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ELCDismissed· [2019] KEELC 2787 (KLR)

Edwin Kago Kagwi v Stanbic Bank Kenya Ltd & 4 others [2019] KEELC 2787 (KLR)

Environment and Land Court
13 June 2019
EOE. O. Obaga
1,479 words in judgment
View original judgmentRead on Kenya Law Watch case
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·~6 min to read original · ~4 min brief

The bottom line

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Once your charged property has been sold at auction and transferred to a new owner, a Kenyan court will not grant an injunction—your remedy is damages.

What this practically means

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Executive summary

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The Plaintiff/Applicant filed a Notice of Motion dated 27th November 2017 in a suit over Flat No. D6, Block D on L.R. No. 2/125 (Original No. 2/90/2), seeking temporary and interlocutory injunctions restraining the Defendants from disposing of, alienating, transferring or interfering with his possession of the suit property, and an order compelling the 1st Respondent bank to avail comprehensive certified statements of his current and loan accounts. The Applicant had taken loan facilities from the 1st Respondent in 2003 and 2008, secured by a charge over the suit property. After default, statutory notices issued and the property was advertised for sale on several occasions; after the fourth advertisement the property was sold by public auction on 18th July 2017 and later transferred to the 3rd Respondent, the auction purchaser, who took possession, renovated it and placed a tenant. The Applicant alleged that statutory notices were improperly served, that he had cleared the loan, and that the auction was collusive and irregular. The 1st and 3rd Respondents opposed, contending all notices were duly issued, statements were up to date, the Applicant had depositied Kshs.3,000,000 towards the loan, and that the 3rd Respondent was a bona fide purchaser. The court framed two issues: whether an injunction should issue and whether accounts should be ordered. It held the application was overtaken by events since the property had been sold, transferred and registered in the 3rd Respondent's name; an injunction cannot preserve what has already occurred, and the only remedy for an irregularly conducted auction is damages. No prima facie case was shown, as statutory notices issued and the Applicant defaulted. The claim for accounts also failed as up-to-date statements existed. The application was dismissed with costs to the Respondents.

Key legal issues

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01

Whether an injunction should issue where the suit property has already been sold, transferred and registered in the purchaser's name

Holding

No injunction can issue; the application is overtaken by events and the appropriate remedy, if any, is damages.

Reasoning

The court noted the property was sold on 18th July 2017 and the application was filed on 30th November 2017, with the property since registered in the 3rd Respondent's name and possession taken. An injunction preserves the status quo; it cannot undo a completed sale. The court also held the Applicant had not demonstrated a prima facie case, as statutory notices were issued and the Applicant was aware of his loan status yet failed to repay or clear accumulated arrears.

p. 2
02

Whether an order for accounts against the 1st Respondent should be granted

Holding

Refused, because the 1st Respondent demonstrated up-to-date statements of account and the excess auction proceeds were credited to the Applicant's account.

Reasoning

The court observed that the 1st Respondent had annexed up-to-date statements of account to its replying affidavit, and that after the auction the Applicant was advised that any excess sum realised had been credited to his account. In these circumstances, the court found no basis to order production of further comprehensive statements as sought in prayer 4 of the Notice of Motion, and dismissed the application in its entirety.

Legal principles established

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  • An injunction cannot issue in respect of an act that has already occurred; once property is sold at auction and transferred, the plaintiff's only remedy is damages.

Court orders

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  1. 1.The Notice of Motion dated 27th November, 2017 is dismissed
  2. 2.Costs of the application to the Respondents
Jurisdiction invoked
Original civil jurisdiction of the Environment and Land Court over a suit concerning L.R. No. 2/125 (Original No. 2/90/2) (specific provision not stated in the judgment)

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, "Edwin Kago Kagwi v Stanbic Bank Kenya Ltd & 4 others [2019] KEELC 2787 (KLR)", Case Analysis (2019). . Source: https://new.kenyalaw.org/akn/ke/judgment/keelc/2019/2787/eng@2019-06-13

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