Osman Tahir Sheikh Said,Amina Tahir Sheikh Said & Said Ahmed Tahir Shikh Said (All suing as the Executors of the will of the late Tahir sheikh Said Ahmed) v Bank of Africa Limited [2019] KEHC 2038 (KLR)

Full Case Text

REPUBLIC OF KENYA

IN THE HIGH COURT OF KENYA AT MOMBASA

CIVIL SUIT NO. 80 OF 2018

OSMAN TAHIR SHEIKH SAID

AMINA TAHIR SHEIKH SAID

SAID AHMED TAHIR SHIKH SAID..................................PLAINTFFS

(All suing as the Executors of the will

of the late Tahir sheikh Said Ahmed)

VERSUS

BANK OF AFRICA LIMITED............................................DEFENDANT

RULING

1. There are four applications before this court for consideration, being;

(a) Notice of Motion application dated 2nd October, 2018 andfiled incourt on 4th October, 2013 by the plaintiff /applicant

(b) a chamber summons application dated 10thApril, 2019and a Notice of Motion dated 10thApril, 2019 both filed incourt on 10thApril,2019 by the plaintiff applicant;

(c) a Notice of Motion application dated 24th April, 2019 anda Noticeof Preliminary Objection dated 11thFebruary,2019, filed by the Defendant;

(d) a Notice of Motion application dated 28th June, 2019,and filed in court on 1st July, 2019 by the Plaintiff/Applicant.

2. However, counsel for the parties opted to dispense with the noticeof motion application dated 24th April, 2019 by way of writtensubmissions with the Defendant /applicant filing its submissions on 1stJuly, 2019 while the plaintiff/Respondentfiled theirs on 18th July,2019.

3. I have read through all the applications filed in this matter and find itappropriate to begin with considering the Notice of Preliminaryobjection filed by the Defendant on 12th February, 2019 in oppositionto the notice of motion application dated 28th January, 2019 and filedby the plaintiff. This is for the reasons set out in the case of MUKHISABISCUIT MANUFACTURING CO. LTD –VRS- WEST END DISTRIBUTORS LTD, ( 1969) E.A 696, where it was held that;

“ A Preliminary Objection is in the nature of what usedto be a demurrer. It raises a pure point of law which is argued on the assumption that all the facts pleaded by the other side are correct. It cannot be raised if any fact has to be ascertained or if what issought is the exercise of Judicial discretion”.

4. It was also held in the same MUKHISA case (Supra) that a preliminaryobjection consists of a pointof law which has been pleaded or whicharise by clear implication out of pleadings and which if urgued, maydispose of the suit.

5. In the Notice of Motion application dated 28thJanuary, 2019 and filedon even date the plaintiff sought;

(a) spent

(b) theHonourable court to be pleased to set aside and/or varythe orders made suomoto on 26thNovember, 2019 dismissingthe suit;

(d) costs of the application in the case.

6. The defendant , in his Notice of Preliminary Objection contents that

(a) On 21stJuly, 2016 LadyJustice NjokiMwangi in MombasaHCCCNo. 57 of 2016 Juja coffee Exporters Ltd & Others -v- Bank of Africa, granted a conditional injunction restraining the bank from disposing of the charge properties;

(b) The Court of Appeal in Mombasa Civil Appeal No 99 of 2016 Bank of Arica Limited V Juja coffee Exporters Ltd & Others by a ruling dated 25thJanuary, 2018 determined thequestionof excercise of the Defendants’ statutory power of saleover the suit properties. The court allowed the bank’s appeal and set aside the order of Hon. Lady Justice NjokiMwangi dated 21st July 2016 where she had granted a conditional injunction.

7. Counsel for both parties filed their written submissions with respectto the Preliminary Objection with regard to the plaintiff’s notice ofmotion application dated 11th February 2019. The plaintiff filed their written submissions on 28th March, 2019 while the defendant filedtheirs on the 1st April ,2019.

