Cecily Wangari Kariuki v KCB Bank Kenya Limited [2017] KEHC 9622 (KLR)

REPUBLIC OF KENYA

IN THE HIGH COURT OF KENYA AT NAIROBI

CIVIL DIVISION

HIGH COURT CIVIL CASE NO. 143 OF 2017

CECILY WANGARI KARIUKI.................................PLAINTIFF/APPLICANT

VERSUS

KCB BANK KENYA LIMITED........................DEFENDANT/RESPONDENT

RULING

1. The application dated 29th June, 2017 seeks orders that the Honourable court be pleased to issue a temporary injunction restraining the Defendant/Respondent whether by itself, agents, servants or employees, or howsoever otherwise, from trespassing onto, advertising for sale, selling and/or dealing with property L.R. No. 1/602 Apartment No. 502 Block A Skyview Park Kilimani Area-Nairobi Country in any manner whatsoever, pending hearing and determination of this application/suit.

2. The application is premised on the grounds stated in the application and is supported by the affidavit of the Applicant, Cecily Wangari Kariuki. The Applicant’s case is that she is the registered propriety of the suit premises, which was purchased through a Mortgage facility with the Respondent for the sum of Ksh.20,000,000/= payable by monthly installments of Ksh.234,937/= for twenty five (25) years. The Applicant’s complaint is that despite having been making payments towards the settlement of the loan the Respondent has illegally and unlawfully without any prior notification instructed auctioneers to sell the property. It is deposed that the Applicant was not served with a statutory notice as required by the law and that no valuation has been carried to ascertain the value of the property. The Applicant is apprehensive that the property may be sold at a throw away price.

3. The application was opposed vide the grounds of opposition dated 12th July 2017 and filed in court on 13th July, 2017. The said grounds state as follows:

(a) That the Plaintiff’s application is incurably defective, incompetent and devoid of merit.

(b) That the Plaintiff has not demonstrated aprima faciecase to warrant being granted the orders for injunction being sought.

(c) That the Plaintiff by her own admission has confirmed that she has defaulted on the loan repayment.

(d) That the Plaintiff defaulted in repaying the loan facility granted to her by the Defendant knowingly and blatantly disregarding the consequences that would befall her upon default.

(e) That contrary to the Plaintiffs allegation, Statutory Notice was duly served on the Plaintiff.

(f) That a valuation of the property was carried out on 8th December 2016 and the same remains valid for one (1) year.

(g) The Plaintiff is requesting this Honourable Court to discharge her from her contractual obligation to repay the loan. If the injunction orders sought are granted against the Respondent, the court would be encouraging and stamping a breach of contract, to which it should not be seen to be aiding.

(h) The Plaintiff has an alternative remedy, a claim for disputed amount as pleaded. The Plaintiff claim therefore is quantifiable and can be easily compensated in damages.

(i) The Defendant not being in breach of contract nor of any statutory duty ought not to be injuncted by the orders sought in the Plaintiff’s application aforesaid and pray the application be dismissed.

(j) The Plaintiff was indebted to the defendant to the tune of Ksh.25,745,423. 40/= as at 12th July, 2017. If the Plaintiff is acting in good faith he should pay the said sum of Ksh.25,745,423. 40/= plus accruing interest outstanding in the 1st Defendant’s books in the account of the Plaintiff.

(k) No prejudice or loss will be occasioned to the Plaintiff if the orders sought are not granted.

4. The application was canvassed by way of written submissions. However, while crafting the ruling herein, I found on the record a replying affidavit on record sworn by Fredrick Mung’athia on 22nd August, 2017. The said replying affidavit is irregularly on the record as it was filed without the leave of the court. It is not clear whether the Applicant was served with the same. I therefore expunge the said replying affidavit from the record. I have considered the application, the grounds of opposition and the authorities cited.

5. On whether to issue the restraining injunctive orders sought, the principles applicable were well settled in the case of GIELLA –VS- CASSMAN BROWN & CO. (1973) EA. To succeed, the applicant must establish a prima facie case with a probability of success, that irreparable loss which cannot be adequately compensated by award of damages would be suffered and if in doubt, the court will decide on a balance of convenience.

6. As stated by the Court of Appeal in Mrao Ltd v First American Bank of Kenya Ltd & 2 others [2003] eKLR:

“.......a prima facie case” I would say that in civil cases it is a case in which on the material presented to the Court a tribunal properly directing itself will conclude that there exists a right which has apparently been infringed by the opposite party as to call for an explanation or rebuttal from the latter.”

7. The Applicant has admitted in the plaint that she has not been able to consistently settle the monthly installments. In the affidavit in support, the Applicant has only exhibited the advertisement by the auctioneers. No evidence of the payments made so far has been given. On the other hand, with the grounds of opposition being the only response by the Respondent that this court is considering in respect of this application, there is no evidence from the Respondent to counter the averment made by the Applicant that she was not served with the Statutory Notice.

8. Turning to the question of whether the Applicant can be compensated in monetary terms, it is not in dispute that the property the subject of this suit was charged to secure the loan facility. The Respondent has made a bid to exercise it’s statutory power of sale. The Applicant’s property having been offered as security for the loan, the Respondent is entitled to sell the same. The property became a commodity for sale the moment it was used as collateral for the loan. (See for example Kihara v Barlcays Bank (1) Ltd 2001 EA)

9. On the balance of convenience, it is noted that the property in question is stated to be the Applicant’s home. Without proof of service of the statutory notice, the sale of the property would cause a greater risk of injustice to the Applicant than to the respondent. (See for example Paul Gitonga Wanjua v Gathuthi Tea Factory Ltd & 2 others [2005] eKLR)

10. With the foregoing, I allow the application with costs. The duration of the injunction is limited to such time as the Respondent will serve a fresh Statutory Notice (See for example Act Fast Security Ltd v Equity Bank Ltd [2014] eKLR). The Applicant to give an undertaking as to damages within 7 days from date hereof.

Dated, signed and delivered in Nairobi this 9th day of Nov, 2017.

B. THURANIRA JADEN

JUDGE