https://new.kenyalaw.org/akn/ke/judgment/kehc/2026/12992

REPUBLIC OF KENYA IN THE HIGH COURT OF KENYA AT NAIROBI COMMERCIAL AND TAX DIVISION INSOLVENCY PETITION NO. E063 OF 2021 CORAM: F. MUGAMBI, J IN THE MATTER OF CYTTON HIGH YIELDS SOLUTIONS (IN LIQUIDATION) CYTONN HIGH YIELD SOLUTIONS LLP ……………. PETITIONER VERSUS THE OFFICIAL RECEIVER ……………………………. RESPONDENT (On the applications dated: 16th June 2025 by Gen. Paul Opiyo; 13 May 2026 by Esther Nyaguthii Munderu; 21st May 2026 by Nicholas William Marsh; 14th April 2026 by Jotham Nasser Olwero; 20th May 2026 by Amritpal Singh Chaggar; 16th June 2025 by Cytonn High Yield Solution LLP (In Liquidation); 18th May 2026 by Bakulchandra Kothari and Prafulla Kothari; 26th August 2025 by Paul Wanyika Wambugu; and HCCOMM IP NO. E063 OF 2021 RULING Page 1 27th April 2026 by Prof. Daniel Njiru Mugendi and 109 Others) COMPOSITE RULING Background and Introduction 1. This Composite Ruling determines a number of applications filed at different stages of these liquidation proceedings, as per the directions issued by this Court on 22nd May 2026. Rather than recite each application strictly in the order in which it was filed, I have found it more useful to group them according to the interest each seeks to advance, both in the interest of expedition, given the sheer number of parties before the Court, and because it is only when the applications are read together in this manner that the true shape of the dispute emerges. The joinder application: 2. I begin with the application dated 16th June 2025, filed by Saroni & Stevens Advocates, by which Gen. Paul Opiyo seeks joinder on behalf of some 25,000 persons said to be investors in the Cytonn High Yield Fund (CHYF). The case advanced on their behalf is that CHYF invested in excess of Kshs HCCOMM IP NO. E063 OF 2021 RULING Page 2 300,000,000/= in the development of the properties that are now subject to the preservation orders issued by this Court. It is stated that this investment entitles the investors to recognition as first-ranking creditors in respect of the Ridge, Applewood and Taraji, and as second-ranking secured creditors over the Alma. It is their case that the Official Receiver has, to date, declined to recognize that standing and the joinder is sought so as to enable them canvas their interests. 3. The application is supported by the affidavit of Gen. Paul Opiyo sworn on 16th June 2025, to which is annexed a list identifying the investors on whose behalf he claims to act. The individual home owners: 4. The second, and by far the larger, family of applications comes from individuals who purchased apartment units at the Alma and now find themselves caught between the developer, Cytonn Integrated Project LLP (CIPL) and the secured creditor Bank (SBM). 11 interested parties, acting through C. Koile & Co. Advocates, moved this Court on 16th June 2025 for injunctive relief HCCOMM IP NO. E063 OF 2021 RULING Page 3 against the Official Receiver from interfering with units C-505, D-308, D-301, E-701, D-401, D-1005, D-1007 and C-201 at the Alma, erected on L.R. No. Kiambaa/Ruaka/6667 (the suit property). 5. Their case is that each of them purchased his or her respective unit from CIPL before the preservation orders were issued, that they are bona fide purchasers for value who had made the requisite payments and had already set in motion the process of perfecting their titles. They claim that this process was overtaken by the preservation orders of 6th January 2023, notwithstanding their status as purchasers without notice. They complain, further, that despite submitting proof of ownership to SBM, they have received no formal response. They take issue with the consent orders issued by this Court, the appointment of Muigai Commercial Agencies, and what they describe as the sidelining of the developer from the verification exercise. Their application is supported by the affidavit of Mercy Muthoni Mbuba. HCCOMM IP NO. E063 OF 2021 RULING Page 4 6. A materially similar application was brought on 26th August 2025 by Abdullahi, Gitari & Odhiambo Advocates on behalf of Paul Wanyika Wambugu, who seeks to have the preservation orders of 6th January 2023 varied to exclude his own unit. He deposes to having executed a Letter of Offer with CIPL at a purchase price of Kshs 10,900,000/=, of which Kshs 5,450,000/= was satisfied by the conversion of an existing investment in Cytonn Project Notes (CPN), an SPV within the CHYS structure, and the balance paid in further instalments which culminated in full and final settlement and the execution of a lease agreement. He maintains that this transaction was concluded well before the institution of these insolvency proceedings. 7. That same thread runs through a series of later applications filed by C. Koile & Co. Advocates on behalf of Esther Nyaguthii Munderu (13th May 2026), Bakulchandra and Prafulla Kothari (18th May 2026), Amritpal Singh Chaggar (20th May 2026) and Nicholas William Marsh (21st May 2026). Each of them impugns the verification process conducted by SBM as evidenced by its HCCOMM IP NO. E063 OF 2021 RULING Page 5 Affidavit of Verification dated 6th May 2026, on the footing that it was carried out without the collaboration of the developer that the Court's directions had contemplated, and each seeking a declaration that they are bona fide purchasers and an order for partial discharge of their units. 8. Esther Nyaguthii Munderu's (Esther) case is that she paid the full purchase price of Kshs 9,500,000/= directly into the developer's account at Diamond Trust Bank (DTB), took possession under a sub-lease pending completion, and had already commenced the process of securing a partial discharge and title when the preservation orders of 6th January 2023 were issued. This, she says, was some 3 years after she had completed payment, and well before SBM's facility of Kshs 650,000,000/=, was advanced. She relies on SBM's own Conditional Offer letter dated 27th February 2019, which she says expressly acknowledged the existence of pre-sale home owners of her description, such that the Bank extended its facility with full notice of purchasers who already held equitable interests in the apartments. HCCOMM IP NO. E063 OF 2021 RULING Page 6 9. Bakulchandra Kothari and Prafulla Kothari (the Kotharis), for their part, say they purchased their unit for Kshs 9,000,000/=, paid part of the price to the developer's accounts at Chase Bank and DTB before 23rd August 2019, and the remainder to SBM once the facility was in place, only to be told, by the Bank's own verification response, that only payments made into SBM's accounts could be verified. 10. Amritpal Singh Chaggar (Chaggar), deposes to a sale agreement executed with CIPL on or about 25th October 2016 for the purchase of a unit at a price of Kshs 7,900,000/=. He confirms that the unit was paid in full to the developer's accounts at DTB, with certain further sums paid to SBM only after the facility was advanced. Nicholas William Marsh (Marsh), similarly, executed his sale agreement on 5th June 2018 for a unit priced at Kshs 7,500,000/=, and paid the full purchase price to DTB and Stanbic before 23rd August 2019. 11. Jotham Nasser Olwero's (Nasser) application, which was filed on 14th April 2026 through C. Koile Advocates, takes a somewhat different turn. He HCCOMM IP NO. E063 OF 2021 RULING Page 7 seeks permanent injunctive orders against SBM in respect of his units at the Alma, and an order setting aside as illegal the auctioneer's letter and instructions of 12th and 16th March 2026. As a purchaser of Units D-606 and A-304, he says he duly submitted proof of ownership and a detailed schedule of payments to the advocates for SBM and to the Official Receiver, and received no response. In his supplementary affidavit he raises what he terms differential treatment, pointing out that one of his units was discharged notwithstanding payment through DTB, while the Bank simultaneously maintains that payments through that same institution cannot be verified in respect of his other units. 