8. The first point of law raised by the defendants is that thePlaintiffs/Applicants lack locus standi to institute the present suit sincethe suit properties are owned by limited liability companies. Intheir submissions, the defendants’ counsel has cited, among others,the case of SALMON VRS SALMON ( 1897) A.C 22 in support ofthe arguments that a company is anentitiely separate entity from its shareholders and hence, the Plaintiffs/Applicants herein cannotpurport to have any right to any item or property owned by the saidcompanies. The defendant’s counsel further quoted the case ofNAIROBI MAMBA VILLAGE VRS NATIONAL BANK OFKENYA (2002) IEA 197,where the court held that the chargor isthe only person who can legitimately complain that the power of saleis being exercised unlawfully, irregularly or oppressively (summarized)

9. In response to the above arguments, the plaintiffs’ counsel relied onthe case of HCCC No. 29 of 2018 SABIR TAHIR SHEIKH SAIDAND 6 OTHERS VRFS BANK OF AFRICA,where Honourable L.J. NjokiMwangi granted the Applicants a leeway to file a suit asexecutors of the will of the late Tahir Sheikh Said, that seeking thecourt to take judicial notice of the fact that the properties in disputeare registered in the names of companies where the deceased was achairman and majority shareholder. The applicants counsel furthersubmitted that they are only protecting the interest of the beneficiaries of the estate of the deceased “ TSS” who stand to lose theshares in the companies which own the disputed properties.

10. It will be notedthat there is no divergence of opinion by counsel for theparties on the legal personality of a limited liability company whichacquires its own property, rights and liabilities separate from itsmembers upon its incorporation, as the centuriesold case ofSALMONVRS SALMON a cited by the defendant’s counsel laid thisprinciplerest.

11. There is also no argument that the proper plaintiff in anyproceedings or action in respect of a wrong done to a company is thecompany itself. This rule is properly referred to in company law as “therule in Foss V.Harbottle”. The divergence of view in the present case centers on the exception to this rule which were stated in the Foss caseitself and in other cases that came after it, especially the case ofEDWARDS VS HALLIWELL ( 1950) ALL E.R 1064 which is regardedas the Locus classicus that laid out the exception and where Jenkins,L.J emphasized that;

“……..the rule ( in Foss V Harbottle) is not aninflexible rule and it willbe relaxed where necessary inthe interest of justice”.

12. The court of Appeal cited with approval the case of Foss V Harbottleand that of Edwards V Halliwell intheir case of AMIN AKBERALI MANJI &2 OTHERS VRS ALTAF ABDULRAJUDUDANI & ANOTHER (2015) e KLR,and stated theexceptionstherein asfollows;

(a) There is an exception to the rule where what hasbeen done amounts to fraud and the wrong doers arethemselves in control of the company;

(b)Where it is alleged that the personal rights of theplaintiffshareholders have been or are about to beinfringed;

(c)any other case where the interest of justice requirethat the general rule, requiring suit by the company,should be disregarded.

13. Applying thoseprinciples in the present case, the plaintiffs in the amended plaint filed on 5th April, 2019 describe themselves as theexecutives of the willof their deceased father, Tahir Sheikh Said, whowas the chairman and majority shareholder of the companies which own the disputed properties. And under the law of succession ,shareholding in a company partly forms subject to a will and theplaintiffs can onlybring an action as the lawful administrators wherethe shareholdingrights of their late father have been or are about to beinfringed

14. In the case of RAJESH PRANJIVAN CHUNDAJAMA VRSSALILESH PRINJIVAN CHIDASAMA ( 2014) e KLR, the courtof appeal on the issue of locus standi in a case that deals with theadministration of a deceased person’s estate stated that;

“ ……an administrator is not entitled to bring anyaction as an administrator before he has taken outletter of administration. If he does, the action is incompetent as of the date of inception….” (Emphasisadded).

15. And in the case of KOTHARI VRS QURESHI & ANOHTER(1997)E.A564,the court stated as follows;

“ where a person dies leaving a will appointing anexecutor, theperson so appointed as Executor represents that estate of the deceased testator as fromthe date of death of the testator”.

The court further added that :

“…..and executor may commence a suit before grant ofprobate and he can carry on the proceedings without grant as far as possible until he has proven his title andif this will is ultimately powered no one power not onecan question the validity of such acts….”

16. The plaintiff in the instant case have attached a copy of will of the lateTahir Sheikh Said drawn by MessrAboo&Company advocates and altered on 12th June, 2012. And paragraph9 of the said will reads;

“ I appoint my children (1) Osman Tahir Sheikh Said (son) (2) AminaTahir Sheikh Said ( Daughter ) and (3)Said Ahmed Tahir Sheikh Said (son) to be the jointexecutors and Trustees of this my will”.

From the foregoing, it is my considered view that asappointed executors in the deceased’s will, the plaintiffs cancommence any proceedings in their capacities as administratorspending the grant of probate.

