[2018] KEHC 2472 (KLR)
The court held that the bank could not realize its security without first serving a fresh statutory notice and complying with the statutory timelines, as the previous notice was not demonstrated to have been served. The failure of the applicant to comply with the conditional injunction did not entitle the bank to...
Source-derived case information.
- Citation
- [2018] KEHC 2472 (KLR)
- Parties
- Plaintiff: Longonot Gate Development; Defendant: Equity Bank Limited
- Court
- High Court
- Court Station
- High Court at Nakuru
- Jurisdiction
- Kenya
- Case Number
- Civil Case 44 of 2017
- Procedural Posture
- Civil Case / Ruling on Application for Injunction and Compliance With Statutory Notice Requirements
- Outcome
- Application for further orders on injunction and realization of security allowed in part.
- Judges
- EM Ngugi
- Legal Topics
- Statutory Power of Sale, Injunctions, Service of Statutory Notice, Realization of Security
- Source Language
- en
Source-derived case record
Summary, issues, holding and outcome
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Parties
Longonot Gate Development
Plaintiff
Equity Bank Limited
Defendant
Procedural Posture
Civil Case / Ruling on Application for Injunction and Compliance With Statutory Notice Requirements
Legal Issues
- 1 Whether the defendant bank served a valid statutory notice on the plaintiff before seeking to realize its security.
- 2 Whether the conditional injunction granted by the court was properly complied with by the plaintiff.
- 3 Whether the bank can proceed to realize its security in the absence of proper statutory notice.
Ratio Decidendi
The court held that the bank could not realize its security without first serving a fresh statutory notice and complying with the statutory timelines, as the previous notice was not demonstrated to have been served. The failure of the applicant to comply with the conditional injunction did not entitle the bank to bypass the statutory scheme. The orders of the court do not constrain the bank from following the law, but realization of security must be preceded by proper service of statutory notice as required by the Land Act.
Court Disposition
Application for further orders on injunction and realization of security allowed in part.
Orders
- The bank respondent is at liberty to serve a statutory power of sale in accordance with the law.
- The bank respondent cannot realize its security without serving a new statutory notice and following statutory timelines afresh.
Full Case Text
Judgment text and source record
20 paragraphs
REPUBLIC OF KENYA
IN THE HIGH COURT OF KENYA
AT NAKURU
CIVIL CASE NO. 44 OF 2017
LONGONOT GATE DEVELOPMENT..........PLAINTIFF
VERSUS
EQUITY BANK LIMITED...........................DEFENDANT
RULING
Having heard counsels for the Applicant and the Respondent with respect to the Application dated 27/8/2018 and having read the Ruling of the court dated 23/7/2018 as well as all the documents filed in the matter, I observe the following
1. The court, in its ruling found that the Bank had not discharged its burden to demonstrate that Statutory Notice had been served on the Applicant.
2. The court gave a conditional grant of injunction the condition being the payment of Ksh 31,691,913. 43 which the court found the Applicant facility admitted to owing.
The conditional payment of the sum is the main issue before this court and on appeal before the Court of Appeal. The issue as I understand it is the apprehension that the Bank has been given a licence to realize the securities following failure to pay the Ksh 31,691,913. 43 even before a statutory notice has been served to the applicant.
It is readily obvious that such sale would run afoul of the statutory scheme. It seems to me therefore that the proper resolution of the issue before me is one that would allow the Applicant to preserve its appeal if it so wishes without suffering the illegality of having its property sold without following the statutory scheme.
Consequently, I direct as follows
1. Following the failure of the Applicant to abide by the conditions placed on the grant of injunction by the court, the bank Respondent will be at liberty to serve a statutory power of sale in accordance with the law. To clarify the extent court orders do not constrain the Bank Respondent from following the statutory scheme provided in the law to realize its security.
2. For avoidance of doubt the court having established that there was no demonstration that a statutory notice had been served. The Bank Respondent cannot realize its security without serving new statutory notice and following the statutory timelines afresh.
Dated and delivered in Nakuru this 24th day of October, 2018
........................
JOEL NGUGI
JUDGE