Khamis & 3 others v Trevo Auctioneers & another (Commercial Case E024 of 2026) [2026] KEHC 12505 (KLR) (30 July 2026) (Ruling)

REPUBLIC OF KENYA IN THE HIGH COURT OF KENYA AT MOMBASA COUNTY COURT NAME: MOMBASA HIGH COURT CASE NUMBER: HCCOMM/E024/2026 KHADIJA MUHAMED KHAMIS AND RAHMA ALI SHEIKH AND 2 OTHERS VS TREVO AUCTIONEERS AND ABSA BANK KENYA PLC RULING Introduction 1. The Applicants in this matter through a Notice of Motion dated 21st April,2026 and supported by the Applicants’ Supporting Affidavits sworn on an even date brought under Certificate of Urgency seek the following substantive orders: a) That the Application be certified urgent and be heard on the first instance. b) That this Honourable Court be pleased to grant an order of injunction restraining the Defendants/Respondents whether by themselves, or their authorized agents, auctioneers and/or any of them or otherwise from offering for sale, either by public auction or private treaty of that parcel of and namely MOMBASA/BLOCK XVI/94 situate at Majengo within Mombasa Island in Mombasa County pending hearing and determination of this Application. The Judiciary of Kenya Doc IDENTITY: 44097752855317018776325640877 Tracking Number:OO5ZWT2026 1/ 7 c) That this Honourable Court be pleased to grant an order of injunction restraining the Defendants whether by themselves, or their authorized agents, auctioneers and/or any of them or otherwise from offering for sale, either by public au ction or private treaty of that parcel of and namely MOMBASA/BLOCK XVI/94 situate at Majengo within Mombasa Island in Mombasa County pending hearing and determination of the main suit. d) That costs of this Application be in the cause. 2. The Respondents opposed the Application through the Replying affidavit of Samuel Njuguna, a Legal Officer for the 1st Respondent sworn on 2nd June, 2026. 3. Subsequently on 12th June,2026 the 1st Applicant put in a Further Affidavit while the Respondents filed their written submissions and a list of authorities on the same date. 4. The are no written submissions on record by the Applicants. Background 5. It is not disputed that the 3rd and 4th Applicants are the borrowers herein and took out a loan with the 1st Respondent in the sum Kshs. 22,300,000.00 and provided the subject property, owned by 1st-4th Applicants as security. 6. After the 3rd and 4th Applicants thereafter defaulted in servicing the loan facility which then resulted to the service of two notices by the Respondents’ lawyers i.e. a ninety (90) day notice dated 18th December,2024 followed with a forty (40) day notice dated 22nd March,2025 respectively. 7. On instructions by the 1st Respondent, the 2nd Respondent served a redemption notice upon the Applicants informing them that failure to redeem the property then the 2nd Respondent shall be at liberty to carry out a sale by public auction of the subject property. Issues for Determination The Judiciary of Kenya Doc IDENTITY: 44097752855317018776325640877 Tracking Number:OO5ZWT2026 2/ 7 8. Having considered the Notice of Motion, the Supporting and Further Affidavits by the Applicants and the Replying Affidavit, written submissions and authorities filed by the Respondents, the issues that arise for determination are: a) Whether the suit property ought to be preserved pending the hearing of the Application. b) Who is to bear the costs. Analysis and Determination 9. I now address each issue in turn. Restraint offering for sale, either by public auction or private treaty the subject property pending determination of this Application 10. These prayers are interlocutory in nature: they seek to preserve the suit property pending the hearing of the application. The Applicants did not put in their submissions 10. The Respondents in their submissions contested that the Applicants did not meet the threshold for the grant of the orders sought in their Application. On the other the are no submissions by the Applicants to support their case thus the Court will solely rely on their pleadings. 11. The 1st, 2nd and 4th Applicants in their Affidavits dated 21st April, 2026 and 12th June,2026 respectively contend that the three notices i.e. rectification, statutory notice of intention to sell and the redemption notices were not serviced on them. 12. In rebuttal the Respondents in their Replying Affidavit dated 2nd June,2026 insist that service of these notices was effected on all the Applicants herein vide a company email-delfysecurity@gmail.com which the Applicants had filled in with the 1st Respondent as their address of service and that which all the Applicants are directors thereof. The Judiciary of Kenya Doc IDENTITY: 44097752855317018776325640877 Tracking Number:OO5ZWT2026 3/ 7 13. The Respondents went ahead to attach copies of letters and emails served vide the said email address to support their claim that their exercise of statutory power of sale was procedural and lawful. 