Case ID:165202

Celine Wambui Kigwe v National Bank of Kenya & 2 others [2020] eKLR

Case Metadata

Case Number:

Environment and Land Case 42 of 2020

Parties:

Celine Wambui Kigwe v National Bank of Kenya, Purple Royal Auctioneers & Madonna Realtors Ltd

Date Delivered:

22 Oct 2020

Case Class:

Civil

Court:

Environment and Land Court at Thika

Case Action:

Ruling

Judge(s):

Lucy Nyambura Gacheru

Citation:

Celine Wambui Kigwe v National Bank of Kenya & 2 others [2020] eKLR

Advocates:

Mr. Masore Nyangau for the Plaintiff/Applicant

Mr. Mabeya holding brief for Mr. Nyamwaya for the 1st Defendant/ Respondent

Mr. Maina holding brief for Mr. Wachira for the 3rd Defendant/Respondent

Court Division:

Environment and Land

County:

Kiambu

Advocates:

Mr. Masore Nyangau for the Plaintiff/Applicant

Mr. Mabeya holding brief for Mr. Nyamwaya for the 1st Defendant/ Respondent

Mr. Maina holding brief for Mr. Wachira for the 3rd Defendant/Respondent

History Advocates:

One party or some parties represented

Case Outcome:

Application dismissed with the costs to the Defendants/Respondents.

Disclaimer:

The information contained in the above segment is not part of the judicial opinion delivered by the Court. The metadata has been prepared by Kenya Law as a guide in understanding the subject of the judicial opinion. Kenya Law makes no warranties as to the comprehensiveness or accuracy of the information

REPUBLIC OF KENYA

IN THE ENVIRONMENT AND LAND COURT

AT THIKA

ELC CASE NO. 42 OF 2020

CELINE WAMBUI KIGWE...............................................................PLAINTIFF/APPLICANT

VERSUS

NATIONAL BANK OF KENYA.........................................1

ST

DEFENDANT/RESPONDENT

PURPLE ROYAL AUCTIONEERS.................................2

ND

DEFENDANT/RESPONDENT

MADONNA REALTORS LTD.........................................3

RD

DEFENDANT/RESPONDENT

RULING

The matter for determination herein is the

Notice of Motion Application

dated

1

st

July 2020,

by the Plaintiff/Applicant who has sought the following orders:-

1. THAT the Honourable Court be pleased to restrain all or any of the Defendants from evicting the Plaintiff from or dispossessing the plaintiff of land parcel No.

10823/423(I.R No. 121737)

or to any other person pending the hearing and determination of this suit.

2. THAT in the event Plaintiff would have been evicted from or been dispossessed of land parcel No. 10823/423(I.R No. 121737) by the time this Application is heard, or orders granted, then the Honourable Court be pleased to order that the Plaintiff be reinstated to the said parcel of land pending the hearing an determination of this suit.

3. THAT the costs of this Application be provided for.

There are also two

Notices of Preliminary Objection

by the 1

st

Defendant dated

27

th

July 2020,

and by the 3

rd

Defendant dated

15

th

July 2020.

The two

Notices of Preliminary Objection

are basically the same. The 1

st

and 3

rd

Defendant have sought for striking out of the entire suit on the following grounds:-

1) That the suit is contrary and offends sections 6 and 7 of the Civil Procedure Act, for being

Subjudice

and

Res judicata

since a suit and an Application was filed at the Chief Magistrates’s Court being

Milimani CMCC No. 7493 of 2018

and

Milimani ELC Misc No. 172 of 2019

which matters were heard and determined on merit.

2) The whole suit is vexatious, mischievous, misconceived, non-starter, does not hold in law and is an abuse of the Court process.

3) THAT the whole suit is fatally defective for offending the mandatory legal requirements and should be struck out in the first instance.

The

Notice of Motion Application

is premised on the grounds that the Plaintiff/ Applicant was the 1

st

Defendant’s/ Respondent’s

chargor

in respect of the suit property

L.R No. 10823/423(I.R NO.121737)

being security for a loan. That the 1

st

Defendant/ Respondent operated the said loan account

irregularly, illegally

and

in breach

of the contract by debiting the same with an

unauthorized amounts,

which led to huge accumulations as loan arrears. Further that the Defendants/ Respondents fraudulently sold the said property on

12

th

February 2019,

secretly and without the requisite Notice.

That the Plaintiff/Applicant instituted a suit on

14

th

March 2018,

to stop the sale, but which sale had purportedly taken place a month earlier although the Court restrained the said sale. However, the suit property had not been transferred to the 3

rd

Defendant/Respondent’s name. That the Plaintiff/ Applicant has established that the purported

Public auction

during which the 3

rd

Defendant/ Respondent purported to buy the property was in breach of the

Auctioneers rules

, the sale was secretly and fraudulently arranged and executed by all Defendants/Respondents.