17. The second pointof law that has been raised bythe defendant is thatthe suit hereinis re-judicata. This point will be consideredconcurrently with the issues that the suit is re-subjudice. Thedefendant’s counsel submitted that the plaintiffs/applicants havefailed todisclose the existence of previousdecisions of where injunction applications over the suit properties in the present suit have been dealt with in the pending suits and concluded on appeal, being;

(a) Civil Appeal No 99 of 2016, BANK OF AFRICA LIMITED –VRS-JUJA COFFEE EXPORTERS LIMITED& 4 OTHERS, where the bank allowed the banks appealand set aside Hon. Justice Njoki’s order for conditionalinjunction

(b) Civil application No 48 of 2018 pending at the courtof Appeal.

(c) Mombasa HCCC No. 57 of 2016 JUJA COFFEE EXPORTERS LTD & OTHERS VRS BANK OF AFRICA where Hon. Lady Justice Njoki Mwangi granted a conditional injunction restraining the bank from disposing of the charged properties

According to the defendant’s counsel, the Plaintiffs/Applicants’action of failing to disclose that similar applications for injunction overthe suit properties have been dismissed and the bank oughttoexerciseits statutory power of sale, amountstomaterialnon disclosure andis an abuse of the court process. In response thereof, the plaintiffs’counsel only submitted that res-judicata had not been proved aspleaded

18. The rule or doctrine of res- judicata serves the solitary aim of bringingfinality to litigation and affords parties closure and respite from thespecture of being vexed, haunted and hounded by issuesand suitsthat havealreadybeen determinedby a competent court. It is designed as a pragmatic and common –sensical protection against wastage of time and resources in an endless road of litigations at thebehest of intrepid pleaders hoping that by a multiplicity of suits,and for a party may at last, obtain outcomes favorable to themselves . Without this doctrine (rules) there would be no end tolitigation, and the judicial proves would be rendered a noisomenuisance and brought to disrepute and calumny. The foundation of resjudicata thus rests in public interest for benefit, sure and certain justice( Seethe dictumin independent Electoral and BoundariescommissionMainKamandaand 5 Others (2017) e KLR, by the court of Appeal).

19. Inthat respect, I have considered all the cases outlined by thedefendant in their Notice of Preliminary objectionas falling within therule of res-judcata. I am convinced that HCCCNo. 29 OF 2018, SABIRTAHIR SHEIKH SAID & 6 OTHERS VRS BANK OF AFRICALIMITED, is much related to the suit herein. The learned HonourableJudge delivered her ruling on the 21st September, 2018, which I havekeenly considered.

20. I note that the defendant in that case, which is also the defendantherein, had filed a Notice of Preliminary Objection dated 28th April,2018 and a notice of motion application dated 27th April, 2018 ongrounds similar to the ones raised in the preset preliminary objection.The subject matter therein is the same suit properties in the present case but only the name of the plaintiffs seem to differ. The court in thatcase vehemently dealt with the issueof res- judicata and concluded thatHCC NO. 57 of 20016 raised issues not similar to those in HCCC NO.29 of 2018. The latter suit was filed by person who claimed to be thebeneficiaries of the late TAHIR SHEIKH SAID with intentionof protecting the estate of the deceased from alteration and wastage. Theformer suit sought injunctive orders different from the issues statedabove

21. In HCCC No. 29 of 2018, the plaintiffs perceived the sale of assetsof the companies where their deceased father was a majority shareholder as being tantamount to intermeddling with his estate. It turnsout that the purported assets in HCCC. No. 29 of 2018 are suitproperties in the present case. However, the learned judge dismissed,the suit onfinding that the plaintiff therein had not showed they werelawful administrators of the estate of the late TAHIR SHEIKH SAID.Hence, the only difference in HCCC No.L 29 of 2018 and the presentcase is that the plaintiff’s in this case have attached a will appointingthemas Executors of theestate of their late father, which they failedto doin the former case. The plaintiffsbeing different, eventhoughtthe subject matter is the same, I find the present suit cannot be held to be res-judcata.

22. The last point of law that has been raised by the defendant in thePreliminary Objection is about the case abating since no summonswere served on the defendants by the plaintiffs.

23. In response , the plaintiffs’counsel submits that the case was dismissedand for that fact, it cannot be said the suit abated. The plaintiff’s counsel goes onto submit that there is a pending application ( Noticeof Motion application dated in which reinstatement of the suit has been sought , and that until the same is determined , the issue ofsummons cannot be argued . This line of summons by the plaintiff’scounsel is surprising because there is an interim order in favour ofthe plaintiff in that regard.

24. The provisions of the law under Order 5 Rule 1 (6) of the CivilProcedure Rules is clear that “every summons except where thecourtis to effect service, shall be collected for service within thirty days ofissue or anticipation,whichever is later, fulfilling to which the suitshall abate.

