1. Before the court is the application dated 3rd July, 2024. I have carefully considered the pleadings, submissions and the evidence presented by the parties.
2. A preliminary issue has been raised by the plaintiff that the prayers sought in the application are not anchored on any suit and therefore the application is fatally defective. Judicial pronouncements have settled the fact that interim orders ought to be premised on substantive prayers in a suit. I have taken the liberty to peruse the plaint dated 5th July, 2019 which details the claim by the plaintiff against the defendants.
3. As stated by the parties herein, the loan amount, the securities and the nature of remedies are all intertwined as they arise from the same transaction. I do however note that the suit before this court is purely premised on the enforcement of the guarantees executed by the 1st and 2nd defendants. Needless to say, the suit is not premised on the charge document neither are the details of the charge pleaded. The substantive prayers in the pliant equally relate to the guarantors and not the charge document or the statutory power of sale. On that account, the preliminary objection is indeed merited.
4. Even supposing I was wrong on this account, and for finality sake, I shall nevertheless proceed to render myself on the prayer for injunctive relief. The first question to determine is whether there is a prima facie case with chances of success. The main issue raised by the applicant is that a bank cannot pursue 2 remedies against a defaulter successfully.
5. I begin from the premise that It is not disputed that the 1st defendant applied for and was extended a facility, which facility was secured by amongst others; a legal charge over the suit property and personal guarantees executed by the 2nd and 3rd defendants; that following default, statutory notices were served on the defendants and there is an attempt to sell the suit property while at the same time, the plaintiff has also sued to enforce the guarantees.
6. I have reviewed both the charge and the personal guarantees executed herein. It has long been established that this court has no right to alter an agreement made between two parties so long as the same is consensual and not based on any fraud.
7. Paragraphs 9, 10, 25 and 26 of the collateral charge dated 31/3/2016 together with clauses 1, 2.2, 3.1, 3.2 of the personal guarantees which were executed by the defendants confirm the position that the plaintiff was at liberty to determine the mode of recovery of the debt between exercising the statutory power of sale, or pursuing the debenture or the guarantees. These are the terms that the parties contracted to and they are bound by them.
8. I rely on the finding of the court of appeal in BBK Ltd V Kepha Nyabera & 191 Others & Another, [2013] eKLR that the remedies available to a bank in the case of default can be exercised simultaneously or contemporaneously or successively or not at all. Likewise, in Ecobank Kenya Ltd V Francis Tole Mwakikechi, [2018] eKLR, the court again reaffirmed the position that a creditor is free to choose from which debtor and what method to use to recover the debt.
9. In any case, I agree with the submission that any amount realized from the sale of the suit property shall be offset form the claim against the guarantors. On this account I am convinced that the applicants have not met the threshold for a prima facie case. As such, I need not review the 2nd and 3rd grounds for grant of an injunction.
10. Accordingly, the application dated 3/7/2024 is dismissed with costs in the cause. The applicant has up to 30 days to make good the debt in default of which the plaintiff shall be at liberty to exercise its statutory power of sale. The matter shall otherwise proceed to hearing on 21st and 22nd May, 2025.
DATED, SIGNED AND DELIVERED IN NAIROBI
THIS 26TH DAY OF NOVEMBER, 2024.
F. MUGAMBI
JUDGE
2. A preliminary issue has been raised by the plaintiff that the prayers sought in the application are not anchored on any suit and therefore the application is fatally defective. Judicial pronouncements have settled the fact that interim orders ought to be premised on substantive prayers in a suit. I have taken the liberty to peruse the plaint dated 5th July, 2019 which details the claim by the plaintiff against the defendants.
3. As stated by the parties herein, the loan amount, the securities and the nature of remedies are all intertwined as they arise from the same transaction. I do however note that the suit before this court is purely premised on the enforcement of the guarantees executed by the 1st and 2nd defendants. Needless to say, the suit is not premised on the charge document neither are the details of the charge pleaded. The substantive prayers in the pliant equally relate to the guarantors and not the charge document or the statutory power of sale. On that account, the preliminary objection is indeed merited.
4. Even supposing I was wrong on this account, and for finality sake, I shall nevertheless proceed to render myself on the prayer for injunctive relief. The first question to determine is whether there is a prima facie case with chances of success. The main issue raised by the applicant is that a bank cannot pursue 2 remedies against a defaulter successfully.
5. I begin from the premise that It is not disputed that the 1st defendant applied for and was extended a facility, which facility was secured by amongst others; a legal charge over the suit property and personal guarantees executed by the 2nd and 3rd defendants; that following default, statutory notices were served on the defendants and there is an attempt to sell the suit property while at the same time, the plaintiff has also sued to enforce the guarantees.
6. I have reviewed both the charge and the personal guarantees executed herein. It has long been established that this court has no right to alter an agreement made between two parties so long as the same is consensual and not based on any fraud.
7. Paragraphs 9, 10, 25 and 26 of the collateral charge dated 31/3/2016 together with clauses 1, 2.2, 3.1, 3.2 of the personal guarantees which were executed by the defendants confirm the position that the plaintiff was at liberty to determine the mode of recovery of the debt between exercising the statutory power of sale, or pursuing the debenture or the guarantees. These are the terms that the parties contracted to and they are bound by them.
8. I rely on the finding of the court of appeal in BBK Ltd V Kepha Nyabera & 191 Others & Another, [2013] eKLR that the remedies available to a bank in the case of default can be exercised simultaneously or contemporaneously or successively or not at all. Likewise, in Ecobank Kenya Ltd V Francis Tole Mwakikechi, [2018] eKLR, the court again reaffirmed the position that a creditor is free to choose from which debtor and what method to use to recover the debt.
9. In any case, I agree with the submission that any amount realized from the sale of the suit property shall be offset form the claim against the guarantors. On this account I am convinced that the applicants have not met the threshold for a prima facie case. As such, I need not review the 2nd and 3rd grounds for grant of an injunction.
10. Accordingly, the application dated 3/7/2024 is dismissed with costs in the cause. The applicant has up to 30 days to make good the debt in default of which the plaintiff shall be at liberty to exercise its statutory power of sale. The matter shall otherwise proceed to hearing on 21st and 22nd May, 2025.
DATED, SIGNED AND DELIVERED IN NAIROBI
THIS 26TH DAY OF NOVEMBER, 2024.
F. MUGAMBI
JUDGE