Ruth Njeri Mburu v Co-operative Bank of Kenya Limited & another [2016] KEELRC 764 (KLR)
The bottom line
#A Kenyan court stopped a bank from auctioning a former employee's staff-loan properties, but only because she keeps repaying the loan at staff rates while the case continues.
What this practically means
#Executive summary
#Key legal issues
#Whether amendment of claim and injunction can be sought in one application
Yes; the Court invoked article 159(2)(d) and allowed the combination, overruling the respondent's objection and distinguishing the pre-2010 Constitution decision in Moses Ndungu Mungai v Co-operative Bank
The Court held that article 159(2)(d) requires justice to be dispensed without undue regard to procedural technicalities. No prejudice incapable of compensation by costs would be suffered by the respondent if the amendment were allowed. The decision relied on by the respondent predated the 2010 Constitution and its article 159(2)(d).
Whether the Court has jurisdiction over the charge/securities issue arising from staff loans
Yes; the loans were granted in the course of employment and repayment terms are matters within the knowledge of both parties, so the objection on jurisdiction was overruled
The properties were bought with loans advanced to the claimant in the course of her employment with the 1st respondent, which employment has been terminated. These are facts within the knowledge of both parties, connecting the dispute to the employment relationship and bringing it within the Court's jurisdiction.
Whether an injunction should issue restraining sale of the charged properties
Yes; because the claimant disputes the termination and the properties were bought through a staff loan scheme, loss of them could not be adequately compensated by damages; the injunction issued on condition the claimant services the loan at staff rates
The claimant contests the reasons and manner of her dismissal and seeks damages for malicious prosecution and defamation. The loan was granted on account of her employment, now under dispute. Following Ndolo J in Abraham Nyambane Asiago v Barclays Bank, staff-loan property is dear to the employee and its loss cannot be adequately compensated in damages; lis pendens also restrained dealing with the properties.
Legal principles established
#- Property bought by an employee through a staff loan scheme cannot be adequately protected by an award of damages because it is very dear to the employee and often their only asset or home; injunction may issue to protect it pending suit
- Procedural technicalities should not defeat justice; amendment of pleadings may be allowed where no prejudice incapable of compensation by costs is occasioned
- Under lis pendens, a party to pending litigation should not deal with the subject property as if no litigation were pending
Court orders
#- 1.Leave granted to the claimant to amend her memorandum of claim in terms of the draft amended memorandum
- 2.Injunction restraining the 1st respondent from advertising for sale, selling by private treaty or public auction the suit properties RUIRU/MUGUTHA BLOCK 2/79 and KIAMBU/MUNICIPALITY BLOCK 5 (KIAMUMBI) 2684 pending the hearing and final determination of the suit
- 3.The injunction granted on terms that the claimant continues to service the loan at staff rates pending the hearing and conclusion of the suit
- Jurisdiction invoked
- Article 159(2)(d) of the Constitution of Kenya, 2010; the Court's employment and labour relations jurisdiction
Key timeline
#Practical implications
#Frequently asked questions
#Cite this brief
#Cite this brief
Caselaw, "Ruth Njeri Mburu v Co-operative Bank of Kenya Limited & another [2016] KEELRC 764 (KLR)", Case Analysis (2016). Not stated in the judgment (suit filed 29th October 2013). Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2016/764/eng@2016-08-18
Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.