25. In this instant case, I find that there are no copies of summons whichhave beenpreparedand filed by the plaintiff. I also find that there is noexplanation to that default. In the case of FRENZE INVESTMENTSLTDVRS KENYA WAY LTD, HCCC NO 524 of 1999, the court stated;

“ A summon to enter appearance is not a piece of paperof little consequence. It is a necessary and vital document governing the time table of pleadings andrules governing the insurance and that service thereofmust be complied with for the pleadings to acquirelegitimacy. Such seriousness was underscored by theCourt of Appeal in C.A 85 of 1996 UDAY KUMARCHANDULLALRAJAN & RS T/A LIT PETROL STATIONVRSCHARLES THAITHI ( Unreported ) where a defectivesummonwas issued and served beyond thevalidity of one year butobjection was raised as to itsvalidity although the defendant had already accepted itand entered an unconditional appearance”.

26. Order 5 Rule 1 of the Civil Procedure Rules therefore mandates thata plaint must be accompanied by summonsto enter appearanceandwhere the plaintiff has not taken out summons, the court cannotinvoke its inherent jurisdiction to save such suit as the plaint without appearanceis a nullity. That notwithstanding, the law is clear that the summons once issued are only for one year, after which they lapseand the plaintiff can nonetheless apply for extension.

27. Also, Order 5 of the Civil Procedure rules contemplates that summonsto enter appearance will be issuedand served at the same time as theplaint within 30 days of the date of filing a suit, and the duty,according to Rule 3 (5) is placed on the plaintiff or his advocate toprepare the summons to enter appearance for signature and sealingby the court so as to give it validity. The said provisions stipulates asfollows;

(1) When a suit has been filed a summons shall issue tothedefendantordering him to appear within the timespecifiedtherein.

(2) Everysummons shall be signed by the judge or anofficer appointed by the Judge and shall be sealed withthe seal of thecourt without delay, and in any eventnot more than thirty days from the date of filing suit.

(3) Every summons shall be accompanied by a copyofthe plaint.

(4) The time for appearance shall be fixed with reference to the place of residence of the defendant soas to allow him sufficient time to appear, provided thatthe time for appearance shall not be less than ten days

(5) Every summons shall be prepared bytheplaintiff orhis advocate and filed with the plaint tobe signed inaccordance with sub rule (2) of this rule;

(6) Every summons, except where the court is to effectservice, shallbe collected for service within thirtydays of issue or notification, whichever is later, failingwhich the suit shall abate.

28. Under order 5 Rule (1) 7 of the Civil Procedure Rules , the life span ofthe summon to enter appearance is 24 months upon which if noapplication is made to extend them, the court would without noticedismiss the suit. Although in this case,24 months are not yet over.However, no summons to enter appearance were ever issued from thedate of filing of suit and it isnow almost one year, which is beyond the30days contemplated by the law for such issuance. The rules ofengagement areenacted to achieve justice for bothparties. There isno reasonwhy no summons to enter appearance were not taken out inthis case. This court is under a judicial dutyto ensure that partiesadhere tothe rules of procedure. It therefore follows, that unlessotherwise proven this case has abated.

29. There being injunctive orders issued by this court, focus is nowturned to the notice of motion application dated 24th April, 2-19, whichthe parties have submitted on. The said noticeof motion application dated 24thApril, 2019 was filed on 30th April, 2019 and is expressed tobe brought under Article 159 of the Constitution, section 1A ,B,BAand 63 of the Civil Procedure Act, sections 55 and 56 of the AdvocatesAct, Order 40 Rules 4 and 7 and Order 50 rule 2 of the Civil ProcedureRule whereby several orders have been sought against the plaintiffsjointly and severally as follows;

(a) Spent

(b)The exparte Order of injunctiongiven on 10th April2019 be forthwith set aside suo motto.

(c) this applicationbe heard in priorityor together withthe plaintiff’s notice of motion dated 10thApril 2019 andNotice of Motion dated 28th January 2019 that is fixedfor hearing on 20thMay, 2019.

(d) The suit and all pendingapplications filed but plaintiffs bedismissed with costs on a full indemnitybasis to the defendant.

(e) The court do find that the plaintiffs are vexations litigants who should seek lave of the court before filingany proceedings in any court registry in Kenya.

(f) This Honourble court do make and order that MrMark WaziriAdvocate actedin blatant dishonest withthe intention to mislead this Honourable court intogranting the interim injunction dated 10th April, 2019which conduct amounts to professional misconductand forum shopping.

