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ELCDismissed· [2019] KEELC 4622 (KLR)

Nzamba Kavili v KCB Bank Kenya Limited [2019] [2019] KEELC 4622 (KLR)

Not stated in the judgment
13 February 2019
LKL. Komingoi
1,400 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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A Kenyan court refused to stop KCB from selling a charged home because the borrower failed to prove his case or show damages could not compensate him.

What this practically means

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Executive summary

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The court determined a Notice of Motion dated 8th November 2016 in which the plaintiff, a director of Nzamaco Metal Works Limited, sought a temporary injunction restraining the defendant bank from entering, alienating or interfering with his quiet possession of parcel Mulango/Wikililye/644 pending trial. The plaintiff had charged the property to secure an overdraft facility of Kshs 1,800,000, which he admitted defaulting on and offered to repay. His grounds were that the bank unlawfully amalgamated the overdraft with an asset-based finance account MG 1218800096 (relating to a motor vehicle) purporting both were secured by the property, and that the property was his matrimonial home occupied by his wife and five children. The bank, through a replying affidavit of a business banker, Peter Daudi Nzulwa, contended the plaintiff voluntarily offered the property as security for both facilities, that spousal consent was obtained, and that it lawfully exercised its statutory power of sale under Section 90 of the Land Act after default. Framing two issues - whether the application met the Giella v Cassman Brown threshold and costs - the court found the security documents (annexure PDN-2, clause 4) identified the suit property as security, disproving the amalgamation claim; that an unrebutted spousal consent affidavit neutralised the matrimonial-home argument; and that the plaintiff, in default with no repayment proposal, showed no prima facie case, no irreparable harm beyond damages, and lost on the balance of convenience. The application was dismissed with costs to the defendant bank.

Key legal issues

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01

Whether the plaintiff established a prima facie case with a probability of success

Holding

No prima facie case was established; the security documents showed the suit property secured both accounts, and the plaintiff defaulted

Reasoning

The court examined annexure PDN-2, whose clause 4 identified LR No. Mulango/Wikililye/644 as the security. The plaintiff's claim that the property secured only the overdraft was therefore untrue. Unrebutted averments in the replying affidavit confirmed the property was security for the facilities, and the plaintiff was in default, with no repayment proposal offered.

p. 2
02

Whether the fact that the suit property is a matrimonial home defeats the statutory power of sale

Holding

No, because valid spousal consent to the charge was obtained

Reasoning

Annexure PDN-5 contained an affidavit of consent sworn by the plaintiff's spouse, Winfred Mawia Nzamba, giving full consent to the creation of the charge. The plaintiff did not rebut this. Accordingly, the matrimonial character of the property did not avail the applicant against the exercise of the statutory power of sale.

p. 2
03

Whether irreparable harm and balance of convenience favoured the plaintiff

Holding

They did not; damages would compensate and the balance of convenience favoured the defendant

Reasoning

Relying on Ooko v Barclays Bank of Kenya Ltd, the court found the plaintiff failed to show irreparable injury not compensable by damages. The statutory notice was lawful as the plaintiff was in default and had made no repayment proposal, and the balance of convenience tilted toward the defendant bank.

p. 3

Legal principles established

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  • An injunction is a discretionary remedy granted on the basis of evidence and sound legal principles
  • A charge over land cannot be restrained by injunction where part of the debt is admitted or proved to be due
  • An applicant for an injunction must make full and frank disclosure and show a right, legal or equitable, requiring protection

Court orders

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  1. 1.The Notice of Motion dated 8th November 2016 is dismissed
  2. 2.Costs of the application awarded to the defendant/respondent

Authorities

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Legislation

  • Civil Procedure ActSections 1A, 1B, 3A
  • Civil Procedure Rules 2010Order 40 Rules 1, 2, 3, 4
  • Land ActSection 90

Cases cited (8)

  • Giella vs Cassman Brown & Co. Ltd
    [1973] EA 358
  • Mrao Ltd vs First American Bank of Kenya Ltd & 2 Others
    [2003] KLR 125
  • Labelle International Ltd & Another vs Fidelity Commercial Bank & Another
    [2003] EA 541
  • Habib Bank AG Zurich vs Pop In Kenya Ltd
    [1999] LLR 3069
  • Matex Commercial Supplies Ltd & Another vs Euro Bank Ltd (in liquidation)
  • Njenga vs Njenga
    (1991) KLR 401
  • Kenleb Cons Ltd vs New Gatitu Services Station Ltd & Another
    1990 KLR 557
  • Ooko vs Barclays Bank of Kenya Ltd
    [2002] KLR 394
Jurisdiction invoked
Sections 1A, 1B and 3A of the Civil Procedure Act and Order 40 Rules 1, 2, 3 and 4 of the Civil Procedure Rules 2010

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, "Nzamba Kavili v KCB Bank Kenya Limited [2019] [2019] KEELC 4622 (KLR)", Case Analysis (2019). . Source: https://new.kenyalaw.org/akn/ke/judgment/keelc/2019/4622/eng@2019-02-13

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