https://new.kenyalaw.org/akn/ke/judgment/kehc/2026/12247

Odera v Credit Bank PLC & another (Civil Case E001 of 2026) [2026] KEHC 12247 (KLR) (31 July 2026) (Ruling) Neutral citation: [2026] KEHC 12247 (KLR) Republic of Kenya In the High Court at Kisumu Civil Case E001 of 2026 A Mabeya, J July 31, 2026 Between James Ouma Odera Applicant and Credit Bank PLC 1st Defendant Florence Akinyi Ohito 2nd Defendant Ruling 1.This is a ruling on the plaintiff's Notice of Motion dated 6/2/2026 seeking interlocutory injunctive relief against the 1st defendant pending the hearing and determination of the suit and on the 2nd defendant's Preliminary Objection dated 20/2/2026 challenging both the competence of the suit and the application. 2.The parties filed written submissions and, on 8/6/2026, Learned Counsel highlighted the same. Although the application and the preliminary objection were canvassed simultaneously, the law is settled that where a preliminary objection, if successful, is capable of disposing of a suit or application, it must be determined first before considering the merits of the application. This Court therefore proposes to first consider the Objection. 3.The plaintiff instituted this suit by a Plaint dated 6/2/2026. Simultaneous with the Plaint, he lodged the Notice of Motion of even date. In suit, he sought a permanent injunction to restrain the 1st defendant from exercising its statutory power of sale over parcels of land known as East Alego/Mur Ngiya/1633, 1634, 1698, 1789 and Kisumu/Manyatta "A"/3495 (“the suit properties”), declarations that the charges registered against the said properties are fraudulent, illegal, null and void and orders directing their discharge. 4.In the Motion, he sought a temporary injunction to restrain the 1st defendant from advertising for sale, selling, alienating or otherwise interfering with the suit properties pending the hearing and determination of the suit. The application was supported by his affidavit sworn on 6/2/2026. 5.He deposed that he was the registered proprietor of East Alego/Mur Ngiya/1634 and East Alego/Mur Ngiya/1698 while the remaining properties were matrimonial properties registered in the name of the 2nd defendant. That the suit properties comprised his family home and developments occupied by himself and his children. 6.That on 2/5/2025, an auctioneer trading as Hegeons Auctioneers served him with a Notification of Sale indicating that the 1st defendant intended to realize the securities in recovery of loan arrears allegedly owed by the 2nd defendant amounting to Kshs.20,179,280.63. 7.He maintained that prior to the said notification, he had never been served with any statutory notices nor had he ever consented to the use of his properties as security for any borrowing by the 2nd defendant. 8.That upon conducting official searches, he discovered that several charges had been registered against the suit properties between September and November, 2018. That he never signed any charge instrument, loan agreement, guarantee, consent or letter of offer; that he never appeared before any advocate or bank official for execution of the security documents; that the original title documents must have been stolen from his house; and that any signatures appearing on the charge instruments were forged by the defendants or their agents. He therefore contended that the charges were fraudulent, illegal, null and void and should be discharged. 9.That the intended sale had previously been stopped by orders issued in Siaya ELC Case No. E022 of 2025 but that suit was subsequently struck out on 6/2/2026 for want of jurisdiction. He was therefore apprehensive that unless the orders sought were issued, the defendants may proceed with the sale thereby rendering both the suit and the application nugatory. 10.The 1st defendant neither filed a replying affidavit nor grounds of opposition to the application. 11.The application was opposed by the 2nd defendant through a replying affidavit sworn on 20/2/2026. She admitted to being the plaintiff's estranged wife. That during the subsistence of their marriage, she acquired several properties, some being registered in her own name and others in the plaintiff's name for the benefit of the family. 