(g)This Honourable court od recommend appropriatedisciplinary measures and/or action against Mr Mark Waziri Advocate under section 55 and 56 of the Advocate Act or find the advocate in contempt of court.

30. The Motion is based on the grounds set out in the body thereof andfortified bythe supportingaffidavit sworn byCHARLES WAIYAKI asSenior Recoveries Officer of thedefendant Bank that;

(a) the plaintiff/Respondent misled this court by deliberately and blatantly concealing material factswith regard to proceedings in the case where similar applications had been dismissedand ordersdenied.

(b) the plaintiff/Respondents have no locus standi onthe basis that they are not the owners of the suit properties which properties are owned by limitedliability companies.

(c) the plaintiff/Applicant filed an application dated 8thApril,2018 whereby injunctiveorders were denied by HonourableJustice P.JOtieno, and the same was withdrawn on 10. 4.2019. That the plaintiffs/applicants then filed anotherapplication seeking for similarorders which were granted by theHonourableLadyJustice Dora Chepkwony. It is the defendant’s view thatthis is forum shopping and it amounts to abuse of courtprocess.

(d) the defendant/applicant’sequity of redemption with respect of plot No 44 section XXI Was extinguishedafter the said property was sold by public auction on18th April, 2019.

(e) the plaintiff/applicants are vexatious litigants who,knowingthat their three injunction applications weredismissed by court,proceeded to file similar mattersbased on similar facts.

31. The application is opposed by the plaintiffs/Respondents vide areplying affidavit sworn on 20th May,2019 by their advocate,MARKWAZIRI and in which he has deponed that;

(a) he relies on the court record with specific referenceto court proceedings of 8th- 11th April, 2019 with regardto the allegations made against him and the court;

(b) on 4th April,2019, the matter came up for highlighting of submissions and he realized that anauction had been conducted on 1st April, 2019 in respectof one of the suit properties hereby Plot No. 44 sectionsXXI Mombasa Island; without notifying the plaintiff’s.

(c)he was instructed to come on record and he filed anapplication dated 8th April, 2019 in which he sought anorder for status quo to preserve the suit properties,which was certified urgent and scheduled to be heardon priority basis.

(d) the application was fixed for hearing on 10th April,2019 andwhen the defendants filed a preliminaryobjection and the plaintiff’s counsel realized that theyhad indicated the wrong parcel number. He had towithdraw the application, which withdrawal was notopposed and he intimated that he wasmoving to fileanother application under the vacation rules.

(e) they were granted status quo orders as prayedduring the Easter vacation

(f) the plaintiff’s counsel denies the allegations onforum shopping and avers that the defendant seeks toset aside valid court orders without following the dueprocess.

The parties agreed to canvass the application by way of writtensubmissions. The defendant /applicant filed its submission on 1stJuly, 2019 while the plaintiffs filed their on the 18th July, 2019.

DEFENDANT’S SUBMISSIONS

32. In itssubmissions, the defendant submitted on five (5) grounds insupport of its application. On the first ground thedefendant submittedthat the exparte order of 10th April,2019 cannot last for more than 14 days as it would contraveneorder 40 rule 4 of the Civil ProcedureRules .The defendant relies on the case of AUNIBHAIJI& 4 OTHERS VRS CHIEF MAGISTRATE, MILLIMANI LAWCOURTS AND 2OTHERS (2017) e KLR, in support of this arguments.The defendant submitted that the lapse of 14days was on 24thApril,2019, the exparteordershaving been granted on the 10th April, 2019. The matter was fixedfor inter parties hearingon the 30thApril,2019,after the defendant filed the application herein, which the defendantcontends that by then theorders had lapsed and would not beextended.

33. On the second ground, the defendant /applicant submitted that sincethe expate orders were not served within 30 days after issuance, thesaid automatically lapsed. As a result of the said exparteorders, the defendant contends that it continues to suffer loss since the chargorhas refused to paythe loan advanced towhichis over 570 millionKenya shillings. The defendant has cited the court of appeal decisionin DIRECTOR OF PUBLIC PROSECUTION VRS JUSTUSMWENDWA KATHENGE & 2 OHTERS ( 2010) e KLR, where the courtstressed on the Rulescommittee stringent rules on injunctions whichare conveyed to prevent the abuse of the remedy of a temporaryinjunction.

34. Thirdly, the defendantsubmitted that the plaintiffs’lack locus standiin the matter since the suit properties are owned by limited liability companies and not them. The plaintiffs are neither directorsnorshareholders of the respective companies and their claims cannot holdwater.

