Stella Mokeira Matara v Thaddues Mose Mangenya & Family Bank Limited [2016] KECA 746 (KLR)

IN THE COURT OF APPEAL

AT KISUMU

(CORAM:  MARAGA, MUSINGA & GATEMBU, JJA.)

CIVIL APPEAL NO. 63 OF 2014

BETWEEN

STELLA MOKEIRA MATARA ……………………..…. APPELLANT

AND

THADDUES MOSE MANGENYA …..………... FIRST RESPONDENT

FAMILY BANK LIMITED …………………. SECOND RESPONDENT

(An Appeal from the Ruling and Order of the High Court of Kenya at Kisii (Okongo, J.) delivered on the 14th day of March, 2014

in

HCCC ENVIRONMENT LAND CASE NO. 209 OF 2012)

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JUDGMENT OF THE COURT

INTRODUCTION

The fundamental question that arose for  determination before the trial court was whether the provisions of sections 78 (1)and79 (3)of theLand    Act, 2012,andsection 28 (a)of theLand  Registration Act, 2012are applicable in  respect of charges that were drawn and registered   prior to the enactment of the said Acts.  Section 79       (3)of theLand Act, 2012provides that a charge over matrimonial home shall only be valid if executed by the chargor and any spouse of the   chargor living in that home, or if such charge is    consented to by such spouse or chargor.  On the other hand, section 28 (a)of theLand    Registration Act provides that all rights over   registered land are subject to spousal rights over    matrimonial property.  The relevant charge in this appeal was drawn and registered sometimes in       2011.

THE APPELLANT’S SUIT

The appellant filed a suit before the Environment   and Land Court at Kisii seeking, inter alia, a permanent injunction to restrain the respondents,  their servants and/or employees from transferring or in any way interfering with her quiet possession of properties known as Wanjare/Bokiangumu/2828  and Wanjare/Bokiangumu/2826(“the suit  properties.” )

The appellant also sought a declaration that the  charge instrument registered against the suit   properties is null and void and for an order for the  cancellation of entry number 9 on the titles to the  suit properties.

The suit was brought on the grounds that the  appellant is the wife of the 1st respondent, who is the registered proprietor of the suit properties, that  her matrimonial home is situated on the suit    properties, and that without her consent and    contrary to the provisions of section 28 (a)of theLand Registration Act, 2012andsection 78of  theLand Act the 1st respondent (her husband)    charged the two properties to secure a loan facility    that was advanced by the 2nd respondent to one  Ibrahim Manoti Michira(“the borrower”).

The appellant further averred that the guarantee    that was executed by the 1st respondent in favour of   the 2nd respondent on the basis of which the 1st  respondent executed the said charge over the suit  properties was invalid for want of consideration, the same having been executed several months after the   2nd respondent had already advanced the loan to   the borrower.

The appellant further contended that the 1st   respondent did not obtain consent of the area Land    Control Board to charge the suit properties to the   2nd respondent, contrary to the provisions of  section 6of theLand Control Act.She added that     the 2nd respondent did not serve the 1st respondent    with a statutory notice and notification of sale,contrary to section 74of theRegistered Land Act   (now repealed).  She became aware of the intended sale of the suit properties when an advertisement     was carried by the “Daily Nation” Newspaper of 11th   June, 2012 indicating that the sale by public auction was to take place on 26th June, 2012.

APPLICATION FOR INJUNCTION

Together with the plaint, the appellant filed an application seeking a temporary injunction to  restrain the respondents from selling the suit  properties or interfering with her occupation of the    same pending hearing and determination of the   suit. The application was premised on more or less     the same grounds upon which the suit was    premised.

THE 2ND RESPONDENT’S RESPONSE

The 1st respondent did not file any response to the     appellant’s application.  The 2nd respondent is the only one who opposed the application through a  replying affidavit sworn by one Zachary Gichia, the    2nd respondent’s head of recoveries.  The bank   contended that the suit properties were registered in  the name of the 1st respondent, who had lawfully     charged the properties to it, that the appellant had   no right to question the transaction, that the   appellant had failed to establish spousal or     matrimonial interest in the suit properties that      could be protected by section 28 (a)of theLand  Registration Act, 2012,andsection 78of theLand Act, 2012.

The 2nd respondent stated that the 1st respondent   obtained consent of the area Land Control Board to charge the suit properties, and that neither the 1st  respondent nor the borrower had repaid the loan that was advanced to the borrower on the 1st      respondent’s guarantee.