Further that the 2

nd

Defendant/Respondent sold the suit property at

Kshs. 12,750,000/=

contrary to the Valuation Report which had put the land at

Kshs. 45,000,000/=

and it is therefore necessary that the Court restrain

Madonna Realtors Limited,

from transferring the suit property as it was registered on

2

nd

June 2020

,as the proprietor of the suit property .

In her supporting Affidavit

Celine Wambui Kigwe,

averred that she took a loan of

Kshs. 4 million

from the 1

st

Defendant/ Respondent for which she offered the suit property as security in

2016.

That in

2016

, the suit property was valued at

Kshs. 45,000,000/=

at open market or at

kshs. 35,000,000/=

were it to be through forced sale. Further that she was servicing the loan from the quarrying business that she undertakes at the suit property. It was her contention that the said suit property is also her residential home although it was never captured in the report.

She also averred that she made several monthly payments towards the repayment of the loan until she noticed that the 1

st

Defendant/ Respondent had started debiting the said account with sums that were neither contractual nor legal. That the non-contractual and or illegal sums kept the loan account stagnant despite the repayments. She contended that she raised the issue of illegal debits with the 1

st

Defendant/ Respondent on several occasions who promised to remove them. That as she waited for the 1

st

Defendant/ Respondent to remove the illegal entries. But on

4

th

July 2018

the 2

nd

Defendant/ Respondent served her with a

Notification of sale

dated

2

nd

July 2018,

notifying her that her property would be sold by

public auction

on

6

th

September 2018

.

It was her contention that the loan outstanding at the date of the said Notice was far less than

Kshs.3,814,587.99,

and that the quoted rate of 14% interest p.a was illegal. She further averred that the value of land quoted on the documents was not

Kshs. 17,000,0000

as the said land that was valued at

Kshs. 45,000,000/=

in 2016

could not have depreciated to

Kshs. 17,000,000/=

in the year

2018

. Further that the instructions to the Auctioneer were purportedly issued by

National Bank Limited,

when the Chargee is

National Bank of Kenya Ltd

. It was her contention that the time for the 1

st

Defendant/ Respondent to exercise power of sale had not arisen, as there had been no

demand Notice

issued by

National Bank Kenya Ltd,

to her. She further averred that there had not been any demand notice given to one

Rosemary Wangeci Mwangi,

who was her guarantor.

Further that upon receipt of the notification for sale, she approached the 1

st

Defendant/Respondent, who assured her that they would attend to the issues. That the suit property was not sold on

6

th

September 2018,

as advertised and she believed that the illegal entries would be removed as the notice was issued during a waiver period. That she then instituted

Milimani

CMCC No. 7493 of 2018,

being apprehensive that the 1

st

Defendant/ Respondent intended to sell her property in which an order of injunction was issued on

14

th

March 2018,

restraining any sale or transfer of the suit property. That subsequent to the injunction orders, the 1

st

Defendant/ Respondent made an Application for the reviews of the orders in which it indicated that it had sold the property a month before the order of Court to stop the sale. It was her contention that the

unauthorized

and

illegal

sums debited on her account together with the illegal charges was a fraudulent move on the part of the 1

st

and 2

nd

Defendants/ Respondents in collusion with the 3

rd

Defendant/ Respondent to pave way for the 3

rd

Defendant/ Respondent to buy the said property.

She averred that

Kshs. 17,000,000/=

indicated in the notification of sale as the value of the suit property as at

30

th

April 2018

, was fraudulent and done to get a quick buyer. Further that the suit property was sold at

Ksh. 12,750,000/=

which stands her home and she urged the Court to maintain

status quo

and

stay

any

transfer.

She contended that although the subordinate Court set aside its order of injunction on review, it stayed its order pending the hearing and determination of the Application before the Environment and Land Court Nairobi. That the ruling before the Environment and Land Court in

ELC Misc Application 172 of 2019

was delivered after the transfer and which discharged the stay order of the Chief Magistrates Court. That the transfer of the suit was done before the stay order lapsed and the same was therefore in breach of the Court order.

The Application is opposed and the 3

rd

Defendant/ Respondent filed a Replying Affidavit sworn by

Moses Kibathi

on

20

th

July 2020,

who averred that on

28

th

January 2019

, the 3

rd

Defendant/ Respondent learnt of a scheduled

public auction

through an advertisement in the

Daily Nation Newspaper

, indicating that the suit property would be sold at the 2

nd

Defendant’s/ Respondents offices. He averred that the 3

rd

Defendant/ Respondent contacted the 2

nd

Defendant/ Respondent to inquire about the auction and whether all requirements had been met and the 2

nd

Defendant/Respondent indicated that the same was being sold upon the Plaintiff/ Applicant defaulting in a loan facility. That it was confirmed that the 1

st

Defendant/ Respondent had issued various notices under section

90(1) of the Land Act

and 40 days’ notice under

Section 96(1) of the Land Act 2012.