12. Finally, 110 home owners of the Alma, through Lwanga Onyango Advocates LLP, moved this Court on 27th April 2026 to set aside the redemption notice issued on 16th March 2026 and to have an independent and neutral person or body appointed to oversee the verification process, which they describe as fundamentally flawed. Their application is supported by the affidavit of Peter Maina Wachira, sworn on their behalf. HCCOMM IP NO. E063 OF 2021 RULING Page 8 The developer and the related SPVs: 13. In light of the directions issued on 17th July 2026, and having regard to the pendency before the Supreme Court of Kenya in Supreme Court Petition (Application) No. E001 of 2026: Cytonn Investments Partners Four LLP & 6 Others V The Official Receiver & Others, a number of applications filed by the SPVs will be held in abeyance. 14. That said, the application and the affidavit of Elizabeth Nailantei Nkuukuu sworn on 14th December 2025, seeks to set aside the consent dated 1st August 2024, adopted before Mabeya J. on 30th November 2024, on the ground that it was negotiated, executed and adopted without CIPL's participation, knowledge, instructions or approval, notwithstanding that CIPL is both the registered proprietor of the Alma and the actual borrower under the SBM facilities. 15. CIPL accuses the Bank of reneging on earlier averments confirming its compliance with its loan obligations, and points to its own application of 17th HCCOMM IP NO. E063 OF 2021 RULING Page 9 February 2023 seeking the lifting of the preservation orders to allow for repayment of the outstanding facility, contending that the direct effect of the impugned consent was to extinguish its proprietary rights without its involvement. 16. A further application, dated 10th April 2026 and filed through the same firm, supported by the affidavit of Adamskey Dudi sworn 17th March 2026, seeks an order compelling the Official Receiver to complete the proof of debt and verification exercise in respect of CIPL's claim, and to furnish a definitive written response in compliance with the Court's directions of 30th January 2026, before taking any further step in the tender process. CIPL says it placed before the Official Receiver evidence supporting both its claim to exclude the subject property from the liquidation estate and a proof of debt, and that a public tender for disposal of the asset was advertised before any response issued. The rival positions: 17. Each of these applications is opposed by either the Official Receiver, SBM and the Creditors Committee HCCOMM IP NO. E063 OF 2021 RULING Page 10 as well. As against the joinder application, the Official Receiver maintains that this Court is functus officio, the issues raised having already been determined in COACA E590 of 2023, COACA E647 of 2024 and HCCOMM 760 of 2024, that counsel for the investors was directed by the Court of Appeal to furnish particulars of the parties he represents and has not done so, and that Gen. Paul Opiyo has produced no authority entitling him to depose on behalf of the class he purports to represent. 18. The Official Receiver further denies that the investors hold any registered security, insisting that SBM is the sole secured creditor over the Alma, and maintains that the proper course for any investor is to lodge an individual proof of debt. 19. As against the home owner applications generally, the Official Receiver's position is that neither the charge, the further charge, nor the conditional offer letters carved out any exclusion for units that had already been sold to the applicants, that SBM's status as secured creditor over the whole of the Alma is unaffected by payments made to CIPL, and HCCOMM IP NO. E063 OF 2021 RULING Page 11 that home owners who did not pay SBM directly must look to CIPL, and not the Bank, for recovery. The Official Receiver denies that the verification exercise was conducted unilaterally, laying the blame instead on the developer and the applicants for failing to furnish the necessary documentation. The Official Receiver points, in respect of the 110 home owners, to their want of locus standi, the absence of any authority for Peter Maina Wachira to depose on their behalf, and the Court of Appeal's Ruling of 29th May 2026 dismissing an injunction against the sale of the suit property. 20. SBM's position rests on the grounds that none of the applicants holds a registrable interest capable of binding the Bank; that the letter of offer issued to CIPL required all pre-sale proceeds to be channeled into an escrow account held with SBM and that clause 13 of the Charge prohibited any dealing with the charged property without the Bank's written consent; that the developer was obliged under clause 8(h) to furnish pre-sale contracts to the Bank and largely failed to do so, which default was acknowledged by CIPL. SBM argues that consequently, any units with monies HCCOMM IP NO. E063 OF 2021 RULING Page 12 not traceable to the Bank's own records remain available for realization, subject to the categorization of purchasers as set out in its Affidavits of Verification. 21. The said affidavits categorize the units as those fully paid through the Bank, units partially paid, and units on which nothing was received through the Bank. In respect of Nasser’s unit specifically, the Bank confirms, that unit B 502 will not form part of the sale, while maintaining that the other units, on which no payment and one payment respectively were received, cannot be discharged. As against CIPL's application of 14th December 2025 seeking to set aside the consent, the Bank maintains that the grounds raised have already been argued before this Court and the Court of Appeal and are accordingly barred by the sub judice rule, and that its dealings with the Official Receiver, rather than with CIPL directly, were mandated by the preservation orders and the Insolvency Act. HCCOMM IP NO. E063 OF 2021 RULING Page 13 22. Having considered the applications, responses and submissions on record I now turn to identify the issues properly arising for determination. Issues for Determination: 23. Again, stripped of their individual detail, and from an overall consideration of the cases advanced by all the parties, the applications raise the following issues for determination: i. Whether the application dated 16th June 2025 for the joinder of Gen Paul Opiyo on behalf of the CHYF investors is barred by res judicata or sub judice, and whether the joinder should be allowed; ii. Whether the individual applicants who purchased units at the Alma from CIP LLP hold equitable interests capable of binding SBM as chargee, iii. The interests of the various home owners with reference to the date of registration of SBM's charge on 23rd August 2019; iv. Whether the verification exercise conducted by SBM, as reflected in its Affidavits of Verification, was conducted in compliance with this Court's directions HCCOMM IP NO. E063 OF 2021 RULING Page 14 and is a sound basis on which to determine which units may be sold; v. Whether the Consent dated 1st August 2024, adopted on 30th November 2024, ought to be set aside; vi. Whether the Official Receiver should be directed to complete the proof of debt and verification exercise in respect of CIPL's claim, and to issue a definitive response, before any further step is taken in the tender or sale process; vii. Whether the redemption notice of 16th March 2026 and the associated auctioneer's letter and instructions of 12th and 16th March 2026 ought to be set aside, whether in whole or as against specific units; and viii. Whether an independent or otherwise reconstituted verification mechanism ought to be put in place, and what should be done about the apparent inconsistency in treatment illustrated by some units. Analysis and Determination i. Joinder of the 25,000 investors of CHYF: HCCOMM IP NO. E063 OF 2021 RULING Page 15 24. I begin with determining the application dated 16th June 2025 by which Gen. Paul Opiyo seeks joinder on behalf of the CHYF investors. That is for the reason that if the Official Receiver's preliminary objection is upheld, it disposes of that application without any need for me to descend into its merits. The objection is grounded matters which have been said to render the application either res judicata or sub judice: see Nairobi Court of Appeal COACA E590 of 2023, COACA E647 of 2024 and HCCOMM 760 of 2024. 