Francis Muturi Maina v Barclays Bank (K) Ltd [2014] KEHC 5731 (KLR)

REPUBLIC OF KENYA

IN THE HIGH COURT OF KENYA AT BUNGOMA

CIVIL   CASE NO. 19 OF 2013 [O.S]

FRANCIS MUTURI MAINA …...........................................  PLAINTIFF

VERSUS

BARCLAYS BANK (K) LTD..............................................DEFENDANT

RULING

1.         The applicant FRANCIS MUTURI MAINA has moved this court under Sec. 1A, 1B, 3, 3A and 63 (e) of the Civil Procedure Act and Order 51 Rule 1 of the Civil Procedure Rules seeking orders;

(a).      Service of this application be dispensed with in the first  instance.

(b).      THAT pending the hearing and determination of this application inter-parties there be a temporary injunction restraining the Respondent its agents and/or servants from auctioning the title Kimilili/Kimilili/1069 in a public auction or by private treaty.

(c).      Pending the hearing and determination of this suit there  be a temporary injunction restraining the Respondent its agents and/or servants from auctioning that title  Kimilili/Kimilili/1069 by  a public auction or by private treaty.

(d).      Costs of this application be provided for.

2.         The motion is supported by the grounds on its face and the supporting affidavit of  the Applicant.   The main grounds are;

I.          The Applicant has financial difficulty to settle the loan on the terms set by the documents.

II.         The subject property is the only residential home to the Applicants  young family.

III.       This court seized is with jurisdiction under the Land Registration  Act to grant the orders sought.

3.         The application is opposed by the Respondent.  Through a  replying  affidavit sworn by the Respondents Recoveries Officer, Mr. Castro Mutai, outlaying the reasons for the opposition. First    that the Applicant has admitted his indebtedness and failure to  make payments for the loan.  Upon the Applicant’s default, he    was issued with a demand  notice as required by law.

4.         The Respondent depones further that the Applicant was issued with all the relevant statutory notices before the property was  advertised for sale. They have all been annexed to the replying affidavit. That the Applicant;s allegations of his financial  difficulties  have not been proved.  Lastly, that once the property  is charged  it ceases to have any sentimental  value as it becomes a commodity which can be sold.

5.         The parties thereafter filed their written submissions.  The Applicant  submits that his application is anchored under sec. 63  (e) of the Civil  Procedure Act and sec. 106 (2) (6) of the Land  Act.  That if this application is not granted, the entire suit will be rendered an academic exercise.

6.         The Applicant submits he has demonstrated good faith by stating  his  first  installment will be Kshs. 218000/= if this application is allowed   and he   has gone ahead to make that payment even before the court has made such an order.   On the issue of   prima facie case, the Applicant  says this is his residential home which his young family knows.  Secondly the Applicant will be greatly prejudiced as the house has been grossly under valued  by the Respondent and/or his agent from Kshs  6million to Kshs 3. 2 million.

7.         The Applicant also questions the notice served upon him by the  Respondent in his submissions. That the 40 days  notice under Section 96 (2) has to  be preceded by 90 days under sec. 90 (1) of  the   Land   Act.  That the          Respondent also failed to do a current forced valuation before the sale as the valuation report  annexed was done    six months before date of  sale.He referred the court   to the case of  David Gitome  Kuhiguka vs. Equity Bank Ltd [2013] e KLR.He    urged the   court to allow   the application.

8.         The Respondent on its part submitted highlighting both the  uncontroverted facts and the controverted facts. I will concern myself only with the controverted facts. Briefly, the Applicant  does not  deny he was granted a loan to which he signed an  agreement binding him to comply with the terms and conditions of the loan.  The Respondent referred the  court to court of appeal case of Giro Commercial  Bank Ltd. vs. Halid Hamed  Mutesi  No. 342 of   2000.

9.         That is is trite Law that an injunction cannot issue where there is  default.  There are set precedents when injunction can be granted  to a borrower and none of them is among these listed by the  Applicant. It cited  Pelican Investments Ltd. Vs. National Bank of Kenya Ltd. CC No. 570 of 1998 quoting Halsbury's  Laws of    England [4 ed] volume 32 at paragraph 725.

10. On the applicant suffering irreparable loss, the Respondent  submits   that the value of the land    is one that can be  quantified and   therefore capable of being addressed by  damages.  The  Respondent cited Joseph Kiarie Mbugua vs.     Consolidated Bank   of Kenya Ltd. & Garam Investmentswhere Waweru J. said   that any property offered as security is    converted into a commodity whose value in monetary terms is     readily ascertainable.

