[2022] KEHC 15993 (KLR)

Benchmark Management Limited v Stanbic Bank Kenya Limited & another; Simiyu & another (Interested Parties) (Commercial Case 56 of 2020) [2022] KEHC 15993 (KLR) (Commercial and Tax) (2 December 2022) (Ruling)

Neutral citation: [2022] KEHC 15993 (KLR)

Republic of Kenya

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

Commercial and Tax

Commercial Case 56 of 2020

A Mabeya, J

December 2, 2022

Between

Benchmark Management Limited

Applicant

and

Stanbic Bank Kenya Limited

1st Defendant

Keysian Auctioneers

2nd Defendant

and

Teresa Masaka Simiyu

Interested Party

Abraham Katana Kyuvi

Interested Party

Ruling

1. Before court is the notice of motion dated January 29, 2021. The same was brought, inter alia, under section 63(e) of the Civil Procedure Act.

2. The applicant sought for an order against the defendants to restrain them from entering, trespassing, transferring and/or in any way dealing with Apartment No A Kita Gardens Apartments erected on LR No 209/3221 Kileleshwa Nairobi (hereinafter the ‘suit property’).

3. The application was based on the grounds that on September 30, 2020 under the instructions of the 1st respondent, the 2nd respondent purported to sell the suit property by public auction. That the sale transaction was yet to be fully effected as the property was yet to be transferred.

4. That due process was never followed when the bank purported to sell the suit property. That the applicant did not receive notice of the intended sale by public auction to enable it to comply with the bank’s conditions for averting the sale including payment of money due to the bank.

5. That the auction was done hurriedly and in a concealed manner. That the respondents did not give the applicant’s payment proposal consideration. That the respondents never served the three months’ notice as required by law nor did they quote the value of the property in the purported sale.

6. The 1st interested party opposed the application vide a replying affidavit sworn by herself and also on behalf of the 2nd interested party who is her husband.

7. It was their case that they came across an advert carried out by the 2nd respondent in the Daily Nation Newspaper of September 16, 2020 advertising the sale of the suit property on the September 30, 2020.

8. That they attended the auction and were declared the successful bidders, having placed a bid of Kshs 15,075,000/-. That they had paid the full purchase price and were waiting for the transfer of the property by the 1st respondent to them.

9. That they were only purchasers for value who attended an auction and bid for the suit property and declared the successful purchasers. That any claims by the plaintiffs should be directed against the 1st respondent by way of damages.

10. Section 63 of the Civil Procedure Act provides that the court may, to prevent the ends of justice from being defeated, grant a temporary injunction and make such other interlocutory orders as may appear to the court to be just and convenient.

11. Order 40 rule 1 of the Civil Procedure Rules provides for the granting of interlocutory injunctions. The principles applicable were settled in the case of Giella v Cassman Brown [1973] EA 358. These are that; (i) the applicant must prove a prima facie case with a probability of success (ii) the applicant must illustrate that he will suffer irreparable loss and damage if the injunction is not granted, and iii) if the court is in doubt, it will determine the matter on a balance of convenience.

12. On prima facie, the applicant’s case is that the 2nd respondent sold its property by public auction to the interested parties on September 30, 2020 but the property is yet to be transferred to them. That the sale was irregular as it was not served with the requisite 30 day notice before the auction took place which would have enabled it to redeem the property. That its payment proposal was not considered and the value of the property was not quoted in the notification of sale.

13. In the affidavit of Ben R M Mbai sworn on October 7, 2020, a 14 day’s notice of the sale of the suit property from the 2nd respondent to the applicant was produced. There was also evidence of a 45 day notice dated August 19, 2020.

14. In this regard, the applicant’s assertion that it was not served with the required notices is untrue.

15. I further note that the forced sale price of the property was quoted as Kshs 15,000,000/- in the aforementioned notification of sale.

16. While it is true that the applicant offered a payment proposal to the 1st respondent, the bank did not accept it and proceeded to exercise its statutory power of sale.

17. Having considered the above and the fact that it is undisputed that the applicant defaulted in loan arrears, I find that the applicant has not established a prima facie case with any probability of success. I find that there is no right which has apparently been infringed by the defendant’s to call for an explanation or rebuttal.

18. As a prima facie case has not been established, it is not necessary for the court to consider the other requirements provided in Giella for the grant of an injunction.

19. Further, under section 99(3) of the Land Act provides: -“A person to whom this section applies is protected even if at any time before the completion of the sale, the person has actual notice that there has not been a default by the chargor, or that a notice has been duly served or that the sale is in some way, unnecessary, improper or irregular, except in the case of fraud, misrepresentation or other dishonest conduct on the part of the chargee, of which that person has actual or constructive notice.”

20. In light of the foregoing and the evidence of sale of the suit property, I find that the interested parties are innocent buyers and are entitled to have the property that they have purchased transferred to them. The balance of convenience is in favour of declining the orders sought.

21. Besides, in the event that the suit is determined in favour of the plaintiff, it shall have a remedy through damages from the 1st respondent which is an established financial institution that is capable of paying such damages.

22. All in all, I find no merit in the application and it is therefore dismissed with costs.

23It is so ordered.

DATED AND DELIVERED AT NAIROBI THIS 2ND DAY OF DECEMBER, 2022. A MABEYA, FCIArbJUDGE