25. The Official Receiver drew my attention, in particular, to the proceedings before the Court of Appeal in COACA E590 of 2023 on 6th March 2025, where, at pages 45, 46 and 47 of the typed proceedings, the learned Judges of Appeal expressed concern over the evidence tendered by Mr Ogolla on behalf of the 25,000 investors, and specifically over the fact that the list annexed to that evidence had been redacted. It was submitted, by the Official Receiver and the Creditors Committee, on the strength of that exchange, that this Court ought to decline jurisdiction. HCCOMM IP NO. E063 OF 2021 RULING Page 16 26. I do not accept the submission in the terms in which it was put. Section 7 of the Civil Procedure Act is the provision that governs the doctrine of res judicata, and it is settled that before it can be invoked, the matter said to be res judicata must have been heard and finally determined by a court of competent jurisdiction. See the Supreme Court decisions in Communications Commission of Kenya & 5 Others V Royal Media Services Limited & 5 Others, [2014] eKLR and John Florence Maritime Services Limited & Another V Cabinet Secretary Transport & Infrastructure & 3 Others, (Petition 17 of 2015) [2021] KESC 39 (KLR). 27. Nothing placed before me shows that the Court of Appeal in COACA E590 of 2023 has made any final determination on the question of joinder of the 25,000 investors. What the record does show, and what counsel for the Official Receiver was on firmer ground in pointing out, is that the very question of the joinder is presently and actively before the Court of Appeal, which engages an altogether different provision. HCCOMM IP NO. E063 OF 2021 RULING Page 17 28. Section 6 of the Civil Procedure Act, provides for the sub judice rule, which restrains a court from proceeding with a matter directly and substantially in issue in a previously instituted proceeding between the same parties that remains pending before a court of competent jurisdiction. 29. That the same question is indeed pending is not, on this record, seriously in doubt. Page 5 of the proceedings before the Court of Appeal confirms that what was before that Court was an application dated 4th January 2025 “in which some applicants representing other persons seek joinder as interested parties”. Mr Ogolla, resisted the suggestion that this renders the present Court functus officio, insisting that the issues before the Court of Appeal are distinct from those raised in this application. I would have expected, if that were truly so, that counsel would have identified with some precision wherein the distinction lies. None was offered. What I am left with, on the material before me, is the unremarkable fact that a superior court is already seized of the question whether these 25,000 persons ought to be joined HCCOMM IP NO. E063 OF 2021 RULING Page 18 as parties asserting an interest in these very properties. 30. Comity and indeed the ordinary hierarchy of courts, demand that I not run a parallel race to judgment on that same question. That is precisely the mischief the sub judice rule exists to guard against, and I find the objection well taken on that ground. 31. I should add, lest this finding be thought to turn on a technicality alone, that the application fares no better on its own merits. The affidavit sworn by Gen Paul Opiyo on 16th June 2025, stripped of its exhibits, discloses nothing beyond a bare list of names and telephone contacts. There is nothing in that list, or anywhere else in the supporting material, capable of establishing that the persons named are in fact investors in CHYF, still less that they hold the first-ranking security they claim over the suit properties. An applicant who asks the Court to recognize 25,000 persons as secured creditors carries, at the very least, an evidentiary burden to show who those persons are and what they are owed. That burden has not been HCCOMM IP NO. E063 OF 2021 RULING Page 19 discharged. Whether the matter is approached on the threshold objection or on its substance, therefore, the result is the same, and the application must fail with costs. ii. The Alma Unit Owners: 32. Before I come to the substance of the home owners' claims, I must first dispose of the objection raised by SBM that the applications are, in any event, incompetent by reason of the doctrine of res judicata under Section 7 of the Civil Procedure Act. The Bank's argument, put simply, is that its statutory right of sale over the Alma was conclusively settled in Civil Application No. E102 of 2026; Cytonn Integrated Project LLP V SBM Bank Kenya Limited & Another and by this Court's own Ruling of 18th December 2025, and that the home owners cannot now be permitted to reopen, through the back door, a question that has already been laid to rest between the Bank and the developer. 33. The parameters of the doctrine are not in doubt. As previously stated, for res judicata to bar a suit or application, it must be shown that a matter had HCCOMM IP NO. E063 OF 2021 RULING Page 20 been directly and substantially in issue in the former proceeding, that the former proceeding was between the same parties, or parties under whom they or any of them claim, that those parties were litigating under the same title and that the matter had been heard and finally decided by a court competent to try it. It is the second and third of these requirements that defeat SBM's objection. 34. The proceedings relied upon were contests between the Bank and CIPL over the existence and enforceability of the statutory power of sale following default. On that narrow question, I accept without hesitation that both this Court and the Court of Appeal have spoken, and spoken with finality. But the home owners now before me were neither parties nor privies to those proceedings, and the question they raise is a wholly different one, not whether the Bank's charge is valid and its power of sale exercisable but whether particular individuals, by virtue of agreements and payments made to the developer, hold interests capable of standing in the way of the exercise of that power over their specific units. The objection accordingly fails and I turn to the merits. HCCOMM IP NO. E063 OF 2021 RULING Page 21 iii. The doctrine of the bona fide purchaser for value: 35. The various home owners' cases rest, in centrality, on the doctrine of the bona fide purchaser for value without notice, a doctrine as old as equity itself, and one which the Supreme Court had recent occasion to restate with clarity in Sehmi & Another V Tarabana Company Limited & 5 Others, [2025] KESC 21 (KLR) . The Court there affirmed that a purchase of a legal estate for value without notice remains an absolute and unanswerable defence against the claims of a prior equitable owner, but was equally emphatic that the burden of establishing the defence lies squarely on the person who asserts it. The Court stated as follows: “It is a fundamental principle of the law of property in land that a purchase of a legal estate for value without notice is an absolute, unqualified and unanswerable defence against the claims of any prior equitable owner or encumbrancer. … Three HCCOMM IP NO. E063 OF 2021 RULING Page 22 main ingredients must be present for a claimant to mount a successful defence based on the doctrine. These are, innocence, purchase for value, and a legal estate.” 36. In evaluating these ingredients, the Court went further to state: “The element of innocence means that the purchaser must act in good faith. His conduct must not raise any doubt as to whether indeed, he did not have any notice or knowledge as to the existence of a rival interest in the suit land. … The element of innocence also connotes the exercise of diligence expected of any reasonable purchaser. The claimant must demonstrate that he acted diligently and conducted a reasonable inquiry into the status of the estate or land that he sought to purchase. HCCOMM IP NO. E063 OF 2021 RULING Page 23 … Purchase for value means that consideration in money or money’s worth was paid by the claimant in return for the land. … Even a person who has given value will be bound if before he obtained the land, he knew of the existence of equitable interest.” 37. It equally bears mentioning the decision in Torino Enterprises Limited V Attorney General , (Petition 5 (E006) of 2022) [2023] KESC 79 (KLR) , cited by the Supreme Court in Sehmi. Of relevance to the present situation is the finding that an innocent purchaser for value denotes a purchaser who exercised due diligence, which would include, being aware of what they were purchasing. 