11.      The Respondent submits further that the Applicant has failed to  establish a prima facie case. Lastly on the issue whether the court   can re-write a Charge contract under Section  105 and  106 of the Land Registration Act, it wants the  court to find the application is  commenced under  section 90  of the Land Registration  Act. The reliefs relied upon do not afford this court jurisdiction to re-open   the charge.  12.  I must thank both counsels for lengthy and well researched submissions filed on the application  before me. I do   find there are three issues for my determination as follows.

I.          Whether the Applicant has established a prima facie case to warrant the orders sought.

ii.         Whether if the orders sought are not granted, the entire suit  can be rendered nugatory.

Iii.        Whether this court can re-open the charge and revise the terms thereof.

Prima Face Case:

13.      The Applicant’s averment contained in the supporting affidavit is on the strength that the suit   property  Kimilili/Kimilili/1069 is the only home  his young family knows.  He has  financial difficulties occasioned by fraud of his relatives and employees. That the  Respondent has under-valued the property.  These  issues are contested by the Respondents.  Having considered  the  submissions by both parties and taking into account  provisions of   the  case    law on charged property, I do agree with the Respondent submissions that once the property is charged, it  became a   commodity for sale and therefore lost its  sentimental value.  See Augustine Kibet Vs. Savings  And Loan (K) Ltd.

14.      Further the  Respondent deponed that the Applicant  did not  disclose where he lived before he acquired this property    hence he cannot say it was his only home. The Applicant did not explain this away either in the pleadings or his submissions. Mr Ocharo orally told the   court on 27th Feb 2014 that he had       filed a supplementary affidavit     but I found none from the record at the time of writing this ruling.

15.      On the limb of under valuing the property by the Respondent, again I find the Applicant’s case wanting. He deponed that the  property   was bought at Kshs. 6,000,000/= having secured   Kshs.   4,000,000/=   from the Respondent while he paid Kshs  2,000,000/=.  He did not  annex an agreement of sale  showing the land was sold for Kshs.6,000,000/=. He also did not annex  his own independent valuation  report  to give a higher value  than  what the Respondent presented.  The application as  presented  minus this evidence makes it difficult  for this court to   exercise her discretion in favour of the applicant to grant the orders sought.

16.      Last limb of this heading as regards his financial difficulties. It is well captured in paragraph 14 and 15 of the replying affidavit which states the applicant failed to prove that his cousin and employees caused him financial troubles to warrant the court’s  sympathy.  Nothing in the pleadings supported this averment nor was it substantiated in the submissions made by the Applicant. In summary, I find the applicant has not established a fact to merit   the exercise of the discretion of the court favourably.

Irreparable loss:

17.      It is not disputed the suit property is quantifiable as it was bought   for Kshs 6,000,000/ as put by the applicant. The  issue the applicant has  is the fact that this is the only home his family  knows (sentimental value) which in his view is unquantifiable.  The  Applicant has submitted his application  was not brought under Order 40 of the Civil Procedure Rules as alluded to by the Respondent in their submissions. The sections under which it is premised relates generally to the fair administration of justice  and exercise of  discretion of this court which when the court is      exercising must ensure justice is done to both parties since it is a double edged  sword. In any event, principles for granting  injunctions whether applications are brought under order 40 of  the Civil Procedure Rules   or not are guided by the decision in the renowned case of Giella Vs Cassman Brown. The court cannot exercise discretion in a vacuum        but evaluate the facts presented.

18.      The Applicant has also not substantiated the nature of prejudice he will suffer and whether or not it cannot be compensated by   way of damages.  From his affidavit and submissions, I find no  prejudice disclosed that cannot be compensated by way of damages.

19.      Can the court re-open the Charge? Section 105 of the Land Act No. 6 of 2012  grants this court power to re-open a charge secured on a matrimonial home in the interest of doing justice to the parties. The Applicant asked the court to invoke the provisions of  section 106 of the Land Act.

20.      Looking at the application before me, it is seeking temporary  orders of injunction pending determination of suit.  The  prayer of whether or  not to re-open the charge is contained in   the substantive suit (originating summons). Secondly the  application was not anchored to    be brought under section 106. There was no mention of re-opening of the Charge as one of the grounds relied upon. The advocates bringing the issue of re-opening the Charge in their submissions the interlocutory  stage is tantamount to  confusing the court to determine a matter that is not prayed for in the application for determination now. This court will not delve into determining issues   not before her and without giving parties a hearing. I will therefore let this issue   rest here to await the determination of the  originating             summons.

21.      Consequently, having considered the application wholesome and  for the reasons given in the above paragraphs, I find this application is lacking in merit and  do dismiss it with costs.

DATED, SIGNED and DELIVERED this  25th day of March 2014

A. OMOLLO

JUDGE.