SAMUEL GITHURE MAINA v FAMILY BANK LTD & another [2011] KEHC 2531 (KLR)

REPUBLIC OF KENYA

IN THE HIGH COURT OF KENYA

AT NAKURU

CIVIL CASE HCA 298 OF 2010

SAMUEL GITHUREMAINA .............................PLAINTIFF

VERSUS

FAMILY BANK LTD & ANOTHER............DEFENDANTS

R U L I N G

The appellant, Samuel Githure Maina, filed an appeal against the ruling of the Resident Magistrate( B Kituyi),deliveredon 22/10/2010 in Nakuru CMCC 549/2010. In the application before the trial   Court, Family Bank , the 1st respondent had purportedly issued a statutory notice of sale to the applicant and a  45 days redemption notice. The trial court found that the respondent had the right to exercise its power of sale. The applicant filed the Notice of Motion  dated 20/11/2010, seeking an order of temporary   injunction to restrain  the defendant/respondent by themselves or their agents or servants from selling, alienating, or disposing of the  suit property Dundori/Lanet Block 5/894 (New Gakoe) pending   the hearing   of the appeal .

The grounds upon which the applicant brings this  application are that the  appeal  has high chances of success; that the appellant will suffer substantial loss if an injunction is not granted, the respondent has advertised the said   property for sale and it is likely to be sold. In the supporting affidavit, the applicant denies that he was ever   served with the statutory notice of sale nor was he served with the 45 days redemption Notice .  Mr Ogolla, counsel   for the applicant urged that   there was no evidence   that the notice was ever served on the applicant   nor was  the redemption notice as provided   under Rule 15, (d) of the Auctioneer’s Rules. It was also submitted  that   upon being served  with the plaint and summons, the appellant   did not   enter appearance but instead on 21/6/2010 ,a notice of appointment was filed by Waiganjo Advocate and   that was in contravention  of Order 6 Rule (2) (1)   of the  Civil Procedure Rule ( Old order 8 Rule 2).

It was counsel’s contention that a memorandumof appearance should have been filed   and in default, the   respondent ‘s documents should have been expunged   from the record; that a defence was filed after after a  judgement was entered against the Defendant on 8/7/2010. The same  has not been set aside to date. Counsel distinguished the case with the ruling in Henry   Wanyama Khaemba vrs Standard Chartered Bank   Ltd ca 45/05 and Mountain View Transporters   Ltd Vaccon Holdings Ltd CA 385/04 where the courts observed that an order of injunction would not be granted due to non disclosure of material facts. He submitted that in the above cited case the statutory notice had been served but  that is not the case in the instant case.

In opposing the application, the respondent filed a replying affidavit swornby Kenneth Kirugi, an advocate practicing   in the firm of J . M Waiganjo & Co advocates, which firm has the conduct of the matter. Mr Kirugi   argued that   the issue of statutory   notice of   sale was raised and urged  in   the trial court . He urged   that the respondent showed  the court, that   statutory notice that had been issued which is evidence that   the same was served.  Counsel also urged that the lower court considered  the issue of material non-disclosure and the orders that had been issued   ex-parte were not confirmed  He agreed with the principle   in MOUNTIAN VIEW CASE   that once  the statutory  notice of sale was served , even if  the redemption notice was not issued, if   chargee was still indebted to the chargor,  then the chargee  could   exercise the power of sale, as happened in this case.

As regards the filing of memorandum of appearance the lower Courtalso addressed  the issue and  observed that  the Court   can only strike out the appearance  under Order 9 Rule 4 of the CPR and that there was no fatal   mistake made that could call for striking out of the appearance and defence. Counsel   urged the Court to note, that the objection comes late in the day, because way before   the application came up.  On 9/9/2010, the applicant’s counsel had   on 14/6/2010, entered into a consent and that is why the lower court   said that the  applicant relied on  mere technicalities .It was further submitted that unless the exercise   of   power of sale was oppressive,  the Court would  not interfere with   it and since the  applicant is still indebted to the respondent , the execution cannot be stopped .Counsel   said that in Henry   Khaemba’s, case   the court noted that since the   statutory notice was properly served, the court could not   interfere   with   the Respondent’s power of sale.

In the instant case, it is notdenied that the applicant did execute the charge document is still indebted   to the Respondent.

I have considered the authorities  reliedupon and it is worth   pointing out that in  these  authorities orders of injunction   were not made pending   appeal, but   the Courts were considering   applications  for   injunctions  upon filing suit. This is a slightly different scenario.

In his submissions, the applicant’s counsel has repeated   submissions   made in the lower court. The applicant only needs to  demonstrate that he has an arguable  case on appeal but need  not to go into   every details   of the arguments   made in the lower court because   that is for appeal. I have read the ruling of the lower Court. Though   the trial Court made  a   finding that   the statutory   notice was served on the applicant, It did not indicate the reasons for arriving at that conclusion. The mode of service of the notice   was   not disclosed either   in the lower court  or in this application . The production   of the statutory notice in this Court is  not evidence  of  service of the said notice on the applicant.

The lowercourt also made a finding that the applicant was guilty of material non-disclosure but did not state  the basis for that finding. Similarly,   the trial   court made a finding   that the applicant had complied with Order 9 Rule   4 CPR but   did not   back that finding  with any reasons . In the   circumstances, I do find   that the   applicant has an  arguable  appeal and he should be accorded a chance to urge his appeal. If an order of injunction   is not granted, the land   which was used as security  in obtaining the loan is threatened with sale and may be put outside the  applicants’ reach and the substratum of this appeal is   be  totally destroyed . For the   above reasons, the Court is inclined to grant an order   of   injunction in terms of prayer 3 of the Notice of Motion   dated 30/11/2010, restraining   the respondent  from selling, alienating or disposing of Dundori/Lanet Block 5/894 (New Gakoe )pending   the hearing   and   determination of the appeal. However, I have observed   earlier that the applicant   does not deny that he has  defaulted with the loan repayment. The   order of   injunction   does not mean that he is relieved of his  obligations under  the charge. He must   show   good faith by   continuing to service                      the outstanding loan during the  pendency  of the appeal. I further order that the appellants should ensure that this appeal is ready and   fixed for hearing within   the next   6 months and in default   the order  of injunction will automatically lapse .

Cost to abide the appeal

DATED AND  DELIVERED THIS  20TH DAY OF MAY 2011

R.P.V WENDOH

JUDGE

PRESENT

Mr Litunda holding brief forOgola for Applicant

Ms Wanjiru holding brief for Waiganjo fprRespondent.

Court Clerk: Kennedy Oguma