Caroline Cherotich Kirwa v M Oriental Bank (K) Limited, Onesmus Macharia, Jeremiah Koskei Bowen & Henry Kiprono Kirwa [2018] KEELC 4471 (KLR)

REPUBLIC OF KENYA

IN THE ENVIRONMENT AND LAND COURT OF KENYA AT ELDORET

E & L CASE NO. 198 OF 2016

CAROLINE CHEROTICH KIRWA....................................................................PLAINTIFF

VERSUS

M. ORIENTAL BANK (K) LIMITED.......................................................1ST DEFENDANT

ONESMUS MACHARIA T/A WATTS AUCTIONEERS.......................2ND DEFENDANT

JEREMIAH KOSKEI BOWEN.................................................................3RD DEFENDANT

HENRY KIPRONO KIRWA......................................................................4TH DEFENDANT

RULING

Caroline Cherotich Kirwa (hereinafter referred to as the plaintiff) has come to court against M. Oriental Bank (K) Limited, Onesmus Macharia t/s Watts Auctioneers, Jeremiah Koskei Bowenand Henry Kiprono Kirwa claiming that the 4th defendant is the registered owner of all that parcel of land known as Uasin Gishu/Kimumu Settlement Scheme/1850, measuring approximately 0. 5 acres whereon there is a 3-bedroomed residential house, detached garage, servant quarter and a zero-grazing unit.  The house has been a matrimonial home since the year 2008. The said land has been advertised for auction.  The property was charged on 26. 01. 2012.  The loan was renewed on 01. 12. 2014.  the plaintiff claims that the transaction made after the Land Registration Act came into force are void and illegal as her consent was not obtained.

She prays that a declaration that the sale by public auction that was scheduled to take place on 15. 7.2016 to be conducted by the 2nd defendant on instructions of the 1st defendant over land parcel No. Uasin Gishu/Kimumu Scheme/1850 is void and illegal. That an injunction restraining the 1st and 2nd defendants from selling, advertising for sale, transferring or otherwise purporting to exercise statutory power of sale over land parcel No. Uasin Gishu/Kimumu Scheme/1850 Kimumu. That an order declaring that the charge purported to be registered by the 1st defendant against the plaintiff’s matrimonial property land parcel No. Uasin Gishu/Kimumu Scheme/1850 scheme is void and illegal. Any advances made by the 1st defendant to the 3rd defendant after May, 2012 are not secured by the matrimonial home, and as such, the chargor is not bound to satisfy the same. An order directed at the 1st and 4th defendants to discharge the charge registered against land parcel No. Uasin Gishu/Kimumu Scheme/1850 without cavil or argument or any lien whatsoever.

Accompanying the suit is Notice of Motion where the plaintiff prays that there be a temporary injunction restraining the defendants/respondents jointly and severally either by themselves or their agents from offering for sale, selling by public auction, purporting to exercise statutory power of sale, transferring, alienating or otherwise in any manner interfering with or dealing adversely with land parcel No. Uasin Gishu/Kimumu Settlement Scheme/1850, pending the hearing of the suit.

The application is based on the affidavit of the plaintiff whose gist is that the Plaintiff is the spouse of the registered owner of all that parcel of land known as land parcel No. Uasin Gishu/Kimumu Settlement Scheme/1850. The suit property is purportedly charged to the 1st Defendant in order to guarantee the sum of Kshs.3,000,000/= advanced to the 3rd Defendant, Jeremiah Koskei Bowen without spousal consent. The said property is the matrimonial home where the Plaintiff and 4th Defendant reside with their children. The Plaintiff properties are in danger of being sold by public auction by the 2nd Defendant on 15. 7.2016 to recover the sum of Kshs.167,000,000/= yet the sum guaranteed is the sum of Kshs. 3,000,000/= albeit without spousal consent. The initial indebtedness was cleared in 2014 and a new loan taken without a further charge or spousal consent. There was no spousal consent given to the transaction to charge the suit land or have further advances. The 2nd Defendant has clogged the Plaintiff's equity of redemption. No statutory notices or any notification of sale under section 90 of the Land Act and Rule 15(d) of the Auctioneers Rules has been served. The Plaintiff has a prima facie case with probability of success. The right to discharge a single property under Section 83 of the Land Act has been clogged by subsequent indebtedness of Kshs. 167,000,000/=.

The plaintiff stands to suffer irreparable loss in the event that the suit matrimonial property is sold.

