Richard Kitsao William & 2 others v Standard Chartered Bank (K) Ltd [2019] KEELC 3167 (KLR)
The bottom line
#A Kenyan court refused to stop a bank from selling charged land because the borrowers admitted default and the auction had already happened.
What this practically means
#Executive summary
#Key legal issues
#Whether the Plaintiffs established a prima facie case for injunction
No prima facie case was established; the Plaintiffs admitted default and receipt of statutory notices
The court applied Giella v Cassman Brown and Mrao Ltd v First American Bank. It found the Plaintiffs admitted indebtedness and that the Bank served the requisite statutory notices under Section 90 of the Land Act. Having admitted default, the Plaintiffs had no basis for the injunction application. A prima facie case requires more than an arguable case and must show infringement of a right with probability of success at trial.
Whether the application was overtaken by events by the auction sale
Yes; the properties were sold on 13th April 2018 at 11.00 a.m., before service of the court order at 3.04 p.m., extinguishing the equity of redemption
The Bank exhibited a Memorandum of Sale showing sale to the highest bidder, one Yusuf Ashur Ahmed, on 13th April 2018 at 11.00 a.m., while the order was served the same day at 3.04 p.m. Granting an injunction after the completed sale would prejudice a third party purchaser. This independently rendered the injunction relief ungrantable.
Whether the Court could enlarge time for loan repayment
No; the Court cannot vary the contractual terms freely entered into by the parties
The Plaintiffs sought an enlargement of six months from April 2018 to liquidate the outstanding loan. The court held that no legal basis existed for the Court to rewrite or vary the lending contract to which the parties had voluntarily agreed, and accordingly refused this head of relief as well.
Legal principles established
#- The conditions for grant of an interlocutory injunction are: prima facie case with probability of success; irreparable injury not compensable by damages; and, if in doubt, balance of convenience
- A mortgagee/chargee will not be restrained from exercising the power of sale merely because the amount due is disputed or the mortgagor has begun a redemption action
- Where the statutory power of sale has been exercised before service of injunctive orders, the equity of redemption is extinguished and an injunction cannot be granted as it would affect a third party
Court orders
#- 1.The application dated 11th April 2018 is dismissed for lack of merit
- 2.The Defendant/Respondent is awarded the costs of the application
- Jurisdiction invoked
- Original civil jurisdiction of the Environment and Land Court over land parcels Kilifi/Mtwapa/1248 and Kilifi/Mtwapa/353
Key timeline
#Practical implications
#Frequently asked questions
#Cite this brief
#Cite this brief
Caselaw, "Richard Kitsao William & 2 others v Standard Chartered Bank (K) Ltd [2019] KEELC 3167 (KLR)", Case Analysis (2019). Notice of Motion application dated 11th April 2018 (Malindi ELC suit). Source: https://new.kenyalaw.org/akn/ke/judgment/keelc/2019/3167/eng@2019-05-29
Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.