35. On the fourth ground, the defendant submitted that the plaintiffs’advocate acted dishonestly when he withdrew his notice of motiondated 8th April, 2019 where the court had declined to grant him theorder’s sought only to file a similar application a few hours later whereinjunctive orders were granted . Insupport of this argument by thedefendant, the case of ABDULLAHI MOHAMED SHEIKH VRSGULF AFRICAN BANK LIMITED (Unreported) MILIMANI HCCCNO. 501 of 2016. He also submitted on the abuse of court process,andmaterial non- disclosure as wellas on professional misconduct by theplaintiffs’counsel and cited authorities to support these arguments.

36. On the fifth issue, the defendant submitted that the chargor’sright ofredemption was extinguished by the auction sale on 18th April 2019and the only remedy available was an award of general damages. Herelied on theprovision of Section 99 of the Land Act, 2012 and thecaseof MBUTHIAVRS JIMBA CREDIT FINANCE CORPORATION(1998) to support its arguments.

PLAINTIFFS’ SUBMISSIONS

37. In their submissions filed in court on the 18th July, 2019, the plaintiffssubmitted that the orders granted on 10thApril, 2019 were orders forstatus quo and not injunctive tothe extend asserted by thedefendant/applicant. The plaintiff’s counsel further submits that thedefendants areguilty in approaching the court with unclean handssince it haspreviously advertised its auction in the Daily Nation orthe Standard but opted to advertise in the People’s Daily. Theplaintiffs’ counsel submitted further that no notices were issued norleaflets circulated in respect of the auction. However, the plaintiffs’counsel is of the view that the defendants applicationraises issueswhich are pending and are yet to be determined. The plaintiff’s counselsubmits that it would be prudent or this court to rule on thedefendant’s applicationand the ordersgranted onthe 10th April,2019 and leave the rest to the trial court.

38. In any event, the plaintiffs’ counsel submitted on the following issues.

The first issue is whether the order of status quo order wasissuedjudiciously. On this the plaintiffssubmitted that the court granted thesaid orders to strike and preserve a balance pending the hearing anddetermination of the application.

39. Secondly, in response to the contention that anexparteorder cannotlast for more than 14 days the plaintiffs’ counsel submitted that they moved immediately and on 12thApril, 2019 obtained the earliesthearing date beingthe 9th May, 2019 which they served upon thedefendant’sadvocate on 16thApril, 2019. To this, the plaintiffs’ counsel submittedthat theyare not incontrol of the registry’s diary and ina nutshell no earlier date could be obtained. Further, the plaintiffs’counsel submitted that they could only serve the exparteorders afterthey hadbeen signed bythe Deputy Registrar. Thus the three daysrequired for service of exparteorders could only start counting as from11th April, 2019 when the orders were granted.

40. And on the issue of the equity of redemption having extinguished, theplaintiffs’ counsel submitted that they wish to challenge the legality ofthe said auction and thereforeinference cannot be read to the effectthat the same has been extinguished.

ANALYSIS AND DETERMINATION.

41. Having considered the application, the grounds in the supportingaffidavit, the Respondents’replying affidavit, written submissions byboth counsel together with the cited authorities and the law reliedupon I find that the premise of the present application is that theinjunctive order in force was issued exparte and would not have beenissued had the court been seized of all the necessary information. The plaintiffsare accused of forumshopping in having been denied thesame orders by the Honourable P. J.Otieno, then hours later movingto this court and obtained the said orders. The exparte status quoorders which were granted on the 10thApril, 2019, are in essence injunctive orders restraining the defendant from interfering with theexisting state of affairs or circumstances pending the determination oftheapplication. Status quo orders are issued by the court to prevent any of the parties in a dispute from taking any action until the mattercan be resolved.

42. To understand what proceedings exparte or ex-parte orders mean inlaw, one need not go further than the civil Procedure Act ( Cap 21) andthe rules made there under , and in this case,reference is made to Order 40 of the Civil Procedure Rules, 2010, which provides forissuance of orders Ex-parte.It states as follows;

“ Where the court is satisfied for reason to be recorded that the objective of granting the injunctionwould be defeated by the delay, it may hear the application ex-parte”.

43. More crucially, for our purposes however are provisions of Order 40Rule 4 (2) and (3) which sheds light on what is to be regarded ex- parte. Theprovision is also follows;

Order 40 rule 4 (2)

“ An ex parte injunction may be granted only once fornot more than 14 days and shall not be extendedthereafter except once by consent of parties or by theorder of the court for a period not exceeding fourteendays.”

