Noorjahan Ebrahim Adam v SBM Bank (Kenya) Ltd & another [2021] KEELC 3881 (KLR)
The bottom line
#A Kenyan court allowed a bank to proceed with selling a charged Mombasa apartment because the borrower admitted the debt and the bank followed every required legal step.
What this practically means
#Executive summary
#Key legal issues
#Whether the applicant established a prima facie case with a probability of success under the Giella principles
No - having admitted indebtedness and the chargee having complied with the statutory notice and valuation requirements, no prima facie case was made out
The court applied Giella v Cassman Brown. It was not disputed that the loan was advanced and secured by the charge, that the applicant defaulted, and that notices of exercise of statutory power of sale dated 29th October 2018 and 6th February 2020 plus a valuation report were issued. An admitted indebtedness plus full statutory compliance defeats the claim of an unexercisable power of sale, so no prima facie case with probability of success existed.
Whether the statutory power of sale had accrued
Yes - the requisite notices under Sections 90 and 96 of the Land Act were served and a valuation conducted, so the chargee's power of sale was exercisable
Section 90(1) requires a 90-day notice to remedy default and Section 96(2) requires a 40-day notice to sell before completing a sale. The court perused the replying affidavit, found a notice of exercise of statutory power of sale and a valuation report annexed, and concluded the notices were issued and valuation carried out, making the statutory power of sale exercisable notwithstanding the applicant's denial of service.
Whether irreparable loss would be suffered if the property were sold
No - the charged property is a commercial commodity whose value is ascertainable and any loss is quantifiable in damages
Applying the second Giella principle, the court held that the suit property, having been charged, was reduced to a commercial commodity with an ascertainable value. Damages would be an adequate remedy, so the applicant failed on the irreparable harm limb and could not salvage the application through the balance of convenience.
Legal principles established
#- Compliance with the notice requirements under Sections 90 and 96(2) of the Land Act is mandatory and a precondition to exercising the statutory power of sale
Court orders
#- 1.The notice of motion dated 21st September 2020 is dismissed
- 2.Costs of the application awarded to the 1st respondent
- Jurisdiction invoked
- Order 40 Rules 1, 2 & 4 and Order 51 of the Civil Procedure Rules; Sections 1A, 1B, 3A and 63(e) of the Civil Procedure Act
Key timeline
#Practical implications
#Frequently asked questions
#Cite this brief
#Cite this brief
Caselaw, "Noorjahan Ebrahim Adam v SBM Bank (Kenya) Ltd & another [2021] KEELC 3881 (KLR)", Case Analysis (2021). Not stated in the judgment (notice of motion dated 21st September 2020). Source: https://new.kenyalaw.org/akn/ke/judgment/keelc/2021/3881/eng@2021-03-23
Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.