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ELCDismissedNot stated in the excerpt· [2022] KEELC 497 (KLR)

Gilbert Kiptoo Cheruiyot t/a Gilchery Ltd v Family Bank Ltd & another [2022] KEELC 497 (KLR)

Environment and Land Court
24 March 2022
MMM. N. Mwanyale
3,283 words in judgment
View original judgmentRead on Kenya Law Watch case
AI-assisted case brief
·~13 min to read original · ~4 min brief

The bottom line

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A Kapsabet court allowed a bank to proceed toward auctioning charged land because the borrower failed to prove its statutory notices were defective.

What this practically means

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Executive summary

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The Plaintiff/Applicant, Gilbert Kiptoo Cheruiyot, moved the Court by Notice of Motion dated 26th November 2021 seeking a temporary injunction restraining the 1st and 2nd Defendants from advertising for sale by public auction, selling or interfering with land parcels NANDI/KOYO/563, 566 and 567, and declarations that the 45-day redemption notice and notification of sale were nullities for non-compliance with Sections 90(2) and 96(2) of the Land Act. The applicant deponed that Gilchery Limited obtained a Kshs 15,000,000 loan secured by the suit properties, that the business suffered Covid-19 setbacks, and that the bank failed to respond to restructuring requests. The 1st Defendant countered that the loan was restructured, defaulted again, and that the 90-day statutory notice, 40-day notice of intention to sell and redemption notice were all duly served by registered post. The sole issue was whether the applicant met the Giella -vs- Cassman Brown threshold for an interlocutory injunction. Applying Nguruman, the court examined sequentially whether a prima facie case existed. It found the loan, default and restructuring undisputed; held that service by registered post complied with clause 15 of the letter of offer (the email clause merely providing proof of service); found the statutory notices of 10th March 2021 and 10th July 2021 substantially complied with Section 90(2) of the Land Act; and held the 45-day redemption notice complied with Rule 15(d) of the Auctioneers Act. No prima facie case having been established, the other Giella conditions fell away. The application was dismissed with costs and the interim orders of 16th December 2021 were discharged.

Key legal issues

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01

Prima facie case for injunction

Holding

Not established - the statutory notices under Sections 90 and 96(2) of the Land Act were issued and served, and the redemption notice complied with Rule 15(d) of the Auctioneers Act

Reasoning

The court found the loan and default undisputed, held the bank restructured the loan as proved by annexure FBL-5, and found the statutory notices dated 10th March 2021 and 10th July 2021 contained all matters required by Section 90(2) of the Land Act. Service by registered post complied with clause 15 of the letter of offer, and the 45-day redemption notice contained the amount needed to stop the sale.

p. 4
02

Mode of service of statutory notices

Holding

Service by registered post was valid despite the email notice clause

Reasoning

Clause 13 of the letter of offer merely provided an email address sufficient to prove service; it did not exclude other modes. Clause 15 expressly permitted service by hand, email, fax or post, with service by post deemed effected five business days after posting. The notices were posted to the borrower's undisputed postal address.

p. 4

Legal principles established

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  • The Giella -vs- Cassman Brown conditions for temporary injunction are applied sequentially; failure at the first step ends the inquiry
  • Service by registered post to the borrower's address on the letter of offer and charge constitutes valid service; an email clause providing an address for proof of service does not limit the modes of service

Court orders

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  1. 1.The Plaintiff's Notice of Motion dated 26th November 2021 is dismissed with costs
  2. 2.The interim orders issued on 16th December 2021 are discharged

Authorities

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Legislation

  • Land ActSections 90(1), 90(2), 96(2)
  • Land Registration ActSection 56(2)
  • Auctioneers ActRule 15(d)

Cases cited (9)

  • Giella -vs- Cassman Brown and Company Limited
    (1973) EA 358
  • Nguruman Limited –vs- Jan Bonde Nielsen and 2 others
    (2014) eKLR
  • Khan and Another -vs- Habi Bank A.G. Zurich and Another
    (2022) eKLR
  • Mrao Ltd. –vs- First Americal Bank of Kenya Limited and 2 others
    (2003) eKLR
  • Gieni Plains Company Limited and 2 others –vs- Eco Bank Kenya Limited
    (2017) eKLR
  • Salim Lemuta Konyokie and Another vs Erick Konchella and 2 others
    (2006) eKLR
  • Kenya Commercial Finance Company Ltd -vs- Afraha Education Society
    (2001) Vol. 1 E.A. 86
  • Joseph Otura Allaii –vs- China Overseas Engineering Group
    (2013) eKLR
  • Stephen Sonto Sipala –vs- Co-operative Bank of Kenya Ltd and Another
    (2018) eKLR
Jurisdiction invoked
Original jurisdiction under the Environment and Land Court Act over land charges and statutory power of sale (specific provision not stated)

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, "Gilbert Kiptoo Cheruiyot t/a Gilchery Ltd v Family Bank Ltd & another [2022] KEELC 497 (KLR)", Case Analysis (2022). Not stated in the excerpt. Source: https://new.kenyalaw.org/akn/ke/judgment/keelc/2022/497/eng@2022-03-24

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