Order 40 rule 4 (3)

“ In any case where the court grants an ex-parte injunction theapplicant shall within three days fromthe date of issue of theorder, serve the order, theapplication , and pleading on the party sought to berestrained. In default of service of any of the documents specified under this rule, theinjunction shall automatically lapse”.

44. A summation of Order 40 Rule 4 (1),(2) and (3) is that for reason oflikelihood of delay, a court may issueinjunctive relief exparte. But thatcanonly be once, with the order issued having a legal lifespan of 14days, with a possible extensiononly once for equal period. The order,however, is issued when the other side is not yet served ( See sub- rule 3) and if issued, the order is to be served together with theapplication and the pleadings within three days of issuance. If this isnot done, the order automatically lapse.(see the case of ERICOCHIENGVRS FREDRICK AILA ONYANGO& ANOTHER (2018) eKLR.

45. From the foregoing provisions of the above Order 40 of the CivilProcedure Rules, no doubt, the expareinjunction having beengrantedon 10thApril, 2019, the law above quoted required that it lasts for 14days only.In the instant case, I agree with the defendant that 14 dayslapsed on 24thApril, 2019 and no extension was granted then. Theexplanationput forward by the plaintiff is that the earlier date availedin the registry was on 9th May,2019 and the circumstances were beyondthe control of the plaintiffs and the advocate.

46. For the benefit of the parties herein, the Black’s Law Dictionary,9thEdition at page 657 the word “ex-parte” is defined as;

“ Done or made at the instance and for the benefit ofone partyonly, and without notice to, or argument by,any person adverse interest; of, or relating to involvingcourt action taken or received by one party withoutnotice to the other, USU for temporary or emergencyrelief”.

47. Having said so, I have considered the court file and found that noneof the parties was present when theseorders were issued on 10thApril,2019. It is therefore my considered view that the proceedings of thecourt on the said date well fit within the definition of ex-parteproceedings and were to be entertained within the confines of Order40 Rule 4 of the Civil Procedure Rules.

In the case of MRS RAHAB WANJIRU EVANS VRS ESSO (K)LTD, Civil appeal no. 13 of 1995 ( 1995)-1998) IEA 332, thecourt of appeal held that;

“…..exparteinjunctionorders granted for more than 14days are of no legal effect and cannot be extended, Itherefor find that this court is so bound”.

In any event, the status quo at the time this court granted the orderswas that plot No 44 section XXI had already been sold ina publicauction on the 1st April.

48. Having earlier considered the issue on locus standi in the preliminaryobjection, I therefore move to the next issue, which is whetherequityof redemption had been extinguished with regard to plot No.44 sectionXXI . The defendant submitted that the chargor’s equity of redemptionwas extinguishedafter the auction sale on the 1st April, 2019. Theplaintiffs’ are contesting the legality of auction saleby purporting thatdue procedure was not exercised and that no notice was servedonthem. Section 99 of the Land Act provides;

“(1) this scion apples to –

(a) A person who purchasescharged land from thechargee or receiver, except where the chargee is thepurchaser; or

(b) A person claiming the charge land through the person who purchases charged land from the charge or receiver including a person claiming through the chargee if the chargee and person so claiming obtained the charged land in good faith and for value”.

(2 )A person to whom this section applies;

(a) is not answerable for the loss, misapplication or nonapplicationof the purchase money paid money paidfor the charged land;

(b)is not obliged to see to the application of the purchase price;

(c) is not obliged to inquire whether there has been adefault by thechargor or whether any notice requiredtobe given in connection with the excercise of the power of sale has been dulygiven or whether the saleis otherwise necessary proper or regular,

(3) A person to whom this section applies is protected even ifat any time before thecompletion of the sale the person has actual notice that there has not been adefault by thechargor, or that a notice has been dulyserved or that the sale is in some way, unnecessary,improper, or irregular,except in the case of fraud,misrepresentation or otherdishonest conduct on thepart of the chargee, of which thatperson has actualor constructive notice.

(4) A person prejudiced by an unauthorized, improper orirregularexcercise of the power of sale shall have aremedy in damages against the person exercising thatpower”.

This section protects the purchaser. The equity of redemption isextinguished at the fall of the hammer.

49. On 1st April, 2019, the charged property was sold by public auction to athird party. The sale by public auction extinguishes equity ofredemptionat the fall of the hammer whether the property istransferred to the purchaser or not. I find the plaintiffs application withregard to plot No. 44 Section XXI has been overtaken by events as thesale which the plaintiffs’sought to stay had already taken place. The third party who purchased the property at a public auction is thereforeprotected by provisions of section 99 of theLand Act.