38. It is against this background that the position of each home owner’s application must be tested. I find it convenient to consider the applications in two categories, determined by the date of 23rd August 2019, being the date when SBM's charge over the Alma was registered. HCCOMM IP NO. E063 OF 2021 RULING Page 24 Category A: purchasers who dealt with the developer before 23rd August 2019: 39. I begin with those who purchased and paid for their units before the charge came into existence, for it is here that the doctrine speaks most clearly. The offer letter dated 27th February 2019 in respect of the facility addressed to CIPL acknowledges, on its face, that the facility was intended to "partly finance completion" of the development, a language which itself presupposes a project that was already under way and, necessarily, already sold in part. 40. That inference is further corroborated by the letter dated 7th March 2019 sent by Elizabeth Nkuukuu on behalf of the developer to Peter Ndirangu of SBM, in which the developer expressly informed the Bank that "sales are currently at 60%." A lender who is told, before it advances a shilling, that 6 in every 10 units have already found a buyer, whether the same was accurate or not, cannot afterward present itself as an innocent chargee HCCOMM IP NO. E063 OF 2021 RULING Page 25 unaware of pre-existing purchasers as the Bank would want this Court to believe. 41. Indeed, the Bank went further and built that knowledge into the very architecture of the facility. Clause 8(h)(viii) of the letter of offer of 27th February 2019 made it a condition precedent that the developer avail to the Bank "the sales contracts for the pre-sales, mortgage and cash buyers already onboarded". This was an acknowledgment, in the clearest possible terms, that such buyers existed and that the Bank considered their position material enough to warrant disclosure before the charge was created. 42. Clause 8(u) of the Supplemental Letter of Offer of 25th May 2022 carried the same theme forward, requiring that: ‘all project pre-sale collections [be] made directly into the escrow account’, with the escrow details ‘embedded into the sale agreements’. 43. These provisions cannot be read in isolation from one another. Read together, they show a Bank that knew, at the point of taking its security, that pre- HCCOMM IP NO. E063 OF 2021 RULING Page 26 sale purchasers existed at the Alma and that it required the developer to disclose them. A chargee that takes security with that degree of actual knowledge cannot, when the developer defaults on the very disclosure obligations the Bank itself insisted upon, turn around and treat the undisclosed purchasers as though they had never existed. The developer's failure to comply with clause 8(h) is a breach owed to the Bank, and sounds in whatever claim the Bank may have against the developer. 44. It is not a breach that can be visited upon an innocent purchaser who had no hand in it, no visibility into it, and no means of compelling the developer to comply. Nor, in my view, can SBM insist on the benefit of a charge over the entirety of the Alma while it was the Bank's own conditions precedent that required sight of the pre-sale contracts before completion, that went unmet. In other words, a party cannot rely on a contractual condition inserted in a contract for its own protection and, in the same breath, disclaim responsibility for having proceeded without it having been satisfied. HCCOMM IP NO. E063 OF 2021 RULING Page 27 45. Applying the elements set out in Sehmi, I am unable to reach any conclusion other than that this category of purchasers entered into their purchases honestly, for value, and at a time when no rival interest existed of which they could reasonably have had notice. They were, on this record, bona fide purchasers for value. What is more, the evidence does not stop at showing that these purchasers were innocent. It goes further and shows that it was the Bank which entered the arrangement with its eyes open. 46. Be that as it may, a purchaser seeking the protection of this equitable relief must also show the value actually paid for the unit. Favourable timing alone proves nothing. A purchaser before the charge is no less bound than any other to satisfy the second limb of Sehmi; that is, purchase for value, and cannot escape the requirement to prove payment simply because the question of SBM's notice does not arise in his case. 47. Esther Munderu in her application dated 13th May 2026 produced a sale agreement dated 19th HCCOMM IP NO. E063 OF 2021 RULING Page 28 December 2016 in respect of Apartment J-501. The same indicates that the purchase price was Kshs 9,500,000/=. Clause 3.2.5 of that agreement required her to remit the purchase price into the developer's account at Diamond Trust Bank (DTB), and Clause 3.3 provided that the funds so paid would be applied towards the development of the apartment. She later on signed a Deed of Variation and changed her unit to F902. 48. From a review of the evidence Esther has placed before this Court, I am unable to find that she has discharged the burden that Sehmi demands of her. The only proof of payment on record is a bank deposit of Kshs 925,000/- made on 13th May 2016, not by Esther herself, but by a D. Omuga. Where the payment relied upon to found an equitable interest was made by a third party, it falls to the claimant to explain the connection between that payment and her own purchase, whether by producing the underlying cheque, an instruction authorizing the deposit on her behalf, or some other evidence tracing the funds to her. None of that has been done here, and I am left with a HCCOMM IP NO. E063 OF 2021 RULING Page 29 deposit slip bearing a stranger's name and nothing to bridge the gap. 49. The position is no better in respect of the cheque dated 17th March 2017 for Kshs 550,000/-. A cheque, without more, proves only that an instrument was drawn; it says nothing of whether it was honoured, whether it was in fact presented, or whether the sum it represents ever found its way into the developer's account. In the absence of a corresponding bank statement or receipt confirming that the developer received and banked that sum, the cheque remains no more than a piece of paper and evidence, at best, of an intention to pay, not of payment made. As for the sum of Kshs 8,000,000/- said to have been transferred to the vendor's account on 9th February 2017, no evidence of that transfer has been placed before me at all. I have only the assertion that it occurred. I am unable to hold that she has satisfied the limbs set out in Sehmi to be declared a bona fide purchaser for value purely on these grounds. Her application fails and with costs. HCCOMM IP NO. E063 OF 2021 RULING Page 30 50. Chaggar, in the application dated 20th May 2026, placed before this Court a sale agreement dated 25th October 2016 in respect of apartment C802, at a purchase price of Kshs 7,900,000/-, payable to the developer's account at DTB. The difficulty for Chaggar lies not in the agreement, but in what was, and was not, tendered by way of proof of payment. 51. The sums reflected in the evidence he has produced do not, even taken together, add up to the purchase price of Kshs 7,900,000/-. Secondly, the evidence relied upon consists of bank statements from Standard Chartered Bank that have been redacted, and which bear no certification. Such a statement is not a document this Court can safely act upon as proof of its contents. For these reasons, I find that Chaggar has not discharged the burden that the doctrine of the bona fide purchaser for value places upon him, and his application cannot succeed on the evidence as it stands. It is also dismissed with costs. HCCOMM IP NO. E063 OF 2021 RULING Page 31 52. Marsh, through his affidavit sworn on 21st May 2026, presented before this Court the sale agreement dated 5th June 2018 for the purchase of apartment B901 at Kshs 7,500,000/-, an agreement which, on its face, directed payment to the developer's account held at Chase Bank. The obstacle, once more, lies in the proof. The evidence Marsh has placed before me is not evidence of payment confirmations in their original bank-generated form, but of information that is extracted and recreated into email correspondence, from HSBC and Mashreq Bank. The payments appear to have been remitted to Chase Bank, DTB and later SBM. I would, however, be prepared to indulge the applicant to the extent of allowing him to engage with SBM and place before the Bank the original bank-issued statements or confirmations, in their unaltered form, should these in fact substantiate payment of the full purchase price. 