Phoebe Wanja Boore & Othniel Kinja Ndirangu v Kelvin N. Mwaura t/a Ken Track Auctioneers & Wananchi Sacco Society Limited [2021] KECPT 535 (KLR)

REPUBLIC OF KENYA

IN THE CO-OPERATIVE TRIBUNAL

AT NAIROBI

TRIBUNAL CASE NO.740 OF 2019

PHOEBE  WANJA  BOORE..................................................................1ST CLAIMANT

OTHNIEL KINJA  NDIRANGU..........................................................2ND CLAIMANT

VERSUS

KELVIN  N. MWAURA T/A KEN TRACK  AUCTIONEERS....1ST  RESPONDENT

WANANCHI SACCO SOCIETY  LIMITED.................................2ND RESPONDENT

RULING

Vide the Application dated 6. 12. 2019, the Claimants has moved this Tribunal  seeking  for the Orders inter alia:

Spent;

That a conservatory  Order be and is  hereby issued  against the Defendants restraining  them whether  by themselves, their agents and/or servants from conducting  a sale  by  public  Auction of all that parcel  of land known  as LR. NO. Tetu/Kabage/550 on 17. 12. 2019 pending the hearing and  determination  of this Application;  and

Costs in the cause.

The Application is supported by the grounds on its face and the Affidavit sworn by  the 1st Claimant  on 6. 12. 2019.

The 1st Respondent   has opposed the Application by filing a Replying Affidavit sworn by Leonard Lwei Mwangi  on 24. 2.2020.

Vide  the  directions  given  on  23. 4.2020,  the Application  was canvassed  by way of  written submissions.  The Claimant   filed  their submissions  on 9. 11. 2020, while the Respondents did so on 11. 11. 2020.

Claimant’s Contention

It  is the Claimant’s  Contention   that  she guaranteed  the 2nd  Claimant  a loan  and offered  property LR.NO.Tetu/Kabage/550as security. That  she is  the registered  owner  of the said  parcel  of land.  That she  is surprised  that the  1st Respondent,  on the instructions  of the 2nd  Respondent, has advertised  the said property for  sale without  issuing  her with the appropriate  Notices. That  in the circumstances, the alleged  is illegal and should  thus be voided.

Respondent’s case

The Respondents have  opposed  the Application  on grounds that  sometimes in January, 2017, the 2nd Claimant  applied  for a business loan  of Kshs.3,000,000/=. That  the loan was approved  on  10. 2.2017 with property  LR.NO. Tetu/Kabage/550 being  offered as security. That a  legal charge  over the  said property  was executed  between  the 1st  Claimant and  2nd Claimant  on the one hand and the 2nd Respondent  on the other on  2. 3.2017. That  subsequently, and from the month  of April, 2017,  the 2nd  Claimant  started defaulting  in repayment  of the loan.  That when  the default  persisted, the  2nd  Respondent  was compelled  to  begin  the process  of realizing  its security.  Consequently, the property  was advertised  for sale in June,  2018. That  the Claimants approached  the Chief Magistrate’s Court  in Nyeri  vide CMCC.NO.169/18 seeking  injunctive  Orders. That  by  consent  of  the parties, the suit was withdrawn on  11. 12. 2018 on the understanding  that the 2nd  Claimant  would make  a reasonable  proposal  on repayment  of the  outstanding  loan.

That  on 7. 1.2019,  the  2nd  Respondent  wrote a  letter  to the 2nd  Claimant informing  him about  the outstanding  debt which  stood at kshs.1,821,118. 71 and invited  him to make proposal  on payment.

That  on 22. 2.19,  and  following   no response  by the 2nd  Claimant,  the 2nd  Respondent  issued a  90 days, Notice to both of  them detailing  the extent  of breach. That both  Claimants  were  duly served  with the Notice.

That after  the lapse  of 90 days,  the Claimants never rectified  the  default prompting  the  2nd Respondent to issue  the 40 days  redemption  Notice. That both  Claimants  were served  with the Notice.

That on 9. 10. 2019, the 1st Respondent  issued  a Notification  of  sale followed  by a 45 days  redemption Notice.

That notwithstanding personal  service of these Notices, the  1st  Respondent  also  sent Notification  of sale  and redemption  Notice  to them  through  registered  post.

That  the Claimants  never  rectified  their  default  thus prompting  the Respondents  to  advertise  the property for sale  on 29. 11. 2019 vide the Star Newspaper. As per  the advertisement, the property  was scheduled  for auction on  17. 12. 2019.

That as at 24. 2.2020, the outstanding loan stood  at kshs.3,655,462. 3.

That  from the foregoing, it is  apparent  that the Respondents followed  the law in realizing  the charged  property.

Issued  for determination

The Claimant’s  Application  dated 6. 12. 2019 has presented  the following  issues  for determination:

Whether  the Claimants  have  established  a proper basis  to warrant  the  grant  of  an Order  of temporary  injunction.

Who  should meet  the cost  of the Application?

Temporary  injunction

The law  on  temporary  injunctions  is embodied  in Order  40  of the Civil Procedure  Rules  and case law.