12.That the parties jointly decided to obtain a loan facility from the 1st defendant to finance construction of their matrimonial home; that she was granted a loan facility of Kshs.22,000,000/- repayable over eighty-four months and that the plaintiff willingly accompanied her to the bank, executed all the requisite documentation including guarantees and consents, surrendered the original title documents and thereafter participated in utilization of the loan proceeds towards construction of the matrimonial home. 13.That the plaintiff's denial was actuated by malice following the breakdown of their marriage and was intended solely to escape his obligations under the loan facility. She further deposed that in Kisumu High Court Civil Case No. E019 of 2025, which she had instituted against the 1st defendant and the auctioneer, parties were directed to negotiate, whereupon the plaintiff participated in negotiations and even signed a consent permitting the sale of one of the charged properties for purposes of liquidating part of the loan arrears. She therefore contended that the plaintiff had not established a prima facie case and that the application ought to be dismissed. 14.Simultaneous, with the replying affidavit, she filed the Notice of Preliminary Objection dated 20/2/2026. In it, she raised several grounds, to wit, that the plaintiff lacked locus standi; that the suit was sub judice Kisumu High Court Civil Case No. E019 of 2025; that it was res judicata; that the doctrine of exhaustion had not been complied with and that the proceedings constituted an abuse of the process of the Court. The Parties' submissions 15.Counsel for the 2nd defendant relied on written submissions dated 9/4/2026 together with oral highlights made before the Court. It was submitted that the plaintiff's allegations that his signatures were fraudulently obtained could not stand because he had executed the guarantee, indemnity and consent documents relating to the loan advanced on 12/6/2018 and had benefited from the loan proceeds. The case of Arthi Highway Developers Limited v West End Butchery Limited & 6 Others [2015] eKLR, was relied on for the proposition that fraud must not only be specifically pleaded but also strictly proved to a standard above a balance of probabilities. 16.That the proceedings were sub judice Kisumu High Court Civil Case No. E019 of 2025 which concerns the same loan transaction and the same charged properties. That the plaintiff had previously filed Siaya ELC Case No. E022 of 2025 which was struck out for want of jurisdiction before filing the present proceedings and that the plaintiff was engaging in multiplicity of suits contrary to section 6 of the Civil Procedure Act. 17.That the proceedings offended the doctrine of res judicata and the Court should uphold the Objection and dismiss both the suit and the application with costs. 18.Learned Counsel for the plaintiff relied on written submissions dated 21/4/ 2026 and oral highlights. It was submitted that the Objection did not satisfy the test laid down in Mukisa Biscuit Manufacturing Co. Ltd v West End Distributors Ltd [1969] EA 696 because the allegations of fraud and validity of the charge instruments were matters that required evidence and cannot be disposed of as pure points of law. 19.On sub judice, it was argued that although Kisumu High Court Civil Case No. E019 of 2025 existed, the plaintiff was not a party and no pleadings from the said suit had been produced before this Court to demonstrate the identity of parties and the issues raised therein. Reliance was placed on Nguruman Limited v Jan Bonde Nielsen & 2 Others for the proposition that the doctrine is only applicable where the parties and the issues are substantially the same. 20.On res judicata, it was submitted that Siaya ELC Case No. E022 of 2025 was struck out for want of jurisdiction. Consequently, there was no determination on merits by a court of competent jurisdiction capable of giving rise to the plea of res judicata under section 7 of the Civil Procedure Act. The Court was therefore urged to dismiss the Objection and determine the Notice of Motion on its merits. 21.Having considered the pleadings, affidavits, submissions and the authorities cited, the Court is of the view that the following issues arise for determination at this stage:a.Whether the Objection dated 20/2/2026 raises pure points of law within the meaning of Mukisa Biscuit Manufacturing Co. Ltd v West End Distributors Ltd [1969] EA 696;b.Whether the present suit is sub judice Kisumu High Court Civil Case No. E019 of 2025;c.Whether the present suit is res judicata by virtue of Siaya ELC Case No. E022 of 2025. 22.On the first issue, the law governing preliminary objections is now well settled. The oft-cited decision in Mukisa Biscuit Manufacturing Co. Ltd v West End Distributors Ltd [1969] EA 696 defined a preliminary objection as one consisting of a pure point of law which is argued on the assumption that all the facts pleaded by the opposite party are correct and which, if successful, is capable of disposing of the suit without the necessity of ascertaining contested facts. 