14. The exercise of statutory power of sell by the lender sets in upon default by the borrower of any obligation in the contract for more than one month. Before this power is exercised, the following notices are to be issued by the lender to the borrower: a) Rectification Notice under Section 90 of the Land Act shall adequately inform the recipient of the following matters— • The nature and extent of the default by the chargor; • if the default consists of the non-payment of any money due under the charge, the amount that must be paid to rectify the default and the time, being not less than three months, by the end of which the payment in default must have been completed; • if the default consists of the failure to perform or observe any covenant, express or implied, in the charge, the thing the chargor must do or desist from doing so as to rectify the default and the time, being not less than two months, by the end of which the default must have been rectified; the consequence that if the default is not rectified within the time specified • in the notice, the chargee will proceed to exercise any of the remedies referred to in this section in accordance with the procedures provided for in this sub- part; and the right of the chargor in respect of certain remedies to apply to the court • for relief against those remedies. The Judiciary of Kenya Doc IDENTITY: 44097752855317018776325640877 Tracking Number:OO5ZWT2026 4/ 7 The Court wishes to address the issue of the structure of this 15. notice marked SN-5 from the Respondents. The notice is silent on the amount that the borrowers’ have defaulted in paying and the amount that is payable so as to rectify the said breach. 16. The notice jumps directly to directing the chargor are to pay back the full loan amount failure to which the chargee shall exercise its statutory remedy under section 96 as read with section 90(3) of the Land Act. 17. This is in inconsistent with the dictates of the Land Act. b). Notice of Intention to Sell under section 96 of the Land Act 18. Where there is non-compliance of the first notice served then the Chargee shall go ahead and serve a second notice and shall not proceed to complete any contract for the sale of the charged land until at least forty days have elapsed from the date of the service of the notice to sell. 19. The law dictates that this notice is to also be served on a spouse of the chargor who had given consent, any person who is a co-owner with the chargor and any guarantor of the money advanced under the charge. 20. The is no proof that any of the spouses who had given consent for the property to be charged received this Delfy Securities is and person on its own and it cannot be said that service upon the said entity and its directors is service upon the spouses of the said directors. It cannot be said that a notice. 21. Yet again the laid down procedures were faulted. c). Redemption Notice under under Rule 15(d) of the Auctioneers Rule 1997 The Judiciary of Kenya Doc IDENTITY: 44097752855317018776325640877 Tracking Number:OO5ZWT2026 5/ 7 22. An auctioneer licensed under the Auctioneers Act shall serve this notice upon the owners of the property up for sell notifying them that with a period of not less than 45 days they have the opportunity to redeem the property by paying the amount set forth in the notice. This is the final notice issued before the property is sold by way of public action. 23. From perusal of the financial statements of the loan facility it is clear that the 3rd and 4th Applicants severally defaulted in payment of the installments as stipulated in the charge. This does not dispense with the responsibility by the chargee to ensure that the laid down procedures are observed; they cannot be overlooked so that a party can exercise its statutory power of sale. Disposition For reasons stated above, this Court makes the following orders: a) The Notice of Motion dated 21st April,2026 is allowed, the Respondents are restrained whether by themselves, or their authorized agents,auctioneers and/or any of them or otherwise from offering for sale, either by public auction or private treaty of that parcel of and namely MOMBASA/BLOCK XVI/94 situate at Majengo within Mombasa Island in Mombasa County pending hearing and determination of the substantive suit. b) Costs shall be in the cause. It is so ordered. PRE TRIAL ON 3OTH SEPTEMBER 2026 Dated, signed and delivered in Open Court/Online through MS TEAMS, this The Judiciary of Kenya Doc IDENTITY: 44097752855317018776325640877 Tracking Number:OO5ZWT2026 6/ 7 30th day of July 2026. HON. LADY JUSTICE W.K.MICHENI JUDGE Mr .OLUGA FR THE A RESPONDENT PRESENT N\ A APPLICANT MS BEBORA COURT ASSISTANT SIGNED BY/FOR: 5 □ TH E J U D I C I A R Y O F K E N Y A ★ HON. LADY JUSTICE WENDY MICHENI Mombasa High Court High Court Commercial and Tax Date: 2026-07-30 18:18:37 The Judiciary of Kenya Doc IDENTITY: 44097752855317018776325640877 Tracking Number:OO5ZWT2026 7/ 7