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ELCStruck OutCivil Suit No E386 of 2022· [2023] KEELC 412 (KLR)

Gakaria v National Housing Corporation & 2 others (Civil Suit E386 of 2022) [2023] KEELC 412 (KLR)

Environment and Land Court
2 February 2023
6,462 words in judgment
View original judgmentRead on Kenya Law Watch case
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·~26 min to read original · ~4 min brief

The bottom line

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What this practically means

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Executive summary

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The Plaintiff, registered proprietor of L.R. No. Muguga/Muguga/1620 charged to the 1st Defendant, filed a suit and Notice of Motion dated 16th November 2022 seeking declarations that the Notification of Sale and 45 days' Auctioneer's Notice were nullities for want of the statutory notices required by Sections 90(2) and 96(2) of the Land Act, 2012, together with a temporary injunction restraining the advertised public auction of the suit property. Only the 1st Defendant entered appearance; although counsel represented that a Replying Affidavit had been filed, none was available on the court record, leaving the application uncontroverted. The Applicant alone filed written submissions, arguing jurisdiction and reliance on the Mrao and Nguruman thresholds. The court mero motu raised jurisdiction, noting Cooperative Bank v Patrick Kang'ethe Njuguna and Diamond Trust Bank v Fatma Hassan Hadi, in which the Court of Appeal held that disputes challenging a chargee's exercise of statutory power of sale concern charges and accounts rather than 'use' of land under Article 162(2)(b), and therefore fall within the High Court's civil jurisdiction. Despite expressing personal reservations grounded in Section 150 of the Land Act and acknowledging contrary ELC authority, the judge held himself bound by the doctrine of stare decisis. He found that the court lacked jurisdiction; a prima facie case could not arise before a forum devoid of jurisdiction (applying Macfoy v United Africa Co Ltd), and irreparable loss was not made out since the property had monetary value. The suit and application were struck out with no order as to costs.

Key legal issues

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01

Jurisdiction of the ELC over challenges to a chargee's statutory power of sale

Holding

The ELC lacks jurisdiction; such disputes are commercial matters for the High Court, per Cooperative Bank v Patrick Kang'ethe Njuguna and Diamond Trust Bank Kenya Ltd v Fatma Hassan Hadi

Reasoning

Following binding Court of Appeal authority, a charge is a disposition creating an interest in land for security, not a 'use' of land under Article 162. Contracts cognizable by the ELC must be incidental to land use and exclude mortgages, charges and collection of dues, which fall within the High Court's civil jurisdiction. Although the judge expressed personal reservations grounded in Section 150 of the Land Act, the doctrine of stare decisis compelled him to follow the Court of Appeal decisions.

p. 12
02

Whether the applicant established a prima facie case for injunction

Holding

No - a prima facie case cannot be established before a forum without jurisdiction

Reasoning

Although the uncontroverted complaint of want of statutory notices under Sections 90 and 96 of the Land Act would ordinarily invalidate the exercise of the statutory power of sale, the applicant was agitating that complaint in a forum divested of jurisdiction. Applying Macfoy v United Africa Co Ltd, putting such a case before a court without jurisdiction is putting something on nothing; it collapses. The irreparable loss and balance of convenience limbs accordingly fell away.

p. 11

Legal principles established

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  • Jurisdiction is everything; proceedings by a court without jurisdiction are a nullity
  • Challenges to the propriety, validity and legality of a chargee's exercise of statutory power of sale fall outside the jurisdiction of the Environment and Land Court and belong to the High Court
  • Failure to issue and serve statutory notices under Sections 90 and 96 of the Land Act would invalidate exercise of the statutory power of sale
  • Lower courts are bound by unreviewed decisions of superior courts under the doctrine of stare decisis

Court orders

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  1. 1.The Plaintiff's suit together with the Notice of Motion application dated 16th November 2022 be and are hereby struck out
  2. 2.No orders as to costs

Authorities

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Legislation

  • Land ActSection 90(2)(b)
  • Land ActSection 96(2)
  • Land ActSection 2
  • Land ActSection 80
  • Land Act, 2012 (2016)Section 150
  • Land Act, 2012 (2016)Sections 88, 90 and 96
  • Environment and Land Court ActSection 13(2)(d)
  • Constitution of KenyaArticle 162(2)(b)

Cases cited (12)

  • Cooperative Bank Limited v Patrick Kang'ethe Njuguna & 5 Others
    (2017) eKLR
  • Peter Kiama Maina v Industrial Commercial Development Corporation & Another
    Thika ELC No. 11 of 2020 (2020/2021) eKLR
  • Lydia Nyambura Mbugua v Diamond Trust Bank (K) Ltd & Another
    (2018) eKLR
  • Mrao Ltd v First American Bank of Kenya & 2 Others
    (2003) eKLR
  • Nguruman Ltd v Jan Bonde Nielsen & 2 Others
    (2014) eKLR
  • Pius Kipchirchir Kogo v Frank Kimeli Tenani
    (2018) eKLR
  • Phoenix of E.A. Assurance Company Limited v Simeon Muruchi Thiga t/a Newspaper Service
    [2019] eKLR
  • Owners of the Motor Vessel "Lillian S" v Caltex Oil (Kenya) Ltd
    [1989]
  • Diamond Trust Bank Kenya Limited v Fatma Hassan Hadi
    (Civil Appeal 18 of 2020) [2022] KECA 769 (KLR)
  • P.J. Dave Flowers Limited v Limuru Hills Limited
    Malindi Civil Appeal No. 123 of 2019
  • Dodhia v National Grindlays Bank Ltd
    (1970) EA 195
  • Macfoy v United Africa Co. Ltd
    [1961] 3 All E.R. 1169
Jurisdiction invoked
Article 162(2)(b) of the Constitution; Environment and Land Court Act; Land Act, 2012 (Section 150)

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, "Gakaria v National Housing Corporation & 2 others (Civil Suit E386 of 2022) [2023] KEELC 412 (KLR)", Case Analysis (2023). Civil Suit No E386 of 2022. Source: https://new.kenyalaw.org/akn/ke/judgment/keelc/2023/412/eng@2023-02-02

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