[2007] KEHC 328 (KLR)
The court found that the main issue in dispute was whether the defendant was entitled to charge penalty interest not provided for in the charge document. As this issue required evidence and could not be determined at the interlocutory stage, the court was satisfied that the plaintiff had established a prima facie...
Source-derived case information.
- Citation
- [2007] KEHC 328 (KLR)
- Parties
- Plaintiff: Festus H.K. Mng’ambwa; Defendant: Housing Finance Company of Kenya Ltd.
- Court
- High Court
- Court Station
- High Court at Mombasa
- Jurisdiction
- Kenya
- Case Number
- Civil Suit 196 of 2006
- Procedural Posture
- Civil Suit / Ruling on Interlocutory Injunction Application
- Outcome
- interlocutory injunction granted
- Judges
- DK Maraga
- Legal Topics
- Mortgage Redemption, Penalty Interest, Injunctive Relief, Enforcement of Charges
- 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
Festus H.K. Mng’ambwa
Plaintiff
Housing Finance Company of Kenya Ltd.
Defendant
Procedural Posture
Civil Suit / Ruling on Interlocutory Injunction Application
Legal Issues
- 1 Whether the defendant is entitled to charge penalty interest not provided for in the charge document.
- 2 Whether the plaintiff is entitled to a temporary injunction restraining the sale of the charged property pending determination of the suit.
Ratio Decidendi
The court found that the main issue in dispute was whether the defendant was entitled to charge penalty interest not provided for in the charge document. As this issue required evidence and could not be determined at the interlocutory stage, the court was satisfied that the plaintiff had established a prima facie case warranting the grant of a temporary injunction. Accordingly, the court granted the injunction restraining the defendant from selling the property until the suit is heard and determined, with costs of the application to be in the cause.
Court Disposition
interlocutory injunction granted
Orders
- A temporary injunction is granted restraining the defendant from selling L.R. NO. Werugha/Wundanyi/951 until the suit is heard and determined.
- Costs of the application shall be in the cause.
Full Case Text
Judgment text and source record
16 paragraphs
REPUBLIC OF KENYA
IN THE HIGH COURT OF KENYA
AT MOMBASA
CIVIL SUIT 196 OF 2006
FESTUS H.K. MNG’AMBWA …………………………………………. PLAINTIFF
- V E R S U S –
HOUSING FINANCE COMPANY OF KENYA LTD. ……..………. DEFENDANT
RULING
By a charge dated 3rd December 1990 the plaintiff charged his property situate in Wundanyi and known as L.R. NO. Werugha/Wundanyi/951 to the defendant to secure a sum of shs. 270,000/- advanced to him. He claims in his plaint that despite the payment of that sum together with interest under the charge the defendant is threatening to sell the property. He has therefore filed this suit and sought an injunction to restrain the defendant from selling the property and an order to compel the defendant to discharge it. Simultaneously with the filing of the suit the plaintiff also filed an application for a temporary injunction to restrain the defendant from selling the property until this suit is heard and determined. This ruling is on that application after an inter parte hearing.
Presenting the application Mr. Maosa, counsel for the plaintiff submitted that the defendant has charged penalty interest, which is not provided for in the charge document and demanded an exorbitant sum thus making it impossible for the plaintiff to redeem the charged property.
On his part Mr. Wameyo for the defendant submitted that this application has no merit. In his view the only point raised is the amount due which on the authority of several cases cited including the case of Shavida & Others – Vs- The Delphis Bank Ltd, Mombasa HCCC. No. 111 of 2003 cannot be the basis of granting an injunction.
The main issue raised in this suit is the charging of penalty interest which the plaintiff terms illegal, as it is not provided for in the charge document. The defendant stated in several documents annexed to the replying affidavit sworn on its behalf including the letter to the plaintiff dated 31st May 1993 and the statement dated 17th November 1994 that it would and actually did charge penalty interest on outstanding arrears.
The major issue that will have to be decided at the hearing of this suit therefore is whether or not the defendant is entitled to charge penalty interest. Having not heard evidence I cannot at this stage decide either way. However having considered the matter I am satisfied that the plaintiff has made out a prima facie entitling him to an order of injunction which I hereby grant him in terms of prayer 2 of his application dated the 31st October 2006 until this suit is heard and determined. The costs of the application shall be in cause.
DATED and delivered this 12th day of June 2007.
D. MARAGA
JUDGE