William Ndala Wamalwa & Rose Nanjala Wamalwa v Edgar Ralph Kwoma Wamalwa, Eco Bank Kenya Limited & Consumasters East Africa Limited [2017] KEHC 2143 (KLR)

REPUBLIC OF KENYA

IN THE HIGH COURT OF KENYA AT NAIROBI

COMMERCIAL AND ADMIRALTY DIVISION-MILIMANI

CIVIL CASE NO.244 OF 2017

WILLIAM NDALA WAMALWA………………………..1ST PLAINTIFF

ROSE NANJALA WAMALWA………………………...2ND PLAINTIFF

VERSUS

EDGAR RALPH KWOMA WAMALWA……….………1ST DEFENDANT

ECO BANK KENYA LIMITED………..……………...…2ND DEFENDANT

CONSUMASTERS EAST AFRICA LIMITED…………3RD DEFENDANT

R U L I N G

This is a ruling on application dated 13th June 2017 filed by the Plaintiffs herein seeking the following orders

1. Spent.

2. Spent.

3. That pending hearing and disposal of this suit the 3rd Defendant/Respondent be restrained from Entering, taking possession, occupying blockading residents in L.R. No. Trans-Nzoia/Ndalala/4.

4. That pending hearing and disposal of this suit the 3rd Defendant/Respondent be restrained from advertising, erecting signs, offering for sale, and subdividing, selling, transferring, charging or otherwise alienating property no. L.R. No. Trans-zoia/Ndalala/4.

Grounds on the face of the application are

That  the title held by the 3rd Defendant is illegal as it was obtained irregularly without any statutory consent and payment of stamp duty

That the charge of the property to the 2nd Defendant was procured through fraud and was not signed by the Plaintiffs

That the 2nd Defendant made no effort to seek consent from the Plaintiff or inform them of the charge or default by the 1st Defendant

That the application from Land Control Board was not signed by the Plaintiff resulting in it being invalid

Statutory notices were not served on the Plaintiffs

Property was not valued by Government valuer to determine the stamp duty payable on transfer by charge and that property was undervalued

That the 3rd Defendant intends to sell property before the hearing in this suit.

The application is supported by affidavit sworn by the 2nd Plaintiff on 13th June 2017 and supplementary affidavit sworn on 24th July 2017. she restated the grounds on the face of the application. She averred that Plaintiffs are the registered owners of L.R. No.Trans-Zoia/Ndalalala/4 measuring 93 acres situated at Kitale in which they have developed a family house, zero grazing, units and stores. She attached the title deed to the affidavit. She averred that her and her husband the 1st  Plaintiff are 80 and 84 years old respectively; that the 1st Defendant is their last born son and that they live with the 1st Defendant in their home in Hardy Estate Nairobi.

2nd Defendant stated that in May 2017 his son one Eric Wamalwa was served with a vacation notice requiring him to vacate the property herein within 6 months and she fears that if the 3rd Defendant if not restrained by this Court they will be evicted from the property before being heard.

She averred that the 1st Defendant had worked for the 2nd Defendant and has learnt from the 1st Defendant that he had taken a facility from the 2nd Defendant but upon leaving the bank, the terms were changed to punish him and their relationship became acrimonious; that the 2nd Defendant imposed penalties and additional interest which made him default and auction was hurriedly arranged without his knowledge. She averred that the 1st Defendant showed him a letter from the 2nd Defendant infirming her husband the 1st Plaintiff herein that an auction had been carried out and balance of the money held by the 2nd Defendant in their account. She averred that the 1st Defendant painted himself a victim of the 2nd Defendant and assured him that there was a likelihood of resolving the dispute in order to return the suit property to them. She stated that she hired an Advocate to investigate and give them an opinion. She said that the Advocate obtained the charge document from the registrar of lands Kitale which showed the 1st Defendant as borrower and the Plaintiffs as chargors guaranteeing Kshs 2,000,000 with interest

She averred that the signatures purported to be hers and her husband in the charge document were not theirs and that they Advocates alleged to have witnessed their signatures are not known to her, that her husband’s pin was entered for her, that the signatures alleged to be hers and her husband in the charge and application for consent from Land Control Board are forgeries, postal address in the charge not theirs. She denied having attended the Land Control Board alleged to have taken place on 17th December 2013

She averred that the property is worth Kshs 60 million but the 2nd Defendant sold it for 23million. She added that no consent from Land Control Board was submitted with the transfer nor are there records to show that consent was sought from the Land Control Board. She stated that the 2nd Defendant has failed to supply the Plaintiffs with valuation reports prior to charging and sale of the property.

In response the 2nd Defendant filed replying affidavit sworn by Jack Kimathi the legal officer recoveries for the 2nd Defendant and affidavit sworn by Aggrey L.Kidiavai Advocate.

