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ELCPartially AllowedNot stated in judgment (Malindi ELC; suit arising from Notice of Motion dated 11th August 2023)· [2024] KEELC 4375 (KLR)

African Budget and Executive Homes Company Ltd & another v Middle East Bank Kenya Limited & another (Environment & Land Case E010 of 2023) [2024] KEELC 4375 (KLR)

Environment and Land Court
29 May 2024
MNMwangi Njoroge
2,406 words in judgment
View original judgmentRead on Kenya Law Watch case
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The bottom line

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The Malindi Environment and Land Court stopped Middle East Bank Kenya from selling charged land, ruling the bank must first disclose all charge documents and account statements.

What this practically means

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Executive summary

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This is a ruling of the Environment and Land Court at Malindi (Mwangi Njoroge J) on the plaintiff's Notice of Motion dated 11th August 2023 and the 1st defendant's preliminary objection dated 18th September 2023. The plaintiff, David Mureithi Kanyi, sought injunctions restraining the bank and auctioneers from advertising, selling or dealing with seven properties, a declaration that no valid statutory notices were issued under Sections 90 and 96 of the Land Act, and a forensic audit of the charge transactions. He contended the charge covered only Kilifi/Mtwapa/3259 and 3260, making the intended sale of the other properties void, and that the facilities did not expire until 2026. The bank (through Elizabeth Ong'are, Credit Manager) deponed that facilities of Kshs. 50.5 million, later restructured to Kshs. 139.6 million, were charged over all seven properties and remained unserviced despite a 90-day statutory notice. The preliminary objection - attacking verification of the plaint, lis pendens as against Kilifi ELC No. E106 of 2023, and the validity of the ex parte orders - failed because its grounds raised facts requiring evidence, contrary to the Mukisa Biscuit and Oraro v Mbaja thresholds. On the injunction, applying Giella v Cassman Brown and Nguruman, the court found no valuation before it to assess irreparable loss and granted relief on the balance of convenience, the bank's loss being compensable by costs. The application was granted in terms of prayers 3 and 4; prayer 5 was granted only to the extent that the bank supply account statements and all charge documents within 21 days. Costs were in the cause, with directions for compliance and a hearing-date mention on 24/9/24.

Key legal issues

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01

Whether the preliminary objection met the Mukisa Biscuit threshold

Holding

It failed; the grounds raised factual matters requiring evidence, not pure points of law

Reasoning

The court applied Mukisa Biscuit and Oraro v Mbaja, holding that a preliminary objection must not be blurred with contested facts or depend on evidence. The grounds in the objection, including alleged defects in the plaint and nullity of the ex parte orders, required factual investigation and thus could not be sustained as preliminary objections.

p. 4
02

Whether an interlocutory injunction should issue to restrain sale of the charged properties

Holding

Injunction granted; in the absence of a valuation to determine irreparable loss, the balance of convenience favoured the plaintiff

Reasoning

Applying Giella v Cassman Brown and Nguruman, the court noted the plaintiff risked losing the suit properties while the defendant's loss, if any, was compensable by costs. Since no valuation of the suit properties was placed before the court to assess irreparable injury, the court resorted to the balance of convenience, which favoured the applicant.

p. 5

Legal principles established

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  • A preliminary objection must be a pure point of law, not dependent on ascertainment of facts or exercise of discretion
  • Where no valuation is presented to enable assessment of irreparable loss, the court may be guided by the balance of convenience

Court orders

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  1. 1.Temporary injunction granted in terms of prayer 3 barring the 1st and 2nd defendants from selling, disposing of, alienating or dealing with the suit properties pending hearing and determination of the main suit
  2. 2.Declaration granted in terms of prayer 4 as prayed
  3. 3.1st defendant ordered to supply to the plaintiff within 21 days account statements of indebtedness dating from the earliest charge document, and all charge documents and variations thereof
  4. 4.Costs of the application in the cause
  5. 5.Plaintiff to comply with the Civil Procedure Rules within 30 days and defendant within the following 30 days; suit listed on 24/9/24 for fixing of hearing date

Authorities

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Legislation

  • Land ActSection 90(2)(b)
  • Land ActSection 96(2)
  • Auctioneers RulesRule 15
  • Civil Procedure ActSection 6
  • Civil Procedure Rules 2010Order 40(1)(a) and (b)

Cases cited (6)

  • Mukisa Biscuit Manufacturing Co. Ltd v West End Distributors Ltd
    (1969) EA 696
  • Oraro v Mbaja
    [2005] KLR 141
  • Giella v Cassman Brown & Company Limited
    [Supra]
  • Nguruman Limited Jan Bonde Nielsen & 2 others
    [2014] eKLR
  • Moses C. Muhia Njoroge & 2 others v Jane W Lesaloi and 5 others
    (2014) eKLR
  • Omega Enterprises v KTDA
    [1998] eKLR
Jurisdiction invoked
Original jurisdiction of the Environment and Land Court under Order 40 of the Civil Procedure Rules 2010

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, "African Budget and Executive Homes Company Ltd & another v Middle East Bank Kenya Limited & another (Environment & Land Case E010 of 2023) [2024] KEELC 4375 (KLR)", Case Analysis (2024). Not stated in judgment (Malindi ELC; suit arising from Notice of Motion dated 11th August 2023). Source: https://new.kenyalaw.org/akn/ke/judgment/keelc/2024/4375/eng@2024-05-29

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