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ELCPartially Allowednot stated in excerpt· [2019] KEELC 1359 (KLR)

Simion Omanwa Osoro v Benson Okeno Okioma & 3 others [2019] KEELC 1359 (KLR)

Environment and Land Court
8 October 2019
JMJ. M. MutungiJOJ Onyango
1,776 words in judgment
View original judgmentRead on Kenya Law Watch case
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The bottom line

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A Kenyan court removed a bank from a land suit because its charge had been discharged and no fraud was pleaded against it.

What this practically means

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Executive summary

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The 3rd Defendant, a financial institution, applied by Chamber Summons dated 9th February 2018 under Sections 1A, 1B and 3A of the Civil Procedure Act and Order 1 Rule 14 of the Civil Procedure Rules to be struck out of the suit. It asserted that it had advanced Kshs 2,700,000/= to the 2nd Defendant secured by a legal charge over LR No. Matutu/Settlement Scheme/280; that the loan was fully repaid and a discharge of charge registered on 13th January 2014; and that it therefore had no interest in the property or the proceedings. The Plaintiff opposed, alleging collusion between the 3rd Defendant and the 2nd Defendant in taking a charge over the whole property when the Plaintiff had sold only two acres, and relied on authorities to the effect that misjoinder or non-joinder does not defeat a suit. The court noted that although the 3rd Defendant had a registered charge when the suit was filed in February 2013 and was then properly enjoined, the charge had been discharged before the 3rd Defendant was served with summons in May 2017; subsequent charges had been registered by Family Bank and Housing Finance Corporation Limited, the latter then subsisting. No fraud was pleaded against the 3rd Defendant. The court found the 3rd Defendant no longer a necessary party and allowed the application, striking its name from the suit, but made no order for costs in its favour since it was a necessary party when the suit was filed.

Key legal issues

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01

Whether the 3rd Defendant remained a necessary/proper party after discharge of its charge

Holding

The 3rd Defendant ceased to be a necessary party once its loan was repaid and the discharge of charge was registered before it was served with summons

Reasoning

The suit was filed in 2013 when the 3rd Defendant held a registered charge over the suit property, so it was then properly enjoined. However, the charge was discharged on 13th January 2014 and summons were not served until May 2017. By then its interest had extinguished, subsequent charges had been registered by other financiers, and the Plaintiff had pleaded no fraud against it, rendering continued joinder unwarranted.

p. 2
02

Whether the suit against the 3rd Defendant was sustainable absent pleaded fraud

Holding

No particulars of fraud were pleaded against the 3rd Defendant, rendering the suit against it unsustainable

Reasoning

The Plaintiff accused the 1st Defendant of impropriety regarding the extent of the land sold, but pleaded nothing against the 3rd Defendant, which appeared to have been faithfully executing its mandate as a financier after due diligence on the title.

p. 2

Legal principles established

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  • A chargee whose charge has been discharged and whose interest in the suit property has ceased is no longer a necessary party to proceedings affecting that property.

Court orders

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  1. 1.The name of the 3rd Defendant be struck off from the suit
  2. 2.No order for the costs of the suit in favour of the 3rd Defendant

Authorities

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Legislation

  • Civil Procedure ActSections 1A, 1B, 3A
  • Civil Procedure Rules 2010Order 1 Rule 14; Order 1 Rule 9; Order 1 Rule 10

Cases cited (2)

  • George Kimathi Mugenyu –vs- China National Overseas Engineering Corporation
    [2014] eKLR
  • Bhudia Builders and Erectors -vs- Ima Agencies Ltd
    [2014] eKLR
Jurisdiction invoked
Sections 1A, 1B and 3A of the Civil Procedure Act and Order 1 Rule 14 of the Civil Procedure Rules 2010

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, "Simion Omanwa Osoro v Benson Okeno Okioma & 3 others [2019] KEELC 1359 (KLR)", Case Analysis (2019). not stated in excerpt. Source: https://new.kenyalaw.org/akn/ke/judgment/keelc/2019/1359/eng@2019-10-08

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