53. More fundamentally, there is nothing before me such as confirmation or bank statements to show that these sums, however and wherever they were sent, were in fact received into the developer's HCCOMM IP NO. E063 OF 2021 RULING Page 32 accounts or debited from his account for that purpose. On this evidence, I am unable to find that Marsh has discharged the burden resting upon him, and his application falls short of the threshold this ruling has set. It too must be dismissed with costs. 54. Finally, the Kotharis presented their agreement dated 1st September 2016 for unit E403 which they purchased at an amount of Kshs. 9,000,000/-. I note that they have attached prima facie evidence of RTGS transfers of Kshs 900,000/-, 1,800,000/- and USD 17,316, 17356, 17,400 and 8,800 made to the developer in DTB and Chase Bank. These amounts are prima facie evidence of payment of the purchase price. The Bank has not provided any evidence controverting the RTGS confirmations. In the circumstances, unit E403 having already been fully paid for prior to the Bank’s interest was not available to be charged and as such is not subject to sale. Prayers e, f, g and h of the application dated 18th May 2026 are therefore allowed. 55. Having said that, what has emerged, on a fair reading of the record, as SBM's principal line of HCCOMM IP NO. E063 OF 2021 RULING Page 33 defence against the home owners in this category who paid the developer through banks other than SBM is that it has no means of verifying payments that passed through accounts it did not hold and statements it has never seen, and that such payments must therefore be treated as though they were never made at all. I am unable to accept that proposition in the unqualified form in which it has been advanced. 56. I return, once more, to Sehmi for it is there that the Supreme Court was at pains to state, in language that admits of no ambiguity, that the onus of proving the status of a bona fide purchaser lies upon the person who asserts it. That much is not in dispute. But it is one thing to hold a claimant to the burden of proving his purchase and it is quite another for the party resisting that claim to discharge itself of any burden whatsoever by simply declaring the underlying evidence unverifiable. SBM cannot, with respect, be permitted to dispose of the claims of several hundred home owners, persons who have, in many cases, sunk their life savings into these units, by the bare assertion that because the payments HCCOMM IP NO. E063 OF 2021 RULING Page 34 were not made into its own books, the question is at an end and the home owners must simply bear the loss. That is not how the burden of proof operates in our law, and it is certainly not how equity has ever treated the innocent purchaser. 57. The general position on the evidential burden of proof is that the same is not static. (See Mati & Another V Gicheru, [2025] KEHC 2062 (KLR) et al). Under sections 107 and 108 of the Evidence Act, the home owners who transacted before 23rd August 2019 carry, in the first instance, the burden of proving that they entered into a genuine sale agreement with the developer and that they paid the purchase price, or a substantial part of it, pursuant to that agreement. Where a home owner produces a sale agreement, evidence of payments due under it including bank statements or receipts reflecting payment of the purchase price, that burden is, in my view, discharged. 58. The burden does not remain fixed on him once discharged. Section 109 provides that once a party makes out a case capable of belief, the HCCOMM IP NO. E063 OF 2021 RULING Page 35 burden shifts to the party who would have the court disbelieve it. It then falls to SBM to displace that specific case with cogent evidence, including adduce evidence displacing that case, whether by showing that the payments were never made, that they were diverted to some purpose other than the purchase price, or that the sale agreement relied upon is fictitious not with the bare blanket assertion that it "cannot verify" payments made into accounts it did not hold. 59. Such an assertion only explains the Bank's own want of information. Section 112 of the Evidence Act makes plain why that gap cannot be visited on the purchaser. The facts of what was paid, and to whom, lay principally within the developer's knowledge, and it was SBM's own choice to advance a facility over land it knew to be already partly sold without insisting, as clause 8(h) entitled it to, on sight of the pre-sale contracts before disbursement. Having failed to secure that disclosure when it held the leverage to do so, SBM cannot now convert its own evidentiary gap into a rule operating conclusively against every purchaser who paid through an account HCCOMM IP NO. E063 OF 2021 RULING Page 36 other than its own. What is required of SBM, once a purchaser has met his initial burden, is not blanket denial but a specific case by case answer. 60. The short point is that an interest that was created and fully paid for before SBM's charge came into existence is not one that a charge can extinguish. A chargee can only take what the chargor actually had to give, and where the developer had already received full value and parted with the beneficial interest in a unit before 23rd August 2019, there remained, by that date, no more than a bare legal shell for the charge to attach to. 61. I therefore hold that any home owner who has proved full payment of the purchase price to the developer before 23rd August 2019, to the required standard and places that evidence before SBM is entitled to have that unit excluded from the pool available for sale. Category B: purchasers whose dealings with the developer post-date the charge: 62. The position of these purchasers is quite different, for from that date the Bank's interest stood HCCOMM IP NO. E063 OF 2021 RULING Page 37 registered and perfected, and a bona fide purchaser dealing with the property thereafter was required to do more, by way of diligence, than one who had transacted while the land remained unencumbered. 63. SBM has relied, for this proposition, on the Court of Appeal's decision in Bank of Africa Kenya Limited and another V TSS Investment Limited and 2 Others, (Civil Appeal E055 of 2022) [2024] KECA 410 (KLR). They equally rely on Maheshkumar Popatlal Shah V Highgrove Holdings Limited & Another, [2020] eKLR and Tulip Apartments Limited V Southern Credit Banking Corporation, [2000] eKLR , for the settled proposition that a purchaser who deals with a chargor in respect of charged property, without the chargee's consent and in breach of the charge, acquires no interest capable of prevailing against the chargee. I accept that line of authority as correctly stating the law, and I can see no basis on which to depart from it. 64. It further bears returning, at this point, to what Sehmi would actually require of a purchaser who HCCOMM IP NO. E063 OF 2021 RULING Page 38 bought a unit after SBM's charge was already registered, before that purchaser could be permitted to invoke the doctrine at all. The Supreme Court's 3 ingredients of innocence, purchase for value, and the acquisition of a legal estate are cumulative, and it is the first of them, innocence, that proves fatal to this category of applicants. Innocence, as the Court explained, is not simply an absence of actual knowledge. It demands the diligence of a reasonable purchaser, one who makes reasonable inquiry into the state of the title before parting with his money. 