Order  40  Rule  1 provides  in this regard thus:

“ 40  (1) Where  in any suit  it  is proved  by Affidavit or otherwise  (a) that any property  in dispute  in a suit  is in  changer of being wasted,  damaged,  or  alienated by any  party  to the suit or  wrongfully  sold in  execution  of a decree-

The court  may Order  grant  of a temporary  injunction  to restrain  such act, or make  such other  Orders  for the  purpose  of staying and preventing  the  wasting, damaging, alienation, sale,  removal, or  disposition  of the property  as the court  thinks  fit until  the disposal  of the  suit  or  until  further  Orders.”

Before  we can  make any  Order  respecting  a request  for a temporary  injunction,  we  must  first take  into account  certain principles. These  principles  were enunciated  in the celebrated  case of Giella  vs Cassman Brown [1973] EA 358. In  the pertinent  part,  the court set out  the principles  as follows:

“ First,  an Applicant must  show  a prima facie case  with a probability  of  success, secondly,  an interlocutory  injunction  would  not  normally be granted  unless  the  Applicant otherwise  suffer irreparable  harm which  would not  adequately be compensated  by an award  of damages. Thirdly,  if the  court is in doubt,  it will decide an Application  on a balance  of convenience.”

It thus follow that for an  Order  of a temporary  injunction  to be  granted,  a party,  must establish  existence of the following  conditions.

A Prima Facie  case with a probability  of success,

Irreparable harm  which  would not  adequately  be compensated  by way of  damage;

If in doubt, the court  to determine the Application  on a balance  of convenience.

What  then  constitutes  a prima  facie  case?  We find  the answer  in  the decision  of the court  in the case  of Mrao – vs- first American bank  of Kenya Limited  [2013] eKLR. In the  pertinent  part,  the court held thus:

“....A Prima facie case is  more than an  arguable case. It is not  sufficient  to raise  issues.  The evidence  must show  an infringement of a right  and the probability of the Applicants’  case upon trial..... it is a case,  which, on the  material presented  to the court, a Tribunal  property, directing itself will conclude that  there exists  a right which has apparently been  infringed  by the opposite party  as to call  for  an explanation from the other.”

We thus  pause  the question  as to  whether  the Claimant’s  here, in the present  Application, showed  an infringement  of their rights  so as  to  call for an  explanation  by the Respondents at trial.  It  is the 2nd  Claimant’s  case that  the 1st  Respondent has  placed  his property LR.NO. Tetu/Kabage/550 for sale  without  issuance  of the requisite  Notices. That by  failing to do so,  he has been  unlawfully  denied  an  opportunity  to exercise  his power  of Redemption. We have, however,  perused  the annextures  accompanying  the Replying Affidavit  sworn by  Leonard Lewei Mwangi on  24. 2.2020. We note that the  Claimants were served  with the following  documents  on diverse  dates

Date                                       Document served

23. 3.19                                   90 days statutory  Notice dated 22. 2.2019

5. 8.2019                                 Redemption  Notice  dated 29. 7.19

9. 10. 2019                               Notification  of  sale dated  9. 10. 2019

9. 10. 2019                               45 days  Redemption  Notice

To prove service  of the said  documents,  the Respondents provided  Affidavits  sworn by  process  servers on divers  dates.  They are :

Affidavit  of service  sworn by  David  Kamanguya( LLM 7(a)  on  24. 3.2019 and

Affidavit  of service  sworn  by  Peter  Munga (LLM 7(b)) on 6. 8.2019.

Further, the Respondents certificate  of postage  to prove service  by registered  post.  They are marked as Exhibits  LL 9 in the aforesaid  Replying Affidavit.

Upon  perusal  of the Affidavit  of service  sworn by  David  Kamanguya on 24. 3.2019, it is apparent  that both Claimants were served  with  the 90 days  statutory Notice on 23. 3.2019.

As regards,  the 40 days Redemption  Notice,  the Affidavit  of service  sworn by Peter  Mungai  on  6. 8.2019 shows  that the same  was upon  the  1st  Claimant  on  6. 8.2019 and the 6th Claimant on  6. 8.2019.

These Affidavits remain unchallenged  and we thus take  them to represent  a true  reflection  of the events  of the days they refer to.

With these  glaring  evidence  of elaborate  service  of the respective Notice upon the Claimants,  and owing  to the fact that the Claimant’s  case revolve  service  of the said Notices,  the question  begs  as to whether  the Claimants have demonstrated  existence of a right which  have been  trampled by the Respondents so as  to call  for  a rebuttal  by the  Respondents.  Our answer is a resounding  No!. The  evidence  on record  show that  the Claimants  were duly served  with appropriate  Notices and there being  no dispute  of default  by  1st  Claimant, we find that the Claimants  have not  established  a prima facie  case with  a probability  of success.

Conclusion

With the foregoing findings in mind, we do not find merit in the instant Application and hereby dismiss it with costs to the Respondents. Orders accordingly.

RULING SIGNED, DATED AND DELIVERED VIRTUALLY THIS 7TH DAY OF JANUARY, 2021

Hon. F. Terer               Deputy Chairman      Signed      7. 1.2021

Mr. P. Gichuki             Member                       Signed      7. 1.2021

Mr. B. Akusala           Member                       Signed      7. 1.2021

In the absence  of both  parties

Court clerk         Maina

Hon. F. Terer    Deputy Chairman      Signed      7. 1.2021