Adil Waris v Monarch Developers Limited & 2 others [2022] KEELC 448 (KLR)
The bottom line
#A property buyer who ignored an existing bank charge failed to stop the auction because his claim for money damages was not urgent enough for an injunction.
What this practically means
#Executive summary
#Key legal issues
#Prima facie case
The Plaintiff failed to establish a prima facie case against the 2nd and 3rd Defendants: the property was validly charged to the 2nd Defendant whose consent to any dealing was mandatory, and privity of contract bars the Plaintiff's claim against the chargee.
The court applied the Mrao definition of a prima facie case. It found the charge in favour of the 2nd Defendant conferred rights superseding those of the 1st Defendant, so the 1st Defendant could not transact without the chargee's consent as required by Section 88 of the Land Act. The doctrine of privity, per Savings & Loans v Gakombe, barred the Plaintiff from enforcing the charge instrument against the 2nd Defendant; no cause of action lay against the 3rd Defendant advocate who never acted for the Plaintiff.
Irreparable loss
Any loss to the Plaintiff is measurable in monetary terms and therefore not irreparable.
Adopting Nguruman, the court held that irreparable injury must be actual, substantial and not compensable in damages. The Plaintiff's loss would be recovery of the purchase price, special damages and damages for breach of contract - all quantifiable. Following Kenya Commercial Finance Co. Ltd v Afraha Education Society, where damages are adequate, no interlocutory injunction should issue however strong the claim appears.
Balance of convenience
The balance of convenience tilts in favour of the 2nd Defendant chargee.
The loan arrears continued to accrue interest and penalties and might outstrip the property's value; the arrears were not being serviced; and the 2nd Defendant remained exposed to non-recovery. The Plaintiff had transacted without due diligence, which would have revealed the charge. The court held the chargee's ripened statutory rights prevailed.
Legal principles established
#- A chargor cannot transact over charged land without the chargee's consent, and a third party without privity cannot enforce rights under the charge instrument against the chargee.
- Where damages are an adequate remedy, a temporary injunction cannot issue.
Court orders
#- 1.The Notice of Motion Application dated the 14th December 2021 by the Plaintiff/Applicant is dismissed.
- 2.Costs awarded to and/or in favor of the 2nd and 3rd Defendants/Respondents only.
- 3.The Notice of Motion Application dated the 14th December 2021 is dismissed with costs, in the same terms as in ELC No. E432 of 2021.
- Jurisdiction invoked
- Inherent jurisdiction of the Environment and Land Court to grant interim injunctive relief (notice of motion under the court's procedure); Article 40 of the Constitution, 2010 invoked by the Plaintiff
Key timeline
#Practical implications
#Frequently asked questions
#Cite this brief
#Cite this brief
Caselaw, "Adil Waris v Monarch Developers Limited & 2 others [2022] KEELC 448 (KLR)", Case Analysis (2022). Not stated in the excerpt (ruling applies in same terms as ELC No. E432 of 2021). Source: https://new.kenyalaw.org/akn/ke/judgment/keelc/2022/448/eng@2022-02-24
Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.