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ELCStruck Out· [2024] KEELC 6315 (KLR)

Njoroge & another v Molyn Credit Limited (Environment and Land Appeal E017 of 2023) [2024] KEELC 6315 (KLR)

Environment and Land Court
16 September 2024
BEB M Eboso
1,067 words in judgment
View original judgmentRead on Kenya Law Watch case
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The bottom line

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Kenya's Environment and Land Court cannot hear mortgage disputes; borrowers fighting a lender's sale of charged land must go to the High Court instead.

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 Thika (B M Eboso J) on a preliminary objection dated 15 January 2024 raised by the respondent against an appeal. The respondent contended that the suit giving rise to the appeal was a mortgage/charge dispute and that the ELC lacks jurisdiction over such disputes, and sought striking out of the appeal. The two appellants did not file submissions or attend the hearing, having been served with a hearing notice. The court framed a single issue: whether it was seized of jurisdiction to entertain the appeal. Examining the plaint dated 7 December 2022, the court noted the appellants had borrowed Kshs 2,200,000 from the respondent, secured by a charge over title number Muguga/Kanyariri/712, and had sought to injunct the respondent from exercising the chargee's statutory power of sale. Following the Court of Appeal's decision in Co-operative Bank of Kenya Limited v Patrick Kangethe Njuguna, the court held that a charge is an interest in land securing repayment of money; its creation and enforcement have nothing to do with the 'use of land' under Article 162(2)(b) of the Constitution, and contracts within Section 13 of the ELC Act must be incidental to land use, excluding mortgages and charges, which fall within the High Court's civil jurisdiction. The preliminary objection was upheld, the appeal was struck out, and the appellants were ordered to bear the costs of the appeal.

Key legal issues

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01

Whether the Environment and Land Court has jurisdiction to entertain an appeal arising from a mortgage/charge dispute

Holding

The court lacks jurisdiction; a charge is an interest in land securing repayment of money and its creation and enforcement do not amount to 'use of land', so mortgage/charge disputes fall outside Article 162(2)(b) jurisdiction

Reasoning

Relying on Co-operative Bank of Kenya Ltd v Patrick Kangethe Njuguna, the court reasoned that a charge creates a relationship limited to realisation of security for money advanced, and has nothing to do with the use and occupation of, or title to, land. The ELC's jurisdiction over contracts under Section 13 of the ELC Act covers only contracts incidental to use of land, excluding mortgages and charges. Since the appellants' suit sought to restrain exercise of the chargee's statutory power of sale, the appeal was incompetent before this court.

p. 3

Legal principles established

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  • Questions as to whether the chargee's statutory power of sale has crystallised fall outside the jurisdiction of the Environment and Land Court; mortgages and charges fall within the civil jurisdiction of the High Court

Court orders

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  1. 1.The preliminary objection dated 15/1/2024 is upheld
  2. 2.The appeal is struck out
  3. 3.The appellant shall bear costs of the appeal

Authorities

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Legislation

  • Constitution of KenyaArticle 162(2) and (3)
  • Environment and Land Court ActSection 13
  • Land ActSection 2
  • Land ActSection 80

Cases cited (2)

  • Co-operative Bank of Kenya Limited v Patrick Kangethe Njuguna & 5 Others
    [2017] eKLR
  • Albert Chaurembo Mumbo & Others v Maurice Munyao & 148 Others
    (2019) eKLR
Jurisdiction invoked
Article 162(2) and (3) of the Constitution read with Section 13 of the Environment and Land Court Act (jurisdiction raised as the central issue)

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, "Njoroge & another v Molyn Credit Limited (Environment and Land Appeal E017 of 2023) [2024] KEELC 6315 (KLR)", Case Analysis (2024). . Source: https://new.kenyalaw.org/akn/ke/judgment/keelc/2024/6315/eng@2024-09-16

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