50. In the case of MBUTHIA VRS JIMBA CREDIT FINANCECORPORATION AND ANOTHER (1986-1989) IEA 340 ( CAK) the impact of an auction sale on the equity of redemption was considered.There,the charged property was sold by public auction to the secondrespondent and the court of appeal held.

“ A sale destroys the equity of redemption in the mortgaged property and constitutes themortgagee’sexercising the power of sale trustee of the surplusproceeds of sale, if any for the person interested according to priorities.The court will not grant to amortgagortampering the moneys due under the mortgage, an injunction restraining the mortgageefrom completing by conveyance a contract to sell themortgaged property in exercise of this power of saleunless it is proved that the mortgagee entered into thecontract in bad faith”.

The transaction which is the subject of the dispute wasentered into in February, 1982 and is therefore governed not only by the registered Land Act itself , but also by the Common Law and Equity under section 72(1) of that Act, the equity of redemption subsisted in themortgagor until the lease hold premises was sold. Itwas then extinguished and the Act provides that “achargee shall be deemed to have been sold when a bidhas been accepted at the auction sale.

This means that mortgagor’s right of redemption is lostas soon as the mortgage either sellsthe mortgagedproperty by public auction or enters into a bindingcontract in respect of it. On the acceptance of a bid at anauction, there is andimmediate sale bindingon thechargor. The charge is then entered to immediatepossessionof the charged property under subsection(2) of the Act”.

51. In the caseof ZE YU VRS YANG NOVA INDUSTRIALPRODUCT LTD (2003) IEA 362 ( CCK) Justice Nyamu(as he thenwas ) held as follows;

“The existence of a valid sale agreement extinguished the equity of redemption and theapplicant had no remedies touching on the propertyboth as against the former mortgagee and against thepersonexercising the power”.

52. In view of the foregoing, it is evident that the defendant did notsuppress and or ignore the plaintiff’seffort to try and redeem theproperty nor were they denied the equitable right of redemption beforethe auction sale took place. Nonetheless, as the plaintiff’s noted, theauction wasadvertised inthe People’s Daily Magazine instead ofNation newspaper or Standard, but this has not demonstrated thatthe said action by the defendant clogged the plaintiffs’ right ofredemption.

53. Furthermore , the plaintiffs have not justified that there was lack ofissuance of proper notice of sale as they alleged or proved that theyhave a prima facie case with a probability of success or that damageswill not be sufficientcompensation or that the balance of conveniencetilts in their favour. After all, the defendantis a bank and cannot bedefeated to pay general damages to theplaintiffs’ in case of sucheventuality.

54. It is worth noting that in the agreement creating the charge, if notexpress, it is animplied condition that the chargor would pay theloan in the matter agreed therein by the parties.So far, the plaintiffshavenot rebutted the defendant’s averments on the issue of a loan ofoverKshs 570,000,000 creating a charge in the suit properties. Thechargor was therefore duty bound to make good the said loan that wasadvancedto him. But assubmitted by the defendant, the chargordefaulted in thepaymentplan ofthe said loan which was advancedto him, so that the charge remains undischarged as he still owes thebank money

55. And upon his demise, this duty passed on to the Administrators/Executors of his estate. But so far, no payment hasbeen made in payment proposal furnished by the plaintiffs in theircapacity as Executors of his will. There is a declaration in theplaintfiled herein stating that they are willing to pay any loan advanced totheir late father but this is not enough to bind the defendant bankswhich is suffering loss. It should be remembered that the monies thebank advances to people as loans belong to other clients and that thebank is just in business.

56. It is incumbent upon litigants toknow that he who comes to equitymust come with clean hands and that he must also do equity if heexpects to have equity done to him. Litigants must also know that hewho comes to equity must fulfill allor substantially allhis outstanding obligations before insisting on his right. The conduct of the chargor inthis case, and even their ownconduct, betray the plaintiffs herein itdoes not endear them to equitable remedies. Neither the chargornor theplaintiffhave fulfilled all or substantially all the outstandingobligations, and they cannot expect equity to be done to them.

57. In light of theforegoing,

(a)The application dated 24th April, 2019 by the defendant succeeds and the same is allowed with coststo the defendant.

(b)The orders issued by this court on 10thApril, 2019 beandare hereby vacatedsince the parties have notsubmitted onthe otherapplication,

(c) I direct that they appear before the presiding Judgeof this court, Honorable Justice E. K.Ogollafor furtherdirections on a date to be taken in the registry.

Delivered, signed and dated in open court atMombasa this 7th day of October, 2019.

D. O. CHEPKWONY

JUDGE