https://new.kenyalaw.org/akn/ke/judgment/keelc/2026/3386

Equity Bank Limited & another v Kinjunje Gardens Limited & 7 others (Environment and Land Case 941 & 947 of 2016 (Consolidated)) [2026] KEELC 3386 (KLR) (4 June 2026) (Ruling) Neutral citation: [2026] KEELC 3386 (KLR) Republic of Kenya In the Environment and Land Court at Nairobi Environment and Land Case 941 & 947 of 2016 (Consolidated) MN Kullow, J June 4, 2026 Between Equity Bank Limited Plaintiff and Kinjunje Gardens Limited 1st Defendant Patrick Kangethe Njuguna 2nd Defendant Chief Land Registrar 3rd Defendant Margaret Wambui Kangethe 4th Defendant As consolidated with Environment and Land Case 947 of 2016 Between National Bank Kenya (Formerly Commercial Bank Of Africa Limited) Plaintiff and Wardpa Holdings Limited 1st Defendant Co-Operative Bank Of Kenya Limited 2nd Defendant Leakey’S Auctioneers 3rd Defendant Chief Land Registrar 4th Defendant Patrick Kangethe Njuguna 5th Defendant Gladys Njeri Kangethe 6th Defendant George James Kireru 7th Defendant Edward Njuguna Kangethe 8th Defendant Ruling 1.The matter is coming up for determination on the notice of preliminary objection dated 12th February 2026 by the 1st 3rd and 4th defendants. The notice of preliminary objection raised the following groundsa.That, this Honourable Court does not have the jurisdiction to hear the suit as the amended plain has abandoned any claim founded on land, title, use and occupation and pursuing the issue of the charges registered on the suit propertyb.That the amended plaint now raises a purely commercial claim for recovery of money arising from the alleged loan default which does not fall under the jurisdiction of the Environment and Land court 2.The court directed for the notice of preliminary objection be dispensed off by written submissions. The 1st 3rd and 4th defendants in support of the Preliminary objection filed submissions dated 5th May 2026 while the plaintiff drafted submissions dated 18th May 2026. Defendant’s submissions 3.In support of their notice of preliminary objection the 1st , 3rd and 4th defendants submitted that the amended plaint dated 26th May 2022 expressly abandoned the claims relating to title and raised the issue of the charges on the property being irregular seeking for monetary recovery. That the jurisdiction of this court has therefore been oust and without the said jurisdiction the court cannot continue to adjudicate on the matter relying on the case Owners of the Motor Vessel “Lillian S" v Caltex Oil (Kenya) Ltd (Civil Appeal 50 of 1989).The defendants further to buttress the point of th dispute being commercial relied in the case of Co-operative Bank of Kenya Limited v Patrick Kangethe Njuguna & 5 others [2017] KECA 79 (KLR), Plaintiff’s submissions 4.The Plaintiff submitted that the issue of jurisdiction was res judicata as the court had decided on it and that the notice of preliminary objection was designed to delay the matter.That further even if this court hold that it has no jurisdiction the right course of action will not be to dismiss the suit but transfer it to the proper court to in line with article 50 of the constitution that guarantees the right to a fair hearing .Counsel also placed reliance on the case of Joyce Njambi Githungu v Equity Bank Kenya Limited & 2 Others, ELC Suit No. E059 of 2025, Analysis and determination 5.Having considered the Notice of Preliminary objection and the submissions herein the only issue for determination is whether the Notice of Preliminary Objection dated 12th February 2026 is merited.The threshold of a preliminary objection was set out by the Court of Appeal in the case of Mukisa Biscuit Manufacturing Co. Ltd v West End Distributors Ltd (1969) EA 696 as follows:“...a preliminary objection consists of a pure point of law which has been pleaded, or which arises by clear implication out of pleadings, and which if argued as a preliminary objection may dispose of the suit. “The Court went further to note that:-“A preliminary objection is in the nature of what used to be a demurrer. It raises a pure point of law which is argued on the assumption that all the facts pleaded by the other side are correct. It cannot be raised if any fact has to be ascertained or if what is sought is the exercise of judicial discretion. The improper raising of preliminary objections does nothing but unnecessarily increase costs and, on occasion, confuse the issues, and this improper practice should stop.’’ 6.The notice of preliminary objection dated 12th February 2026 is founded on the notion that the suit is improperly before this court as it lacks jurisdiction to entertain the same. It goes without saying that without the requisite jurisdiction a court of law down its tools meaning that the objection, if successful, is capable of finally disposing the whole matter. The objection, therefore, attains the threshold of a pure preliminary point of law. The argument is that the amended plaint dated 26th May 2022 introduced issues that were commercial in nature and hence outside the jurisdiction of this court. The Environment and Land Court is a creation of Article 162 (b) of the Constitution which donates to parliament the power to establish courts with the status of the High Court to hear and determine disputes relating to the Environment and the use and occupation of and title, to land. The Environment and Land Court Act at section 13 defines the jurisdiction of the court thus;1.The Court shall have original and appellate jurisdiction to hear and determine all disputes in accordance with Article 162(2)(b) of the Constitution and with the provisions of this Act or any other law applicable in Kenya relating to environment and land.2.In exercise of its jurisdiction under Article 162(2)(b) of the Constitution, the Court shall have power to hear and determine disputes―a.relating to environmental planning and protection, climate issues, land use