Khalid Yamin Khan & Abdul Waheed Khan t/a Highland Distributors Ventures v Equity Bank Limited & another [2019] KEELC 4927 (KLR)
The bottom line
#The High Court dismissed borrowers' last-minute bid to stop KCB auctioning their Kileleshwa property, ruling one statutory notice covers future defaults.
What this practically means
#Executive summary
#Key legal issues
#Availability of conservatory orders in civil proceedings
The stay/conservatory order prayer was misconceived because the suit is a purely civil dispute with no claim of constitutional violation
The plaintiffs relied on constitutional petition authorities (Wambora; Munya) but neither their plaint nor application alleged violation or threatened violation of constitutional rights. Conservatory orders are governed by the Constitution of Kenya (Protection of Rights and Fundamental Freedoms) Practice and Procedure Rules 2013 and are inapplicable in civil proceedings, which have their own elaborate interlocutory relief procedures. Hence no basis in law existed for the stay sought.
Whether review was warranted on discovery of new and important matter under Section 80 Civil Procedure Act and Order 45 Rule 1
No new matter or evidence was established; the alleged discoveries were within the plaintiffs' knowledge when the 12th April 2018 order was made
The plaintiffs claimed the provisions of section 44A of the Banking Act on non-performing loans and their account status were new matters. However, the IRAC report of 11th August 2015 (annexure AWK-6) discussed section 44A extensively, showing the plaintiffs knew of it before the ruling. The interest rate issue was the main argument in the earlier injunction application, so it could not be re-opened as new evidence.
Alleged non-service of statutory notice under section 96(2) of the Land Act, 2012
Not a ground for review because the plaintiffs admitted service of the notice to redeem in a 2012 letter and in paragraph 13 of the plaint
The plaintiffs' own letter dated 20th December 2012 (annexure AWK7) admitted service of a notice to redeem, and paragraph 13 of the plaint admitted service of a statutory notice. The court agreed with the defendants that a mortgagee need not serve fresh statutory and redemption notices upon each default and before each auction. Therefore the alleged non-service could not justify review of the earlier order.
Leave to amend the plaint
Refused because no draft amended plaint or particulars of intended amendments were placed before the court
The plaintiffs failed to inform the court and the defendants of what the proposed amendments entailed, leaving no material on which the court could exercise its discretion. The defendants had also pointed out the absence of a draft amended plaint in submissions. The prayer therefore failed for lack of a proper foundation.
Legal principles established
#- Conservatory orders belong to constitutional petitions and have no application in ordinary civil proceedings, which have their own interlocutory relief procedures
- A party cannot re-open a dismissed application on new grounds in the pretext of discovering new evidence
- A mortgagee is not obliged to serve fresh statutory and redemption notices each time the mortgagor defaults after notices were once served
Court orders
#- 1.The plaintiffs' application dated 30th April, 2018 is dismissed
- 2.Costs of the application awarded to the defendants
- Jurisdiction invoked
- Inherent civil jurisdiction; review under Section 80 of the Civil Procedure Act and Order 45 Rule 1 of the Civil Procedure Rules
Key timeline
#Practical implications
#Frequently asked questions
#Cite this brief
#Cite this brief
Caselaw, "Khalid Yamin Khan & Abdul Waheed Khan t/a Highland Distributors Ventures v Equity Bank Limited & another [2019] KEELC 4927 (KLR)", Case Analysis (2019). Notice of Motion dated 30th April, 2018 (suit arising from injunction application dated 8th January, 2013). Source: https://new.kenyalaw.org/akn/ke/judgment/keelc/2019/4927/eng@2019-01-24
Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.