23.The Supreme Court reaffirmed the foregoing principles in Independent Electoral and Boundaries Commission v Jane Cheperenger & 2 Others [2015] eKLR, observing that a preliminary objection must not call upon the court to investigate facts or evaluate evidence. The Court stated that: -“The true preliminary objection serves two purposes of merit: firstly, it serves as a shield for the originator of the objection—against profligate deployment of time and other resources. And secondly, it serves the public cause, of sparing scarce judicial time, so it may be committed only to deserving cases of dispute settlement. It is distinctly improper for a party to resort to the preliminary objection as a sword, for winning a case otherwise destined to be resolved judicially, and on the merits.” 24.In the present case, the Objection was on the grounds that; the plaintiff lacked locus standi, the suit was sub judice and res judicata, the doctrine of exhaustion has not been complied with, the application discloses no prima facie case, the suit was defective and that the proceedings amounted to an abuse of court process. 25.Although couched as pure points of law, this Court is obligated to examine their substance rather than their form. The plaintiff's suit is anchored on the allegation that the charge instruments, guarantees, letters of offer and other lending documents were never executed by him and that his purported signatures appearing thereon were forgeries. He further contended that he never appeared before any advocate or bank official to execute the charge instruments and that the title documents must have been unlawfully obtained. 26.On the other hand, the 2nd defendant maintains that the plaintiff voluntarily executed all the documents, accompanied her to the bank, surrendered the original title deeds, benefited from the loan proceeds and even participated in subsequent negotiations regarding liquidation of the debt. 27.These competing positions disclose serious disputes of fact. Whether the plaintiff signed the charge documents, whether the signatures were forged, whether the plaintiff appeared before the attesting advocate, whether the title deeds were voluntarily surrendered or stolen and whether the plaintiff benefited from the loan are matters incapable of determination without viva voce evidence, production of original documents and possibly expert evidence from a document examiner. 28.Indeed, the 2nd defendant's own written submissions invited this Court to conclude that the plaintiff knowingly executed the charge documents because no forensic evidence had been tendered to disprove the signatures. That submission itself demonstrates why the objection cannot qualify as a preliminary objection. The Court cannot determine whether fraud has or has not been proved without first receiving evidence. 29.In Oraro v Mbaja [2005] eKLR aptly stated thus: -“I think the principle is abundantly clear. A “preliminary objection”, correctly understood, is now well identified as, and declared to be a point of law which must not be blurred with factual details liable to be contested and in any event, to be proved through the processes of evidence. Any assertion which claims to be a preliminary objection, and yet it bears factual aspects calling for proof, or seeks to adduce evidence for its authentication, is not, as a matter of legal principle, a true preliminary objection which the Court should allow to proceed.” 30.Similarly, in Aviation & Allied Workers Union Kenya v Kenya Airways Ltd & 3 Others [2015] eKLR, the Supreme Court emphasized that where a court is invited to investigate contested facts, the matter ceases to qualify as a proper preliminary objection. 31.Consequently, to the extent that the Preliminary Objection was raised on the face of contested facts, the same was a cropper. That alone is enough to disallow the objection. 32.On sub-judice, the doctrine is codified under section 6 of the Civil Procedure Act, which provides that: -“No court shall proceed with the trial of any suit or proceeding in which the matter in issue is also directly and substantially in issue in a previously instituted suit or proceeding between the same parties, or between parties under whom they or any of them claim, litigating under the same title, where such suit or proceeding is pending in the same or any other court having jurisdiction in Kenya to grant the relief claimed." 33.The purpose of the doctrine is to prevent courts of concurrent jurisdiction from simultaneously entertaining parallel proceedings involving substantially the same dispute, thereby avoiding conflicting decisions and abuse of court process. 