[2003] KEHC 492 (KLR)
The court found that the plaintiffs had executed a charge in favour of the defendant for a loan of Kshs. 5 million and had defaulted on repayment. The interest rates were specified in the charge, and the plaintiffs were aware of them at the time of execution. The property was valued, and a valuation report was...
Source-derived case information.
- Citation
- [2003] KEHC 492 (KLR)
- Parties
- Plaintiff: Ngegi Muigai; Plaintiff: Catherine Wangui Muigai; Defendant: East African Building Society
- Court
- High Court
- Court Station
- High Court at Mombasa
- Jurisdiction
- Kenya
- Case Number
- ? 547 of 2001
- Procedural Posture
- Civil Suit / Ruling on Interlocutory Injunction Application
- Outcome
- application dismissed with costs
- Legal Topics
- Injunctions, Statutory Notice Requirements, Mortgage Enforcement, Interest Rate Disputes, Valuation of Security, Irreparable Loss
- Source Language
- en
Source-derived case record
Summary, issues, holding and outcome
More case intelligence is available
Unlock the full research layer for this judgment.
Parties
Ngegi Muigai
Plaintiff
Catherine Wangui Muigai
Plaintiff
East African Building Society
Defendant
Procedural Posture
Civil Suit / Ruling on Interlocutory Injunction Application
Legal Issues
- 1 Whether the plaintiffs were served with the mandatory statutory notice before the intended sale of the charged property.
- 2 Whether the defendant failed to value the suit property as required.
- 3 Whether the interest rates applied by the defendant were unconscionable.
Ratio Decidendi
The court found that the plaintiffs had executed a charge in favour of the defendant for a loan of Kshs. 5 million and had defaulted on repayment. The interest rates were specified in the charge, and the plaintiffs were aware of them at the time of execution. The property was valued, and a valuation report was submitted, indicating the open market, mortgage, and forced sale values. The court was satisfied that a statutory notice was duly served in compliance with the law. Since the plaintiffs admitted the debt and default, and the statutory and contractual requirements were met, there was no basis for granting an injunction. The application was therefore dismissed with costs.
Court Disposition
application dismissed with costs
Orders
- The application for injunction is dismissed with costs to the defendant.
Full Case Text
Judgment text and source record
22 paragraphs
REPUBLIC OF KENYA IN THE HIGH COURT OF KENYA AT MOMBASA CIVIL SUIT NO.547 OF 2001
1. NGEGI MUIGAI
2. CATHERINE WANGUI MUIGAI………………………….PLAINTIFFS
V E R S U S
EAST AFRICAN BUILDING SOCIETY……………………DEFENDANT
R U L I N G
This is an application by way of Chamber Summons dated 29/10/2001 brought under Order 39 Rules 1, 2, 3 & 9 of the Civil Procedure Rules and Section 3A of the Civil Procedure Act. The Plaintiffs/Applicants seek an injunction to restrain the Respondents by itself employees servants and/or agents from selling by public auction Plaintiffs/Applicants’ property known as LR/No. MSA/Block XVII/587 and/or delineating or dealing with the said property in any manner.
granted under Certificate of Urgency.
The application is based on the grounds that:
(a) That the Plaintiff was not served with the mandatory Statutory Notice.
(b) That Defendant has failed to value the said property.
(c) That the Defendant has applied unconscionable interest rates on the principal debt of Kshs. 5m.
And that the Plaintiff will suffer irreparable loss. In an affidavit sworn by the Defendant’s legal officerwww.
The Applicants did execute a charge in favour of the East African Building Society, the Respondent herein over the suit property for a loan of Kshs.5,000,000/-. They have defaulted on the loan.
Although the debt is admitted the Applicants now say that the interest charged was unconscionable. There is however a schedule of interest attached to the Executed Charge so that the Applicants were fully aware of what was at stake. The property was valued and a report submitted. As at June 25th, 2000, the Valuer wrote:-
“In our opinion the following values would apply taking into account the current property market conditions, location of the subject property and accommodation provided:
Open market value – Kshs.21m.
Mortgage value - Kshs.19m.
Forced Sale Value - Kshs.17m.”
Having said that and having also noted that a Statutory Notice was given in compliance with the law, I find that the application has no merit. It stands dismissed with costs. Dated this 5th day of March, 2003.
L. P. OUNA
J U D G E