That on the

12

th

February 2018,

the 3

rd

Defendant/ Respondent placed a bid of

Kshs. 12,750,000/=

on the day of the auction and being the highest bidder, the suit property was sold to it upon payment of full purchase price.

It was his contention that on

15

th

March 2019

, the 2

nd

Defendant/ Respondent informed the 3

rd

Defendant/ Respondent that it had been served with orders purporting to injunct them from auctioning the suit property pending the hearing and determination of the suit. That they confirmed from the Court file that at the time of the auction, there were no orders of injunction and that the 1

st

Defendant/ Respondent had responded to the Application detailing the steps take as required to conduct an auction. It was his contention that the 2

nd

Respondent moved to Court seeking to have the trial Court review the ruling and on

14

th

March 2020,

the said orders were vacated and the documents required to transfer the property were forwarded to the 3

rd

Defendant/ Respondent on

24

th

September 2019.

He further averred that the purported withdrawal of

Milimani CMCC NO. 7493 of 2018,

Celine Wambui Kigwe …Vs… National Bank of Kenya Limited & Purple Royal Auctioneers,

has not been adopted as an order of the Court nor has any notice been given and thus the same is irregular. Further that the Plaintiff/ Applicant sought leave from the

ELC Court in Nairobi

to appeal out of time, which Application was heard on its merits and dismissed. That the suit property has already been transferred to the 3

rd

Defendant/ Respondent and a title issued and that the subject matter has been litigated upon before a Court of competent jurisdiction and a determination made. He averred that the 3

rd

Defendant/Respondent undertook all

due diligence

required of a purchaser and he denied that it participated in any irregularity.

He further averred that the orders sought are untenable and unmerited as they will interfere and bar the 3

rd

Defendant/ Respondent from enjoying the ownership of the suit property. It was his contention that the Plaintiff/ Applicant has willingly granted the 3

rd

Defendant/ Respondent vacant possession and thus the prayer of protecting her from being evicted has been overtaken by events. Further that the prayers sought in the main suit have been overtaken by events. That he had been advised by his Advocates that a

Mortgagor’s

right of equity of redemption is extinguished upon the fall of the hammer in a public auction, Further that the Plaintiff/ Applicant has not led any evidence to establish any state of affairs that would irreparably affect he, as she has also sought for prayers of damages in the main suit. That the suit discloses no

prima facie

case and it is in the interest of justice that it is dismissed.

Further in opposing the Application, the 1

st

Defendant/ Respondent filed grounds of opposition to the Application and averred that the Application is

mischievous

,

misconceived

and a

total abuse of the Court process

. That the Application is

incompetent

and

fatally defective

as it offends

Section 7 of the Civil Procedure Act Cap 21,

in view of the pleadings filed in

Milimani CMCC 7943 of 2018,

which matter has since been conclusively heard and determined. That the Application and the suit are fatally defective since the orders sought therein are incapable of being granted in light to the fact that the subject property in question has been sold and legally transferred to the 3

rd

Defendant/ Respondent and as such the 1

st

Defendant no longer has any interest in the suit property. That the 1

st

Defendant/Respondent as erroneously been enjoined as a party in the suit. Further that the claim cannot hold in lieu of

Sections 6 and 7 of the Civil Procedure Act,

with regards to orders issued in

Milimani CMCC 7493 of 2018 and Misc Application No. 172 of 2019

. That the Plaintiff/ Applicant is in court with

unclean hands

having lost upon filing a similar matter in another Court.

The Plaintiff/ Applicant swore a Supplementary Affidavit on

4

th

August 2020,

and averred that her Advocate sent to the Chief Magistrates Court Notice of change of Advocates and

Notice of Withdrawal

of the suit

both dated

1

st

July 2020.

That the method of filing court papers in the Chief Magistrates Court in matters existing since the onset of the

Covid 19 pandemic

was through email numbers

mattersexisting@gmail.com

.

That her Advocates informed her that they waited to be informed of the Court fees but, no information was forthcoming until

28

th

July 2020,

when they were advised to resubmit the said documents through the new filing system and the said matter has therefore been withdrawn. That the suit before the Chef Magistrates Court and the interlocutory Application was against two defendants being the 1

st

and 2

nd

Defendants/ Respondents herein and sought an injunction from selling the suit property and although an injunction was granted, the same was later set aside. She further averred that her Advocate was late in filing the Appeal and leave to file the appeal out of time was not granted.

That she has been advised by her Advocates that a party can withdraw a suit at any stage of the proceedings and such withdrawal is never a defence in a subsequent suit. That since her property is valued at

Kshs. 45, 000,000/=,

the subordinate Court did not have pecuniary jurisdiction to hear and grant any orders. That the instant suit does not seek an injunction to stop any sale and the basis of the suit is cancellation of the title arising from fraudulent advertisement of the suit property.

