[2021] KECPT 535 (KLR)

REPUBLIC OF KENYA

IN THE CO-OPERATIVE TRIBUNAL

AT NAIROBI

TRIBUNAL CASE NO.740 OF 2019

PHOEBE WANJA BOORE..................................................................1ST CLAIMANT

OTHNIEL KINJA NDIRANGU..........................................................2ND CLAIMANT

VERSUS

KELVIN N. MWAURA T/A KEN TRACK AUCTIONEERS....1ST RESPONDENT

WANANCHI SACCO SOCIETY LIMITED.................................2ND RESPONDENT

RULING

Vide the Application dated 6. 12. 2019, the Claimants has moved this Tribunal seeking for the Orders inter alia:

Spent;

That a conservatory Order be and is hereby issued against the Defendants restraining them whether by themselves, their agents and/or servants from conducting a sale by public Auction of all that parcel of land known as LR. NO. Tetu/Kabage/550 on 17. 12. 2019 pending the hearing and determination of this Application; and

Costs in the cause.

The Application is supported by the grounds on its face and the Affidavit sworn by the 1st Claimant on 6. 12. 2019.

The 1st Respondent has opposed the Application by filing a Replying Affidavit sworn by Leonard Lwei Mwangi on 24. 2.2020.

Vide the directions given on 23. 4.2020, the Application was canvassed by way of written submissions. The Claimant filed their submissions on 9. 11. 2020, while the Respondents did so on 11. 11. 2020.

Claimant’s Contention

It is the Claimant’s Contention that she guaranteed the 2nd Claimant a loan and offered property LR.NO.Tetu/Kabage/550as security. That she is the registered owner of the said parcel of land. That she is surprised that the 1st Respondent, on the instructions of the 2nd Respondent, has advertised the said property for sale without issuing her with the appropriate Notices. That in the circumstances, the alleged is illegal and should thus be voided.

Respondent’s case

The Respondents have opposed the Application on grounds that sometimes in January, 2017, the 2nd Claimant applied for a business loan of Kshs.3,000,000/=. That the loan was approved on 10. 2.2017 with property LR.NO. Tetu/Kabage/550 being offered as security. That a legal charge over the said property was executed between the 1st Claimant and 2nd Claimant on the one hand and the 2nd Respondent on the other on 2. 3.2017. That subsequently, and from the month of April, 2017, the 2nd Claimant started defaulting in repayment of the loan. That when the default persisted, the 2nd Respondent was compelled to begin the process of realizing its security. Consequently, the property was advertised for sale in June, 2018. That the Claimants approached the Chief Magistrate’s Court in Nyeri vide CMCC.NO.169/18 seeking injunctive Orders. That by consent of the parties, the suit was withdrawn on 11. 12. 2018 on the understanding that the 2nd Claimant would make a reasonable proposal on repayment of the outstanding loan.

That on 7. 1.2019, the 2nd Respondent wrote a letter to the 2nd Claimant informing him about the outstanding debt which stood at kshs.1,821,118. 71 and invited him to make proposal on payment.

That on 22. 2.19, and following no response by the 2nd Claimant, the 2nd Respondent issued a 90 days, Notice to both of them detailing the extent of breach. That both Claimants were duly served with the Notice.

That after the lapse of 90 days, the Claimants never rectified the default prompting the 2nd Respondent to issue the 40 days redemption Notice. That both Claimants were served with the Notice.

That on 9. 10. 2019, the 1st Respondent issued a Notification of sale followed by a 45 days redemption Notice.

That notwithstanding personal service of these Notices, the 1st Respondent also sent Notification of sale and redemption Notice to them through registered post.

That the Claimants never rectified their default thus prompting the Respondents to advertise the property for sale on 29. 11. 2019 vide the Star Newspaper. As per the advertisement, the property was scheduled for auction on 17. 12. 2019.

That as at 24. 2.2020, the outstanding loan stood at kshs.3,655,462. 3.

That from the foregoing, it is apparent that the Respondents followed the law in realizing the charged property.

Issued for determination

The Claimant’s Application dated 6. 12. 2019 has presented the following issues for determination:

Whether the Claimants have established a proper basis to warrant the grant of an Order of temporary injunction.

Who should meet the cost of the Application?

Temporary injunction

The law on temporary injunctions is embodied in Order 40 of the Civil Procedure Rules and case law.

