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ELCStruck OutNot stated in judgment (Notice of Motion dated 18th December 2023; Defendant's application dated 17th January 2024)· [2024] KEELC 6167 (KLR)

Mturi & another v Diamond Trust Bank Kenya Limited (Environment & Land Case E54 of 2023) [2024] KEELC 6167 (KLR)

Environment and Land Court
26 September 2024
4,594 words in judgment
View original judgmentRead on Kenya Law Watch case
AI-assisted case brief
·~18 min to read original · ~4 min brief

The bottom line

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Kenya's Environment and Land Court struck out a suit trying to stop a bank auction, confirming property-charge disputes belong in the High Court.

What this practically means

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Executive summary

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The plaintiffs, guarantors/chargors of a loan facility advanced by Diamond Trust Bank Kenya Limited to Quantum Petroleum Limited, filed suit to restrain the Bank from auctioning their land, title CR 18746, Subdivision No. 4112, Section I, MN, contending that no 90-day statutory notice under Section 90 of the Land Act was served before the advertised auction of 19th December 2023. The Court issued interim injunctive orders on 18th December 2023. The Bank responded with an application seeking discharge of the ex-parte orders and striking out of the suit for want of jurisdiction or, alternatively, for being frivolous and an abuse of process. The Court identified three issues: its jurisdiction, whether an injunction should issue, and costs. Relying on the binding Court of Appeal decision in Co-operative Bank of Kenya Ltd v Patrick Kang'ethe Njuguna, Makori J held that a charge is a disposition of land creating rights limited to realization of security, and does not amount to land use within Article 162(2); disputes whose predominant issue involves charges, mortgages, collection of dues and rents fall within the High Court's civil jurisdiction. The plaintiffs' complaint about the statutory notice and request for accounts concerned the charge and the debt, not land use. The prior litigation between the borrower and the Bank in Mombasa HCCC No. 97 of 2015 over the same issues made the present suit a reincarnation through the side door, an abuse of process. The Court downed tools, dismissed the plaintiffs' application, struck out the entire suit, allowed the Bank's application on the jurisdiction question, and awarded costs to the Defendant.

Key legal issues

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01

Whether the ELC has jurisdiction over a suit challenging the exercise of a chargee's statutory power of sale for want of statutory notice

Holding

The ELC lacks jurisdiction; the predominant issue is a charge dispute falling within the High Court's civil jurisdiction, following Co-operative Bank of Kenya Ltd v Patrick Kang'ethe Njuguna

Reasoning

The Court of Appeal in Kang'ethe held that a charge creates an interest in land for realization of security, which is a disposition, not land use. Contracts under Section 13 of the ELC Act must be incidental to land use and exclude mortgages and charges. The plaintiffs' claim of non-service of the 90-day statutory notice and the request for accounts concerned the charge and debt, not land use, so the High Court is the proper forum.

p. 7
02

Whether the suit was an abuse of court process given prior litigation in Mombasa HCCC No. 97 of 2015

Holding

The suit was a reincarnation of the earlier dismissed suit filed through the side door

Reasoning

The same parties and issues—debt and statutory notice of sale—had been litigated in Mombasa HCCC No. 97 of 2015 between the borrower and the Bank, which was dismissed for want of prosecution after unsuccessful injunction attempts. Re-litigating the same issues by the guarantors amounted to an abuse of the court process.

p. 8

Legal principles established

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  • Jurisdiction must be addressed first; a court without jurisdiction must stop proceedings
  • Disputes whose predominant issue is charges, mortgages, collection of dues and rents fall within the civil jurisdiction of the High Court, not the ELC

Court orders

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  1. 1.The application dated 18th December 2023 is dismissed
  2. 2.The entire suit is struck out with costs
  3. 3.The application dated 17th January 2024 succeeds on the jurisdiction question
  4. 4.Costs to the Defendants

Authorities

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Legislation

  • Constitution of KenyaArticle 162(2)
  • Constitution of KenyaArticle 260
  • Environment and Land Court ActSections 13(2)(d) and 150
  • Land ActSections 2, 80, 90, 96, 101 and 150
  • Land Registration ActSection 101
  • Registration of Titles ActNot specified

Cases cited (8)

  • Co-operative Bank of Kenya Limited v Patrick Kangethe Njuguna & 5 Others
    [2017] eKLR
  • Mathew Namusei Chahasi v Cooperative Bank Limited & another
    [2021] eKLR
  • Lydia Nyambura Mbugua v Diamond Trust Bank Kenya Limited & another
    [2018] eKLR
  • Owners of the Motor Vessel "Lillian S" v Caltex Oil (Kenya) Ltd
    [1989] eKLR
  • Kinuthia v Kanyi & another (Environment & Land Case E007 of 2023)
    [2024] KEELC 1625 (KLR) (20 March 2024) (Ruling)
  • Thomas Mutuku Kasue v Housing Finance Company Ltd (HFC) & another
    [2021] eKLR
  • Quantum Petroleum Limited v Diamond Trust Bank Kenya Ltd
    [2017] eKLR
  • Mrao Ltd vs First American Bank
    [2003] eKLR
Jurisdiction invoked
Article 162(2) of the Constitution; Sections 13 and 150 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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Later judgments citing this (1)

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Judgments in the corpus that rely on this one. Where the Court said how it treated the authority, that is shown.

Cite this brief

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Cite this brief

Caselaw, "Mturi & another v Diamond Trust Bank Kenya Limited (Environment & Land Case E54 of 2023) [2024] KEELC 6167 (KLR)", Case Analysis (2024). Not stated in judgment (Notice of Motion dated 18th December 2023; Defendant's application dated 17th January 2024). Source: https://new.kenyalaw.org/akn/ke/judgment/keelc/2024/6167/eng@2024-09-26

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