [2019] KEELC 1084 (KLR)
The bottom line
#A Mombasa court refused to stop a microfinance bank's completed auction sale because the borrower admitted the debt and couldn't prove the sale broke the law.
What this practically means
#Executive summary
#Key legal issues
#Whether the plaintiff met the Giella -v- Cassman Brown threshold for an interlocutory injunction
The plaintiff failed to establish a prima facie case, irreparable injury or balance of convenience in his favour
The plaintiff admitted the loan and default, and the property was sold under the terms of the charge and registered in the 2nd Defendant's name. Any loss arising from the sale is compensable by damages, and the balance of convenience favours the chargee recovering its monies. Previous proceedings also existed between the parties.
Whether the 1st Defendant complied with valuation requirements before exercising the statutory power of sale
On the evidence, the valuation of 28th March 2017 was within 12 months of the notified sale date of 20th December 2017, so no breach was demonstrated
The plaintiff did not provide evidence that the property was sold more than 12 months after the valuation. Discrepancies between the pleaded market value of Kshs.25,000,000 and the attached valuation of Kshs.30,000,000 were unexplained, and the sale price was shown to be Kshs.11,000,000 rather than Kshs.8,000,000.
Whether res judicata could be raised by way of preliminary objection
Not decided on the merits; the court only noted previous proceedings in the matter in reaching its conclusion
The plaintiff submitted, citing several authorities, that a plea of res judicata requires interrogation of pleadings and is unsuitable for a preliminary objection. The court did not make a finding on the plea, instead disposing of the application on the injunction threshold.
Legal principles established
#- Under Section 97 of the Land Act, a chargee owes a duty of care to a chargor when exercising the statutory power of sale, failing which it is liable for breach of duty
- A chargee cannot rely on a valuation report more than 12 months old at the time of sale, per Rule 11(b)(x) of the Auctioneers Rules
- The Giella -v- Cassman Brown test governs the grant of interlocutory injunctions: prima facie case with probability of success, irreparable injury not compensable by damages, and balance of convenience
Court orders
#- 1.The Notice of Motion dated 14th November 2018 is dismissed
- 2.Costs of the application to the defendants
- Jurisdiction invoked
- Sections 1A, 3, 3A of the Civil Procedure Act, Order 40 Rules 1, 2 and Order 51 Rule 1 of the Civil Procedure Rules, Sections 79, 96, 97 and 98 of the Land Act and Section 58 of the Land Registration Act
Key timeline
#Practical implications
#Frequently asked questions
#Cite this brief
#Cite this brief
Caselaw, "Andrew Katan Mwaeba v Equity Bank Kenya Limited & 3 others [2019] KEELC 1084 (KLR)", Case Analysis (2019). Notice of Motion dated 14th November 2018 (suit over Title Number Frère Town/Block I/MN/19). Source: https://new.kenyalaw.org/akn/ke/judgment/keelc/2019/1084/eng@2019-10-02
Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.