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ELCDismissedNotice of Motion dated 12th February 2018 (Mombasa)· [2019] KEELC 3095 (KLR)

Mohamed Abdallah Swazuri v Consolidated Bank of Kenya & another [2019] KEELC 3095 (KLR)

Environment and Land Court
22 May 2019
CYC.K. Yano
3,240 words in judgment
View original judgmentRead on Kenya Law Watch case
AI-assisted case brief
·~13 min to read original · ~4 min brief

The bottom line

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The Environment and Land Court in Mombasa refused to stop KCB from selling a Diani plot because the buyer had no contract with the bank.

What this practically means

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Executive summary

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By a Notice of Motion dated 12th February 2018 under the Civil Procedure Act and Order 40 of the Civil Procedure Rules, the plaintiff, who purchased Plot KWALE/DIANI/823 from the chargor Kavunza Nzumbi in June 2016 and claimed to have been servicing the charged loan of Kshs.12,000,000/=, sought temporary injunctions restraining the bank and the auctioneer from selling or dealing with the property, nullification of an auction conducted on 8th February 2018, a declaration of proprietary interest, and a mandatory injunction directing that he pay the loan in instalments. The defendants replied through David Ndirangu's affidavit, contending that the chargor defaulted on banking facilities secured by a First Legal Charge of 22nd October 2013, that the bank had exercised its statutory power of sale after due notices, that the plaintiff was a stranger to the charge with no contractual relationship with the bank, and that requisite notices had been served on the chargor. The court applied the Giella v Cassman Brown principles. It held that a mandatory injunction and final relief could not be granted at the interlocutory stage absent a clear case, invoking Locabail and the Mugenda decision; that the plaintiff, being non-privy to the charge, could not invoke the bank's obligations; and that he had neither established a prima facie case with probability of success nor irreparable harm, his loss being quantifiable in damages. The application was dismissed with costs to the defendants on 22nd May 2019.

Key legal issues

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01

Prima facie case and irreparable harm

Holding

Applicant failed to establish a prima facie case or irreparable harm not compensable in damages

Reasoning

The plaintiff was not privy to the charge; he bought from the chargor without evidence of any agreement with the bank, made payments through the chargor's account, and the chargor defaulted. His loss was quantifiable in damages. The Giella principles were therefore not satisfied and the injunction could not issue.

p. 4
02

Privity of contract

Holding

The bank owed no obligations to the applicant, a stranger to the charge

Reasoning

The applicant was not a party to the loan or charge; any equitable remedy compelling his inclusion in the contract between bank and chargor could not be granted at interlocutory stage.

p. 3

Legal principles established

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  • A contract cannot confer rights or impose obligations on a third party to it (privity of contract)
  • A mandatory injunction or final relief should not be granted at the interlocutory stage except in a clear case

Court orders

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  1. 1.The Notice of Motion dated 12th February 2018 is dismissed
  2. 2.Costs of the application to the Defendants

Authorities

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Legislation

  • Civil Procedure ActSections 1A, 1B, 3, 3A, 63(e)
  • Civil Procedure RulesOrder 40 Rules 1, 2, 3; Order 51 Rule 1
  • Land Actstatutory power of sale
  • Land Registration Actread with the Land Act on enforcement of security

Cases cited (14)

  • Giella –v- Cassman Brown & Co. Ltd
    (1973) EA 358
  • Devcon Group Limited –v- Timsales Limited
    (2016) eKLR
  • Charles Mwarigi Miriti –v- Thanaga Tea Growers Sacco Limited & Another
    (2014) eKLR
  • Savings and Loan (K) Ltd & Another –v- Kanyenje Karangaita Gakombe & Another
    (2015) eKLR
  • Paul Gitonga Wanjui –v- Gathuthi Tea Factory Company Ltd & 2 Others
    (2016) eKLR
  • Mrao –v- First American Bank of Kenya Limited & 2 Others
    (2003) KLR 125
  • Amos Wangeera Njoroge & 9 Others –v- Serah Wamuyu Muriuki & Another
    (2014) eKLR
  • Argos Furnishers Limited –v- Ecobank Kenya Limited & Another
    (2014) eKLR
  • Stanley Munga Githunguri –v- Jimba Credit Corporation Limited
    Civil Appeal No. 144 of 1988
  • Locabail International Finance Limited –v- Agro Export
    (1986) 1 All ER 901
  • Olive Mwihaki Mugenda & Another –v- Okiya Omtata Okoiti & 4 Others
    (2016) eKLR
  • Ashok Kumar Bajpai –v- Dr. (Smt) Ranjama Bajpai
    AIR 2004, ALL 107
  • Vivo Energy Kenya Limited –v- Maloba Petrol Station Limited and 3 Others
    (2015) eKLR
  • Stephen Kipkebut t/a Riverside Lodge and Rooms –v- Naftali Ogola
    (2009) eKLR
Jurisdiction invoked
Sections 1A, 1B, 3, 3A and 63(e) of the Civil Procedure Act and Order 40 Rules 1, 2 and 3 and Order 51 Rule 1 of the Civil Procedure Rules

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, "Mohamed Abdallah Swazuri v Consolidated Bank of Kenya & another [2019] KEELC 3095 (KLR)", Case Analysis (2019). Notice of Motion dated 12th February 2018 (Mombasa). Source: https://new.kenyalaw.org/akn/ke/judgment/keelc/2019/3095/eng@2019-05-22

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