She further averred after service of the suit papers, the 3

rd

Defendant in the company of police officers went to the suit property and confiscated her quarrying equipment and ordered her and her workers to leave the site and she had no option as she awaited the Court’s intervention. She urged the Court to reinstate her to allow her continue with her business and occupation of the residence. She further contended that the purported

public auction

was premature, illegal and fraudulent and that she was ready to deposit

Kshs.

4 million,

being the loan she took from the 1

st

Defendant/ Respondent over which she had given proposal on how to redeem when the Defendants/ Respondents colluded to purport to sell the suit property.

That the 3

rd

Defendant has started to level and demolish everything on the site and unless the Court restrains the Defendants, then she is likely to suffer grave and irreparable loss. She attached photographs of excavation that were taking place on the suit land as

CWK – s of 2.

The application and the Notices of Preliminary objection were canvassed by way of written submissions.

The

Law Firm of Masore Nyangau & Co. Advocates

for the Plaintiff/ Applicant filed their submissions dated

13

th

August 2020,

and urged the Court to allow the Applicant’s prayers.

On Preliminary Objection, the Plaintiff/Applicant submitted that a suit cannot be both

subjudice

and

res judicata

at the same time. Further that a suit cannot offend both

Sections 6 and 7

of the

Civil Procedure Act

. It was submitted that both the suit at Milimani Subordinate Court being

CMCC No.

7493 of 2018,

and

Milimani ELC Misc Application No. 172 of 2019,

are not pending. Further that the parties in the said suit are not the same parties in the instant suit. That the Chief Magistrate’s Court at Milimani did not have jurisdiction to deal with the matter and the suit property was valued at

Kshs.45,000,000/=

as at

30

th

November 2016

. That the suit at Milimani subordinate Court has been wholly withdrawn as per the

Notice Of Withdrawal

of the said suit and so it is not pending.

Further that the suit does not offend

section 7

of the

Civil Procedure Act,

as the instant suit does not seek to stop the auction, but seeks a declaration that the public auction of the suit property conducted on

12

th

February 2019

,and the transfer done on the

2

nd

June 2020

,were premature and are

illegal

and therefore

null

and

void.

That this case is totally different from that case

No. 7439 of 2018,

and the issues are different and therefore, this suit cannot be

Res judicata.

On the Notice of Motion Application, the applicant submitted that she has established all the threshold for grant of injunctive orders set out in the case of

Giella …Vs… Cassman Brown Co Ltd ( 1973)EA 358.

It was her submissions that the 1

st

Defendants purported exercise of its

Statutory power of sale,

was premature, improper and the same was in breach of the

Land Act 2012.

That the 1

st

Defendant did not give a demand notice in writing to the Plaintiff to pay the money owing as is required under

Section 90(1)

of the

Land Act.

Further that the demand and statutory Notice were not served upon the guarantor as required by

Section 96(2)h

of the

Land Act

which is a mandatory requirement.

That the 1

st

Defendant offended

Section 97(1)

of the

Land Act

which obligated a chargee to exercise a duty of care to the chargor and guarantor and obtain the best price reasonably obtained at the time of sale. It was submitted that the suit property was old at

Kshs.12, 750,000/=

whereas it was valued at

Kshs.45,000,000/=.

The applicant urged the Court to allow the prayers as sought in the Notice of Motion Application.

The 1

st

Defendant though

Masire & Mogusu Advocates,

filed their written submissions dated

18

th

September 2020,

and submitted when the 1

st

Defendant moved to exercise its

Statutory power of sale,

the Plaintiff/applicant moved to Milimani Court and filed

CMCC No. 7493 of 2018

, wherein she obtained injunctive orders which were later reviewed by the Court. That she filed

Milimani ELC Misc. Application No. 172 of 2019,

which was determined too and dismissed. That by the time of filing the instant suit,

Milimani CMCC No. 7493 of 2018,

was still pending and therefore this suit is

subjudice

. The 1

st

Defendant relied on various decided cases among them the case of

Thiba Min. Hydro Co. Ltd …Vs… Josphat Karu Ndwiga [2013] eKLR

where the Court held that:-

“It is not the form which the suit is framed that determine whether it is subjudice, rather it is the substance of the suit and looking at the pleadings in both cases.”

Further on

section 7

of the

Civil Procedure Act

, it was submitted that the Applicant approached the Court in

Milimani ELC Misc Application No. 172 of 2019,

which Application was heard on merit and dismissed with costs. That the Plaintiff did not move to the

Court of Appeal

but instead filed the instant suit, which offends the provisions of

Section 7 of Cap 21

.

On whether the Applicant has satisfied the threshold for grant of injunctive orders, the 1

st

Defendant/ Respondent submitted that the remedy sought by the Applicant is equitable in nature and the Court should decline to grant the same to the Applicant has not come to Court with clean hands.