65. A purchaser who transacted after 23rd August 2019 was buying land that was, by then, a matter of public record encumbered by a registered charge. Reasonable diligence and the very diligence Sehmi insists upon, required no more than a search at the Lands Registry, which would have disclosed the charge, its terms, and the restriction on dealing with the property without the chargee's consent. A purchaser who failed to make that elementary inquiry, or who made it and proceeded regardless, cannot in the same breath claim the innocence the doctrine demands. Whatever else may be said of such a purchaser's good faith HCCOMM IP NO. E063 OF 2021 RULING Page 39 towards the developer, he cannot be said to have acted without notice of SBM's interest, for that interest was there, on the register, for him to find. On this ground alone, the doctrine affords no protection to purchasers in this category, and it becomes unnecessary to labour the remaining elements. 66. In this regard, Nasser’s application dated 14th April 2026 lays claim to apartments B502, A-304 and D-606. He confirms, and the Bank does not dispute, that a partial discharge has already been registered over B 502, and I need say nothing further of it. The remaining 2 units stand on an altogether different footing. The agreements for sale in respect of A304 and D606 were executed on 24th November 2020 and 22nd December 2022 respectively. Each agreement, on its own terms, acknowledges SBM's interest as financier of the project, and each expressly provides that the purchase price was to be paid to the developer into an account held with SBM. What remains is proof that the price was in fact paid in the manner the agreements prescribed. HCCOMM IP NO. E063 OF 2021 RULING Page 40 67. The record before me is silent on that score. No evidence by way of receipt, bank statement or confirmation from SBM's own books has been tendered to show that any sum was paid in respect of either A304 or D606. The applicant cannot, in these circumstances, be said to have discharged even the second of the three limbs in Sehmi, that of purchase for value, let alone the first. Units A304 and D606 are, in the result, rightly available for sale, and his application in respect of those two units must fail. 68. Equally, the application dated 16th June 2025, brought by the 11 interested parties discloses sale agreements executed on widely diverse dates, and it is necessary to take each in turn rather than treat the 11 as a single undifferentiated group. 69. Mercy Muthoni Mbuba’s agreement, for Apartment C505 at a purchase price of Kshs 11,029,500/-, was executed on 26th August 2019, that is, 3 days after SBM's charge was registered. One would have expected an agreement concluded at that point in time to make some reference to the Bank's newly perfected interest. It does not. The HCCOMM IP NO. E063 OF 2021 RULING Page 41 agreement is silent on SBM altogether, notwithstanding that the charge was, by the date of execution, already a matter of record. 70. Bhavesh Virji's agreement was executed on 7th September 2021 for apartment D301 at Kshs 12,700,000/-. It expressly acknowledges SBM's position as financier of the project and requires that the purchase price be deposited into the developers account at SBM. Horton Capital Limited's agreement, dated the same 7th September 2021, follows an identical pattern in respect of apartment E701, acknowledging SBM as financier and directing payment of the Kshs 6,375,000/- purchase price into the Bank's account. The agreement in favour of Sanita Tank, Vipul Tank and Kinnari Tank over Unit D401, executed on 25th May 2021, likewise acknowledges SBM's interest and requires the Kshs 10,800,000/- purchase price to be remitted to the developer through the SBM account. 71. The 2 agreements concluded with Jamil Azim Virjee present a curiosity of their own. Though duly executed by the parties, neither bears a date. HCCOMM IP NO. E063 OF 2021 RULING Page 42 The first concerns unit D1007, at a purchase price of Kshs 7,900,000/- payable to the developer's account at DTB and the second, on identical payment terms, concerns unit D1005 at the same price. In the absence of any date on the face of either instrument, and none having been supplied by other evidence, I am unable to place these transactions with any confidence on one or other side. The burden of resolving that uncertainty must, for reasons already given, fall on the party who asks this Court to find in his favour. 72. Job Mwangi Gitau's agreement, finally, is dated 27th May 2016, well before SBM, and relates to unit C 201 at a purchase price of Kshs 7,500,000/-, payable through DTB. I note, in passing, that he features in this application as the 11th interested party, hence his inclusion at this point of analysis. 73. What is fatal to all 11 applicants is that not one of them has placed before this Court any evidence that the purchase price was actually paid. There is nothing beyond the agreements themselves. Having earlier held that the burden of proving payment lies on the party who asserts it, and that HCCOMM IP NO. E063 OF 2021 RULING Page 43 this burden must be discharged before any question of shifting it to SBM can arise, I find that none of the 11 applicants has met that threshold. The application dated 16th June 2025 must accordingly be dismissed in its entirety. 74. Paul Wanyika Wambugu, in his affidavit sworn on 26th August 2025, placed before this Court an agreement dated 30th December 2020 in respect of apartment G 401. It expressly recognizes SBM as financier of the project and provides that the purchase price of Kshs 10,900,000/- was to be paid into the developer's account held with SBM. 75. In support of payment, he has produced two RTGS confirmation slips reflecting sums of Kshs 2,624,782/- and Kshs 635,460/-, and I note that SBM's own Affidavit of Verification acknowledges receipt of a part payment of the purchase price. The balance of his case, however, rests on a Deed of Exit and Conversion executed on 30th September 2020, by which it was agreed that a sum of Kshs 5,594,127, purportedly an existing investment restructured by Cytonn Project Notes, would be converted and applied towards the purchase price. HCCOMM IP NO. E063 OF 2021 RULING Page 44 On his account, this conversion would account for the shortfall between the two confirmed RTGS payments and the full contract price. 76. The difficulty is that this remains, on the record before me, an account and nothing more. I have not been shown any evidence establishing that the sum of Kshs 5,594,127 in fact existed as a subsisting investment capable of conversion, still less that it was actually paid to CPN, or that CPN in turn transferred it to the developer in satisfaction of the balance owing under the sale agreement. In these circumstances, I am unable to find that the balance of the purchase price was paid in good faith or in the manner the transaction required, and his application, save to the limited extent already reflected in SBM's own acknowledgment of part payment, must fail. 77. Having gone through the list of applications, I further note, as submitted by SBM that this category of purchasers purchased their units with knowledge of SBMs interest. That interest provided under Clause 13 of the Charge that HCCOMM IP NO. E063 OF 2021 RULING Page 45 “The Chargor shall not sell, transfer, lease, agree to lease, accept surrenders of leases, charge or part with the possession of any part of the premises without prior written consent of the Bank.” 78. Besides the evidentiary defects I have already addressed in respect of each applicant individually, there is a further and more fundamental difficulty common to every one of them who purchased after the charge was registered. None has demonstrated that the Bank's written consent was obtained before entering into the respective agreement with the developer. I would have to agree with SBM's submission that the applicants cannot seek to rely on private arrangements struck with the developer, to which the Bank was neither party nor privy, in order to defeat rights the Bank holds under a registered and perfected charge. That I am not prepared to countenance. Whatever equities may run between such a purchaser and the developer who sold to him in breach of the developer's own obligations to its lender, those equities cannot be HCCOMM IP NO. E063 OF 2021 RULING Page 46 enforced against the Bank, which gave no consent and received no notice of a transaction concluded after its interest had already attached. 