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ELCDismissedELC 93 of 2016 (with ELC 1073 of 2016, formerly HCCC 357 of 2016)· [2021] KEELC 1251 (KLR)

Commercial Bank of Africa Limited v Ndonga Limited & 4 others [2021] KEELC 1251 (KLR)

Environment and Land Court
28 October 2021
LKL. Komingoi
2,791 words in judgment
View original judgmentRead on Kenya Law Watch case
AI-assisted case brief
·~11 min to read original · ~4 min brief

The bottom line

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A Kenyan court refused to let a bank enforce its loan security through a shortcut application, ruling that disputed land ownership must be fully tried first.

What this practically means

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Executive summary

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This judgment of the Environment and Land Court (L. Komingoi, J) determined two notices of motion arising from competing bank charges over L.R No.209/12513. Commercial Bank of Africa Limited, which advanced Kshs.100,000,000 to Ndonga Limited secured by a first legal charge registered in 2013, sought to enforce its charge jointly with Diamond Trust Bank Limited, which held a separate first legal charge securing a Kshs.80,000,000 facility. Both banks discovered competing claims when DTB advertised the property for auction in 2016 and the lands file could not be traced. CBA sought leave for joint exercise of statutory power of sale, use of its title document, revocation of other titles, reconstruction of the missing lands file, issuance of a provisional title, and newspaper advertisement inviting objections from third parties with parallel titles. The 1st Defendant opposed, arguing the application sought final reliefs at an interlocutory stage, that both securities were defective given the Principal Land Registrar's statement alleging forged signatures, and that transfer of the property to Ndonga Limited was never registered. The court agreed the application was a summary process which, if granted, would leave nothing to litigate, and dismissed it, holding the competing interests over the title required a full hearing. The court also dismissed a motion seeking transfer of ELC 1073 of 2016 to the High Court Commercial and Tax & Admiralty division, holding the ELC has jurisdiction since ownership of the suit property is in issue. Costs of both applications were ordered to abide the outcome of the main suit.

Key legal issues

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01

Whether final reliefs (enforcement of charges, cancellation of titles, reconstruction of the land register) can be granted at an interlocutory stage

Holding

The application was rejected as a summary process; the competing titles and allegations of forgery required full trial

Reasoning

The court found the prayers, if granted, would leave nothing to litigate. Two banks held competing first legal charges over the same property, the lands file could not be traced, and the Principal Land Registrar alleged forgeries. Ownership and genuineness of the titles could only be established after all parties were heard at a full hearing.

p. 4
02

Whether the ELC has jurisdiction over the suit despite a claim of ownership of land and commercial banking facilities

Holding

The ELC retains jurisdiction since ownership of the suit property is in issue; transfer to the High Court Commercial Division was refused

Reasoning

ELC 1073 of 2016 had originated in the High Court Commercial Division but was transferred to the ELC. The court noted that ownership of the suit property was among the issues, engaging its jurisdiction under the law establishing the Environment and Land Court, and declined the transfer.

p. 4

Legal principles established

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  • An interlocutory application that would dispose of the entire suit and leave nothing to be litigated is a summary process that should not be allowed; competing claims to title must be resolved at full trial

Court orders

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  1. 1.The notice of motion dated 15th November 2019 is dismissed
  2. 2.The notice of motion dated 9th February 2021 seeking transfer to the High Court Commercial and Tax & Admiralty division is dismissed
  3. 3.Costs of both applications to abide the outcome of the main suit

Authorities

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Legislation

  • Constitution of KenyaArticle 159(2)
  • Land Registration ActSections 30(2)(a)/33(5), 80, 101, 35(5)
  • Land Act 2012Section 106
  • Civil Procedure ActSections 1A, 1B, 3, 3A
  • Civil Procedure Rules, 2010Order 5 Rule 17, Order 51 Rule 1

Cases cited (4)

  • Westminister Commercial Auctioneers vs Diamond Trust Kenya Limited
    [2021] eKLR
  • Macharia Mwangi Maina & 87 Others vs Davidson Mwangi Kagiri
    [2014] eKLR
  • Lavington Security Limited vs Judiciary
    [2021] eKLR
  • Commercial Bank of Africa v Wardpa Holdings Limited & 7 Others
    [2019] eKLR
Jurisdiction invoked
Article 159(2) of the Constitution of Kenya; Land Registration Act; Land Act 2012; Civil Procedure Act and Rules

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, "Commercial Bank of Africa Limited v Ndonga Limited & 4 others [2021] KEELC 1251 (KLR)", Case Analysis (2021). ELC 93 of 2016 (with ELC 1073 of 2016, formerly HCCC 357 of 2016). Source: https://new.kenyalaw.org/akn/ke/judgment/keelc/2021/1251/eng@2021-10-28

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