34.The Supreme Court in Kenya National Commission on Human Rights v Attorney General; Independent Electoral and Boundaries Commission & 16 Others (Interested Parties) [2020] eKLR stated as follows: -“A party that seeks to invoke the doctrine of res sub-judice must therefore establish that; there is more than one suit over the same subject matter; that one suit was instituted before the other; that both suits are pending before courts of competent jurisdiction and lastly; that the suits are between the same parties or their representatives.” 35.The burden of demonstrating the existence of those elements rests upon the party invoking section 6. The 2nd defendant contended that Kisumu High Court Civil Case No. E019 of 2025 concerns the same loan transaction and the same charged properties and therefore the present proceedings ought to be stayed or dismissed. 36.The Court carefully examined the record before it. Apart from the assertions contained in the replying affidavit and submissions, the pleadings in Kisumu High Court Civil Case No. E019 of 2025 were not placed before this Court. The Court was therefore not been furnished with the evidence of the existence of the said suit to establish the parties, the issues raised therein and its similarity with the present suit, if any. 37.Accordingly, the plea of sub-judice was never established and the same is rejected. 38.On res-judicata, section 7 of the Civil Procedure Act is clear that for the doctrine to apply, there should have been a previous suit where the matter directly and substantially in issue had been directly and substantially determined, it should have been between the same parties or parties claiming under them by a court of competent jurisdiction. Further, the same should have been finally determined on merit by a court of competent jurisdiction. See the Court of Appeal decision in Independent Electoral and Boundaries Commission v Maina Kiai & 5 Others [2017] eKLR. 39.In the present case, it was admitted that the Siaya ELC Case No. E022 of 2025 was struck out for want of jurisdiction. A court that declines jurisdiction does not determine the substantive rights of the parties. Clearly, that doctrine could not apply to the present proceedings. 40.Consequently, the Preliminary Objection dated 20/2/2026 is found to be without merit and is hereby dismissed with costs. Notice of Motion dated 6/2/2026 41.The application was for a temporary interlocutory injunction to restrain the 1st defendant from selling, advertising for sale, transferring, alienating or in any other manner dealing with the suit properties pending the hearing and determination of the suit. It was brought under Order 40 Rules 1, 2 and 4 of the Civil Procedure Rules and Sections 1A, 1B and 3A of the Civil Procedure Act. 42.The 2nd defendant opposed the application through her replying affidavit sworn on 20/2/2026 while, notably, the 1st defendant, against whom the injunctive orders were sought, neither filed a replying affidavit nor grounds of opposition to controvert the plaintiff's factual depositions. 43.The principles governing the grant of interlocutory injunctions are now firmly settled. The locus classicus remains Giella v Cassman Brown & Co. Ltd [1973] EA 358, where the Court held that an applicant must establish a prima facie case with a probability of success, that he stands to suffer irreparable injury incapable of compensation by an award of damages if the injunction is not granted and if the Court is in doubt, the application should be determined on a balance of convenience. 44.In Mrao Ltd v First American Bank of Kenya Ltd & 2 Others [2003] eKLR, a prima facie case was defined as case which on the material presented to the court, a tribunal properly directing itself will conclude that there exists a right which has apparently been infringed by the opposite party so as to call for an explanation or rebuttal from the latter. 45.In Nguruman Limited v Jan Bonde Nielsen & 2 Others [2014] eKLR, the Court of Appeal held that the three conditions are sequential and not conjunctive. Unless an applicant establishes a prima facie case, the Court need not consider irreparable injury or the balance of convenience. 46.The plaintiff’s case was that although several charges were registered against his properties in favour of the 1st defendant in the year 2018, he neither applied for nor guaranteed any loan, never signed any charge, guarantee, letter of offer or consent, never appeared before any advocate or bank official for execution of those documents and that any signatures appearing thereon must have been forged. 47.He further averred that he only became aware of the existence of the charges after being served with a Notification of Sale by the auctioneer dated 2/5/2025. He therefore sought declarations that the charges are fraudulent, illegal, null and void. 48.Conversely, the 2nd defendant contended that the plaintiff voluntarily executed all the documents, accompanied her to the bank, surrendered the original title deeds, participated in utilization of the loan proceeds and even signed a subsequent consent authorizing the sale of one of the charged properties in order to reduce the outstanding indebtedness. 