The 1st defendant through affidavit of Josphat Githagi, the Credit Officer of the Banks, Eldoret Branch states that on 26th January, 2012, a charge over UASIN GISHU/KIMUMU/1650 for Kshs.3,000,000/= was registered in favour of the 1st Defendant to secure overdraft/loan facilities to 2nd Defendant and which facility was guaranteed by the 3rd Defendant.

The plaintiff was not a requirement in law as at January, 2012. The Registration of Land and Land Act came into force in April 2012. The requirement for spousal consent was not meant to apply to charges registered before April 2012.

The 4th defendant freely executed the charge having understood the rights of the Bank in the event of default by the principal debtor/borrower, that's, that the property would be sold in pursuance of the banks power of sale.  The 2nd and 3rd defendants have failed to repay the overdraft/loan facility and the sum due as at 30th June, 2012 was Kshs. 192,562,370.  The loan was not repaid on 28th August 2012 as alleged by the plaintiff. She has clearly misapprehended the nature of an overdraft facility.  The 2nd and 3rd defendants have completely failed to regularized the debit conditions of the account. The 4th Defendant was duly served with the Statutory Notice as by law required. That in the light of the default of repayment of the loan, the Bank is perfectly within its rights of statutory power of sale. The intended sale of the security is grounded on default of payment by the 2nd and 3rd Defendants.

He believes that the plaintiff’s application for injunction, as per advice of his counsel on record, does not meet the conditions as she has failed to prove a prima facie case with probable chances of success. Moreover, that she has failed to demonstrate that damages would not be adequate remedy and lastly, she has failed to demonstrate that that balance of convenience tilts in her favour.  No suggestion of her willingness to give undertaking as to damages or security for costs.

According to the deponent, the fact that the suit property is the matrimonial home of the plaintiff is immaterial and inconsequential as the same became a commodity for sale when it was offered as security for repayment of the overdraft/loan facility and further when she gave her spousal consent to the charge. The application is clear case of an attempt to abuse the provisions of section 94 of Land Registration Act.  The suit and application are frivolous and indeed an abuse of the process of court. That the plaintiff’s application is without merit and ought to fail.

Mr. Henry Kiprono Kirwa, the 4th respondent has filed a replying affidavit where in essence is a supporting affidavit.  It is worth noting that the person who should have filed the suit herein is the 4th defendant as he had guaranteed the loan amounting to Kshs. 3,000,000.

The existence of a prima facie case in favor of the plaintiff is necessary before a temporary injunction can be granted to him.  Prima Facie case has been explained to mean that a serious question is to be tried in the suit and in the event of success, if the injunction be not granted the plaintiff would suffer irreparable injury. The burden is on the plaintiff to satisfy the court by leading evidence or otherwise that he has a Prima Facie case in his favor of him. A prima facie case does not mean a case proved to the hilt but a case which can be said to be established if the evidence which is led in support of the same were believed. I have considered the application, supporting affidavit and replying affidavit and do find that the plaintiff herself has not established a prima facie case with a probability of success as spousal consent was not a requirement when the charge was registered.  Moreover, the plaintiff is not privy to the loan agreement and the charge.  Therefore, I do find that the plaintiff has not established a prima facie case with probability of success.

Irreparable injury means that the injury must be one that cannot be adequately compensated for in damages the existence of a prima facie case is not itself sufficient. The applicant should further show that irreparable injury will occur to him if the injunction is not granted and there is no other remedy open to him by which he will protect himself from the consequences of the apprehended injury.  On irreparable loss, I do find that upon charging the property, it became a commodity for sale and therefore, the 4th defendant was aware of the consequences. In any event the damage to be suffered by the plaintiff can be quantified and the 1st defendant is able to refund the plaintiff the same.

The court should issue an injunction where the balance of convenience is in favor of the plaintiff and not where the balance is in favor of the opposite party. The meaning of balance of convenience in favor of the plaintiff is that if an injunction is not granted and the suit is ultimately decided in favor of the plaintiffs, the inconvenience caused to the plaintiff would be greater than that which would be caused to the defendants if an injunction is granted but the suit is ultimately dismissed. Although it is called balance of convenience it is really the balance of inconvenience and it is for the plaintiffs to show that the inconvenience caused to them would be greater than that which may be caused to the defendants. Should the inconvenience be equal, it is the plaintiffs who suffer. In other words, the plaintiffs have to show that the comparative mischief from the inconvenience which is likely to arise from withholding the injunction will be greater than which is likely to arise from granting it. On balance of convenience, I do find that the 1st defendant will be inconvenienced if the debt is not paid as it would outstrip the value of property. The application is otherwise dismissed with costs.

Dated and delivered at Eldoret this 25th day of January, 2018.

A. OMBWAYO

JUDGE