Order 40 Rule 1 provides in this regard thus:

“ 40 (1) Where in any suit it is proved by Affidavit or otherwise (a) that any property in dispute in a suit is in changer of being wasted, damaged, or alienated by any party to the suit or wrongfully sold in execution of a decree-

The court may Order grant of a temporary injunction to restrain such act, or make such other Orders for the purpose of staying and preventing the wasting, damaging, alienation, sale, removal, or disposition of the property as the court thinks fit until the disposal of the suit or until further Orders.”

Before we can make any Order respecting a request for a temporary injunction, we must first take into account certain principles. These principles were enunciated in the celebrated case of Giella vs Cassman Brown [1973] EA 358. In the pertinent part, the court set out the principles as follows:

“ First, an Applicant must show a prima facie case with a probability of success, secondly, an interlocutory injunction would not normally be granted unless the Applicant otherwise suffer irreparable harm which would not adequately be compensated by an award of damages. Thirdly, if the court is in doubt, it will decide an Application on a balance of convenience.”

It thus follow that for an Order of a temporary injunction to be granted, a party, must establish existence of the following conditions.

A Prima Facie case with a probability of success,

Irreparable harm which would not adequately be compensated by way of damage;

If in doubt, the court to determine the Application on a balance of convenience.

What then constitutes a prima facie case? We find the answer in the decision of the court in the case of Mrao – vs- first American bank of Kenya Limited [2013] eKLR. In the pertinent part, the court held thus:

“....A Prima facie case is more than an arguable case. It is not sufficient to raise issues. The evidence must show an infringement of a right and the probability of the Applicants’ case upon trial..... it is a case, which, on the material presented to the court, a Tribunal property, directing itself will conclude that there exists a right which has apparently been infringed by the opposite party as to call for an explanation from the other.”

We thus pause the question as to whether the Claimant’s here, in the present Application, showed an infringement of their rights so as to call for an explanation by the Respondents at trial. It is the 2nd Claimant’s case that the 1st Respondent has placed his property LR.NO. Tetu/Kabage/550 for sale without issuance of the requisite Notices. That by failing to do so, he has been unlawfully denied an opportunity to exercise his power of Redemption. We have, however, perused the annextures accompanying the Replying Affidavit sworn by Leonard Lewei Mwangi on 24. 2.2020. We note that the Claimants were served with the following documents on diverse dates

Date Document served

23. 3.19 90 days statutory Notice dated 22. 2.2019

5. 8.2019 Redemption Notice dated 29. 7.19

9. 10. 2019 Notification of sale dated 9. 10. 2019

9. 10. 2019 45 days Redemption Notice

To prove service of the said documents, the Respondents provided Affidavits sworn by process servers on divers dates. They are :

Affidavit of service sworn by David Kamanguya( LLM 7(a) on 24. 3.2019 and

Affidavit of service sworn by Peter Munga (LLM 7(b)) on 6. 8.2019.

Further, the Respondents certificate of postage to prove service by registered post. They are marked as Exhibits LL 9 in the aforesaid Replying Affidavit.

Upon perusal of the Affidavit of service sworn by David Kamanguya on 24. 3.2019, it is apparent that both Claimants were served with the 90 days statutory Notice on 23. 3.2019.

As regards, the 40 days Redemption Notice, the Affidavit of service sworn by Peter Mungai on 6. 8.2019 shows that the same was upon the 1st Claimant on 6. 8.2019 and the 6th Claimant on 6. 8.2019.

These Affidavits remain unchallenged and we thus take them to represent a true reflection of the events of the days they refer to.

With these glaring evidence of elaborate service of the respective Notice upon the Claimants, and owing to the fact that the Claimant’s case revolve service of the said Notices, the question begs as to whether the Claimants have demonstrated existence of a right which have been trampled by the Respondents so as to call for a rebuttal by the Respondents. Our answer is a resounding No!. The evidence on record show that the Claimants were duly served with appropriate Notices and there being no dispute of default by 1st Claimant, we find that the Claimants have not established a prima facie case with a probability of success.

Conclusion

With the foregoing findings in mind, we do not find merit in the instant Application and hereby dismiss it with costs to the Respondents. Orders accordingly.

RULING SIGNED, DATED AND DELIVERED VIRTUALLY THIS 7TH DAY OF JANUARY, 2021

Hon. F. Terer Deputy Chairman Signed 7. 1.2021

Mr. P. Gichuki Member Signed 7. 1.2021

Mr. B. Akusala Member Signed 7. 1.2021

In the absence of both parties

Court clerk Maina

Hon. F. Terer Deputy Chairman Signed 7. 1.2021