Samuel Gikuru & 2 others v HFC Limited [2020] KEELC 759 (KLR)
The bottom line
#A Mombasa court allowed a bank to proceed with selling charged land because the borrowers only disputed accounts, which is not a valid ground to stop a sale.
What this practically means
#Executive summary
#Key legal issues
#Jurisdiction of the ELC over charge/mortgage disputes
The court has jurisdiction; the dispute relates to land or an interest in land.
Article 162(2)(b) and Section 13(2)(d) and (e) of the ELC Act confer jurisdiction over contracts and instruments granting enforceable interests in land. A charge is a disposition relating to land, and Sections 101 of the Land Registration Act and 150 of the Land Act confer jurisdiction on this court over disputes under those Acts. The objection therefore fails.
Whether the statutory notices under Section 96 of the Land Act were served
The forty days' notice to sell was sent and received by the plaintiffs.
The defendant annexed the notice to sell dated 19th July 2019 with its certificate of posting, addressed to the same address as the three-month notice which the plaintiffs admitted receiving. The court found the plaintiffs' claim of non-receipt not believable.
Whether the defendant complied with Section 97(2) of the Land Act on valuation
The defendant did not violate Section 97(2); it relied on a January 2020 valuation which the plaintiffs did not controvert.
The defendant annexed a valuation report dated 27th January 2020 to its replying affidavit. The plaintiffs did not challenge that valuation, and unchallenged evidence stands. The allegation of reliance on a 2013 valuation was therefore not established.
Whether the plaintiffs established a prima facie case and irreparable injury for an injunction
No prima facie case; any loss is compensable by damages.
The court applied the Giella v Cassman Brown principles. On the material, the plaintiffs defaulted, disputed accounts which is not a ground to stop a statutory sale, and the charged property is a commercial commodity whose loss can be ascertained and compensated monetarily. The requirements for an injunction were not satisfied.
Legal principles established
#- The Environment and Land Court has jurisdiction over disputes concerning charges over land, as a charge is a disposition relating to land and instruments granting enforceable interests in land fall under Section 13(2)(d) of the ELC Act.
- A dispute on accounts or on the amount of interest charged is not a valid ground for restraining the exercise of a statutory power of sale.
- Where property is charged, its loss is compensable by damages and an injunction will not issue.
Court orders
#- 1.The Notice of Motion dated 13th March 2020 is dismissed with costs
- Jurisdiction invoked
- Article 162(2)(b) of the Constitution and Sections 13, 101 and 150 of the Environment and Land Court Act, Land Registration Act and Land Act
Key timeline
#Practical implications
#Frequently asked questions
#Later judgments citing this (1)
#Judgments in the corpus that rely on this one. Where the Court said how it treated the authority, that is shown.
- Kitsao & another v TSS Investment Limited & 2 others (Environment & Land Case 51 of 2022) [2022] KEELC 3058 (KLR)[2022] KEELC 3058 (KLR)24 May 2022followed
Cite this brief
#Cite this brief
Caselaw, "Samuel Gikuru & 2 others v HFC Limited [2020] KEELC 759 (KLR)", Case Analysis (2020). . Source: https://new.kenyalaw.org/akn/ke/judgment/keelc/2020/759/eng@2020-10-29
Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.