Further that the suit property has been sold and legally transferred to the 3

rd

Defendant and the 1

st

Defendant no long has any interest on the said suit property. That the Plaintiff has approached the Court with unclean hands as she has lost similar matter in other court and she is now on a fishing expedition. For this the 1

st

Defendant/Respondent relied on the case of

Francis J. K. Ichatha vs Housing Finance Co. of Kenya (2005) eKLR

, where the Court held:-

“A Plaintiff should not be granted an injunction if he does not have clean hands and no Court of Equity will aid a man to derive advantage from his own wrong. For the Plaintiff seeks this Court to protect him from the consequences of his own default. He who seeks equity must do equity. The Plaintiff should not be protected or given advantage by virtue of his own refusal to make repayment to the Defendant/Respondent, a debt which he expressly undertook to pay.”

The Court was urged to strike out the Plaintiff/Applicant’s entire suit and the instant application for being fatally defective and incompetent.

On the part of the 3

rd

Defendant, the

Law Firm of Wachira Kirigo & Co Advocates

filed their written submissions dated

22

nd

August 2020,

and submitted that the suit herein is

Subjudice

and/or

Resjudicata.

That the Plaintiff/applicant had filed

Milimani CMCC No. 7493 of 2018,

which culminated in

Milimani ELC Misc App. No. 172 of 2019

. That though the Plaintiff alleges that the lower court suit was withdrawn, the same was done on

28

th

July 2020,

whereas this suit was filed on

1

st

July 2020.

It was submitted that at the time of filing this suit, there was a matter still pending in Court over the same issues. The 3

rd

Defendant/Respondent relied on the case of

Kofinaf Company Ltd & Another …Vs… Nahashon Ngige Nyagah & 2 others (2017)eKLR,

where the Court held:-

“A Court will not allow a Plaintiff to use the right to discontinue or withdraw so as to abuse the process of the Court or to defeat the ends of justice.”

Further that even if the Plaintiff/Applicant has introduced a 3

rd

Party, that cannot be used to dissuade this Court that the suit herein is not

Res Judicata.

For the 3

rd

Defendant/Respondent relied on the case of

Christopher Orina Kenyariri T/A Kenyariri & Associates Advocates …Vs… Salama Beach Hotel Ltd & 3 Others (2017)eKLR,

where the Court held that:-

“The introduction of 3

rd

Respondent as a Plaintiff in this matter does not change the design of the Respondents claim. The fact that the Respondent claim is

res judicata

cannot be upset by bringing on board the 3

rd

Respondent. Litigating a concluded matter under surrogates or uploading more parties to a claim does not change the conclusion already reached by the Court in former trial…….”

Therefore, it was the 3

rd

Respondent’s submission that the Plaintiff/ Applicant is barred from instituting this matter which was a subject of litigation in the foremention cases and which matter has been concluded thereof dismissed.

On the Application the 3

rd

Defendant submitted that it is a

bonafide purchaser

for value

without notice

and in possession. That at the time of purchase there was no orders to inhibit the said sale. That since the 3

rd

Defendant did not participate in any

irregularities

, that it was aware of, then it holds

indefeasible

title to the suit land and the law on sanctity of title is now settled. The 3

rd

Defendant relied on the case of

Arthi Highway Developers Ltd vs West End Butchery Ltd & 6 Others [2015] eKLR.

On whether the Applicant is deserving of injunctive orders, the 3

rd

Defendant/Respondent submitted that the Plaintiff has not established that she has a

prima-facie

case with a probability of success at the trial as she is seeking injunction beyond the fall of the hammer. That it is settled law that if a claimant is able to convince that the process leading to the fall of the hammer was flawed in any way, such a claimant can only get compensation. For this the 3

rd

Respondent relied on the case of

Bomet Beer Distributors Ltd & Another vs Kenya commercial Bank Ltd & 4 others [2005] eKLR,

where the Court held that:-

“What is clear is that once a property has been knocked down and sold in a public auction by charge in exercise of its statutory power of sale,

the equity of redemption of the charge is extinguished.

The only remedy for chargor who is dissatisfied with the conduct of the sale is to file suit for general or special damages.”

That it is not in dispute that the suit property herein was sold and at the fall of the hammer by public auctioneer transfer of the property took effect. Therefore, all the Plaintiff can claim is damages.

Further that the Plaintiff/Applicant has put a value to the suit property and can thus be compensated by an award of damages. Again the Plaintiff/Applicant has sought for damages as an alternative prayer in the Plaint. It was contended that the Plaintiff does not reside on the suit property and therefore she will not suffer any irreparable loss.

On the balance of convenience, it was submitted that the same does not tilt in favour of the Plaintiff/Applicant but in favour of the 3

rd

Defendant/Respondent who is a

bonafide purchaser

for value. The Court was urged to uphold the

Preliminary Objection

herein and to dismiss the Plaintiff/Applicant instant application with costs.

The above being pleadings and the submissions filed by the parties, the court will now consider the same and determine the two matters.

The first to be determined are the

two Notices of Preliminary objection.