The 2nd respondent further contended that the   charge over the suit properties was duly executed under the relevant provisions of the Registered Land  Act and that the cited sections of the Land Act, 2012 and the Land Registration Act, 2012 were not    applicable.

THE TRIAL COURT’S FINDINGS

In his considered ruling, the learned judge  summarized the issues for determination in the    application as follows:

“In order to establish a prima facie case, the plaintiff had a duty to prove that; she is the 1st defendant’s spouse, she has her matrimonial home on the suit properties and that as at the date of execution of the charge in question, spousal consent was required as a matter of law before a charge could be created over a matrimonial home.”

Dismissing the application for interlocutory    injunction, the learned judge found, inter alia; that:

the appellant was the 1st respondent’s spouse,

the appellant had not proved that her matrimonial home is situated on the suit properties,

(iii)   the appellant had not proved that    under the law that was applicable    at the time the charge over the suit properties was executed  spousal consent was required   prior to execution of the charge,

(iv)   although section 78 (1) of the   Land Registration Act, 2012 extends the general provision of    that Act relating to charges which  includes the requirement of spousal consent to the charges that were created before the commencement of that Act, the   application of the provisions of the Land Act, 2012 to charges   executed prior to the coming into   effect of that Act would not   extend to formal requirements of     the content of such charges,

(v)    section 79 (3) of the Land Act,  2012 does not apply to charges  created prior to the         commencement of the Act,

(vi)   the appellant had no right to   challenge the validity of the charge or the process through         which the suit properties were    put up for sale.

THE APPEAL

Aggrieved by the aforesaid decision, the appellant   preferred an appeal to this Court.  The appeal    challenges almost all the learned judge’s findings as stated above, except the first one, that the appellant    was the 1st respondent’s spouse.  Mr. Masese, the       appellant’s learned counsel, made brief submissions  in support of the grounds of the appeal and urged the court to allow the appeal.

The 1st respondent simply left the matter to the Court’s discretion.  He said that he made a mistake  by guaranteeing the borrower, who had since  defaulted in repayment of the money advanced to      him by the 2nd respondent.

Miss. Kisaka, learned counsel for the respondent, opposed the appeal.  She reiterated that the    appellant was not obliged to grant spousal consent since the charge in issue was drawn and executed  on 28th February, 2011 whereas the Land Act, 2012, which provides for spousal consent over    matrimonial properties, came into effect on 2nd May, 2012.  The 2nd respondent could not therefore have   been expected to obey a law that was not in force    when the charge was drawn since a law cannot  operate retrospectively.

We have considered the entire record of appeal as   well as the submissions by counsel.  In determining    this appeal, we must bear in mind that the appeal  arose from an interlocutory ruling and the   substantive hearing is still pending before the High     Court.  We shall therefore restrain ourselves from  making definitive findings on a number of issues to avoid embarrassment to the trial court or prejudice      to either of the parties in dispute.  See BP (Kenya)Limited V Kisumu Market  Service Station, Civil Appeal No. 25 of 1992andDavid Kama Gakuru VNational Industrial Credit Bank Limited, Civil Appeal No. 84of2001.

Grant or refusal of an interim injunction is an    exercise of judicial discretion.  An appellate court   will not normally interfere with the exercise of such  discretion unless it is satisfied that the decision is clearly wrong because the trial court misdirected  itself or it acted on matters it ought not to have  acted on or it failed to take into consideration  matters which it should have taken into consideration and in so doing arrived at a wrong    conclusion.  See Mbogo V Shah [1968] E.A.93.

It is in the backdrop of the above principles that  we shall proceed to determine whether in dismissing  the application for interim injunction the learned judge exercised his discretion judicially.

The learned judge was not satisfied that the  appellant had established a prima facie case with a   probability of success.  In Mrao Limited V First American Bank of Kenya Limited & 2 Others [2003] KLR 125at138,Bosire, JA. stated that:

“[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 success of the applicant’s case upon trial.  That is clearly a standard which is higher than an arguable case.”

It was not sufficient for the appellant to merely raise   issues or arguments as to why the 2nd respondent   should not have been allowed to exercise its statutory right of sale of the suit properties, she was  under an obligation to demonstrate that there had been infringement of her rights and that she was  most likely going to succeed in her suit against the     respondents.

The gravamen of the appellant’s appeal was that the learned judge erred in his interpretation of section  79 (3)of theLand Act, 2012andsection 28 (a)of theLand Registration Act, 2012.

Section 79 (3) of the Land Act states as follows:

“A charge of a matrimonial home, shall be valid if any document or form used in applying for such a charge, or used to grant the charge, is executed by the chargor and any spouse of the chargor living in that matrimonial home, or there is evidence from the document that it has been assented to by all such persons.”

