Were v Stanbic Bank Kenya Ltd [2023] KEHC 23518 (KLR)

Were v Stanbic Bank Kenya Ltd (Commercial Case E010 of 2023) [2023] KEHC 23518 (KLR) (Commercial and Tax) (13 October 2023) (Ruling)

Neutral citation: [2023] KEHC 23518 (KLR)

Republic of Kenya

In the High Court at Nairobi (Milimani Commercial Courts Commercial and Tax Division)

Commercial and Tax

Commercial Case E010 of 2023

FG Mugambi, J

October 13, 2023

Between

Linda Were

Plaintiff

and

Stanbic Bank Kenya Ltd

Respondent

Ruling

Brief Facts 1. Before the court is the application dated March 24, 2023. It is brought under section 3A and 63(c) and (e) of the Civil Procedure Act CAP 21 Laws of Kenya and Order 40 rules 2 and 3 as well as Order 51 rule 1 of theCivil Procedure Rules. The application seeks temporary injunctive orders against the respondent.

2. The uncontroverted facts are that the applicant acquired the suit property known as LR No 1/362(IR NO 98066) Apartment No A2 Acacia Block through a bank facility advanced to her by the respondent. The facility for the sum of Kshs 19,866,839. 22 was secured by a legal charge created over the said property. The plaintiff defaulted in repaying the loan which continued to accrue interest and stood at Kshs 20,224,035. 32 as at March 2023.

3. Following the default, the respondent advertised the property for sale through public auction which was scheduled to take place on March 29, 2023. The auction did not take place and is the gist of the present application.

4. The plaintiff’s contention was that the default was as a result of her losing her job and the bank had refused to restructure the facility. She took issue with the respondent for not issuing her with a valuation report. It was her case that despite having paid a substantial amount towards the loan through Mpesa, the payments were not reflected on the loan account.

5. The application was opposed by the respondent who emphasized on the obligation that the applicant owed the respondent to repay the monies advanced to her. The respondent notes that the applicant had expressly admitted owing the money to the bank at paragraph 4 of her affidavit. In its further defence the respondent pointed out that it had issued a three (3) months’ statutory notice and later on another 40 days’ notice to the applicant. When the applicant failed to comply the notices, the defendant instructed the auctioneers to issue 45 days’ redemption notice and later on realize the security.

6. The respondent further stated that a valuation of the suit property was conducted and the first auction was conducted on March 29, 2023 but was not successful as the bids received were below the reserve price. The respondent countered the averments of payment by way of Mpesa and stated that the applicant had not given evidence of the same. She had not even stated how much money had been paid. In a nutshell, the respondent’s case was that the applicant had not established the basis for an injunction.

Analysis 7. I have carefully considered the pleadings, evidence and the rival submissions filed by the parties. The issue for determination is whether or not the applicant has met the threshold for granting of an interlocutory injunction.

8. The conditions for granting interlocutory injunctions are set out in Order 40 rule (1) (a) and (b) of theCivil Procedure Rules 2010. These conditions have been interpreted and given effect through numerous judicial pronouncements. Amongst the most celebrated of these is the case ofGiella V Cassman Brown & Co Ltd, (1973) EA 385. The Court at page 360 (Spry J) held that:“The conditions for the grant of an interlocutory injunction are 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."

9. In determining what amounts to a prima facie case, the Court of Appeal in the case of Mrao Limited V First American Bank of Kenya and 2 Others, (2003) KLR 125, stated:“A prima facie case in a Civil Case include but is not confined to a “genuine or arguable” case. It is a case which on the material presented to the court, a tribunal properly directing itself will conclude there exists a right which has apparently been infringed by the opposite party as to call for an explanation or rebuttal from the latter. A prima facie case is more than an arguable case. It is not sufficient to raise issues but 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.”

10. Has the applicant demonstrated that she has a prima facie case with a probability of success? From a cursory look at the record, the applicant does not deny that she benefited from a loan facility for the purchase of the suit property. It is also not in dispute that the applicant defaulted in making the payments as agreed. The statutory notices were issued by the respondent as required by statute and the 45 days’ notice and notification of sale was issued as well.

11. The applicant’s contention is that the valuation report was not shared with her and that some Mpesa payments had not been reflected in the statement. Section 97(2) of the Land Act 2012 require a valuation to be undertaken before the auction. The respondent has provided evidence of the valuation report. Any dispute as to the amount payable by the plaintiff is not a ground for granting an injunction. In any case, the applicant does not state how much money was paid through Mpesa. No evidence has been produced to substantiate this claim.

12. Having given her property as security in the event of default, I am of the view that the respondent’s statutory power of sale has accrued and that all legal processes were followed in the circumstances. The applicant cannot therefore force the bank to restructure the loan. I therefore find that the applicant has not made out a prima facie case with a probability of success. Having so found, this Court need not consider the second and third conditions for the grant of a temporally injunction.

Determination 13. The application lacks merit and is therefore dismissed with costs to the respondent.

DATED, SIGNED AND DELIVERED IN NAIROBI THIS 13TH DAY OF OCTOBER 2023. F. MUGAMBIJUDGE