This is so because if the Court was to find that the issues raised herein falls within the purview of what amounts to pure Preliminary Objection and the same is upheld, then the said Preliminary objections are capable of disposing of this matter at a Preliminary stage. See the case of

Quick Enterprises Ltd vs Kenya Railways Corporation, Kisumu HCCC No. 22 of 1999,

where the court held that:-

“When preliminary points are raised, they should be capable of disposing the matter preliminary without the court having to resort to ascertaining the facts from elsewhere apart from looking at the pleadings.”

A Preliminary Objection was described in the case of

Mukisa Biscuits Manufacturing Co. Ltd…Vs…West End Distributors Ltd (1969) EA 696

to mean:-

“So far as I am aware, a Preliminary Objection consists of a point of law which has been pleaded, or which arises by clear implication out of pleadings, and which if argued as a preliminary point may dispose of the suit. Examples are an objection to the jurisdiction of the court or a plea of limitation, or a submission that the parties are bound by the contract giving rise to the suit to refer the dispute to arbitration

.”

Further Sir

Charles Nebbold, JA

stated that:-

“

A Preliminary Objection is in the nature of what used to be a demurrer. It raises a pure point of law which is argued on the assumption that all the facts pleaded by the other side are correct. It cannot be raised if any fact had to be ascertained or if what is sought is the exercise of judicial discretion. The improper raising of points by way of Preliminary Objection does not nothing but unnecessarily increase costs and, on occasion, confuse the issue. The improper practice should stop

.”

From the description of a Preliminary Objection, it is evident that anything that purports to be a Preliminary Objection must not deal with disputed facts. See the case of

Oraro…Vs…Mbaja (2005) 1KLR 141

,

where the Court held that:-

“Anything that purports to be a Preliminary Objection must not deal with disputed facts and it must not derive its foundation from factual information which stands to be tested by rules of evidence.”

The 1

st

and 3

rd

Defendant have averred that the suit herein offends the provisions of

Sections 6

and

7

of the

Civil Procedure Act

as the suit is

Subjudice

and

Resjudicata.

The said objection has been opposed by the Plaintiff herein. In the case of

Henry Wanyama Khaemba… Vs… Standard Chartered Bank Ltd & Another (2014) eKLR

, the Court held that:-

“That re-statement of the limited scope of a Preliminary Objection brings me to the point where I hold that the Preliminary Objection by the 1

st

Defendant is not a true Preliminary Objection in the sense of the law. The issues of res judicata, duplicity of suits and suit having been spent will require probing of evidence as it is already evident from the submissions by the 1

st

Defendant. They are incapable of being handled as Preliminary Objections because of the limited scope of the jurisdiction on preliminary objection. Court of laws have always had a well-founded quarrel with parties who resort to raising preliminary objections in improperly”.

Again in the case of

George Kamau Kimani & 4 Others…Vs…County Government of Trans Nzoia & Another (2014), eKLR

, the Court held that:-

“I have considered the points raised by the 1

st

Defendant. All those points can be argued in the normal manner. They do not qualify to be raised as Preliminary Points. One cannot raise a ground of res judicata by way of Preliminary Objection. The best way to raise a ground of res judicata is by way of Notice of Motion where pleadings are annexed to enable the court to determine whether the current suit is res judicata. Professor Sifuna did not raise the issue of res judicata by way of Notice of Motion. Professor Sifuna only annexed a ruling in respect of a case which was struck out. This is not a proper way of issues which require ascertainment of facts by way of evidence. They cannot be brought by way of Preliminary Objection”.

From the above findings and holding of the Court, it is evident that for a Court to determine whether the issues raised herein were directly and substantially in issue in the other cases cited by the 1

st

and 3

rd

Defendants, the Court will have to ascertain facts and probe evidence. In a Preliminary Objection the Court is not required to ascertain facts and the same cannot be raise don disputed facts. Taking into account the above position, the Court finds and holds that the issue of

Subjudice

and

Resjudicata

are not capable of being determined without ascertaining of facts as thus do not fall under the purview of pure points of law. These issues needs to be determined through a Notice of Motion application or at the main trial

The other issues raised is that the suit is

vexatious,

misconceived

and is an

abuse

of the Court process. Further that the said suit is fatally defective for offending the mandatory legal requirement and should be struck out.

The principles of striking out are well settled. See the case of

D.T Dobie & Company Ltd –vs- Muchina & Another

(1982) KLR 1

(

Madan, Miller & Potter, JJA)

wherein the court stated:-

“No suit ought to be summarily dismissed unless it appears so hopeless that it is plainly and obviously discloses no cause of action, and is so weak as to be beyond redemption and incurable by amendment.”

It is clear that a suit should only be struck out where the said suit is hopeless clear that it raises no cause of action. This is so because a Court of Justice should aim at sustaining a suit rather than terminate it by summary dismissal. See the case of

Francis Kamande …Vs… Vanguard Electrical Services Ltd (1998) eKLR

where the Court of Appeal stated as follows:-

“The summary procedure can only be adopted when it can be clearly seen that a claim or answer is on the face of it obviously unsustainable”.