Jack Kimathi confirmed that the Plaintiffs herein were the registered owners of property known as L.R. No.Trans-Nzoia/Ndalalala/4 and that a facility of 2 Million was advanced to the 1st Defendant secured by a charge dated 30th December 2013 over the said property. He averred that the 1st Defendant defaulted prompting the 2nd Defendant to exercise its statutory power of sale. He stated that 40 days’ notice was issued to both borrower and chargors on 5th February 2016; and 45 days redemption notice was issued when the default continued; thereafter the property was advertised for sale on 4th July 2016 and 15th September 2016. he averred that the 2nd Defendant complied with the law but the Plaintiffs are trying to use Court as a shield to escape their obligation as chargors to the 2nd Defendant. He urged Court to dismiss the application as it is intended to prevent 2nd Defendant from exercising its statutory power of sale.

Aggrey L.Kidiavai Advocate averred that that the Plaintiffs appeared before him on 30th December 2013 and executed charge instrument attached to Jack Kimathi affidavit. He added that the Plaintiffs executed Land Control Board application on 17th December 2013 and the signatures in the two documents are no therefore a forgery.

Advocates herein filed written submissions and highlighted on 4th October 2017. The 1st Defendant chose not to participate in the application.

Mr. Ojiambo for the Plaintiffs/Applicants submitted that the 3rd Respondents failed to attached stamp duty and consent of Land Control Board to the affidavit filed and that he has asked to be served but to date he has not been served with the documents. He submitted that the Plaintiffs did not sign the letter of offer to guarantee the loan nor were they aware of the charge or the loan facility. He submitted that the lawyer who is alleging Plaintiffs appeared before him is based in Kitale and he is not stating where and when the Plaintiffs appeared before him to execute the documents. He submitted as earlier averred by the 2nd Plaintiff that they have given one pin number for the two Plaintiffs. He submitted that in the absence of a valid charge the bank will not have statutory power of sale.

He submitted that the purchaser and the bank have refused show receipt for payment of stamp duty nor consent of land control board. He concluded that the transaction was fraudulent and urged Court to allow injunction to preserve the property to enable Plaintiffs present the entire case

Counsel for the 2nd Defendant/Respondent submitted that there was no requirement for the notices to be served personally and postage of the notices were proper service. He said that no criminal charges have been preferred against 1st Defendant and the fact that the 1st Defendant failed to participate in this proceedings show that he is in cahoots with the Plaintiffs. He submitted that the Plaintiffs have not established prima facie case. He submitted that the 2nd Defendant had right to exercise power when default occurred.

As to whether Plaintiff is likely to suffer irreparable damage he submitted that value of property can be ascertained and lose remedied by award of damages. He cited the case of Wanjohi Vs Equity Building Society.

On balance of convenience, he submitted that it lies in favour of 2nd and 3rd Defendants.

As to whether the Plaintiffs deserve equitable remedy, he submitted that the 1st Defendant took a loan and covenanted to pay and should not therefore use the Plaintiffs as a shield. He said the Plaintiffs are guilty of laches and the suit cannot be decided on favour of the Plaintiffs.

Counsel for the 3rd Defendant/Respondent associated himself with submissions by Counsel for the 2nd Respondent.

I have considered rival submissions by parties herein. I wish to consider whether the Plaintiffs have established prima facie case to warrant grant of the orders sought. There is no dispute that the Plaintiffs were registered owners of land L.R. No.Trans-Nzoia/Ndalalala/4 and that the title was charged for a facility of 2 million advanced to the 1st Defendant, a son to the Plaintiffs. Plaintiffs confirmed from 1st Defendant that he was advanced the said amount by the 2nd Defendant who was his employer then. The Plaintiffs have denied authorizing charge of the title or guaranteeing the loan and alleged fraud. Though Aggrey L. Kidiavai swore affidavit to the effect that the Plaintiffs executed the documents before him, in the presence of denial by Plaintiff, it would be necessary to subject the averments to test by cross examination. This can only be establish if a full trial is conducted. It would be in the interest of justice to establish whether a valid charge was created which would then empower the 2nd Defendant to dispose of the property in event of default. On perusing the rival averments and looking at the documents attached, it would not be possible to reach a logical conclusion on validity of the charge without a full hearing. Before considering whether notices were served it would be imperative to consider validity of the charge.  Valuation of property is also in issue. This calls for preservation of the property before the above issues are resolved. From the foregoing therefore I find that the Plaintiffs have established a prima facie case and it would be in the interest of justice to preserve the property herein awaiting hearing and determination of this suit. I proceed to restrain the 3rd Respondent by itself, its director, servants or agents from entering, taking possession, occupying, blockading and evicting residents or obstructing free use, quiet possession and enjoyment of property known as L.R. No. Trans-Nzoia/Ndalala/4.  Costs in the cause.

Dated and Delivered at Nairobi this 1st day of November 2017

………………………………

RACHEL NGETICH

JUDGE

IN THE PRESENCE OF

………………………………  COURT ASSISTANT

………………………………  COUNSEL FOR PLAINTIFFS/APPLICANTS

………………………………  COUNSEL  DEFENDANTS/RESPONDENTS