79. This position was reaffirmed in Innercity Properties Limited V Housing Finance and Another, HC COMM No. E030 of 2020 [2020] eKLR which was cited with approval in the Ririani case (Supra) it was held thus: “[41] The interested parties’ case is that they purchased their apartments from the plaintiff and that they have paid the purchase price and are in possession thereof. Quite apart from the fact they do not have any claim to be litigated against the defendants which would entitle them to an injunction, they have not shown that they have a legal claim against the Bank. Since the Bank is the Chargee, it must give its consent to the plaintiff to sell the property. The interested parties have not shown that they HCCOMM IP NO. E063 OF 2021 RULING Page 47 received the Bank’s consent to purchase the apartments or that they paid the Bank any money. Since they have not established a legal claim against the Bank, the court cannot issue an injunction in their favour.” 80. For the avoidance of doubt, these units purchased after 23rd August 2019 remain available to SBM for sale in the exercise of its statutory power, to recover the sums outstanding under the defaulted facility. It however remains open to any purchaser within this category to arrest the sale of their particular unit by making full payment of the value directly to the Bank, in which event the Bank shall be obliged to issue the corresponding discharge in the same manner as it would for any other unit fully paid through its own books. Transition purchasers: those who began before the charge and completed after it: 81. There remains a third category, distinct from either of those already considered, comprising purchasers who entered into their sale agreements HCCOMM IP NO. E063 OF 2021 RULING Page 48 and commenced payment of the purchase price before 23rd August 2019, but who, upon learning that SBM had since perfected its charge over the Alma, redirected their subsequent instalments to the Bank itself rather than continuing to pay the developer directly. For want of a better label, I shall refer to them as transition purchasers. 82. The transition purchaser's conduct in redirecting payment to SBM once its interest became apparent is the clearest possible demonstration of the diligence and good faith demanded. A transition purchaser who proves that they have made the full sequence of payments is, in my view, entitled to the same relief as those who completed their purchase entirely before the charge was registered. The unit is not for sale. 83. I should address, briefly, the position of a transition purchaser who began their transactions before the registration of SBM’s security but elected nonetheless to complete the outstanding balance of the purchase price through the developer's third-party accounts rather than redirecting payment to the Bank. Such a purchaser cannot HCCOMM IP NO. E063 OF 2021 RULING Page 49 claim the same footing as the transition purchaser considered above. Continuing to pay the developer rather than routing their payment through the escrow account envisaged in the charge instruments is, unless it can be shown that there was no notice, not the conduct of a reasonably diligent purchaser acting without notice. 84. To that extent, such a purchaser's post-charge instalments must be treated on the same footing as the post-charge purchasers dealt with earlier. The payments are incapable of binding the Bank, and unavailable to defeat its statutory right of sale. This would not, however, disturb the portion of the purchase price genuinely paid to the developer before 23rd August 2019. Such a purchaser may be obliged to settle the unverified balance directly with SBM if the unit is to be saved from sale. iv. The verification exercise, redemption notice and auctioneer's instructions: 85. Having determined the individual home owners' applications, I now turn to the application dated 27th April 2026 brought by the 110 home owners. I begin, as I must, with the question of locus standi, HCCOMM IP NO. E063 OF 2021 RULING Page 50 raised by the Creditors Committee to the application. Indeed, I agree that not a single one of the 110 has placed before this Court any evidence of the interest they claim, still less identified the specific unit to which that interest is said to attach. 86. That said, I will still determine the application in the interest of finality. It is plain, on the record before me, that the Bank has completed its verification exercise and has placed the outcome of that exercise before the Court in its Affidavits of Verification. Whether the 110 home owners are content with that outcome and whether they wish to press the point further, is a separate question from whether the exercise itself was carried out and the two ought not to be conflated. Having regard to the sheer volume of documentation and the number of units involved, I am satisfied that the Bank has, in substance, complied with the directions this Court previously issued, subject only to the further orders arising from this ruling. 87. From a review of the record, I find no evidence whatsoever of bias or collusion on the part of either SBM or the Official Receiver. Nor do I find HCCOMM IP NO. E063 OF 2021 RULING Page 51 any basis for displacing the Bank as the entity in charge of conducting the verification exercise in favour of some other body. SBM is the secured creditor, and it is SBM, and no one else, that holds custody of the records against which payments made into its own accounts can be checked. That the Bank has an adverse interest in the outcome of these proceedings is not, without more, a reason to strip it of a role no other party is as well placed to perform. If that were the test, no chargee bank could ever be trusted to verify its own security, a proposition for which I have been shown no authority. 88. The documents on record speak for themselves, as they have done before me in the course of this ruling, and they demonstrate that the home owners have been afforded a real and substantive opportunity to place their evidence before the Bank. That opportunity is what due process requires. It does not, however, translate into an entitlement to have the Bank or this Court manufacture rights that the evidence itself does not support. HCCOMM IP NO. E063 OF 2021 RULING Page 52 89. Regarding the developer's involvement, I wish to make several observations. First, I have already pronounced myself on the obligation imposed by clause 8(h)(viii) of the Letter of Offer dated 27th February 2019, requiring the developer to furnish the Bank with all sale contracts relating to pre-sale, mortgage and cash buyers. Nothing in my earlier findings on SBM's own knowledge and conduct absolves the developer of that separate and distinct contractual obligation. It is equally beyond dispute that this Court had, in its earlier directions, required the developer to participate in the verification exercise precisely because it was in a position to furnish SBM with evidence of payments made before the charge came into being. 90. Those directions were not an invitation to the developer to sit on whatever material information it held while the exercise proceeded without it. The directions were a call to active cooperation. The applicants’ submission that SBMs verification is defective for having failed to cooperate with the developer adds little to their case. The obligation to share information capable of altering the outcome of the verification exercise rested, and HCCOMM IP NO. E063 OF 2021 RULING Page 53 continues to rest, on the developer, if at all there is any such information. I note, in this regard, that the various home owners in these proceedings have, in a great many instances, been represented by the same counsel who acts for the developer. Had there been material information capable of assisting their cases, I have no doubt it would have found its way before this Court through that same channel. Beyond these observations, I would agree with SBM that it can only verify what lies within its own power to verify. 