Ibrahim Wanene Kiingati Nuthu v Jampur Agencies Limited, James Muchemi Kihara, Purity Wakiuru Waithaka, Grofin Sgb Kenya Limited, Antique Auctioneers Agencies & James Gathara Mwarangu [2022] KEELC 1643 (KLR)
The bottom line
#A Kenyan borrower who charged his land as loan security lost his bid to block its sale because he admitted default and never redeemed the property.
What this practically means
#Executive summary
#Key legal issues
#Whether the Plaintiff established a prima facie case with a probability of success
No prima facie case was established. The Plaintiff admitted offering the suit property as security and admitted default, thereby acknowledging the 4th Defendant's right to realize the securities; he also did not dispute service of redemption and sale notices, and did not demonstrate that he sought to join the Milimani suit or challenge the mediation agreement.
The court applied the Giella and Mrao tests. Having admitted the charge and the default, the Plaintiff could not evade the consequences of the charge without redeeming it. His complaint about a fraudulent mediation agreement failed because he neither sought joinder in the underlying commercial suit nor otherwise challenged the mediation agreement. The court therefore held the Giella threshold of a prima facie case with probability of success unsatisfied and did not proceed further in his favour.
Whether the Plaintiff would suffer irreparable injury not compensable in damages
No. By charging the property the Plaintiff converted it into a commercial commodity of ascertainable monetary value whose loss can be made good by damages, and the 4th Defendant is a stable lending institution capable of compensating him.
Relying on Nahashon K. Mbatia vs. Finance Company Limited, the court held that a charged property has an ascertainable value and its loss is compensable in money. Further, until redemption the property remained the chargee's, so the Plaintiff could not plead irreparable injury over property he had not redeemed. The irreparable-injury limb of Giella accordingly failed.
Where the balance of convenience lies
The balance of convenience tilts in favour of denying the injunction, since the Plaintiff had neither redeemed the property nor proposed redemption, and the 6th Defendant had already transferred the property to a third party.
The court weighed the Plaintiff's claimed greater injury against the equities: he willingly offered the property as security but had no intention of redeeming it, and the 6th Defendant had already parted with ownership to a third party. Granting an injunction over unredeemed security would offend equitable principles, so the third Giella limb also favoured refusal of the interlocutory relief.
Legal principles established
#- A chargor who has admitted offering the property as security and who admits default cannot plead irreparable injury in respect of a property he has not redeemed; the charged property remains the chargee's until redemption
- It is against the principles of equity to grant an injunction over property a chargor willingly offered as security but has no intention of redeeming
Court orders
#- 1.The Plaintiff's Notice of Motion application dated 3rd February 2021 is dismissed
- 2.Costs of the application awarded to the Defendants
- Jurisdiction invoked
- Order 22 Rule 69(1), Order 40 Rule 1(a), Order 51 Rule 10 of the Civil Procedure Rules and Sections 1A, 1B and 3A of the Civil Procedure Act
Key timeline
#Practical implications
#Frequently asked questions
#Cite this brief
#Cite this brief
Caselaw, "Ibrahim Wanene Kiingati Nuthu v Jampur Agencies Limited, James Muchemi Kihara, Purity Wakiuru Waithaka, Grofin Sgb Kenya Limited, Antique Auctioneers Agencies & James Gathara Mwarangu [2022] KEELC 1643 (KLR)", Case Analysis (2022). Not stated in judgment (Notice of Motion dated 3rd February 2021). Source: https://new.kenyalaw.org/akn/ke/judgment/keelc/2022/1643/eng@2022-02-09
Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.