planning, title, tenure, boundaries, rates, rents, valuations, mining, minerals and other natural resources;b.relating to compulsory acquisition of land;c.relating to land administration and management;d.relating to public, private and community land and contracts, choses in action or other instruments granting any enforceable interests in land;e.and any other dispute relating to environment and land. 7.It is now fairly well settled that arising from the holding in Cooperative Bank of Kenya –v- Patrick Kangethe Njuguna (2017) eKLR the High Court is the proper forum to litigate accounting matters owing to its unlimited original jurisdiction in Civil Matters.However, there are instances where there are overlapping mandates such as in the instant case. Faced with such a case Ngugi J ( as he then was ) in the case of Suzane Butler and 4 others Vs Redhill Investors and another (2017) eKLR stated “When faced with a controversy whether a particular case is a dispute about land (which should be litigated at the ELC) or not, the Courts utilize the Pre-dominant Purpose Test: In a transaction involving both a sale of land and other services or goods, jurisdiction lies at the ELC if the transaction is predominantly for land, but the High Court has jurisdiction if the transaction is predominantly for the provision of goods, construction, or works.The Court must first determine whether the pre-dominant purpose of the transaction is the sale of land or construction. Whether the High Court or the ELC has jurisdiction hinges on the predominant purpose of the transaction, that is, whether the contract primarily concerns the use, of land or, in this case, the construction of a townhouse. For the court to make this determination, the pleadings provide useful guidance. 8.This court will have to look at the cause of action in the amended plaint to establish the dispute arising. Paragraph 8 of the amended plaint reads;Pursuant to a letter of offer dated 9th December 2014, the plaintiff agreed to advance a loan facility to the 1st defendant on the following termsa.A development loan facility in the sum of Ksh 20,000,000/= for purposes of constructing a commercial building referred to as woodlands building and renovation of a hostel establishment in the central Business District referred to as princess Hotel. Terms of the facility were…………………………b.The facility was secured by several facilities as belowi.A First Legal Charge for KShs.60.000,000/- to be registered over property L.R No Dagoretti/Riruta/2290 in favor of the Plaintiffii.A first legal charge for Ksh 80,000/ to be registered over property LR No Dagoretti /Riruta/2289iii.A first legal charge for Ksh 60,000,000/= to be registered over property LR No Dagoretti /Riruta/2289iv.An all-assets Debenture over the 1+ Defendant's existing and future assets to be registered in favor of the Plaintiff.v.A Deed of Assignment of Rental Income receivable from the securities properties to be duly registered in favor of the Plaintiffvi.Guarantee and Indemnity by the 5 & 6t Defendants, in their capacity as the Directors and Shareholders of the 1st Defendant 9.Paragraph 10 indicates that the 1st defendant defaulted in settlement of the facility causing the plaintiff to issue statutory notice. 10.Paragraph 11 of the amended plaint reads; The plaintiff avers that it was an express term of the said loan facility vide the letter of offer of 9th December 2014 with the 1st defendant that the latter would diligently and without fail service the loan repayment by way of monthly instalments and that in the event of default the plaintiff would be at liberty to sue for the recovery of all outstanding amounts. The plaintiff avers that the default by the 1st, 3rd and 4th defendants amount to breach of contract 11.From the above facts it goes without saying that the dispute involves the issue of default of a loan facility advanced to the 1st defendant. In this instance, it is undisputed that the dispute stems from the letter offer dated 9th December 2014 between the Plaintiff and the 1st defendant. The amended plaint further confirms that all orders sought primarily relate to breach of contract and seeking of monies owed. It further seeks protection of interests stemming out of the contract through damages. Bearing this mind, I find that the issues raised are commercial in nature for this reason, find that the suit falls squarely within the jurisdiction of the High Court. 12.In the case of Spinners & Spinners Limited v Spinners & Spinners Limited [2017] eKLR, it was held as follows;“ In my view, this incidental concurrent jurisdiction includes the ability of both the High Court and the Equal Status Courts to deal with certain procedural or administrative questions that present quasi-judicial issues where the Court in question is requested to act in the interests of justice or due administration of justice. This is where I would locate the ability of any of the three superior courts of cognate jurisdiction to transfer to the counterpart superior court any case filed before it that would more appropriately be adjudicated in the cognate superior court.” Final disposition 13.In view of the foregoing, I see no to reason depart from the aforementioned decision and for the interest of justice, I hereby issue the following orders;i.That the notice of Preliminary Objection dated 12th February 2026 is merited.ii.This suit is hereby transferred to High Court (Commercial and Tax Division) for hearing and determination and the Deputy Registrar of this Court is directed to facilitate the same.iii.Costs to abide the determination of the main suit.It is so ordered. DATED, SIGNED AND DELIVERED VIRTUALLY AT NAIROBI ON THIS 4TH DAY OF JUNE 2026.MOHAMMED N. KULLOWJUDGERuling delivered in the presence of: -Mr. Kibaiko for the Plaintiff in 941Ms. Kipkulafor the PlaintiffMr. Wandera for 2nd DefendantMr. Karaya for 1st, 3rd and 4th DefendantsMr. Allan Kamau for 2nd Defendant in 941Philomena W . Court Assistant