Gulf African Bank Limited & another v Sawa Allied Investments Limited
The bottom line
#A Kenyan court allowed a bank to proceed with selling charged land after proving the borrower defaulted and received all required statutory notices.
What this practically means
#Executive summary
#Key legal issues
#Whether the respondent established a prima facie case justifying a temporary injunction
No prima facie case was established; default was undisputed and the statutory notices under Sections 90 and 96 of the Land Act were duly served by email and registered mail to the address in the charge instrument.
The court re-evaluated the evidence as a first appellate court. Default commenced before Covid-19 and was undisputed. The chargee proved despatch of the 90-day statutory notice, 40-day redemption notice and 45-day notification of sale by email and registered post to the address in the charge instrument. With default and due notice shown, the respondent had no apparent right infringed and the trial magistrate misapprehended the facts in finding a prima facie case.
Whether the trial magistrate properly exercised his discretion in granting the injunction on Covid-19 grounds
The discretion was improperly exercised; the injunction was granted on considerations (Covid-19 hardship) not supported by the evidence, since default predated the pandemic.
The trial court granted the injunction 'in the interest of justice' having regard to Covid-19 challenges in 2020. The appellate court found the default commenced in October 2019 through February 2020, before containment measures began in March 2020, and that no evidence linked the default to the pandemic. Reliance on an unpleaded, unproven factual basis was a misdirection warranting interference.
Legal principles established
#- A temporary injunction requires satisfaction of all three Giella conditions; failure of one disentitles the applicant
- Where a chargor alleges non-service of statutory notices, the burden shifts to the chargee to demonstrate prima facie that the notices were served
- Once default and due service of statutory notices are shown, there is no basis to restrain the chargee's statutory power of sale
Court orders
#- 1.Appeal allowed
- 2.Ruling delivered by Hon Orenge K I Principal Magistrate on March 4, 2021 set aside
- 3.Substituted therefor an order dismissing the respondent's notice of motion dated September 3, 2020
- 4.Costs of the notice of motion awarded to the appellants
- 5.Costs of the appeal awarded to the appellants
- On appeal from
- Chief Magistrate's Court at Nakuru
- CM ELC suit No. 155 of 2020
- Jurisdiction invoked
- First appeal from the Chief Magistrate's Court under the Environment and Land Court's appellate jurisdiction
Key timeline
#Practical implications
#Frequently asked questions
#Cite this brief
#Cite this brief
Caselaw, "Gulf African Bank Limited & another v Sawa Allied Investments Limited", Case Analysis (2022). Environment and Land Appeal E11 of 2021. Source: https://new.kenyalaw.org/akn/ke/judgment/keelc/2022/12573/eng@2022-09-27
Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.