[2012] KEHC 2550 (KLR)
The court found that the plaintiff had fully paid the decretal sum secured by the charge, as evidenced by the bank entries and advices. The defendant's attempt to sell the property to recover auctioneer's and legal fees was improper, as such fees should be pursued by agreement or taxation, not by sale of the charged...
Source-derived case information.
- Citation
- [2012] KEHC 2550 (KLR)
- Parties
- Plaintiff: Gathecha Holdings Ltd; Defendant: National Bank of Kenya Limited
- Court
- High Court
- Court Station
- High Court at Mombasa
- Jurisdiction
- Kenya
- Case Number
- Civil Case 189 of 2011
- Procedural Posture
- Civil Case / Ruling on Interlocutory Injunction Application
- Outcome
- application for injunction granted
- Legal Topics
- Injunctions, Mortgage Discharge, Auctioneer Fees, Legal Costs
- Source Language
- en
Source-derived case record
Summary, issues, holding and outcome
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Parties
Gathecha Holdings Ltd
Plaintiff
National Bank of Kenya Limited
Defendant
Procedural Posture
Civil Case / Ruling on Interlocutory Injunction Application
Legal Issues
- 1 Whether the defendant bank should be restrained by injunction from selling the plaintiff's property after full repayment of the charged debt.
- 2 Whether auctioneer's and legal fees can justify the sale of the charged property after the principal debt is settled.
Ratio Decidendi
The court found that the plaintiff had fully paid the decretal sum secured by the charge, as evidenced by the bank entries and advices. The defendant's attempt to sell the property to recover auctioneer's and legal fees was improper, as such fees should be pursued by agreement or taxation, not by sale of the charged property. The court held that once the principal debt is settled, the mortgagee cannot exercise the power of sale solely to recover ancillary costs. The application for injunction was therefore merited and granted, bringing the main dispute to an end.
Court Disposition
application for injunction granted
Orders
- An injunction is issued restraining the defendant from selling property LR MBA/BLOCK XXI/423 M.I.
- The defendant may pursue auctioneer's and legal fees by agreement or taxation, not by sale of the property.
Full Case Text
Judgment text and source record
23 paragraphs
REPUBLIC OF KENYA
IN THE HIGH COURT OF KENYA
AT MOMBASA
CIVIL CASE 189 OF 2011
GATHECHA HOLDINGS LTD.................................................................................PLAINTIFF
VERSUS
NATIONAL BANK OF KENYA LIMITED............................................................DEFENDANT
Coram:
Mwera, J.
Juma for Plaintiff
Ojiambo for Defendant
Court Clerk Furaha
R U L I N G
In the notice of motion dated 21st April, 2012 brought under Order XI rule 3 Civil Procedure Rules and sections 1A, 1B, 3A of Civil Procedure Act the plaintiff company had one prayer:
•that an injunction do issue against the defendant bank so that it should not sell property LR MBA/BLOCK XXI/423 M.I.
It was stated in the grounds that the subject property was registered in the name of the plaintiff. The defendant held a legal charge over it for Shs. 47,201,434/07 which was fully paid on 23rd April, 2012. Accordingly, the defendant should not sell that property on 30th April, 2012.
The managing director of the plaintiff annexed to her supporting affidavit evidence that the debt in question was paid by two bank entries on 23rd April, 2012 of Shs. 15 million and 32. 1 million respectively, and the defendant issued two computer generated advices (annexure PNN1). That the bank was nonetheless demanding a further Shs. 1,421,348/= to cover auctioneer’s charges and legal fees. The plaintiff could not understand how that could be open to the intended auction sale as if it was part of the loan facility. These fees can be claimed and paid either by way of agreement or taxation. On the same 26th April, 2012 an interim order against the intended sale was granted.
Before the application came for inter partes hearing, the defendant filed some six grounds of objection in that the applicant had not made out a case to warrant an injunction and that the intended sale was by the parties consent. The auctioneer issued a notification of sale incurring expenses. These were not exorbitant sums; they were payable under the charge in question.
Parties were directed to file written submissions on 26th May, 2012. Nothing happened and the matter came for mention on 18th July, 2012. Only the plaintiff had filed its script. The court granted the defendant time to do so by 19th July, 2012. It did not do so and the court proceeded to pen a ruling as per the application and the submission by the plaintiff. The submission more or less repeated what was set out in the motion.
Having perused all material placed before this court, it is inclined to grant the orders sought. The whole decretal sum has been paid. If the defendant wishes to pursue auctioneer’s and legal fees, may that be by way of agreement or taxation – not to sell the charged property as it is attempting to do now. Of course if the certified payable fees/expenses are not paid, then the defendant has the usual known courses to move to recover them. Accordingly, this application succeeds with costs. And with this the main dispute here appears to have come to an end.
Delivered on 29th May, 2012.
J. W. MWERA
JUDGE