[2004] KEHC 210 (KLR)
The court held that once a consent judgment is entered and recorded, it becomes the operative judgment between the parties, and any execution of the decree must be carried out through the court process. The bank, having opted to recover its debt through court action and having entered into a consent judgment,...
Source-derived case information.
- Citation
- [2004] KEHC 210 (KLR)
- Parties
- Plaintiff: Trust Bank Limited; Defendant: Mohamed Bakari Mbwana
- Court
- High Court
- Court Station
- High Court at Mombasa
- Jurisdiction
- Kenya
- Case Number
- Civil Case 80 of 1998
- Procedural Posture
- Civil Case / Ruling on Application to Restrain Execution Outside Court Process
- Outcome
- application allowed
- Legal Topics
- Consent Judgment, Execution of Decree, Chattels Mortgage, Power of Sale, Liquidation of Bank
- Source Language
- en
Source-derived case record
Summary, issues, holding and outcome
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Parties
Trust Bank Limited
Plaintiff
Mohamed Bakari Mbwana
Defendant
Procedural Posture
Civil Case / Ruling on Application to Restrain Execution Outside Court Process
Legal Issues
- 1 Whether the plaintiff bank can execute against the defendant's property outside the court process after a consent judgment was entered.
- 2 Whether the defendant has satisfied the decree as per the consent judgment.
- 3 Whether the bank's attempt to sell securities without court reference is oppressive and contrary to the consent judgment.
Ratio Decidendi
The court held that once a consent judgment is entered and recorded, it becomes the operative judgment between the parties, and any execution of the decree must be carried out through the court process. The bank, having opted to recover its debt through court action and having entered into a consent judgment, extinguished its right to execute securities outside the court process. The attempt by the bank to sell the defendant's property without court reference was deemed oppressive and unjust, especially where the defendant claims to have satisfied the decree. The court emphasized that disputes regarding satisfaction of the decree and outstanding amounts must be resolved judicially, not...
Court Disposition
application allowed
Orders
- The plaintiff bank is restrained from executing against the defendant's property outside the court process.
- Orders prayed for in the application are granted with costs to the applicant.
Full Case Text
Judgment text and source record
22 paragraphs
REPUBLIC OF KENYA IN THE HIGH COURT OF KENYA AT MOMBASA
Civil Case 80 of 1998
TRUST BANK LIMITED ………………….....................................……………. PLAINTIFF
- v e r s u s –
MOHAMED BAKARI MBWANA …………................................………….. DEFENDANT
R U L I N G
In this case the defendant entered into a consent judgment with plaintiff on 22. 7.1998 which consent was in writing and was filed on 23. 7.1998. The applicant sates that he has paid in full the amount of decree .
In the meantime the plaintiff Bank has been put into liquidation. Then on 30. 4.2004 Auctioneers issued a proclamation purportedly under instruction issued by Chokaa and Co. Advocates on 25. 3.04 to attach certain items including plot no. Kwale/Mrima/578 and improvements there. Also a Notification of sale of motor vehicle and other items of the applicant. The applicant disputes the banker's right to sell his property saying that he had paid the claim in full. The plaint filed by the Bank in 1998 shows a claim of shs. 1,328,216. 70 in respect of the applicants undebtedness to the plaintiff bank. By consent this claim was settled in accordance with the terms of the said consent. Paragraph 4 of the consent states;-
“4. If the defendant commits default in the payment of any one
instalment on its due date the whole amount then outstanding together with interest shall became immediately payable and the plaintiff shall be at liberty to forthwith execute the decree herein in respect of such outstanding balance.”
The consent signed by both parties was entered on record and it serves as the judgment in this case. The mode of execution falls under the provisions of Civil Procedure Rules.
It is my view the Bank for whatever reason opted to recover its debt from the applicant personally through court action. There were not two debts but one which was secured by a chattels mortgage and a charge. By entering into a consent judgment the rights to execute securities were extinguished. The provision for execution in default of payment require that the Plaintiff do return to court and apply to execute his decree whereby the defendant decree- debtor would have a chance to put his case forward. In the present case he says he finalized all payments according to the consent. There is a dispute as to what is outstanding. The old principle of rule of law is that the disputes of this nature have to be settled in a court of law. It is not disputed that the charger has right to exercise his power of sale of security without referring the dispute to court. However, that right is not to be used in oppressive manner but justily.
I find here the plaintiff is acting unjustly by failing to abide by the consent judgment which grants him a right to execute. Purporting to sell the securities in the circumstances of this case outside the process of court is oppressive. The Decree debtor is likely to suffer loss and injustice. The matter ought to be dealt with through the court process. There are authorities cited here namely Bullen & Leake 12th Edition on the issue that the applications frivolous and vexatious. I do not find this application to be without substance. The suit was initiated by the respondent Bank who compromised its right by entering into a consent letter. Whether it is entitled to resort to execution of securities without reference to court when this suit is still not finalized is the question troubling the applicant and in my view it is serious matter as the respondent purports to act without allowing the applicant to be heard.
I have also perused the Ruling by Mbaluto J which is relied upon by the respondent. In that case the matter of the recovery of the loan had not reached the court. The applicants were seeking to restrain the bank from exercising its power of sale to recover the loan. The difference is that in this case the Bank did not attempt to sell the securities but sought to recover from the charge directly through court action. I am, therefore, convinced that the applicant is entitled to a hearing which he can only get if the attempted recovery which the applicant denies is due is made through the court. For example the consent judgment fixed the amount recoverable “inclusive” of interest and advocate costs at shs. 1,336,362. 85. These have to be verified by court. I, therefore, allow the application before the court and grant orders prayed for with costs to the applicant.
Dated this 15th day of October, 2004.
J. KHAMINWA
JUDGE
15. 10. 04
Ruling read in open court in presence of Mr. Kanyi
Mr. Omolo in open court.
J. KHAMINWA
JUDGE