Mombasa Water Products Limited v Kenya Commercial Bank Limited (Environment & Land Case E007 of 2023) [2024] KEELC 4275 (KLR)
The bottom line
#The Environment and Land Court stopped KCB from auctioning Mombasa Water Products' land, ruling the bank skipped required notice, valuation and advertising steps before selling.
What this practically means
#Executive summary
#Key legal issues
#Whether the Environment and Land Court at Mombasa has jurisdiction over a dispute arising from a banker-customer charge over land
The Court has jurisdiction because the reliefs sought concern the chargee's statutory power of sale over titled land, falling squarely within Article 162(2)(b) and Section 13 of the ELC Act.
The Court traced its jurisdiction to Article 162(2)(b) of the Constitution and Sections 3 and 13 of the Environment and Land Court Act, 2011, which confer power to determine disputes relating to land, titles and instruments granting enforceable interests in land. Relying on Motor Vessel Lillian 'S' and Samuel Kamau Macharia, it held that jurisdiction flows from the Constitution and statute. It found the reliefs sought (concerning sale of the charged suit property) fell within the ELC's ambit, and the objection was 'lame, baseless and unfounded'.
Whether the Plaintiff's suit was res judicata to HCCC No. 40 of 2015 and the two struck-out magistrate's court suits
The suit was not res judicata because none of the former suits involved a final adjudication on the merits by a competent court.
Applying Section 7 of the Civil Procedure Act and the Maina Kiai elements, the Court found the magistrate suits were struck out purely for want of pecuniary jurisdiction (hence not heard and finally determined on merits by a competent court) and the High Court suit was compromised by consent without adjudication. Further, the present suit raised a new issue - the alleged violation of Articles 10 and 46 arising from the hasty advertisement of sale after the 4th August, 2023 compensation letter - which was never litigated before.
Whether the Plaintiff was entitled to a temporary injunction restraining the sale of the suit property
Yes. The Plaintiff established a prima facie case with probability of success given the apparent non-compliance with statutory notice and valuation requirements, and the application succeeded.
Applying Giella v Cassman Brown and Mrao Ltd, the Court found the Plaintiff was the registered owner of the suit property, and that the 2023 advertisement of sale appeared to breach the 2018 consent order (requiring advertising for at least 15 days at the reserve price), the 45 days' notice under Rule 15(d) of the Auctioneers Rules (notice wrongly addressed), and Section 97(2) and (3) of the Land Act read with Rule 11(b)(x) (no current valuation). On these facts the Plaintiff established a prima facie case and the application was allowed.
Costs of the two applications
Costs follow the event; the successful Plaintiff is entitled to costs of both applications, to be in the cause.
Relying on Section 27(1) of the Civil Procedure Rules on costs following the event, the Court held that since the Plaintiff succeeded in establishing its case in both applications, it was entitled to costs thereof, but ordered them to be in the cause rather than payable immediately.
Legal principles established
#- The Environment and Land Court has jurisdiction over disputes involving charges over land and threatened statutory power of sale where the reliefs sought touch on title and interests in land, notwithstanding the commercial banker-customer origin of the dispute.
- Res judicata requires a former suit that was heard and finally determined by a competent court between the same parties; a suit struck out for want of jurisdiction or compromised by consent without adjudication does not found the doctrine.
Court orders
#- 1.That pursuant to Article 162(2)(b) of the Constitution and Sections 3 & 13 of the Environment & Land Court Act, Sections 101 of the Land Registration Act and Section 150 of the Land Act, the Court has jurisdiction to hear and determine the issues in question in this matter.
- 2.That the Notice of Motion application dated 15th August, 2023 be and is hereby found to be meritorious and is allowed.
- 3.That the Notice of Motion application dated 25th September, 2023 be and is hereby found to be unmeritorious and is dismissed.
- 4.That the suit be fixed for hearing on 7th October, 2024, with a mention on 8th July, 2024 for Pre-Trial Conference under Order 11 of the Civil Procedure Rules, 2010.
- 5.That costs to be awarded to the Plaintiff for the two applications dated 15th August, 2023 and 25th September, 2023 to be in the cause.
- Jurisdiction invoked
- Article 162(2)(b) of the Constitution of Kenya, 2010; Sections 3 & 13 of the Environment and Land Court Act, No. 19 of 2011; Section 101 of the Land Registration Act, No. 3 of 2012; Section 150 of the Land Act, No. 6 of 2012
Key timeline
#Practical implications
#Frequently asked questions
#Cite this brief
#Cite this brief
Caselaw, "Mombasa Water Products Limited v Kenya Commercial Bank Limited (Environment & Land Case E007 of 2023) [2024] KEELC 4275 (KLR)", Case Analysis (2024). Not stated in the judgment (Plaint dated 15th August, 2023 with two Notices of Motion dated 15th August, 2023 and 25th September, 2023). Source: https://new.kenyalaw.org/akn/ke/judgment/keelc/2024/4275/eng@2024-05-16
Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.