George Rombo v Jones Gibson Mwangi & Housing Finance Company of Kenya Ltd [2018] KEELC 4450 (KLR)

REPUBLIC OF KENYA

IN THE ENVIRONMENT AND LAND COURT AT MILIMANI

ELC CIVIL SUIT NO. 464 OF 2007

FORMELY HCCC NO.2087 OF 2011

GEORGE ROMBO………………………….…..…………PLAINTIFF

=VERSUS=

JONES GIBSON MWANGI………………………….….DEFENDANT

HOUSING FINANCE COMPANY OF KENYA LTD….THIRD PARTY

JUDGEMENT:

1. The Defendant herein Jones Gibson Mwangi made an application to issue a third party notice against Housing Finance Company of Kenya (HFCK) on 10th November 2014. This application was allowed in a Ruling delivered on 31st May 2017.

2. The Defendant then issued a third party notice against the third party. The third party who had already entered appearance following a previous application responded to the Defendants claim through replying affidavit sworn on 6th October 2017. The Court directed that the Defendant and the third party file written submissions in respect of the Defendant’s claim against the third party. The Plaintiff in this claim died in 2006.

3. The Defendant herein had taken a loan of Kshs.88,200/= over which a charge was created on LR No. Nairobi/Block 76/810. When the defendant defaulted, the third party issued requisite statutory notices and the charged property was sold in a public auction. The charged property was bought by the plaintiff in this case. The plaintiff then filed an originating summons seeking orders of eviction. Attempts were made to serve the defendant in person in vain. He was finally served through advertisement in the press. He did not enter appearance and judgement was entered in favour of the Plaintiff. The Defendant was evicted from the suit premises. This marked the beginning of numerous applications by the defendant majority of which have been dismissed.

4. In these third party proceedings between the defendant and third party, the defendant claims for accountability, liability, re-conveyance of LR No. Nairobi Block 76/810  including damages and mesne profits. The defendant’s basis for these claims is that there was actually no sale which took place and that the cheque of Kshs.1,200,000/= issued by Barclays Bank for the purported sale proceeds was fraudulent . The Defendant contends that he had redeemed his mortgage and that therefore there was no basis upon which his property would have been sold.

5. In response to the defendant’s claim the third party contends that it had advanced a loan to the defendant over which the defendant’s property was given a security. When the defendant defaulted the property was sold in a public auction. It fetched Kshs.1,700,000/=. This amount was over and above what was owed by the defendant to the third party. The third party called upon the defendant to pick up a refund which he did. The third party therefore contends that the defendant has no claim against it and that there is no basis upon which the sold property can be re-conveyed back to the defendant and that in any case the third party has no interest in the sold property.

6. I have gone through the defendant’s claim as well as a response to the same by the third party. I have also gone through the submissions by the parties herein. The issues which emerge for determination are firstly whether the defendant redeemed the mortgaged property and secondly whether the suit property was fraudulently sold in a public auction. The third and last issue is whether the defendant is entitled to any indemnity.

7. On the first issue , the defendant has always wanted the court to believe that he is the one who raised Kshs.1,700,000/= which he gave the third party so as to redeem his property. In support of this contention, the defendant has been relying on his loan account statement from the third party in trying to mislead the court. In this statement annexed to the third party notice, a sum of Kshs.500,000/= was credited into his loan account on 31st August 2000. Another payment of Kshs.1,200,000/= was credited into the defendant’s loan account on 24th October 2000.

8. The suit property was auctioned on 18th July 2000. There is therefore  no way the defendant can claim that he is the one who raised Kshs.1,700,000/=. If there was any redemption to be made by the defendant, it should have been before the fall of the hammer on 18th July 2000. The plaintiff who was the highest bidder paid a deposit of Kshs.500,000/= to the auctioneers as per their letter of 19th July 2000 to M/s Mathenge & Muchemi Advocates for the third party.

9. M/s Mathenge & Muchemi Advocates forwarded a cheque of Ksh.500,000/= to the third party through their letter of 27th July 2000. This is the amount which was credited into the defendant’s loan account on 31st August 2000. On 23rd October 2000, M/s Mathenge & Muchemi & Advocates forwarded a banker’s cheque of Kshs.1,200,000/= to the third party. This amount was credited into the defendant’s loan account on 24th October 2000.

10. The third party issued a cheque of Kshs.442,152. 55 in favour of the defendant on 16th February 2001 being refund of what was over above what he owed the third party. This amount is reflected in the loan account of the defendant as a refund. The defendant does not deny that he received this amount. I therefore find that the defendant did not redeem the mortgage before the fall of the hammer.

11. On the second issue, the defendant seems to be of the view that there was no cheque of Kshs.1,200,000/= issued by Barclays . His basis for this is that there is no receipt for the cheque. He asked the court in one of his numerous applications to have the officers from the third party summoned to come and show any receipt issued by the third party. This order was issued by the late Justice Kamau. The third party’s officials appeared and explained that the file in respect of the loan had been closed and taken to the archives. They pleaded for time to get it. The defendant made an application to court in which he sought order that a bogus banker’s cheque had been issued and that after the court called for a receipt of the same from the third party there was no compliance. Retired Justice Kubo dismissed the defendant’s application on 19th June 2008.

12. The defendant never challenged the sale of his property before it was sold and wherever he tried to fault the process thereafter he did not succeed. There is absolutely no evidence of any fraud against the third party. It follows therefore that there is no basis upon which the defendant can claim any indemnity from the third party.  I find that the defendant’s claim against the third party is misconceived. The same is hereby dismissed with costs to the third party.

Dated, Signed and delivered at Nairobi on this 19thday of February 2018.

E.O.OBAGA

JUDGE

In the presence of :

Mr Gikunda for Mr Abuya for 3rd Party

Defendant in person

Court Assistant: Hilda

E.O.OBAGA

JUDGE