49.It is evident that the parties have presented diametrically opposed versions of events. The issue whether the plaintiff voluntarily executed the charge documents or whether the signatures were forged can only be conclusively determined after hearing oral evidence, examining the original security documents, considering the evidence of the attesting advocate and, if necessary, expert handwriting evidence. 50.At this interlocutory stage, the Court is not called upon to determine the authenticity of the signatures or make definitive findings on allegations of fraud. An application for interlocutory injunction is not intended to determine contested questions of fact or finally decide legal rights. The Court is merely required to determine whether the plaintiff has demonstrated an arguable case deserving investigation at trial. 51.The plaintiff is the registered proprietor of some of the charged properties and claims beneficial interest in the remainder as matrimonial property. He disputes the validity of every security instrument allegedly executed by him. 52.If ultimately established at trial that the plaintiff neither executed nor authorized the execution of the charge instruments, the consequences would undoubtedly affect the legality of the 1st defendant's statutory power of sale. These are not frivolous allegations. They raise substantial issues requiring judicial investigation. 53.The Court also takes judicial notice of the fact that fraud is a serious allegation requiring strict proof. However, the standard of proof becomes relevant during trial and not at the interlocutory stage. 54.Considering that there was no rebuttal from the 1st defendant on the plaintiff’s serious allegations, the Court is satisfied that the plaintiff has established a prima facie case with a probability of success within the meaning of Mrao Ltd v First American Bank of Kenya Ltd & 2 Others [2003] eKLR. 55.On the second limb of whether damages would constitute an adequate remedy, the plaintiff contended that the charged properties include his family home and houses occupied by his children. That unless restrained, the 1st defendant intended to sell them off. 56.Land occupies a unique position in Kenyan jurisprudence. Where residential or family property is threatened with sale, damages do not invariably constitute adequate compensation especially when such property is said not to have been willingly offered as security. 57.In Nguruman Ltd v Jan Bonde Nielsen & 2 Others [2014] eKLR, the Court of Appeal observed that irreparable injury refers to injury that cannot adequately be remedied by damages. In the present case, should the sale proceed before the plaintiff's allegations of fraud are investigated, the suit may ultimately be rendered academic. If third-party rights intervene, restoration of the status quo may become impossible. 58.This Court is therefore persuaded that the Plaintiff has demonstrated the likelihood of suffering irreparable harm which may not adequately be compensated by damages. 59.The Court notes that the principal dispute concerns the legality of the charges themselves. Assuming there remained any doubt, the balance of convenience would still favour preservation of the subject matter. If the injunction is declined and the sale proceeds, the plaintiff may permanently lose his proprietary interest before the validity of the impugned securities is adjudicated. Conversely, should the injunction be granted, the 1st Defendant remains protected because the charged properties shall continue to exist as securities pending determination of the suit. 60.The Court is alive to the fact that lending institutions have statutory rights to realize securities upon default. However, where the very validity of the security instruments is directly challenged on grounds of fraud and forgery, prudence dictates preservation of the property until those allegations are fully interrogated through evidence. The balance of convenience therefore tilts in favour of maintaining the status quo. 61.In the premises, the Court is satisfied that the plaintiff has met the threshold for the grant of an interlocutory injunction. 62.Accordingly, the Court makes the following orders: -a.The Notice of Preliminary Objection dated 20/2/2026 is hereby dismissed with costs.b.The plaintiff Notice of Motion dated 6/2/2026 is hereby allowed as prayed.It is so ordered. DATED AND DELIVERED AT KISUMU THIS 31ST DAY OF JULY, 2026.A. MABEYA, FCI ArbJUDGE