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ELCOtherAppeal filed by memorandum of appeal dated 12th June 2018 (filed 13th June 2018)· [2021] KEELC 4625 (KLR)

Speed Capital Limted v Joseph Ongondo Ngani & another [2021] KEELC 4625 (KLR)

Environment and Land Court
26 January 2021
727 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 transferred a loan interest dispute to the High Court, confirming that calculating money owed under a loan is a commercial, not land, matter.

What this practically means

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Executive summary

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This is a ruling (styled 'in lieu of Judgment') of the Environment and Land Court at Migori in an appeal brought by Speed Capital Ltd by a memorandum of appeal dated 12th June 2018, against decisions arising from a suit commenced by plaint dated 22nd July 2016. The underlying dispute concerned a loan of Kshs. 500,000 advanced by the appellant to the 1st respondent, secured by title deeds over five parcels of land (LR Kamagambo/Kamenya/623, 625, 627 and 663; LR Kamagambo/Kamwango/1289; and LR Kanyamkago/Kawere 1/1009). The trial magistrate had earlier characterized the dispute as a commercial matter in a ruling on a preliminary objection delivered on 31st October 2016, and in an injunction ruling of 26th April 2017 noted that the loan agreement did not specify the rate of interest. Judge G.M.A. Ongondo held that the dominant issue was the calculation of interest and sums owing - an accounting question which, following Co-operative Bank of Kenya Ltd v Patrick Kangethe Njuguna and Republic v Karisa Chengo, rests with the High Court under Article 165(3) of the Constitution and does not fall within the ELC's jurisdiction under Article 162(2)(b), section 13 of the ELC Act or section 150 of the Land Act. Invoking the Owners of the Motor Vessel 'Lilian S' principle and the overriding objective provisions, the court declined to allow the appeal and instead ordered its transfer to the High Court at Migori, with mention on 31st March 2021 for directions. No costs order was made.

Key legal issues

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01

Jurisdiction of the ELC over a dispute whose dominant issue is calculation of interest on a loan secured by a charge

Holding

The ELC lacks jurisdiction; the matter falls within the High Court's jurisdiction under Article 165(3)

Reasoning

The 1st respondent borrowed Kshs. 500,000 from the appellant secured by titles to five parcels of land. Two prior trial court rulings characterized the dispute as commercial and raised the question of the applicable rate of interest. The court held that the dominant issue is the calculation of interest and sums owing, an accounting question reserved for the High Court under Article 165(3), following the Co-operative Bank case and Karisa Chengo. The ELC's jurisdiction under Article 162(2)(b), section 13 of the ELC Act and section 150 of the Land Act does not extend to it.

p. 2
02

Disposal of an appeal filed before a court without jurisdiction

Holding

The appeal was transferred to the High Court at Migori rather than struck out, in furtherance of the overriding objective

Reasoning

Mindful of sections 1A, 1B, 3, 3A, 5, 16 and 18 of the Civil Procedure Act and section 3 of the Environment and Land Court Act, aligned to Article 159(2)(b), (d) and (c) of the Constitution, the court exercised its power to transfer the appeal to the competent court rather than dismiss it, and fixed a mention date for directions.

p. 2

Legal principles established

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  • The tabulation of sums owing under a banker/lender contractual relationship and determination of accounting questions fall within the jurisdiction of the High Court under Article 165(3) of the Constitution, not the ELC
  • Where a court lacks jurisdiction, it must down its tools

Court orders

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  1. 1.The appeal is transferred to the High Court of Kenya at Migori for hearing and determination
  2. 2.Mention before the Honourable Judge, Migori High Court on 31st March 2021 for directions

Authorities

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Legislation

  • Constitution of Kenya, 2010Article 165(3)
  • Constitution of Kenya, 2010Article 162(2)(b)
  • Constitution of Kenya, 2010Article 159(2)(b), (d) and (c)
  • Environment and Land Court Act, 2015 (2012)Section 13
  • Land Act, 2016 (2012)Section 150
  • Environment and Land Court Act, 2015 (2012)Section 3
  • Civil Procedure Act (Chapter 21, Laws of Kenya)Sections 1A, 1B, 3, 3A, 5, 16 and 18

Cases cited (3)

  • Co-operative Bank of Kenya Ltd =vs= Patrick Kangethe Njuguna & 5 Others
    (2017) eKLR
  • Republic =vs= Karisa Chengo and 2 others
    (2017) eKLR
  • Owners of the Motor Vessel M.V Lilian “S” =vs= Caltex Oil (K) Ltd
    (1989) 1 KLR 1
On appeal from
Magistrates' Court (trial court, Migori)
Suit filed by plaint dated 22nd July 2016
Jurisdiction invoked
Article 162(2)(b) and Article 165(3) of the Constitution of Kenya, 2010; sections 13 of the Environment and Land Court Act and 150 of the Land Act (jurisdiction issue)

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, "Speed Capital Limted v Joseph Ongondo Ngani & another [2021] KEELC 4625 (KLR)", Case Analysis (2021). Appeal filed by memorandum of appeal dated 12th June 2018 (filed 13th June 2018). Source: https://new.kenyalaw.org/akn/ke/judgment/keelc/2021/4625/eng@2021-01-26

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