[2011] KEHC 1606 (KLR)
The court found that the Plaintiff had fully repaid the loan secured by the legal charge, as evidenced by documentary proof including payment receipts, correspondence, and a statement of account showing a zero balance. The Defendant, having ceased operations in Kenya, failed to discharge the charge and did not...
Source-derived case information.
- Citation
- [2011] KEHC 1606 (KLR)
- Parties
- Plaintiff: Gatatha Farmers Co. Limited; Defendant: The First National Bank of Chicago
- Court
- High Court
- Court Station
- High Court at Nairobi (Milimani Commercial Courts)
- Jurisdiction
- Kenya
- Case Number
- Civil Case 313 of 2008
- Procedural Posture
- Miscellaneous Application / Judgment
- Outcome
- Originating Summons allowed; orders granted as prayed.
- Judges
- CN Mugo
- Legal Topics
- Discharge of Charge, Statute Barred Claims, Secured Transactions, Loan Repayment, Property Encumbrances
- Source Language
- en
Source-derived case record
Summary, issues, holding and outcome
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Parties
Gatatha Farmers Co. Limited
Plaintiff
The First National Bank of Chicago
Defendant
Procedural Posture
Miscellaneous Application / Judgment
Legal Issues
- 1 Whether the Defendant is obliged to discharge the legal charge over the Plaintiff's properties after full repayment of the loan.
- 2 Whether any claims under the charge document are statute barred under the law of Limitation.
Ratio Decidendi
The court found that the Plaintiff had fully repaid the loan secured by the legal charge, as evidenced by documentary proof including payment receipts, correspondence, and a statement of account showing a zero balance. The Defendant, having ceased operations in Kenya, failed to discharge the charge and did not respond to the suit despite proper service and public advertisement. The court held that the Plaintiff had proved its case on a balance of probabilities. Furthermore, any claims by the Defendant under the charge would be statute barred under the Limitation of Actions Act. The continued registration of the charge constituted an unnecessary encumbrance on the Plaintiff's properties,...
Court Disposition
Originating Summons allowed; orders granted as prayed.
Orders
- The legal charge dated 2nd July 1982 registered in favour of the Defendant over the Plaintiff’s immovable properties comprised in land Title Nos. L.R 1400, 1404, 1402, 2177, 2272, 100355 Trans Nzoia District is discharged.
- Costs of the application awarded to the Plaintiff.
Full Case Text
Judgment text and source record
30 paragraphs
REPUBLIC OF KENYA
IN THE HIGH COURT OF KENYA
AT NAIROBI
COMMERCIAL & TAX DIVISION
CIVIL CASE NO. MISC. 313 OF 2008 (O.S)
GATATHA FARMERS CO. LIMITED..................................................................PLAINTIFF
VERSUS
THE FIRST NATIONALBANK OF CHICAGO..............................................DEFENDANT
JUDGMENT
This judgment is delivered in the Originating Summons dated 10th June 2008, wherein leave to dispense with the service of the summons and hearing notices was granted on 4th February 2011.
The facts of the case are as set out in the Supporting Affidavit of the Plaintiff’s Chairman, Peter Mburu Gakwa, sworn on 10th June 2008. The orders sought under the suit are as follows:-
1. That the Legal Charge dated 2nd July 1982 registered in favour of the Defendant over the Plaintiff’s immovable properties comprised in the land Title No.s L.R 1400, 1404, 1402, 2177, 2272 100355 Trans Nzoia District be discharged.
2. Costs of the application be provided for.
The Originating Summons was necessitated by the closing of the Defendant’s operations in Kenya after its loan to the Plaintiff (KShs. 15,000,000/=) had been repaid in full but without discharging the charged properties. The Originating Summons was formally heard, wherein one witness testified on oath and produced a bundle of documents comprising, inter alia, the following:
1. The charge document.
2. Copies of the above-stated titles all showing that the charge registered in favour of the Defendant has not been discharged.
3. The Plaintiff’s letter dated 24th June 1986, under cover of which, the final installment of the loan (KShs. 1. 5 M) was paid vide two cheques numbered 1112324 and 936689 respectively.
4. The Defendant’s letter dated 30th June 1986 acknowledging receipt of the above loan balance and requesting for payment of legal charges inorder to close the accounts.
5. A statement of account dated 31st July 1986 reflecting a zero balance on the Plaintiff’s account with the Defendant.
The witness testified that all efforts to trace the Defendants for the purposes of obtaining a discharge of charge were fruitless and that even after the Originating Summons was advertised in the media no-one came up to defend the same.
I am satisfied, on the basis of the evidence placed before me that the Plaintiff has proved its case on the balance of probabilities. The documents exhibited before court speak for themselves and the contents thereof have not been rebutted at all.
Considering also, that all and any claims, as would be based on the Charge document herein would be statute barred under the law of Limitation, justice demands that the orders sought herein be granted to free the Plaintiff’s properties from the unnecessary encumbrance.
Consequently, the Originating Summons is hereby allowed and the orders sought granted. For whatever it is worth an order for costs to the Plaintiff is also granted.
Orders accordingly.
DATED, SIGNED and DELIVEREDat NAIROBI this 23RDday of SEPTEMBER, 2011.
M.G. MUGO
JUDGE
In the presence of :
Mr. Kuria holding brief for Mr. RaijiFor the Applicant
No AppearanceFor the Respondent