91. It bears repeating, that a verification exercise of this kind is, of its nature, a case-by-case undertaking and cannot proceed on generalities. Each claim must be particularized on its own evidence before it can be meaningfully assessed. That much I have endeavored to do in respect of each named applicant before me. In any case, as earlier stated, each of the unit owners bears a legal duty to obtain, from the developer, whatever information pertains to their own claim; after all, it was between the unit owner and the developer, and no one else, that the contract was made and the dealings conducted. It is not for SBM, a HCCOMM IP NO. E063 OF 2021 RULING Page 54 stranger to those private arrangements, to reconstruct a purchaser's case from records the purchaser's own counterparty holds and has, thus far, declined to produce. 92. That said, in light of the findings I have made regarding transactions predating 23rd August 2019, and subject always to the individual purchasers in question having met the evidentiary standard this ruling requires, there may well be cause to revisit the redemption notice and the notification for sale, so that they reflect whatever change in circumstances follows from those findings. The application dated 14th December 2025 and whether the consent of 1st August 2023 should be set aside: 93. I turn now to CIPL's application seeking to set aside the Consent recorded between SBM and the Official Receiver on 1st August 2023 and adopted by this Court on 30th November 2023, the reinstatement of the status quo ante, and a rehearing of SBM's Notice of Motion dated 17th February 2023 with the full participation of all stakeholders. The application is opposed by SBM HCCOMM IP NO. E063 OF 2021 RULING Page 55 through the replying affidavit of Paul Kaguru sworn on 30th January 2026. 94. CIPL's case, is that the Consent was negotiated and adopted without its participation notwithstanding that it is both registered proprietor of the Alma and the actual borrower under the SBM facilities; that the Official Receiver had no standing to compromise rights arising under the Charge and Further Charge to which the Official Receiver was not a party and to which CHYS, the entity under liquidation, was itself a stranger; that there exists a live dispute over the interest charged by SBM; and that RCHYF holds a second-ranking mezzanine interest and registered floating charge that the Consent disregards, in a structure of intercompany loan notes among the various Cytonn entities. 95. It is a cardinal principal of law that a consent order, once adopted by the Court, stands on the same footing as any other judgment and may only be disturbed on the grounds settled by the Court of Appeal in Brooke Bond Liebig V Mallya, [1975] EA 266. The grounds are fraud, collusion, or such other factor as would vitiate an ordinary contract, HCCOMM IP NO. E063 OF 2021 RULING Page 56 or where it can be shown that the consent was given without sufficient material facts, or in misapprehension or ignorance of material facts, or in general for a reason which would enable a court to set aside an agreement. 96. As to the first ground relied upon, it is not controverted that SBM's entitlement to exercise its statutory power of sale over the Alma, and the fact and extent of CIPL's indebtedness, are matters conclusively settled by this Court and by the Court of Appeal. Those findings are res judicata and CIPL cannot re-litigate them under the guise of an attack on the Consent. 97. The attack on the Official Receiver’s capacity to enter into the Consent misapprehends the effect of liquidation and the rights of the company in liquidation. The Official Receiver, as liquidator, does not require privity with SBM's security instruments to compromise the manner in which a secured creditor's claim is dealt with in the liquidation. The Third Schedule to the Insolvency Act, at Paragraphs 2 and 3 of Part 1, vests the liquidator with the power to enter into HCCOMM IP NO. E063 OF 2021 RULING Page 57 arrangements or compromises for the benefit of creditors as a whole. CIPL's own rights over the Alma, once it entered liquidation, passed to the Official Receiver to manage in the collective interest of creditors, SBM included. The Official Receiver was accordingly entitled in law to enter into the Consent, and I am not satisfied that doing so was, without more, prejudicial to CIPL or the general body of creditors. 98. Additionally, the claim relating to a dispute over the quantum of interest accruing to SBM is not a matter capable of vitiating the Consent. It is a quantifiable dispute, and one that can, if established, simply be given effect to by an appropriate order requiring SBM to account for or repay any sum found to have been wrongly charged. 99. The fourth ground fares no better. The question of RCHYF's claimed second-ranking mezzanine interest, the floating charge, and the wider web of intercompany loan notes among the Cytonn entities has already been the subject of this Court's determination in Insolvency No. E192 of 2025, HCCOMM IP NO. E063 OF 2021 RULING Page 58 where I found that the scheme of intercompany arrangements among the Cytonn entities and their promoters was designed to circumvent the liquidation process and divert assets from the pool available to the general body of creditors. 100. In that matter reference was made to Section 449(3) of the Insolvency Act which confirms that a company's own contributories and connected interests must await payment in full of the general creditors before anything is released to them; the same principle applies with equal force to RCHYF's claimed interest and to the loan notes issued among the related Cytonn entities. That structure cannot be permitted to defeat the claims of the general body of creditors, and I have, in this ruling, already traced and pronounced upon the rights of the home owners at the Alma in relation to the verification exercise. I am not persuaded that the Consent, in the terms in which it was adopted, works any prejudice to those rights, since whatever residue reaches the Official Receiver after SBM's recovery remains subject to the entitlements this ruling has already determined. That ground accordingly fails as well. HCCOMM IP NO. E063 OF 2021 RULING Page 59 101. The remaining creditors CIPL points to as unrepresented in the negotiation of the Consent are, in any event, the direct responsibility of the Official Receiver, whose statutory duty is to treat all creditors equally in the distribution of the liquidation estate. Their interests do not depend on having been parties to the Consent negotiations. 102. For these reasons, I find that CIPL has not brought its application within the Brooke Bond Liebig threshold. There is no fraud, no collusion, and no other vitiating factor established on the record. The application to set aside the Consent dated 1st August 2023, adopted on 30th November 2023, fails and is dismissed, with costs. HCCOMM IP NO. E063 OF 2021 RULING Page 60 Disposition and Final Orders 103. Having considered the applications, the rival positions of the parties, and for the reasons set out above, I make the following final orders: i. The joinder application dated 16th June 2025 is dismissed with costs; ii. The application dated 16th June 2025 brought by 11 home owners is dismissed with costs; iii. The application of Paul Wanyika Wambugu dated 26th August 2025 succeeds only to the extent already reflected in SBM's own Affidavit of Verification acknowledging receipt of part payment. In all other respects, the application is dismissed. I make no order as to costs on this application, given the divided outcome; iv. The application of CIPL dated 14th December 2025 is dismissed with costs; v. The application of Esther Nyaguthii Munderu dated 13th May 2026 is dismissed with costs; HCCOMM IP NO. E063 OF 2021 RULING Page 61 vi. The application of Amritpal Singh Chaggar dated 20th May 2026 is dismissed with costs; vii. The application of Nicholas William Marsh dated 21st May 2026 is held in abeyance in the terms outlined. There are no orders as to costs at this point; viii. The application of Jotham Nasser Olwero dated 14th April 2026 is dismissed as far as it relates to Units A-304 and D-606, with costs; ix. The application of the 110 Home Owners dated 27th April 2026 is dismissed with costs; and x. The application of Bakulchandra and Prafulla Kothari dated 18th May 2026 is allowed. The applicants shall have the costs of the application. DATED, SIGNED AND DELIVERED IN NAIROBI THIS 7 TH DAY OF AUGUST 2026. F. MUGAMBI JUDGE HCCOMM IP NO. E063 OF 2021 RULING Page 62 HCCOMM IP NO. E063 OF 2021 RULING Page 63