[2023] KECPT 799 (KLR)
The Tribunal found that the claimant had not addressed the respondent's key contention regarding undisclosed changes in the registration of the secured motor vehicles, which was a material fact relevant to the grant of interim relief. The Tribunal emphasized that equitable relief, such as a stay of execution or...
Source-derived case information.
- Citation
- [2023] KECPT 799 (KLR)
- Parties
- Applicant: New Mega Africa Ltd; Respondent: Tower Savings and Credit Co-op Society Ltd; Respondent: Jogendah Auctioneering Services
- Court
- Cooperative Tribunal
- Jurisdiction
- Kenya
- Case Number
- Tribunal Case 389 / E480 of 2022
- Procedural Posture
- Miscellaneous Application / Ruling on Application to Set Aside Interim Stay of Proclamation and Attachment
- Outcome
- application allowed; interim stay vacated; costs in the cause; suit to proceed to pre-trial directions
- Judges
- BM Kimemia, J. Mwatsama, B Sawe, F Lotuiya, P. Gichuki, M Chesikaw, PO Aol
- Legal Topics
- Loan Default, Security Enforcement, Injunctive Relief, Proclamation and Attachment
- Source Language
- en
Source-derived case record
Summary, issues, holding and outcome
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Parties
New Mega Africa Ltd
Applicant
Tower Savings and Credit Co-op Society Ltd
Respondent
Jogendah Auctioneering Services
Respondent
Procedural Posture
Miscellaneous Application / Ruling on Application to Set Aside Interim Stay of Proclamation and Attachment
Legal Issues
- 1 Whether the interim stay of proclamation and attachment granted on 30th June 2022 should be vacated or set aside.
- 2 Whether the claimant failed to disclose material facts regarding changes in the registration of secured motor vehicles.
- 3 Whether the 1st respondent is entitled to enforce its security following the claimant's default.
Ratio Decidendi
The Tribunal found that the claimant had not addressed the respondent's key contention regarding undisclosed changes in the registration of the secured motor vehicles, which was a material fact relevant to the grant of interim relief. The Tribunal emphasized that equitable relief, such as a stay of execution or attachment, requires full and frank disclosure by the applicant. The evidence presented by the respondent, including affidavits and log book exhibits, was not contradicted by the claimant. In light of the claimant's default on its loan obligations and the lack of disclosure, the Tribunal determined that the interim stay of proclamation and attachment granted on 30th June 2022...
Court Disposition
application allowed; interim stay vacated; costs in the cause; suit to proceed to pre-trial directions
Orders
- The application dated 22nd July 2022 is allowed.
- The Tribunal's order dated 30th June 2022 is hereby vacated/discharged.
Full Case Text
Judgment text and source record
28 paragraphs
New Mega Africa Ltd v Tower Savings and Credit Co-op Society Ltd & another (Tribunal Case 389 / E480 of 2022) [2023] KECPT 799 (KLR) (Nairobi) (3 August 2023) (Ruling)
Neutral citation: [2023] KECPT 799 (KLR)
Republic of Kenya
In the Cooperative Tribunal
Nairobi
Tribunal Case 389 / E480 of 2022
BM Kimemia, Chair, J. Mwatsama, Vice Chair, B Sawe, F Lotuiya, P. Gichuki, M Chesikaw & PO Aol, Members
August 3, 2023
Between
New Mega Africa Ltd
Claimant
and
Tower Savings and Credit Co-op Society Ltd
1st Respondent
Jogendah Auctioneering Services
2nd Respondent
Ruling
1. The Ruling is premised on the fact that in 2019 the Claimant applied and was granted two (2) loan facilities namely a flex loan of Kes 11,000,000/= and an asset finance loan of Kes 60,000,000/= by the 1st Respondent at an interest rate of 10. 08% per annum and payable within 48 months at monthly installments of Kes1,754,000/=
2. The loan was secured by joint registration of the below-listed motor vehicles, Wheel Loader, and Tipper Trailers in the names of the Claimant and the 1st Respondent as per the contract dated 10th September 2019. i.Motor Vehicles registered KBZ 703Z, KBZ 7042, KBZ 707Z, KBZ 708Z, KBZ 715Z, KBZ 716Z, KBZ 718Z, KBZ 719Z and KBZ 720Z.ii.Wheel Loader: KHMA 636H.iii.Tipper Trailers: ZE 7774, 7778, 7780, 7782, 7784, 7785, 7851,7854, 7855, 7856 and 7859. In addition, the Claimant’s deposits held by the Respondent formed part of the security to secure the loan.
