Alo Boo Safaris Kenya Limited v HFC Bank Limited & another [2022] KEHC 10857 (KLR)

Alo Boo Safaris Kenya Limited v HFC Bank Limited & another (Commercial Case E169 of 2022) [2022] KEHC 10857 (KLR) (Commercial and Tax) (13 June 2022) (Ruling)

Neutral citation: [2022] KEHC 10857 (KLR)

Republic of Kenya

In the High Court at Nairobi (Milimani Commercial Courts Commercial and Tax Division)

Commercial and Tax

Commercial Case E169 of 2022

DAS Majanja, J

June 13, 2022

Between

Alo Boo Safaris Kenya Limited

Plaintiff

and

HFC Bank Limited

1st Defendant

Sportlight Intercepts

2nd Defendant

Ruling

1. The Plaintiff is the registered owner of a property known as Nairobi/block 60/430 situated in Ngei Estate Phase I (“the suit property”). It took out a mortgage facility of KES. 18,000,000. 00 from the 1st Defendant (“the Bank”) secured by a charge over the suit property dated 6th October 2014.

2. The plaintiff filed a Notice of Motion dated 18th May 2022 made under Order 40 rules 1 and 2 of the Civil Procedure Rules seeking an injunction restraining the Defendants from exercising its statutory power of sale by selling theeh suit property pending the hearing and determination of the suit. In the alternative, it seeks an order that the Bank’s exercise of its statutory power of sale be suspended or postponed for a period of 60 days or such other period to enable it redeem the suit property. The application is supported by the affidavit and supplementary affidavit of the Plaintiff’s director, David Waiyaki Mungai, sworn on 18th May 2022 and 26th May 2022. It is opposed on behalf of the Defendants through the Replying Affidavit of Christine Wahome, the Bank’s Legal Officer, sworn on 24th May 2022.

3. The parties’ advocates made brief oral submissions in support of their respective positions and which I have considered. For the reasons that will become apparent I do not propose to deal with the merits of the application.

4. The Defendants state that the sale of the suit property took place on 20th May 2022 at 11. 30am. They further state that the sale was concluded with the highest bidder who signed the memorandum of sale and paid the deposit. The Plaintiff denies that the sale took place and states that its director was present at the 2nd Defendant’s offices at 11. 00am and that the auction did not take place as alleged. It states that if the sale took place, it took place contrary to the advert which stated that the auction would take place at 11. 30am. It avers that the sale took place in contravention of the court order.

5. From the averments by the Plaintiff, the court is confronted with a claim that its orders were disobeyed in that the sale took place despite service of the order. Since this is a matter that goes to the court’s dignity it is an issue that ought to be investigated. However, this issue was not raised in a formal application or an application for contempt of court against the Defendants. It was raised in the Plaintiff’s supplementary affidavit and counsel’s oral arguments. The Defendants did not have the opportunity to respond to the allegations and charges of disobedience of a court order against them.

6. The Defendants case is also that an injunction cannot issue as the suit property was purchased at the auction by a third party. Without the party being heard, the injunction sought in the application and any relief against the suit property cannot be granted without that party being given an opportunity to be heard on the matter.

7. It is for the aforesaid reasons that the Notice of Motion dated 18th May 2022 is adjourned to enable the Plaintiff reconsider its position in view of the findings I have made and to take the necessary steps to put its case before the court.

DATED AND DELIVERED AT NAIROBI THIS 13TH DAY OF JUNE 2022. D. S. MAJANJAJUDGECourt of Assistant: Mr M. OnyangoMr Mungai Instructed by Mungai Kalande and Company Advocates for the Plaintiff.Mr Mugisha instructed by Nyaanga and Mugisha Advocates for the Defendants.