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ELCPartially AllowedNot stated in judgment· [2022] KEELC 1956 (KLR)

Joseph Kaimenyi Marete v Pitchcare Marketing Division & 2 others [2022] KEELC 1956 (KLR)

Environment and Land Court
26 January 2022
2,561 words in judgment
View original judgmentRead on Kenya Law Watch case
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The bottom line

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A Kenyan guarantor stopped his land from being auctioned because the bank sent statutory notices to the wrong address.

What this practically means

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Executive summary

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This ruling of the Environment and Land Court at Meru (Nzili J) determined three interlocutory matters in a suit in which the plaintiff, a guarantor, sought a temporary injunction restraining the defendants from selling his land over a Kshs. 6.5 million loan advanced to the 1st defendant. First, the court dismissed the 2nd defendant's preliminary objection challenging jurisdiction as a commercial dispute, holding that Article 162(b) of the Constitution and Section 13(2) of the ELC Act, together with the Land Act and Land Registration Act, confer jurisdiction over charges, guarantees and exercise of the statutory power of sale. Secondly, the court dismissed the 2nd defendant's application for review of the interim orders of 19.7.2021, finding no prejudice since the 2nd defendant had entered appearance, did not dispute service, and the injunction application remained pending with only one prayer allowed. Thirdly, on the injunction, the court applied the prima facie case, irreparable harm and balance of convenience test. Although the plaintiff admitted executing the charge, letter of guarantee and letter of offer, the court found the statutory notices under Sections 90 and 96 of the Land Act had been posted to the principal debtor's postal address rather than the guarantor's address held by the bank, with no certificate of posting for the 45 days' redemption notice. Relying on Obel Omuom, the burden shifted to the chargee to prove due service, which it failed to discharge. The court found a prima facie case with probability of success, granted the injunction, and ordered the plaintiff to comply with Order 11 within 45 days and set the suit down for hearing within six months, failing which the orders would stand vacated.

Key legal issues

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01

Jurisdiction of the ELC over a charge/guarantee dispute characterized as commercial

Holding

The ELC has jurisdiction; the dispute falls under Sections 78-106 of the Land Act and Sections 56-59 and 101 of the Land Registration Act.

Reasoning

Article 162(b) and Section 13(2) of the ELC Act confer jurisdiction over contracts and instruments granting enforceable interests in land. The dispute implicates statutory notices, charges, and equity of redemption under the Land Act. The authority relied on by the 2nd defendant (Cooperative Bank v Kangethe Njuguna) dealt purely with taking of accounts, per Munyao J in Margaret Muthoni Njoroge v Housing Finance.

p. 2
02

Review of orders of 19.7.2021

Holding

Review refused; no prejudice since only prayer 2 was allowed and the application remained pending.

Reasoning

The 2nd defendant had entered appearance (memorandum dated 23.4.2021, filed 15.7.2021) and did not dispute service, yet offered no explanation for absence on 19.7.2021. Only prayer 2 of the injunction application had been allowed; the rest remained for determination, so the alleged new evidence caused no prejudice.

p. 2
03

Temporary injunction against exercise of statutory power of sale

Holding

Injunction granted; service of statutory notices to the wrong postal address raised a bona fide issue on the regularity of the exercise of the power of sale.

Reasoning

Applying the Giella principles, the applicant established a prima facie case. Though he executed the charge and guarantee, the statutory notices were posted to the principal debtor's address rather than the guarantor's address held by the bank, with no explanation. The chargee bore the burden of proving due notification, which it failed to discharge.

p. 4

Legal principles established

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  • Where a chargor alleges non-receipt of a statutory notice, the burden shifts to the chargee to demonstrate that the statutory notice was served upon the chargor.
  • The ELC has jurisdiction over disputes concerning charges, guarantees over land and exercise of statutory power of sale under the Land Act and Land Registration Act.

Court orders

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  1. 1.Preliminary objection dismissed with costs
  2. 2.Application dated 27.9.2021 (review) dismissed with no orders as to costs
  3. 3.Temporary injunction orders sought in the application dated 16.4.2021 granted
  4. 4.Plaintiff to comply with Order 11 within 45 days and set the main suit down for hearing within six months, failing which the orders shall stand vacated

Authorities

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Legislation

  • Constitution of Kenya 2010Article 162(b)
  • Environment and Land Court Act 2011Section 13(2)
  • Land Registration ActSections 2, 56-59, 101
  • Land ActSections 2, 78-106, 89, 90, 91, 96, 97, 98, 103, 104, 105
  • Auctioneer Rules 1997Rule 15
  • Civil Procedure RulesOrder 45 rule 1, Order 11

Cases cited (11)

  • Cooperative Bank of Kenya Ltd –vs- Patrick Kangethe Njuguna & 5 Others
    [2017] eKLR
  • Margaret Muthoni Njoroge –vs- Housing Finance Company Limited & Another
    [2020] eKLR
  • Zadrack Oyaro Ochoki & Another –vs- Consolidated Bank of Kenya Ltd.
    [2013] eKLR
  • Bii –vs- Kenya Commercial Bank Ltd
    [2001] eKLR
  • Mrao Ltd –vs- First American Bank of Kenya Ltd
    [2003] eKLR
  • Shah –vs- Shah
    [1996] C.A 91
  • Emrre Global Investors Ltd –vs- Housing Finance Company Of Kenya Ltd & 2 Others
    [2014] EKLR
  • Francis Wisitsa Gyideya –vs- Kenya Commercial Bank Ltd
    [2014] eKLR
  • Obel Omuom –vs- Kenya Commercial Bank Ltd
    [1996] eKLR
  • Moses Kibiego Yato –vs- Eco Bank Kenya Ltd
    [2014] eKLR
  • Robert Kipyegon Chepkony –vs- Barclays Bank of Kenya Ltd. & Another
    [2019] eKLR
Jurisdiction invoked
Article 162(b) of the Constitution as read with Section 13(2) of the Environment and Land Court Act 2011

Key timeline

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Practical implications

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Frequently asked questions

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Later judgments citing this (1)

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Judgments in the corpus that rely on this one. Where the Court said how it treated the authority, that is shown.

Cite this brief

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Cite this brief

Caselaw, "Joseph Kaimenyi Marete v Pitchcare Marketing Division & 2 others [2022] KEELC 1956 (KLR)", Case Analysis (2022). Not stated in judgment. Source: https://new.kenyalaw.org/akn/ke/judgment/keelc/2022/1956/eng@2022-01-26

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