The Court has considered the Plaint as filed by the Plaintiff herein. It raises various allegations of fraud and illegality against the Defendants. The court cannot find and hold through a summary dismissal that this suit is hopeless and raises no cause of action. It is clear that there is a

reasonable cause of action

and thus this suit is not a candidate for summary dismissal through striking out. The Plaintiff should be allowed to ventilate her case and then the same should be decided on merit.

For the above reasons, the Court finds that the

two Notices of Preliminary Objections

raised by the 1

st

and 3

rd

Defendants are not merited and the same are dismissed entirely with costs being in the cause.

On the Notice of Motion dated

1

st

July 2020,

the Court notes that the Plaintiff/Applicant has sought for injunctive orders which are equitable reliefs granted at the discretion of the Court. However, the said discretion should be exercised judicially. See the case of

Nyutu & Others…Vs…Gatheru & Others (1990) KLR 554

, where the Court held that:-

“Whether or not to grant an injunction is in the discretion of the Court and the discretion is a free one, but must be judicially exercised”.

The principles for grant of injunctive orders are well settled in the case of

Giella …Vs… Cassman Brown Co Ltd ( 1973)EA 358.

There principles are:-

“

The conditions for granting a temporary injunction in East Africa are well known and these are:

First

, the Applicant must show a prima facie case with a probability of success

. Secondly

, an interlocutory injunction will not normally be granted unless the applicant might otherwise suffer irreparable injury which might not adequately be compensated by an award of damages.

Thirdl

y, if the Court is in doubt, it will decide an application on the balance of convenience. See also

E.A Industries ...Vs...Trufoods (1972) EA 420.”

It is also very clear that at this juncture the court is only called to determine whether the Plaintiff/Applicant is deserving of the injunctive orders sought and cannot delve in the substantive issue and make finally concluded views of the dispute at hand. See the case of

Agip (K) Ltd...Vs...Maheshchandra Himatlal Vora & Others, Civil Appeal No.213 of 1999 (2000) 2EA 285

, where the Court held that:-

“In an application for injunction, the Court should not delve into substantive issues and make finally concluded views of the dispute before hearing oral evidence”.

Taking into account the Principles set out in

Giella vs Cassman

and

juxtaposing the same with the available evidence, the Court finds that the Plaintiff/Applicant needs to first establish that she has a prima facie case with the probability of success at the trial. In the case of

Habib Bank Attorney General Zurich…Vs…Eugene Marion Yakub, Civil Appeal No.43 of 1982

,

(1982) (LR 4977(LAK)

the Court held:-

“Probability of success means the Court is only to gauge the strength of the Plaintiff’s case and not to adjudge the main suit at that stage since proof is only required at the hearing stage”.

From the available evidence, it is evident that the suit property was sold to the 3

rd

Defendant/Respondent through public auction. It is also evident that at the time of sale of the suit property, there were no injunctive orders. The Plaintiff/Applicant has alleged that the said sale by public auction was not conducted regularly and that there were allegalities and fraud that were employed by the Defendants/Respondents herein. However, it is evident that the Plaintiff/Applicant had charged her suit property to secure a loan facility from the 1

st

Defendant. It is also evident that in the said charge, the 1

st

Defendant had a right to exercise its Statutory Power of Sale in the event of default by the charger. It is also evident that the 1

st

Defendant did exercise the said Power of Sale as provided by

Section 96

of the

Land Act.

The suit property was purchased by 3

rd

Defendant through a Public Auction.

The Plaintiff/Applicant is seeking to injunct the Defendants after the fall of the hammer. The Court will concur with the 3

rd

Defendant’s Submissions that once the property has been knocked down and sold in a

Public Auction,

by the charge, in exercise of its Statutory Power of Sale, the equity of redemption of the Chargor is extinguished. See the case of

Bomet Beer Distributors Ltd & another v Kenya Commercial Bank Ltd & 4 others [2005] eKLR:-

There are other decisions made on this point but the above referred cases will

suffice for the purposes of this application. What is clear is that once a property has

been knocked down and sold in a public auction by a chargee in exercise of its statutory

power of sale, the equity of redemption of the chargor is extinguished. The only

remedy for chargor who is dissatisfied with the conduct of the sale is to file suit for

general or special damages.”

The Plaintiff/Applicant will be required to call evidence and prove the allegations raised by her against the Defendants. The 3

rd

Defendant purchased the suit property through a Public Auction and has denied any impropriety on its part. The disputed issues herein can only be resolved after calling of evidence at the main trial. For now, the Court finds and holds that the Applicant’s

equity of Redemption was extinguished

at the fall of the hammer and thus she has not established a

prima-facie

with probability of success at the trial.

