[2016] KEELC 628 (KLR)
The court found that the plaintiff, as guarantor, had executed a guarantee for a financial facility granted to the 3rd defendant and charged her property to the 1st defendant. The 3rd defendant defaulted, and the plaintiff admitted the outstanding debt and agreed to liquidate it by consent. The court held that, in...
Source-derived case information.
- Citation
- [2016] KEELC 628 (KLR)
- Parties
- Plaintiff: Elizabeth Jerono Yator; Defendant: Consolidated Bank (K) Limited; Defendant: Protus Wanga T/A Timeless Dolphin Auctioneers; Defendant: Lomson Enterprises Limited
- Court
- Environment and Land Court
- Court Station
- Environment and Land Court at Eldoret
- Jurisdiction
- Kenya
- Case Number
- Environment & Land Case 17 of 2015
- Procedural Posture
- Environment and Land Case / Ruling on Costs After Compromise of Suit
- Outcome
- Costs awarded to the 1st defendant.
- Judges
- A Ombwayo
- Legal Topics
- Guarantee Liability, Charge of Land, Award of Costs, Loan Default
- 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
Elizabeth Jerono Yator
Plaintiff
Consolidated Bank (K) Limited
Defendant
Protus Wanga T/A Timeless Dolphin Auctioneers
Defendant
Lomson Enterprises Limited
Defendant
Procedural Posture
Environment and Land Case / Ruling on Costs After Compromise of Suit
Legal Issues
- 1 Who is the successful party entitled to costs after compromise of a suit involving a charged property and guarantee liability.
- 2 Whether the plaintiff, as guarantor, should bear the costs after admitting liability and agreeing to liquidate the debt.
Ratio Decidendi
The court found that the plaintiff, as guarantor, had executed a guarantee for a financial facility granted to the 3rd defendant and charged her property to the 1st defendant. The 3rd defendant defaulted, and the plaintiff admitted the outstanding debt and agreed to liquidate it by consent. The court held that, in these circumstances, the 1st defendant was the successful party as the plaintiff's claim was not granted and she admitted liability. Exercising its discretion, the court awarded costs to the 1st defendant, reasoning that the plaintiff should bear the costs for having to settle the guarantee after the 3rd defendant's default.
Court Disposition
Costs awarded to the 1st defendant.
Orders
- The plaintiff shall pay the costs of the suit to the 1st defendant.
Full Case Text
Judgment text and source record
17 paragraphs
REPUBLIC OF KENYA
IN THE ENVIRONMENT AND LAND COURT OF KENYA AT ELDORET
ENVIRONMENT & LAND CASE NO. 17 OF 2015
ELIZABETH JERONO YATOR................................................ PLAINTIFF
VERSUS
CONSOLIDATED BANK (K) LIMITED ..........................1ST DEFENDANT
PROTUS WANGA
T/A TIMELESS DOLPHIN AUCTIONEERS..................2ND DEFENDANT
LOMSON ENTERPRISES LIMITED..............................3RD DEFENDANT
R U L I N G
Elizabeth Jerono Yator herein referred to as the Plaintiff sued Consolidated Bank Ltd and Protus Wanga T/A Timeless Dolphin Auctioneers and Lomson Enterprises Limited. The suit was commenced by way of Plaint dated 20/1/2013 and filed on the same date. The Plaint was accompanied by an application for injunction filed under certificate of urgency. The statement of defence for 1st and 2nd defendant was filed on 11/2/2013 whilst the replying affidavit to the application was filed on 24/2/2015.
The reply to the 1st and 2nd Defendant's defence was filed on 3/3/2015. However the suit was compromised in terms that the Plaintiff has to liquidate the debt of Kshs.3,200,000/= by paying Kshs.200,000/= to the 1st Defendant on or before the 31/8/2013. The plaintiff thereafter was to pay Kshs. 100,000/= to the 1st defendant monthly. That the Plaintiff was to pay the balance outstanding thereto in equal installments for a period of 5 years. The 1st defendant was not to charge the plaintiff penalty interest incurred before the consent.
The only issue remaining is who pays costs. The firm ofMagare Musundi & Company Advocates on behalf of the Plaintiff stated that they were successful party as the suit was compromised in terms of the Plaint. On the contrary, the firm of Cheptumo & Company Advocates for the 1st and 2nd Defendants submit that the prayers sought were not granted and that the Plaintiff admitted indebtedness to the 1st defendant and agreed to pay the sums declined by the 1st defendant to be outstanding.
I have considered the submission of both counsels on record and do find that it is not disputed that the plaintiff is the proprietor of Eldoret Municipality Block 9/912 as a Lessee for a term of 99 years from 1/1/1989 from the Eldoret Municipal Council. The property was charged to Consolidated Bank of Kenya on 13/8/2012 for Kshs.3,500,000/=. The charge was as a result of a guarantee executed by the Plaintiff in consideration of the 1st defendant granting a loan to the 3rd defendant. The Plaintiff as a guarantor to the 3rd defendant guarantee the liability of purported sum of Kshs.4,500,000/=. By consent dated 19/3/2015, the plaintiff agreed to liquidate the outstanding debt. The implication of the above is that the 3rd defendant was in arrears and therefore the successful party was the 1st defendant. In exercise of my discretion to award costs and looking at the circumstances of the case, that the plaintiff executed a guarantee on a financial facility granted to the 3rd defendant and charged his property to the 1st defendant and that the 3rd defendant failed or neglected to service the facility as agreed and that the plaintiff was willing to service her guarantee on pro rata basis, the she has admitted that the 3rd defendant was indeed owing the 1st defendant and therefore she should be punished for costs. The upshot of the above is that I do award costs to the 1st defendant. Orders accordingly.
DATED AND DELIVERED AT ELDORET THIS 17TH DAY OF AUGUST, 2016
ANTONY OMBWAYO
JUDGE