Asset & Cargo Ltd v Housing Finance Kenya Ltd & another [2021] KEELC 565 (KLR)
The bottom line
#What this practically means
#Executive summary
#Key legal issues
#Temporary injunction against exercise of statutory power of sale
Rejected: the applicant, in acknowledged default, had no prima facie case and no irreparable injury beyond damages; balance of convenience favoured the chargee
Applying Giella v Cassman Brown, the court found the plaintiff confirmed in arrears and thus without a prima facie case. The injunction jurisdiction rests on probability of irreparable injury and inadequacy of pecuniary compensation per Nguruman. Here the property was company-registered and valued, and the chargee's statutory power of sale under Section 97(2) of the Land Act tilted the balance of convenience in its favour.
Review of the ruling of 7th July 2020
Application did not meet the Order 45(1)/Section 80 threshold; matrimonial-home argument was not sufficient reason and the application was filed ~10 months late without explanation
Review requires discovery of new and important matter, an error apparent on the face of the record or other sufficient reason, and application without unreasonable delay. The plaintiff's Covid-19 and matrimonial-home contentions were afterthoughts known earlier, the alleged loan restructuring was denied and never completed, and the ten-month delay was unexplained.
Court's power to interfere with contract terms (loan restructuring)
Court cannot be called upon to rewrite binding loan and charge terms; sanctity of contract prevails
The plaintiff sought to have the court compel restructuring to an allegedly agreed figure and direct mode of repayment. The court held that the charge terms were clear and binding, the property was registered in the company's name, and the chargee had lawfully followed the contractual and statutory recovery avenues; courts cannot dictate new means of recovery.
Legal principles established
#- A court lacks jurisdiction to rewrite or vary the agreed and binding terms of a loan agreement and charge between parties
- Review under Order 45(1) and Section 80 requires new and important matter, an error apparent on the face of the record, or other sufficient reason, and must be brought without unreasonable delay
Court orders
#- 1.Declined to review and/or set aside the court's ruling and orders issued on 7th July, 2020 and all other consequential orders
- 2.Matter to be fixed for hearing within 90 days from the date of the ruling
- 3.Pre-trial Conference mention on 18th January, 2022 pursuant to Order 11 of the Civil Procedure Rules on case management
- 4.Costs of the application to be borne by the Plaintiff/Applicant
- Jurisdiction invoked
- Sections 1A, 1B, 3A of the Civil Procedure Act (Cap. 21) and Order 45 Rule 1, Order 40 Rule 1 and Order 50 Rule 1 of the Civil Procedure Rules, 2010
Key timeline
#Practical implications
#Frequently asked questions
#Cite this brief
#Cite this brief
Caselaw, "Asset & Cargo Ltd v Housing Finance Kenya Ltd & another [2021] KEELC 565 (KLR)", Case Analysis (2021). Notice of Motion dated 25th March, 2021 (ELC suit, Mombasa). Source: https://new.kenyalaw.org/akn/ke/judgment/keelc/2021/565/eng@2021-11-25
Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.