On the second limb of whether the Plaintiff/Applicant will suffer irreparable loss which cannot be compensated by an award of damages it is clear that in her Plaint, the Plaintiff has given the value of the suit property and has also sought for damages as an alternative prayer in the Plaint. It is therefore clear and evident that the Plaintiff/Applicant can adequately be compensated with an award of damages in the event the Court is to find that the process of carrying out the public auction was irregular. See the case of

East African Breweries Ltd Vs Castle Brewing(k) Ltd, Nairobi High Court Civil case No. 848 of 1998 (1998) LLR 7408,

where the Court held that:-

“where the defendant has particularized its losses in monetary terms and figures, the loss is

redressable

in damages that are certain.”

Equally in this case, the Plaintiff/Applicant has given a figure of the

monetary value of the suit property and the same is redresable in damages that are certain.

Further

Section 99(4)

of the

Land Act

provides a remedy for a person who feels prejudiced by the exercise of the chargees’ Statutory Power of Sale.

It states as follows:-

“99(4)

A person prejudiced by an unauthorized, improper or irregular exercise of the power of sale shall have a remedy in damages against the person exercising that power.”

A person prejudiced by an unauthorized, improper irregular exercise of the power of sale shall have a remedy in damages against the person exercising that powers. It is evident that the Plaintiff/Applicant herein has a remedy in damages and she has indeed sought for damages as an

alternative

prayer in her Plaint. Further the Plaintiff/Applicant has alleged that she resides at the suit property and that if the orders sought are not granted, she will have to loose her residential house. However, the 3

rd

Defendant has denied that allegations and has averred that it is the one in possession of the suit property. It is very clear that once a suit property is put up as

security

to secure a loan, it becomes a commodity for sale, and the Court cannot injunct a chargee from exercising its Statutory Power of Sale on allegations that the chargor’s attaches sentimental value to the suit property. Once the suit property herein was charged, it become a commodity for sale, See the case of

Daniel Ndonge Ndirangu...Vs...Barclays Bank of Kenya Ltd & Another, Nakuru HCCC No.8 of 2012, (B)

, where the Court held that:-

“It must also be noted that when a Chargor lets loose its property to a Chargee as security for a loan or any other commercial facility on the basis that in the event of a default, it be sold by the Chargee, the damages are forseable. The security is henceforth a commodity for sale or possible sale without prior concurrence and consent of the Chargor. How can he having defaulted to pay loan arrears prompting a Chargee to exercise its Statutory Power of Sale claim that he is likely to suffer loss and injury incapable of compensation by an award of damages.”

On the third limb of if the Court is in doubt to decide the matter on a balance of convenience, this Court finds that it is not in doubt. Even if the Court was to decide on the said balance of convenience, the same would not tilt in favor of the Plaintiff/Applicant, but in favor of the 3

rd

Defendant/Respondent who purchased the suit property through a Public auction from the 1

st

Defendant/Respondent who was to exercise its Statutory powers of sale.

Section 99(2)

of the

Land Act

offers protection to purchasers such as the 3

rd

Defendant herein. See

Section 99(2) (c )

which provides:-

“A person to whom this section applies:- is not obliged to inquire whether there has been a default by the chargee on whether any notice required to be given in connection with the exercise of the power of sale has been duly given or whether the sale is otherwise necessary, proper or regular.”

Further

section 99(1) (a)

provides that the protection of purchaser applies to a person who purchases charged land from the

Chargee

or receiver except where the chargee is the purchaser:-

The 3

rd

Defendant is such a purchaser and at this juncture, the Court finds that it is protected under

Section 99

of the

Land Act,

and thus the balance of convenience does

not

tilt in favor of the Plaintiff/Applicant.

Having now carefully considered the available evidence, and the written Submissions together with the cited authorities, the Court finds that the Plaintiff/Applicant has failed toe stablish the threshold for grant of injunctive orders which are equitable reliefs.

Consequently, the Court finds that the

Notice of Motion Application

dated

1

st

July, 2020,

is

not

merited and the same is

dismissed

entirely with the costs to the Defendants/Respondents.

It is so ordered.

Dated, signed

and

Delivered

at

Thika

this 22

nd

day of October 2020

L. GACHERU

JUDGE

22/10/2020

Court Assistant – Lucy

ORDER

In view of the declaration of measures restricting court operations due to the

COVID-19

Pandemic, and in light of the directions issued by His Lordship, the Chief Justice on

15

th

March 2020

, this

Ruling

has been delivered to the parties online with their consents. They have waived compliance with

Order 21 rule 1

of the

Civil Procedure Rules

which requires that all judgments and rulings be pronounced in open Court.

With Consent of and virtual appearance via video conference – Microsoft Teams Platform

Mr. Masore Nyangau for the Plaintiff/Applicant

Mr. Mabeya holding brief for Mr. Nyamwaya for the 1

st

Defendant/ Respondent

Mr. Maina holding brief for Mr. Wachira for the 3

rd

Defendant/Respondent

L. GACHERU

JUDGE

22/10/2020