Wekesa v Absa Bank Kenya PLC [2023] KEHC 26660 (KLR)

Wekesa v Absa Bank Kenya PLC (Civil Appeal 039 of 2023) [2023] KEHC 26660 (KLR) (21 November 2023) (Ruling)

Neutral citation: [2023] KEHC 26660 (KLR)

Republic of Kenya

In the High Court at Mombasa

Civil Appeal 039 of 2023

DKN Magare, J

November 21, 2023

Between

Evans Murumba Wekesa

Plaintiff

and

Absa Bank Kenya PLC

Defendant

Ruling

1. The Plaintiff pleaded that he is the owner of Villa no 3 situate on CR 75453 plot no 22507/I/MN. They state that they were not served with a statutory notice in the suit they claim the following: -a.That the Application be certified as urgent and be heard ex-parte in the first instanceb.That there be a stay of the Defendant/Respondent’s Notification of sale dated 27th February, 2023 pending the hearing and determination of this application inter–partes.c.That the Honourable Court be pleased to stay execution of the Defendant/Respondent’s Notification of sale dated 27th February, 2023 pending the hearing and determination of this suit.d.That the Defendants/Respondents herein, their agents, servants, employees and/or any other person actin on its behalf be and hereby temporarily restrained from selling and/or disposing byway of public auction, or alienate and/or interfere in any manner with the Applicants property VILLA no 3 situated on property Title no CR 75453 Plot no 22507/I/MNe.That any other Order and/or relief that this Honourable Court may deem fit and just to grant in the premises.f.That the cost of the Application be provided for.

2. There is no basis laid for prayers (b), and (c) in the plaint dated 29/5/2023. Both the list of documents and witness statements are bare without attachments.

3. As it is usual in these kind of cases the plaintiff filed an application dated 29/5/2023 stopping a sale on pray, “27/5/2023. He sought for orders that:-a.Spentb.Spentc.That the Honourable Court be pleased to stay execution of the Defendant/Respondent’s Notification of sale dated 27th February, 2023 pending the hearing and determination of this suit.d.That the Defendants/Respondents herein, their agents, servants, employees and / or any other persons acting on its behalf be and are hereby temporarily restrained from selling and/or disposing by way of Public Auction, or to alienate and/ or interfere in any manner with the Applicants property VILLA no 3 situated on property Title no CR 75453 Plot no 22507I/MN.e.That any other Order and/or relief that this Honourable Court may deem fit and just to grant in the premises.f.That the cost of the Application be provided for.

4. This was based on the Applicant’s affidavit that the Applicant was in financial difficulties and was trying to liquidate his debt. He sought political office in 2022 and as usual, in the political climate in Kenya, Kenyans did not honour the Honourable member. He is now a villager and opted to cut losses and restructure the outstanding loan. He states that he is in danger of losing Villa no 3 situate on CR 75453 plot no MN 228071/I/MN being sold on “26/5/2023). These dates were past.

5. He feared that his right of redemption was attached. The Respondent entered an appearance on 5/7/2023. They filed a replying affidavit (107 pages) including annexutres sworn by Samuel Njuguna, the defendant's legal counsel recoveries. They stated that the application is without merit. The loan taken was 26,400,000/=. This was changed to by the suit property as per the enclosed charge. Default was made. It is their case that the plaintiff in paragraphs 5, 7, and 8 of his affidavit addresses the default.

6. A statutory notice was issued as per the notice dated and a certificate of posting.

7. The plaintiff was also served with a 40-day statutory notice. They stated that the law required service by registered post.

8. The plaintiff remains in arrears. A statement of account is annexed with arrears of 29,555,007/40. The last payment was on 28/9/22 when he paid. The suit was valued on 24/2/2023 at a market value of 29,5000,000/=. The repayment period was 156 months at ksh 244,127 at 6 % interest with 18 % being default interest. The plaintiff was an employee of the defendant.

9. A statutory Notice dated 27/2/2023 demanded ksh 27,109,252. 55 in default of doing so within 3 months of service, the were to serve. The certificate of posting indicted that the same was sent on 3/3/2023 at 12:14 hours.

10. The 40 day statutory notice was set out at 1219 hours. On 30/5/2023 a notice was issued, giving 40 days notice. This was a day after filing of the suit herein. Claiming a sum of ksh 29,014,782/=. Unlike other notices the notice is not signed.

Analysis 11. This is a claim for an injunction pending hearing of the suit. The plaintiff claimed not to have been served with a statutory notice. He stated he was only served with 45 days' notice. Even in the statement annexed, it was clear that only ksh 1,826,679. 30 had been paid since 1/11/2022 and a sum of 26,701,058. 60 was due and owing. The 18% interest rate is disclosed on the face of the application. A letter written on 18/10/22 was written without prejudice and should not have been used. The parties were negotiating over the areas.

12. The notice that had been issued by the time of suit was filed was only a statutory notice. Therefore, it is not possible for a 40-day redemption notice to have been issued before the same was written. The proper documents received were statutory notices. The notices expired on 3/6/2023. The 40-day notice was issued on 30/5/2023.

13. In these kinds of matters are guided by the locus classic case of Giella v Cassman Brown & Co. Ltd (1973) EA, 358, 360, which sets out principles for the grant of injunction. The court, stated as follows, through the wisdom of Spry VP, as then he was, as follows: -“The conditions for the grant of an interlocutory injunction are now, I think, well settled in East Africa. First, an applicant must show a prima facie case with a probability of success. Secondly, an interlocutory injunction will not normally be granted unless the applicant might otherwise suffer irreparable injury, which would not adequately be compensated by an award of damages. Thirdly, if the court is in doubt, it will decide an application on the balance of convenience.”

