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ELCOtherChamber Summons dated 14/2/2020 (arising from Kisumu Chief Magistrates Civil Suit No. 311 of 2018)· [2021] KEELC 10 (KLR)

Housing Finance Company of Kenya Limited v Ruth Wanjiru Njenga & 3 others [2021] KEELC 10 (KLR)

Environment and Land Court
1 October 2021
AOAntony Ombwayo
1,926 words in judgment
View original judgmentRead on Kenya Law Watch case
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The bottom line

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Kenya's Environment and Land Court ruled that mortgage recovery disputes belong in the High Court, transferring Housing Finance's case back after finding charging land is a commercial matter, not land use.

What this practically means

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Executive summary

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Housing Finance Company of Kenya Limited filed a Chamber Summons seeking extension of time to file a reference against a taxing officer's ruling of 3 October 2019 taxing the 1st respondent's bill of costs at Kshs. 596,850, contending that instruction fees of Kshs. 557,500 were inordinately high because the amended plaint involved an unliquidated claim. The respondents, through advocate Bruce O. Odeny, objected that the taxation arose from Kisumu ELC CMC No. 311 of 2018, an environment and land matter, so only the ELC - not the High Court - had jurisdiction. Justice Antony Ombwayo traced the genesis of the dispute: an amended plaint seeking a right of redemption over Kisumu Municipality Block 4/364, which had been charged as security for a Kshs. 1,000,000 loan, and whose sale was challenged after default. Applying Co-operative Bank of Kenya Ltd v Patrick Kangethe Njuguna and Paramount Bank Limited v Vagyi Syed Qamara, the court held that charging land is not land use; the dominant issue was recovery of amounts due under a banker-lender relationship, a purely commercial dispute outside the ELC's jurisdiction under Article 162(2)(b). The court declined to assume jurisdiction, transferred the matter back to the High Court, and awarded costs in the cause, delivering the ruling electronically pursuant to COVID-19 directives.

Key legal issues

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Jurisdiction of the ELC over disputes arising from a charge over land

Holding

The ELC has no jurisdiction; the dominant dispute was recovery of amounts due under a loan secured by a charge, which is a commercial matter for the High Court

Reasoning

Relying on Co-operative Bank of Kenya Ltd v Patrick Kangethe Njuguna, the court reasoned that charging land does not connote land use. The cause of action was not the charge instrument or title to land but the tabulation of sums owing under a banker-lender contractual relationship. Such mortgage and charge recovery disputes fall within the civil jurisdiction of the High Court.

p. 3

Legal principles established

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  • A charge over land creates an interest securing repayment of money; a dispute over realisation of that security is a commercial dispute, not a dispute relating to the use of land, and falls outside the jurisdiction of the Environment and Land Court

Court orders

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  1. 1.The matter is transferred back to the High Court
  2. 2.Costs in the cause

Authorities

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Legislation

  • Advocates Remuneration Order, 2014Schedule VII paragraph 2
  • Land ActSections 2 and 80
  • Environment and Land Court ActSection 13(2)(d)
  • Employment and Labour Relations Court ActSection 12
  • Constitution of KenyaArticles 162, 260

Cases cited (2)

  • Co-operative Bank of Kenya Ltd vs Patrick Kangethe Njuguna & 5 others
    (2017) eKLR
  • Paramount Bank Limited vs Vagyi Syed Qamara & another
    (2017) eKLR
On appeal from
null
null
Jurisdiction invoked
Article 162(2)(b) of the Constitution and the Environment and Land Court Act (jurisdiction of the ELC)

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, "Housing Finance Company of Kenya Limited v Ruth Wanjiru Njenga & 3 others [2021] KEELC 10 (KLR)", Case Analysis (2021). Chamber Summons dated 14/2/2020 (arising from Kisumu Chief Magistrates Civil Suit No. 311 of 2018). Source: https://new.kenyalaw.org/akn/ke/judgment/keelc/2021/10/eng@2021-10-01

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