3. Due to the non-servicing of the loan as earlier agreed the 1st Respondent instructed the 2nd Respondent to proclaim the securities in the possession of the Claimant with a view to attach and sell by Public Auction.In compliance, the 2nd respondent proclaimed and served the claimant on 22nd June 2022 for a recovery sum of Kes51,792,063/=
4. That through a notice of motion dated 28/6/2022 made under the certificate of urgency. The claimant sought orders to:i.Stay the Proclamation and/or Attachment herein pending the hearing and determination of the Application inter parties.
5. On 30th June 2022, the tribunal granted an order stay of the execution of the proclamation and/or attachment pending Mention on 20/9/2022
6. Earlier on 19/8/2021 in case No. 268 of 2021 (E063 of 2021) granted Injunctive Orders which was to restrain the 1st Respondent from seizing, detaining, and selling the motor vehicles pending hearing and determination of the suit.However, the order provided a soft landing to the 1st respondent that the order “does not relieve the claimant from his financial obligation and that in the event that the claimant default in his obligation, the 1st respondent is at liberty to exercise its power as indicated in the letter of offer procedurally.
7. At the turn of events, the 1st respondent through a notice of motion dated July 22, 2022 under certificate of urgency seeking for:i.Spentii.Spentiii.That pending hearing and determination of this suit and/or until further orders herein, the ex parteorders of the Tribunal made on June 30, 2022 staying the notice of proclamation and attachment dated 22nd June 2022 be discharged, set aside, varied, and vacated ex debito justitiae.iv.Costs of the Application
8. The Claimants opposed the Application of the 1st Respondent dated 22nd July 2022 and dwelt majorly on the merit of the Interim Orders in their written submissions without addressing the key issue of the written submissions by the respondent about changes in the registration of the motor vehicle registration NOS. KBZ 715Z, KBZ 703Z, KBZ 719Z, KBZ 714Z, KBZ 715Z, KBZ 716Z, and KBZ 718Z which seems not to have been disclosed to the Tribunal prior the granting of the orders.
9. We have considered the Notice of Motion Application dated 22nd July 2022 filed by the Respondent, the Certificate of Urgency dated 22nd July, 2022, the Supporting Affidavit sworn by Mr. Patrick Kibuika Njenga, examined the Log Book exhibits marked PKN -1 and PKN-9 the Loan Statements of Account of the Claimant marked PKN -3 and the written submission of the parties.
10. From the Affidavit of Mr. Patrick Kibuika Njenga the Chief Executive Officer of the Respondent and all the Respondent’s evidence some of which have not been contra-rated or denied by the Claimant and in order to preserve members’ funds, we Order as follows:i.This application is allowed.ii.That the tribunal’s order dated June 30, 2022 is hereby vacated/discharged.iii.That costs be in the cause.iv.Parties to file witness statements and documentsv.That this suit be mentioned for Pre-trial directions on October 19, 2023.
RULING SIGNED, DATED AND DELIVERED VIRTUALLY AT NAIROBI THIS 3RD DAY OF AUGUST, 2023. HON. BEATRICE KIMEMIA CHAIRPERSON SIGNED 3. 8.2023HON. J. MWATSAMA DEPUTY CHAIRPERSON SIGNED 3. 8.2023HON. BEATRICE SAWE MEMBER SIGNED 3. 8.2023HON. FRIDAH LOTUIYA MEMBER SIGNED 3. 8.2023HON. PHILIP GICHUKI MEMBER SIGNED 3. 8.2023HON. MICHAEL CHESIKAW MEMBER SIGNED 3. 8.2023HON. PAUL AOL MEMBER SIGNED 3. 8.2023TRIBUNAL CLERK JEMIMAHMs. Chege for RespondentMs. Seif holding brief for Wangila for Claimant.HON. BEATRICE KIMEMIA CHAIRPERSON SIGNED 3. 8.2023