14. The Court of Appeal in the case of in the case of Nguruman Limited v Jan Bonde Nielsen & 2 Others [2014] eKLR the Court of Appeal was of the view that these tests are sequential. The Court stated: -“In an interlocutory injunction application, the applicant has to satisfy the triple requirements to;(a)establish his case only at a prima facie level,(b)demonstrate irreparable injury if a temporary injunction is not granted, and(c)ally any doubts as to (b) by showing that the balance of convenience is in his favour.These are the three pillars on which rests the foundation of any order of injunction, interlocutory or permanent. It is established that all the above three conditions and stages are to be applied as separate, distinct and logical hurdles which the applicant is expected to surmount sequentially. See Kenya Commercial Finance Co. Ltd v Afraha Education Society [2001] Vol. 1 EA 86. If the applicant establishes a prima facie case that alone is not sufficient basis to grant an interlocutory injunction, the court must further be satisfied that the injury the respondent will suffer, in the event the injunction is not granted, will be irreparable.In other words, if damages recoverable in law is an adequate remedy and the respondent is capable of paying, no interlocutory order of injunction should normally be granted, however strong the applicant’s claim may appear at that stage. If prima facie case is not established, then irreparable injury and balance of convenience need no consideration. The existence of a prima facie case does not permit “leap-frogging” by the applicant to injunction directly without crossing the other hurdles in between.”

15. On issuance of statutory powers of sale. None has been pleaded and shown on a prima facie basis. Order 2 Rule (4) (1) provides as doth:-“Matters which must be specifically pleadedA party shall in any pleading subsequent to a plaint plead specifically any matter, for example performance, release, payment, fraud, inevitable accident, act of God, any relevant Statute of limitation or any fact showing illegality—(a)which he alleges makes any claim or defence of the opposite party not maintainable;(b)which, if not specifically pleaded, might take the opposite party by surprise; or(c)which raises issues of fact not arising out of the preceding pleading.

16. The Court can’t find illegality or breach of contract without particulars thereof. Order 2 rule 10 provides as follows:-“Particulars of pleading [Order 2, rule 10. ](1)Subject to subrule (2), every pleading shall contain the necessary particulars of any claim, defence or other matter pleaded including, without prejudice to the generality of the foregoing—(a)particulars of any misrepresentation, fraud, breach of trust, wilful default or undue influence on which the party pleading relies; and(b)where a party pleading alleges any condition of the mind of any person, whether any disorder or disability of mind or any malice, fraudulent intention or other condition of mind except knowledge, particulars of the facts on which the party relies.

17. The definition of a prima facie case was brought out in the case of Mrao v First Community Bank.“… in civil cases, it is a case in which , on the material presented to the court a tribunal properly directing itself will conclude that there exists a legal right which has apparently ben informed by the opposite party as to call for an explanation or rebuttal from the latter.”

18. In this matter the application was not let out any scintilla of evidence to show that he had a prima facie case. It is not relevant therefore to consider the other 2 limbs.

19. Though it is clear that the loan is fast approaching the value of has even surpassed the value of land.

20. In the circumstances charged land being a chose in action, the property is properly in the market. The bank is entitled to exercise its statutory power of sale. In Bank of Africa Limited v Juja Coffe Exporters Limited & 4 others[2018] eKLR the Court of Appeal stated as follows: -We may also reiterate what this Court stated in the case of John Nduati Kariuki t/a Johester Merchants v National Bank of Kenya Ltd [2006] eKLR that:-“The applicant may well in due course make out a case to challenge the calculations of his indebtedness to the bank. He may or may not be successful. The legal issue however is whether the dispute on the outstanding loan can scuttle the exercise by a chargee of its power of sale. On that legal proposition this Court has expressed itself before and we need only refer to J.L. Lavuna & others v Civil Servants Housing Co. Ltd. & another – Civil Appl. no NAI 14/95 where Kwach J.A. stated:-“I have always understood the law to be that a court should not grant an injunction restraining a mortgagee from exercising its statutory power of sale solely on the ground that there is a dispute as to the amount due under the mortgage. The legal position on this point is to be found in Halsbury’s Laws of England, Volume 32, 4th edition at paragraph 7255:“725 When mortgagee may be restrained from exercising power of sale.The mortgagee will not be restrained from exercising his power of sale because the amount due is in dispute, or because the mortgagor has begun a redemption action, or because the mortgagor objects to the manner in which the sale is being arranged. He will be restrained, however, if the mortgagor pays the amount claimed into court, that is, the amount which the mortgagee claims to be due to him, unless, on the terms of the mortgage, the claim is excessive"The Court observed in the process, that 'a bank has no money of its own and it is axiomatic that it uses public funds to trade with. The applicant obtained a large amount of those funds and had full benefit of it.' And so it is in this case.”

21. If follows that the banks are entitled to exercise diligence and Lend money out. I am convinced that the application does not have a prima facie case with a probability of succeeding. Without a prima facie case, there is no need to go to other two limbs.

22. It is therefore clear there that the application dated 29/5/2023 is accordingly dismissed with costs of 30,000/=.

23. Directions on the main suit to be given forthwith

Determination 24. The upshot if the foregoing is that issue the following orders: -(a)The application dated 29/5/2023 lacks merit and as such is dismissed with costs of 30,000/= to the respondent.

25. The Court shall issue pre trial directions upon issuance of this ruling.

DELIVERED, DATED AND SIGNED AT MOMBASA ON THIS 21ST DAY OF NOVEMBER, 2023. RULING DELIVERED THROUGH MICROSOFT TEAMS ONLINE PLATFORM.KIZITO MAGAREJUDGEIn the presence of: -Miss Diru for Muthee for RespondentNo appearance for ApplicantCourt Assistant - Brian