Stephen Kariuki Paul v Co-operative Bank (K) Limitedb & another [2019] KEELC 3153 (KLR)
The bottom line
#What this practically means
#Executive summary
#Key legal issues
#Prima facie case for interlocutory injunction against exercise of statutory power of sale
No prima facie case established; the loan, the Charge and the default were admitted or not disputed
The Court found it proved that the 2nd Defendant obtained loan facilities from the 1st Defendant and that the Plaintiff executed a Charge over LR.No.Sigona/195 as security. Both the Plaintiff and the 2nd Defendant admitted default and did not offer any payment. The Plaintiff's claim of ignorance of loan variations was rejected since Letters of Offer were produced and not disputed. Following New Age Developers and Maurice Okelo Alata, a mere dispute of accounts does not restrain a chargee.
Irreparable damage not compensable by damages
Not established; the land was offered as security and its value is calculable
The Court found no statutory breach by the 1st Defendant and held that the Plaintiff, as guarantor, knew statutory power of sale was a remedy. Citing Jopa Villas and Andrew M. Wanjohi, the Court held that property offered as security becomes a commodity for sale, so any loss is calculable on market value and can further be mitigated under Section 97(1) of the Land Act.
Balance of convenience
Tilts in favour of the 1st Defendant
The 1st Defendant was owed a colossal sum with no repayment scheme offered; continued restraint risked the arrears escalating and outstripping the value of the security. The Court applied Andrew M. Wanjohi on the risk of debt outgrowing the security value and the compensability of a wrongful sale.
Provision of loan account documentation and reconciled accounts
Refused at the interlocutory stage
The Court held that an order for production of reconciled loan accounts raises matters of evidence proper for the full trial, not for determination on a Notice of Motion, and declined to grant relief on that limb.
Legal principles established
#- A chargee cannot be restrained by injunction where part of the amount claimed is admitted or proved to be due and the chargor offers no payment scheme
- Mere dispute over the amount outstanding does not excuse a borrower from servicing a loan or restrain a chargee from realizing security
- Once property is given as security it becomes a commodity for sale and irreparable loss cannot be alleged; loss is calculable and mitigable under Section 97(1) of the Land Act
Court orders
#- 1.The Notice of Motion application dated 3rd November 2017 is dismissed entirely with costs to the 1st Defendant/Respondent
- 2.Any interim orders or status quo orders in place are discharged and/or vacated
- 3.The parties to prepare the main suit for hearing expeditiously
- Jurisdiction invoked
- Original civil jurisdiction over land and charge disputes (interlocutory application in a pending suit); specific provision not stated in the judgment
Key timeline
#Practical implications
#Frequently asked questions
#Cite this brief
#Cite this brief
Caselaw, "Stephen Kariuki Paul v Co-operative Bank (K) Limitedb & another [2019] KEELC 3153 (KLR)", Case Analysis (2019). Notice of Motion dated 3rd November 2017 (within the main suit; suit number not stated in judgment). Source: https://new.kenyalaw.org/akn/ke/judgment/keelc/2019/3153/eng@2019-05-24
Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.