Remmy K. Sang v Family Bank Limited & 12 others [2017] KEELC 2490 (KLR)

Nandi/Ndubeneti/476, pending the hearing and determination of the suit and that the honourable court be pleased to compel the 1st defendant to discharge and release his title deed to his property described as Pioneer/Ngeria/Block 1 (EATC)/12206. The application is based on grounds that the plaintiff has cleared the loan facility whilst the 1 st defendant has declined to discharge the collateral on grounds that the plaintiff is responsible for offsetting the loan facility offered to the 2nd defendant. The 1st defendant has recalled the loan facility without involving the principal debtor. The plaintiff is apprehensive that the 1 st defendant will sell the property for a lower value. The property is matrimonial and ought to be preserved. The 1st defendant filed a replying affidavit whose gist is that the 1 st defendant advanced to the 2nd defendant Kshs.5,071,000/= secured by 3rd party charge in favour of the 1st defendant over property title No.Nandi/Ndubeneti/476 registered in the name of the plaintiff. The plaintiff executed a deed of guarantee and indemnity over the said facility. The loan was disbursed on 26.1.2013 and is currently outstanding at Kshs.4,787,118.94. The 2nd defendant has defaulted and that the statutory 3 months’ notice was sent and that the 2nd defendant failed to regularize and therefore, redemption notice as sent. The plaintiff is aware that the 2 nd defendant has defaulted and therefore, the application should be dismissed. Mr. Remmy K. Sang filed a further affidavit stating that the loan secured was made to Sosiani Community Dairy Farmers Group. He guaranteed Sosiani Community Dairy Ltd. He states that the letters dated 16.2.2015 and the list of registered postal parcel were addressed on the premise of loan owned to Sosiani Community Dairy Farmers Group not a limited liability company and that the title originally was Nandi/Ndubeneti/476 and not any other property. The loan was advanced to Sosiani Community Diary Group and not Sosiani Community Dairy Ltd and therefore, the instruction to sell the property is a nullity. The 13 th respondent contends that he was wrongly sued as there is no claim against him. In a supplementary affidavit filed on 23.1.2016, Anthony Ouma states that the offer letter has both the names of Sosiani Community Group Ltd and Sosiani Community Dairy Limited and that Sosiani Community Dairy Ltd received the facility that was guaranteed by the plaintiff and that the plaintiff and 1st defendants were served with notification. The plaintiff submits that the loan was made to Sosiani Community Dairy Farmers Group and not Sosiani Community Dairy Ltd and that the principal borrower is Sosiani Community Dairy Farmers Group. There is a legal charge on Nandi/Ndubeneti/476 and a personal guarantee and indemnity by all the directors of Sosiani Community Dairy Ltd. The plaintiff submits further that he has established a prima facie case with a probability of success. He alleges misrepresentation of facts. Moreover, that 1st defendant has refused to release his property. On the issue of irreparable harm which cannot be compensated by way of damages, the plaintiff states that the defendant may be evidenced with money being a financial institution but that does not mandate the 1 st defendant o bully the plaintiff to submission. On balance of convenience, the plaintiff submits that since the 1 st defendant has breached express provisions of the harm, injunction should be granted. The 1st defendant submits that the plaintiff has failed to demonstrate that there is a prima facie case with a probability of success as he has not demonstrated that he is not indebted to the 1 st defendant as a guarantor. According to the defendant, the borrower secured a guarantor who has defaulted and is liable for Kshs.4,787,118.94 as at 31.8.2015. Moreover, that the procedure in the recovery of the loan was adhered to. The defendant further submits that the plaintiff has not demonstrated that he will suffer irreparable harm as he can be adequately compensated in damages. The plaintiff should have contemplated that the property would be sold if he defaulted. On a balance of convenience, the defendant argues that it tilts hands dismissing the application and that the bank should be allowed to release its security. That the gist of the orders will greatly prejudice the defendant as the debt will grow.

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I have considered the evidence on record and do find that the first issue to be determined is who is the borrower of the loan; Is it Sosiani Community Dairy Farmers Group or Sosiani Community Dairy Ltd. On the 11.8.2011, the 1st defendant offered the directors of Sosiani Community Dairy Ltd of P. O. Box 3435 – 30100, Eldoret a loan of Kshs.5,071,000/=. The security of the loan, was the original title deed and a first legal charge over parcel L.R. No. Nandi/Ndubeneti/476 to be registered in the name of Remmy Kiprotich Sanga. The directors of Sosiani Community Dairy Ltd accepted the offer and the terms and conditions. The plaintiff agreed to guarantee the loan and charged his property L.R. No. Nandi/Ndubeneti/476. It appears that the loan was issued to the company known as Sosiani Community Dairy Limited. However, the account for the secured loan is in the name of Sosiani Community Dairy Farmers Group and not the Sosiani Community Dairy Farmers Ltd. The charge and dead of guarantee indicate that the borrower was Sosiani Community Dairy Ltd of P. O. Box 40 – 30100. The letter dated 16.2.2015 being the statement notice indicated that the money in dispute was advanced to Sosiani Community Dairy Farmers Group. I have also discerned the account availed by the 1 st defendant and do find that the same is not for Sosiani Community Dairy Farmers Ltd but it is for the Sosiani Community Dairy Farmers Group. It is not clear whether the 1st defendant advanced money to the group or to the company. It is clear that the group is a legal entity. Moreover, it is clear that the company exists. It is not clear whether the money borrowed by the company or by the Self-help group all these facts will come out at the hearing of the suit. The second issue revolves on who was referred to as the borrower in the letters addressed to the plaintiff. I have looked at the statutory notice and do find that it refers to the group as the borrower and not the company. This court finds that it is important to establish who borrowed the money; whether it was the company of the group and therefore, on the ground alone, the court finds that the plaintiff has a prima facie case with a likelihood of success as the company is a person with the capacity to sue and be sued in his own name and with the capacity to borrow. The self-help group also has its legal mechanisms and therefore, it is important to establish who was guaranteed by the plaintiff. On the issue of irreparable harm, I do find that the plaintiff has not demonstrated that he will suffer any irreparable harm that cannot be compensated by the 1st defendant as the 1st defendant is a financial institution that is capable of paying the damages where the plaintiff succeeds in his case. However, this case has to be determined on a balance of convenience, thus, who is likely to be inconvenienced if the injunction is granted. On this part, I do find that since there is a lot of confusion as to who borrowed the money, it would be prudent to issue an order of status quo as the plaintiff is likely to lose his property due to confusion between the company and the self-help group whilst the defendant can recover his money from either the company or the self-help group. The upshot of the above is that the application is dismissed. DATED AND DELIVERED AT ELDORET THIS 15TH DAY OF JUNE, 2017. A. OMBWAYO JUDGE

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