The appellant’s contention was that she had neither     executed the charge nor assented to it.

Section 28 (a) of the Land Registration Act stipulates that:

“Unless the contrary is expressed in the register, all registered land shall be subject to the following  overriding interests as may for the time being subsist and affect the same, without their being noted on the register –

Spousal rights over matrimonial   property.”

The learned judge found that the appellant had  proved that she was the 1st appellant’s spouse but   failed to prove that together with the 1st respondent they had their matrimonial (as defined by the Land      Act, 2012) in the suit properties.  The judge held:

“The plaintiff had a duty therefore to demonstrate that the plaintiff and the 1st defendant occupied the suit properties as their family home.  The plaintiff failed to show that there is a home on the suit properties and, secondly, that the plaintiff and the 1st defendant were occupying the alleged home on the suit properties as their family home.”

The appellant had stated at paragraph 5 of her affidavit in support of the application for interim injunction that together with her husband, the 1st    respondent, and their children were residing   on    the suit properties as their matrimonial home.In its replying affidavit, the 2nd respondent stated   that the appellant’s deposition at paragraph 5 was   hollow and unsupported.

By way of a further affidavit filed in response to the  2nd respondent’s replying affidavit, the appellant  reiterated that the suit properties were the only  matrimonial property they owned with her husband,   even   their daughter, Jemima Moraa Matara, had been interred there.  She annexed to her affidavit   their late daughter’s obituary and burial permit.That deposition was not controverted at all.

“Matrimonial home”is defined by the Land Act,  2012 to mean “any property that is owned or leased   by one or both spouses and occupied by the spouses   as their family home.”

Taking into account the above definition, the learned  judge held that the appellant had failed to show, firstly,    that there is a home on the suit   properties and, secondly, that together with the 1st respondent they were occupying the alleged    home.  Perhaps photographs of the home, if at all, or a valuation report containing appropriate description of the suit properties would have  sufficed.  In the circumstances, we cannot fault  the learned judge for the conclusion that he arrived regarding absence of proof   of existence of a matrimonial home on the suit properties.

But even if the appellant had shown that their  matrimonial home was situated in the suit  properties, the appellant still had to prove that her consent to charge the properties was by law     required and was not obtained, considering that the  charge in issue was drawn and executed before the Land Act, 2012and theLand Registration Act, 2012 that espouse spousal consent were enacted.

Section 78 (1)of theLand Act, 2012 stipulates    that:

“(1) This Part applies to all charges on land including any charge made before the coming into effect of this Act and in effect at that time, any other charges of land which are specifically referred to in any section of this Part.”

Regarding applicability of the above quoted  provision of the law to charges executed prior to enactment of the Land act, 2012, the learned judge  held that the provisions cannot be extended to the   formal requirements of and content of such charges  because:

“… the parties executing charges prior to the commencement of that Act could not be expected to comply with the requirements of a law that was not in existence.  To give section 78 (1) of the Land Act, 2012 an interpretation that extends its operation to the formal requirements and content of charges created before the commencement of that Act would make the said Act inconsistent with the provisions of Article 40 (2) (a) of the Constitution of Kenya, 2010 as it would take away property interests of charges under such charges arbitrarily.”

Though at this stage we must restrain ourselves   from making a definitive finding on the true     interpretation of section 78 (1) above, which the 2nd   respondent submitted was not meant to apply    retrospectively, we must bear in mind what the     Supreme Court of Kenya held in S. K. Macharia & Another V KenyaCommercial Bank & Others[2012] eKLR that:

“Retrospective law is not unconstitutional unless it:

is in the nature of a bill of attainder;

impairs the obligation under contracts;

divests vested rights; or

is constitutionally forbidden.”

While the question as to whether section 78 (1)of theLand Act, 2012 operates retrospectively or not   must await determination by the trial court, all   we can say at this juncture is that the appellant did    not establish that the learned judge    exercised his    discretion erroneously in rejecting her contention   that her consent was required before the suit    properties could be charged to the 2nd respondent.

All in all, we find this application lacking in merit and dismiss it with costs to the 2nd respondent.

DATED and delivered at Kisumu this 4th day of March, 2016.

D. K. MARAGA

………………………….

JUDGE OF APPEAL

D. K. MUSINGA

………………….………

JUDGE OF APPEAL

S. GATEMBU KAIRU, FCIArb

……………………..…..

JUDGE OF APPEAL

I certify that this is

a true copy of the original.

DEPUTY REGISTRAR