Silas Misoi Yego v NCBA Bank Kenya PLC & 2 Others
The bottom line
#Lenders can usually proceed with property sales if you default, even if you dispute the debt, provided they followed the legal notice requirements.
What this practically means
#Executive summary
#Key legal issues
#Whether a settlement agreement had been reached on the debt
No agreement was concluded; the Plaintiff never complied with the Bank's conditional offers, so the full debt remained outstanding.
The Bank's offers to accept fixed settlement sums were conditional on payment within stated periods. The Plaintiff failed to meet the conditions of the Kshs 116,000,000 offer (payable by 21st May 2019) and the Kshs 89,200,000 offer (payable within 30 days). The Bank rescinded the latter offer on 20th February 2020 and the debt reverted to Kshs 141,300,000. The Plaintiff admitted indebtedness.
Whether the Bank complied with the 40-day notice to sell under section 96(2) of the Land Act
The Bank served a 40-day notice to sell dated 25th September 2019 by registered post, evidenced by a certificate of posting; no breach of section 96 was established.
Since the Plaintiff denied receipt of the notification of sale, the burden lay on the defendants to prove service. The Bank's uncontested evidence showed a 40-day notice under section 96(2) sent by registered post, plus a courtesy 45-day Notification of Sale by the auctioneer evidenced by an affidavit of service. The court was satisfied service occurred.
Whether the Bank breached its duty of care under section 97 of the Land Act by undervaluing the suit property
The Plaintiff failed to produce cogent evidence displacing the Bank's valuation; a private sale agreement price is not a valuation.
Section 97 requires the chargee to obtain the best price reasonably obtainable and a forced sale valuation within 12 months of sale. To displace a professional valuation, clear evidence is needed; mere assertions or a private sale agreement price of Kshs 200,000,000 are insufficient. The Plaintiff's own valuer assessed forced sale value at Kshs 123,750,000. No violation of section 97 was established.
Whether damages are an adequate remedy and where the balance of convenience lies
Given admitted indebtedness and the damages remedy under section 99(4) of the Land Act, damages are adequate and the balance of convenience favours the Bank.
The Plaintiff admitted indebtedness and knew the charged property would be sold on default. Section 99(4) provides damages for unauthorized, improper or irregular exercise of the power of sale, and the Plaintiff did not show the Bank could not pay. Continued default with escalating interest would erode the security's value, so the balance of convenience did not favour an injunction.
Legal principles established
#- A court will not restrain a chargee from exercising its statutory power of sale merely because the debt is disputed.
- Once a chargor alleges non-receipt of the statutory notice, the burden of proving service rests on the chargee.
- Mere assertions cannot displace a professional valuation; cogent evidence is required to establish undervaluation under section 97(2) of the Land Act.
- The three Giella conditions are applied as separate, sequential hurdles; failure at the first stage ends the inquiry.
Court orders
#- 1.Dismissal of the Notices of Motion dated 16th April 2020 and 4th May 2020
- 2.Costs of the applications to the defendants
- 3.Discharge of the interim orders in force
- Jurisdiction invoked
- Original civil jurisdiction of the High Court over the plaint and Notice of Motion under Order 40 rules 1, 2, 4 and 10 of the Civil Procedure Rules
Key timeline
#Practical implications
#Frequently asked questions
#Cite this brief
#Cite this brief
Caselaw, "Silas Misoi Yego v NCBA Bank Kenya PLC & 2 Others", Case Analysis (2020). Not stated in the judgment (High Court, Nairobi; plaint dated 16th April 2020). Source:
Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.