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ELCDismissed· [2021] KEELC 4598 (KLR)

Vital Plantation Lease Company Limited & another v Fresco Bushlands (K) Limited & another [2021] KEELC 4598 (KLR)

Environment and Land Court of Kenya (Malindi)
29 January 2021
1,866 words in judgment
View original judgmentRead on Kenya Law Watch case
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·~7 min to read original · ~4 min brief

The bottom line

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A Kenyan court threw out a bank's bid to stop an auction because it had no ownership documents to prove its claim.

What this practically means

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Executive summary

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Two Notices of Motion arose from execution proceedings in which the Decree-holder sought to recover a decretal sum of Kshs 1,649,010 plus auctioneers' fees of Kshs 220,000 against the Plaintiffs, jointly and severally. The first Motion, dated 2nd October 2019, sought leave to enjoin SBM Bank Ltd as an Interested Party, an order that the Auctioneers cease damaging attached equipment, and damages for alleged unlawful attachment. The court applied the Supreme Court's principles in Francis Karioki Muratetu on joinder of interested parties and held the application failed the threshold: the bank had neither made nor authorised the application, and the Plaintiffs could not articulate its interest or the prejudice of non-joinder. The claims regarding damage to attached equipment also failed for want of evidence. The second Motion, dated 22nd October 2019, was brought by SBM Bank Kenya Ltd as Objector, seeking a stay of sale and vacation of the proclamation dated 6th July 2019 on two grounds: that Igare Auctioneers lacked geographical jurisdiction over the Coastal region, and that the proclaimed assets were charged to the bank under a Specific Debenture whose rights outranked the Decree-holder's. The court found the licensing list relied on was dated 20th April 2016 and proved nothing about the auctioneers' jurisdiction on the date of proclamation. On the debenture, the bank produced no ownership documents, and logbooks showed the 2nd Judgment Debtor as sole registered owner of the motor vehicles and tractors. The court concluded the objection was a scheme by the judgment debtors to stall lawful execution and dismissed both motions with costs to the Decree-holder.

Key legal issues

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01

Joinder of an interested party at execution stage

Holding

The Plaintiffs' application to enjoin SBM Bank Ltd as interested party failed the Muratetu threshold; the intended party neither applied for nor authorised its joinder

Reasoning

Applying the Supreme Court's principles in Francis Karioki Muratetu, the court found the Plaintiffs could not articulate the bank's personal interest or the prejudice of non-joinder. The bank itself, through its Assistant Legal Manager, averred it was unaware of the suit and only learnt of the proclamation through the judgment debtors' advocates, showing it did not of its own desire to be joined.

p. 3
02

Auctioneer's alleged lack of geographical jurisdiction

Holding

The Objector's evidence, a licensing list as at 20th April 2016, did not prove the Auctioneers lacked jurisdiction when proclaiming on 6th July 2019

Reasoning

The document annexed showed licensed auctioneers and their areas of operation as at 20th April 2016 only. The court held there was no evidence that on the date of proclamation the auctioneers were without jurisdiction, and the Plaintiffs' replying affidavit averred the auctioneers had agents countrywide including the Coast.

p. 3
03

Priority of the Objector's debenture over the proclaimed assets

Holding

The Objector failed to prove its interest since no ownership documents or searches were annexed, and logbooks showed the 2nd Judgment Debtor as sole registered owner

Reasoning

Despite asserting a Specific Debenture dated 2nd May 2014 from the 2nd Defendant to Chase Bank (K) Ltd and a transfer of assets to SBM Bank via Gazette Notice No. 6833 of 6th July 2018, the Objector attached no ownership documents. The 2nd Judgment Debtor's logbooks showed registration in its name without any joint ownership with the bank. The court inferred the application was a scheme to stall execution.

p. 3
04

Alleged damage to attached equipment and claim for damages

Holding

The claim for damages for damage during attachment failed for want of evidence

Reasoning

The Plaintiffs alleged auctioneers were cutting up equipment thereby reducing market value, but placed no evidence before the court from which damage could be deduced. The court therefore declined both the cessation order and the damages claim, finding the entire first motion without merit.

p. 3

Legal principles established

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  • For joinder of an interested party, the applicant must set out the party's identifiable personal interest, the prejudice it would suffer on non-joinder, and the case/submissions the party intends to make, which must not merely replicate other parties' submissions
  • A party asserting a proprietary/security interest in attached movable assets must produce ownership documents from which the interest can be discerned
  • An assertion that an auctioneer lacked territorial jurisdiction must be supported by evidence covering the operative date of the act, not a historical licensing list

Court orders

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  1. 1.The First Notice of Motion dated 2nd October 2019 is dismissed
  2. 2.The Second Notice of Motion dated 22nd October 2019 by the Objector Bank is dismissed
  3. 3.Both applications dismissed with costs to the Decree-holder

Authorities

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Legislation

  • Civil Procedure RulesOrder 22 Rule 22
  • Kenya Gazette Notice No. 6833 of 6th July 2018 (transfer of Chase Bank (Kenya) Ltd assets to SBM Bank Kenya Ltd)N/A

Cases cited (1)

  • Francis Karioki Muratetu & Another -vs- Republic
    (2016) eKLR
Jurisdiction invoked
Inherent jurisdiction of the High Court over execution proceedings; applications brought under the Civil Procedure Rules (Order 22 Rule 22 invoked by the Decree-holder)

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, "Vital Plantation Lease Company Limited & another v Fresco Bushlands (K) Limited & another [2021] KEELC 4598 (KLR)", Case Analysis (2021). . Source: https://new.kenyalaw.org/akn/ke/judgment/keelc/2021/4598/eng@2021-01-29

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