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ELCDismissedNotice of Motion dated 29th June 2017 (suit at Thika Environment and Land Court)· [2019] KEELC 2980 (KLR)

Benson Kinuthia Mwaura (Suing as the Legal Representative of the Estate of John Mwaura Kinuthia (Deceased)) & another v Diamond Trust Bank Ltd & another [2019] KEELC 2980 (KLR)

Environment and Land Court
24 May 2019
3,479 words in judgment
View original judgmentRead on Kenya Law Watch case
AI-assisted case brief
·~14 min to read original · ~4 min brief

The bottom line

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What this practically means

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Executive summary

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The Plaintiffs, brought by Benson Kinuthia Mwaura as legal representative of the estate of the late John Mwaura Kinuthia, moved the court by Notice of Motion dated 29th June 2017 seeking a temporary injunction to restrain the 1st Defendant bank and the 2nd Defendant auctioneer from advertising, selling by public auction, taking possession of or interfering with land parcel Githunguri/Kanjai/608. They alleged the charge securing an overdraft to Magann Pharmaceuticals Ltd was fraudulent and void ab initio because the deceased died before the loan was converted, no spousal consent was given by the 2nd Plaintiff, and statutory notices were never received. The 1st Defendant replied that the charge dated 28th June 2014 was registered on 13th August 2014 before the deceased's death, that the deceased executed the charge and deed of guarantee and his wife consented before an advocate, and that all statutory notices were issued to the addresses in the charge. The 3rd to 7th Defendants confirmed due execution and denied collusion. Applying the Giella vs Cassman Brown criteria, the court found no prima facie case: allegations of forgery and non-receipt of notices could only be resolved at full trial, and the charge bound the deceased's personal representatives. Any loss would be adequately compensable in damages under section 99(4) of the Land Act, the property being a commodity for sale once given as security, and the balance of convenience favoured the bank as the debt might outstrip the security. The application was dismissed entirely with costs to the 1st Defendant, and interim orders were discharged.

Key legal issues

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01

Prima facie case with probability of success

Holding

Not established; the charge was executed by the deceased before his death, bound his personal representatives, and allegations of forgery of spousal consent require full trial evidence

Reasoning

The charge dated 28 June 2014 and deed of guarantee predated the deceased's death, and both documents defined 'Chargor' and 'guarantor' to include personal representatives. The advocate before whom the spousal consent was allegedly executed did not deny witnessing it, so the court could not find forgery on affidavits.

p. 4
02

Irreparable injury

Holding

Not established; the suit property is quantifiable and damages against a bank would suffice

Reasoning

Property offered as security is a commodity for sale; any loss on a sale later found irregular is compensable in damages under section 99(4) of the Land Act, and the chargee is a bank capable of paying an award.

p. 5
03

Balance of convenience

Holding

Tilts in favour of the 1st Defendant as the debt may escalate and outstrip the security

Reasoning

The borrower had not offered how it would remedy the default, and restraining the sale risked the debt growing beyond the value of the security, exposing the bank to substantial irrecoverable loss.

p. 5

Legal principles established

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  • Once a property is given as security for a loan it becomes a commodity for sale and the chargor cannot claim irreparable loss upon default
  • Section 99(4) of the Land Act provides a remedy in damages for a person prejudiced by an unauthorised, improper or irregular exercise of the power of sale

Court orders

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  1. 1.The Plaintiffs/Applicants' Notice of Motion dated 29th June 2017 is dismissed entirely with costs to the 1st Defendant/Respondent
  2. 2.Any interim orders in place are discharged and/or vacated

Authorities

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Legislation

  • Land ActSections 82, 83, 96(2), 99(4)

Cases cited (6)

  • Mrao vs First American Bank of Kenya Ltd & 2 Others
    (2003) eKLR
  • Edwin Kamau Muniu vs Barclays Bank of Kenya Ltd
    Nairobi HCCC No. 1118 of 2002
  • Giella vs Cassman Brown
  • Kibutiri vs Kenya Shell
    Nairobi High Court Civil Case No.3398 of 1980 (1981) KLR
  • E.A Industries vs Trufoods
    (1972) EA 420
  • Andrew M. Wanjohi vs Equity Building Society & 7 Others
Jurisdiction invoked
Original civil jurisdiction of the Environment and Land Court over the charged land parcel Githunguri/Kanjai/608

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, "Benson Kinuthia Mwaura (Suing as the Legal Representative of the Estate of John Mwaura Kinuthia (Deceased)) & another v Diamond Trust Bank Ltd & another [2019] KEELC 2980 (KLR)", Case Analysis (2019). Notice of Motion dated 29th June 2017 (suit at Thika Environment and Land Court). Source: https://new.kenyalaw.org/akn/ke/judgment/keelc/2019/2980/eng@2019-05-24

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