[1999] KEHC 90 (KLR)
The court found that while the plaintiff did not deny being in default, the principal sum had been repaid and the main dispute centered on the interest and charges levied by the defendant, particularly interest on arrears and charges allegedly contrary to the Banking Act. These issues were deemed contentious and...
Source-derived case information.
- Citation
- [1999] KEHC 90 (KLR)
- Parties
- Plaintiff: Davis Nathan Chelogoi; Defendant: Diamond Trust Bank Ltd
- Court
- High Court
- Court Station
- High Court at Nairobi (Milimani Commercial Courts)
- Jurisdiction
- Kenya
- Case Number
- Civil Case 1759 of 1999
- Procedural Posture
- Civil Case / Ruling on Interlocutory Injunction
- Outcome
- Interlocutory injunction maintained pending hearing and determination of the suit.
- Legal Topics
- Injunctions, Statutory Power of Sale, Loan Default, Interest Charges, Banking Act Compliance
- Source Language
- en
Source-derived case record
Summary, issues, holding and outcome
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Parties
Davis Nathan Chelogoi
Plaintiff
Diamond Trust Bank Ltd
Defendant
Procedural Posture
Civil Case / Ruling on Interlocutory Injunction
Legal Issues
- 1 Whether the plaintiff has established a prima facie case with a probability of success to warrant the grant of an injunction.
- 2 Whether damages would be an adequate remedy if the injunction is not granted.
- 3 Whether the interest and charges levied by the defendant are unreasonable, unconscionable, or contrary to the Banking Act.
Ratio Decidendi
The court found that while the plaintiff did not deny being in default, the principal sum had been repaid and the main dispute centered on the interest and charges levied by the defendant, particularly interest on arrears and charges allegedly contrary to the Banking Act. These issues were deemed contentious and material to the main suit. Given the possibility that the charges could be found to be oppressive or unlawful, and in light of the Court of Appeal's position that unconscionable or excessive interest may justify injunctive relief, the court held that the plaintiff had established a prima facie case warranting the maintenance of the injunction until the suit is heard and determined.
Court Disposition
Interlocutory injunction maintained pending hearing and determination of the suit.
Orders
- The order of injunction restraining the defendant from selling, alienating, or disposing of the property L.R. NO. KITALE MUNICIPALITY BLOCK 2/130 shall remain in place until the suit is heard and determined or further orders of the court.
Full Case Text
Judgment text and source record
24 paragraphs
REPUBLIC OF KENYA
IN THE HIGH COURT OF KENYA AT NAIROBI
CIVIL CASE NO. 1759 OF 1999
DAVIS NATHAN CHELOGOI..................................................PLAINTIFF
versus
DIAMOND TRUST BANK LTD............................................DEFENDANT
R U L I N G
On 11th November, 1999 I gave an order of Injunction to restrain the defendant herein from selling alienating or disposing of by public auction or private treaty or in any other way parting with title for property known as L.R. NO. KITALE MUNICIPALITY BLOCK 2/130 belonging to the plaintiff.
I reserved my reasons therefore due to want of time and now give the same hereunder.
I stated then that, the defendant was out to exercise its statutory power of sale after the plaintiff defaulted in payment of the loan advanced to him by the defendant.
The plaintiff was required to establish a prima facie care with a probability of success, that damages would not be adequate compensation in the event the order was not granted and that if the court is in any doubt the matter be decided on a balance of convenience.
The plaintiff has shown that the principal sum advanced by the defendant has been repaid. This has not been controverted by the defendant.
The plaintiff on the other hand does not deny that he is in default. However, his computation leaves a very big difference between what he is ready to pay and what has been demanded by the defendant.
For sometime now, the courts have held that a dispute as to how much is payable in respect of the principal sum or interest cannot avail a litigant in the plaintiff’s position the remedy of an injunction. However, the Court of Appeal in C.A NO. 82 of 1998 Daima Bank & Others -vs_ K.H. Osmond upheld a decision of Kuloba J. where the learned Judge found that the interest charged on the principal sum was not only unreasonable but also unconscionable and manifestly excessive.
In the present case the defendant has charged interest on arrears in addition to interest due. Indeed, the said interest on arrears forms the highest figure of what is being claimed by the defendant. It has been submitted on behalf of the plaintiff that, the charge relating to this property did not provide, inter alia, that interest be payable on arrears as claimed by the defendant.
That is, with respect, a very contentious issue considering the figures reflected in annextures before the court.
It has also been submitted that some charges levied against the plaintiff are against the Banking Act and procedures. This is also a contentious issue.
I have seen some correspondence and evidence that the plaintiff form time to time reached an arrangement with the defendant to liquidate the sum due and owing. That may be so but that cannot deny the plaintiff a right to come to court in the event that the defendant appears to be oppressive as is apparent in this case.
As the main suit is yet to be heard, it may be prejudicial to the parties if more is said than is only necessary at this stage.
For these reasons, the order given shall remain in place until this suit is heard and determined and/or further orders of this court.
It is so ordered.
Dated and delivered at Nairobi this 30th day of November, 1999.
A. MBOGHOLI MSAGHA
JUDGE