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ELCDismissedEnvironment & Land Case 397 of 2017· [2023] KEELC 21369 (KLR)

Sidian Bank Ltd v Olitunya & 4 others

Environment and Land Court
9 November 2023
1,781 words in judgment
View original judgmentRead on Kenya Law Watch case
AI-assisted case brief
·~7 min to read original · ~4 min brief

The bottom line

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Kenya's Environment and Land Court confirmed it can hear a bank's case where a loan dispute is tied to land used as collateral, rejecting attempts to move it.

What this practically means

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Executive summary

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This ruling of the Environment and Land Court at Kajiado (L.C. Komingoi, J) determines a preliminary objection raised orally, and canvassed by written submissions, by the 2nd, 3rd and 4th Defendants challenging the court's jurisdiction to continue hearing the suit. They argued that after the plaintiff discontinued the suit against the 1st and 5th Defendants by consent, the only surviving issue was recovery of debt and enforcement of personal guarantees, a matter within the High Court's unlimited original jurisdiction under Article 165(3) of the Constitution, and asked that the suit be struck out since a court without jurisdiction cannot transfer it. The plaintiff countered that the suit originated from a charge over Title Number Kajiado/Kaputiei North/24052 given as security for financial advances, that issues relating to charges are proprietary and fall within ELC jurisdiction, and that in any event the suit had proceeded substantially with two witnesses heard, so it should be transferred rather than struck out. The court applied the Mukisa Biscuits and Aviation & Allied Workers Union principles that a preliminary objection must rest on a pure question of law, perused the Further Amended Plaint, and found the dispute originates from the suit property used as collateral for the loan. It held that the withdrawal of the 1st and 5th Defendants did not affect the underlying cause of action, affirmed its jurisdiction, and dismissed the preliminary objection with costs to the plaintiff.

Key legal issues

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01

Whether the ELC retains jurisdiction over the suit after withdrawal of the 1st and 5th Defendants, leaving what the objectors said was a pure debt-recovery claim.

Holding

The objection was not merited; the suit remains rooted in the charge over land, within ELC jurisdiction.

Reasoning

The court perused the Further Amended Plaint and found the pleaded facts show the dispute originates from Title Number Kajiado/Kaputiei North/24052, charged as collateral for a loan. The charge and its enforcement are proprietary issues. Withdrawal of the 1st and 5th Defendants did not alter the underlying cause of action, so the court affirmed its jurisdiction to proceed to a final verdict.

p. 4
02

Whether the preliminary objection was properly raised as a pure question of law.

Holding

The court applied the Mukisa Biscuits and Aviation & Allied tests, determining the objection on the face of the pleadings without delving into disputed facts.

Reasoning

Relying on Mukisa Biscuits and the Supreme Court's decision in Aviation & Allied Workers Union, the court reiterated that a preliminary objection must rest on a legal issue with no proper contest as to facts. It then examined the pleadings to discern whether jurisdiction could be resolved on their face, without entering the substantive merits.

p. 3

Legal principles established

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  • A preliminary objection may only be raised on a pure question of law, not on disputed facts.
  • Withdrawal of suit against some defendants does not extinguish the underlying cause of action relating to land over which the ELC has jurisdiction.

Court orders

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  1. 1.The preliminary objection is dismissed with costs to the Plaintiff.

Authorities

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Legislation

  • Constitution of Kenya, 2010Article 162(2)
  • Constitution of Kenya, 2010Article 165(3)
  • Environment and Land Court ActSection 13
  • Land ActSection 150

Cases cited (16)

  • Owners of the Motor Vessel “Lillian S” v Caltex Oil (Kenya) Ltd
    [1989] eKLR

    Jurisdiction must be founded on law, not on facts or assumption.

  • Samuel Kamau Macharia & another v Kenya Commercial Bank Limited & 2 others
    [2012] eKLR

    A court's jurisdiction flows from the Constitution or statute.

  • Patrick Ndegwa Munyua v Benjamin Kiiru Mwangi & another
    [2020] eKLR

    Jurisdiction of the ELC.

  • Kisimani Holdings Limited & Another v Fidelity Bank Limited
    [2013] eKLR

    Debt recovery falls within the High Court's jurisdiction.

  • Co-operative Bank of Kenya Limited v Patrick Kangethe Njuguna & 5 others
    [2017] eKLR

    Recovery of debt and enforcement of guarantees is within the High Court's jurisdiction.

  • Thomas Mutuku Kasue v Housing Finance Company Ltd (HFC) & another
    [2021] eKLR

    Debt recovery is for the High Court; a court without jurisdiction cannot transfer a suit.

  • Stella Kavutha Muthoka & another v Kenya Women Microfinance Bank Ltd
    [2021] eKLR

    Court lacking jurisdiction cannot transfer a suit.

  • Tata Chemicals Magadi Limited v County Governor, Kajiado County & another; National Environmental Management Authority & another (Interested Parties)
    (2020) eKLR

    Court without jurisdiction cannot transfer a suit.

  • Phoenix of East Africa Assurance Co. Ltd v S M Thiga T/A Newspaper Service
    (2019) eKLR

    Striking out where court lacks jurisdiction.

  • Lydia Nyambura Mbugua vs Diamond Trust Bank Kenya Ltd & Another
    [2018]

    Issues relating to charges are proprietary and fall within ELC jurisdiction.

  • Mathew Namusei Chahasi vs Cooperative Bank Ltd & Another
    [2021] eKLR

    Rights and obligations under charges are proprietary issues within ELC jurisdiction.

  • Albert Chaurembo Mumba & 7 others vs Maurice Munyao & 148 others
    [2019] eKLR

    A suit cannot be transferred unless first brought to a court with jurisdiction (Kagenyi v Musiramo).

  • Kagenyi v Musiramo & Another
    (1968) EALR 43

    Transfer of suit cannot cure want of original jurisdiction.

  • John Mwangi Karanja cs Alfred Ndiangui
    [2011] eKLR

    Suit should be transferred, not struck out, in the interests of justice.

  • Mukisa Biscuits Manufacturing Co. Ltd vs West End Distributors Ltd
    (1969) EA 696

    Definition and nature of a preliminary objection - pure question of law.

  • Aviation & Allied Workers Union Kenya v Kenya Airways Limited & 3 others
    [2015] eKLR

    A preliminary objection may only be raised on a pure question of law.

Jurisdiction invoked
Article 162(2) of the Constitution and Section 13 of the Environment and Land Court Act

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, "Sidian Bank Ltd v Olitunya & 4 others", Case Analysis (2023). Environment & Land Case 397 of 2017. Source: https://new.kenyalaw.org/akn/ke/judgment/keelc/2023/21369/eng@2023-11-09

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