Maurizio & 3 others v SBM Bank Limited & 2 others (Environment & Land Case 143 of 2018) [2022] KEELC 3767 (KLR)
The bottom line
#What this practically means
#Executive summary
#Key legal issues
#Whether the charge created over the suit property during pending litigation binds the chargee
The charge was invalid as against the plaintiffs because it was created pendente lite; the 1st defendant's interest cannot trump the plaintiffs' claim.
The court applied the doctrine of lis pendens as articulated in Bellamy v Sabine. Litigation over Portion No. 775 commenced in 2005, yet the 2nd defendant charged the property to the 1st defendant on December 31, 2010. The chargee could not blame the plaintiffs for its lack of foresight in taking as security a property whose ownership was the subject of active court proceedings.
Whether the September 20, 2019 orders should be set aside for non-disclosure of the charge and want of hearing
The court declined to set aside the orders, holding there was no basis to do so and that the charge being wrongful, there could be no basis to permit the auction or sale of the property.
The 1st defendant argued the ruling of September 20, 2019 was obtained without disclosure of the charge and violated its right to fair administrative action under Article 47. The court rejected this, reasoning that lis pendens rendered the charge ineffective and that the bank took security in a property under active litigation at its own risk.
Legal principles established
#- The doctrine of lis pendens precludes any party to a suit from transferring or dealing with the suit property during pending litigation in a manner affecting the rights of another party, except under the authority of the court.
- A purchaser of property in litigation pendente lite, even for value and without notice, is bound by the judgment in the suit.
Court orders
#- 1.The 1st defendant's notice of motion dated March 15, 2021 seeking to set aside the orders of September 20, 2019 is dismissed
- 2.The plaintiffs' notice of motion dated November 24, 2020 is allowed in terms of prayers 3, 4 and 5 thereof, namely: a permanent injunction restraining the defendants from advertising for sale, selling, alienating or dealing with Portion No. 775; cancellation of the intended public auction scheduled for November 27, 2020; and compulsion of the 1st respondent/defendant to surrender the original title of Portion No. 775 or CR No. 9775/25 to enable the plaintiffs to conduct sub-division and hive out the portion purchased
- 3.The plaintiffs are awarded the costs of the two applications
- Jurisdiction invoked
- Original civil jurisdiction of the Environment and Land Court over the suit property (Portion No. 775 Malindi)
Key timeline
#Practical implications
#Frequently asked questions
#Cite this brief
#Cite this brief
Caselaw, "Maurizio & 3 others v SBM Bank Limited & 2 others (Environment & Land Case 143 of 2018) [2022] KEELC 3767 (KLR)", Case Analysis (2022). Malindi ELC No. 143 of 2018 (formerly Malindi HCCC No. 124 of 2005). Source: https://new.kenyalaw.org/akn/ke/judgment/keelc/2022/3767/eng@2022-05-12
Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.