Background and Introduction
1. Before the Court is the Notice of Motion dated 9th December 2024 brought by the Applicants under Order 40 Rules 1 and 2 of the Civil Procedure Rules, Sections 1A, 1B and 3A of the Civil Procedure Act. The applicants seek a temporary injunction to restrain the respondent Bank from selling or interfering with the parcel of land known as Title Number Nairobi/Block 183/333 (hereinafter “the suit property”) pending the hearing and determination of this suit.
2. They acknowledge that the suit property was charged in favour of the Bank to secure a loan facility of KES 27,000,000/= advanced to the 1st applicant. They do not dispute that they are in default of the loan. However, they challenge the Bank’s exercise of its statutory power of sale on the grounds that:
a) The 90-day and 40-day statutory notices were not served;
b) Guarantors were not served with requisite notices of default by the 1st applicant;
c) The Bank arbitrarily imposed fluctuating interest rates and undisclosed charges and
d) No full account of interest, charges, and outstanding loan balance was ever provided.
3. Interim injunctive relief had previously been granted on condition that KES 1,000,000/= was paid before the auction then scheduled for 11th December 2024. On 10th February 2025 this Court was informed that the condition had been met and that the amount had been deposited. At the time of writing this Ruling no evidence is available on the Court CTS to confirm the averment.
4. The application is supported by an affidavit sworn by Njoki Mwangi on 9th December 2024. The Bank opposed the application through a Notice of Preliminary Objection dated 24th January 2025, contending that the affidavit offends Rule 9 of the Oaths and Statutory Declarations Rules for lack of proper commissioning.
5. The Bank also filed a Replying Affidavit sworn on 23rd January 2025 and written submissions. The applicants were yet to file any submissions at the time of writing this Ruling but they were heard in oral submissions as was the Bank through learned counsels Mr Ragot and Mr Nyanjwa respectively.
Analysis and Determination
6. The issues for determination are whether the applicant’s supporting affidavit is fatally defective and whether the applicants have met the threshold for grant of a temporary injunction.
The Preliminary Objection
7. The Bank contends that the affidavit supporting the application is incurably defective, citing Zaheer Jhanda & Another v IEBC & 2 Others [2013] eKLR, where the Court struck out an affidavit for not being duly commissioned. I have perused the impugned affidavit and confirm that it is neither marked, sealed, nor properly commissioned in compliance with Rule 9 of the Oaths and Statutory Declarations Rules.
8. Ordinarily, such an affidavit would be struck out. However, considering the interests of substantive justice, and consistent with the overriding objective in Sections 1A and 1B of the Civil Procedure Act and also for finality of the application, I shall proceed to determine the application on its merits.
9. The principles for grant of a temporary injunction are settled in the case of Giella v Cassman Brown & Co. Ltd [1973] EA 358. The applicant must establish:
a) A prima facie case with a probability of success;
b) That they will suffer irreparable harm which cannot be compensated by damages;
c) If in doubt, the matter should be decided on a balance of convenience.
10. These principles were further reinforced in Nguruman Ltd v Jan Bonde Nielsen & 2 Others [2014] eKLR, where the Court of Appeal emphasized that all three limbs must be satisfied sequentially.
11. The applicants allege that statutory notices were not served upon as required by law. However, the Bank has exhibited copies of the 90-day notice under Section 90 of the Land Act, the 40-day redemption notice under Section 96(2), and notices to the guarantors. Also present is the evidence that service of these was effected via email and registered post, which are recognized modes of service for purposes of Section 90 of the Land Act and the charge instrument. The applicants have not controverted this evidence.
12. The Bank also annexed loan statements, which constitute prima facie evidence of the entries thereto. Section 176 of the Evidence Act provides in this regard that:
Subject to the provisions of this Chapter of this Act, a copy of any entry in a banker’s book shall in all legal proceedings be received as prima facie evidence of such entry, and of the matters, transaction and accounts therein recorded.
13. The veracity of the statements of account has not been challenged. The averment that the Bank has refused to provide such statements is therefore rendered moot. In the circumstances, I am not persuaded that the applicants have demonstrated a prima facie case with a probability of success.
14. I further observe that although the applicants may suffer the loss of the suit property upon its disposal, such loss does not, in law, constitute irreparable harm. The property was voluntarily offered as security. It is well established that once land is charged, it becomes a commodity available for realization by the chargee in the exercise of the statutory power of sale. As reaffirmed in Andrew Muriuki Wanjohi v Equity Building Society & Another [2006] eKLR and Samson Mwathi v Housing Finance Company of Kenya [2019] eKLR , a chargor who pledges property as collateral cannot later be heard to complain of irreparable harm when the chargee enforces its statutory remedies following default.
15. The balance of convenience tilts in favour of the Bank, who has complied with statutory requirements and is seeking to realize a debt admittedly in default. Granting an injunction in these circumstances would only serve to defeat the contractual and statutory rights of the chargee. It would also mean allowing the debt to escalate which eventually may be outstripped by the value of the security.
16. Having failed to establish the threshold under Giella v Cassman Brown, the application dated 9th December 2024 lacks merit. It is dismissed with costs. The interim orders granted earlier are hereby discharged.
It is so ordered.
1. Before the Court is the Notice of Motion dated 9th December 2024 brought by the Applicants under Order 40 Rules 1 and 2 of the Civil Procedure Rules, Sections 1A, 1B and 3A of the Civil Procedure Act. The applicants seek a temporary injunction to restrain the respondent Bank from selling or interfering with the parcel of land known as Title Number Nairobi/Block 183/333 (hereinafter “the suit property”) pending the hearing and determination of this suit.
2. They acknowledge that the suit property was charged in favour of the Bank to secure a loan facility of KES 27,000,000/= advanced to the 1st applicant. They do not dispute that they are in default of the loan. However, they challenge the Bank’s exercise of its statutory power of sale on the grounds that:
a) The 90-day and 40-day statutory notices were not served;
b) Guarantors were not served with requisite notices of default by the 1st applicant;
c) The Bank arbitrarily imposed fluctuating interest rates and undisclosed charges and
d) No full account of interest, charges, and outstanding loan balance was ever provided.
3. Interim injunctive relief had previously been granted on condition that KES 1,000,000/= was paid before the auction then scheduled for 11th December 2024. On 10th February 2025 this Court was informed that the condition had been met and that the amount had been deposited. At the time of writing this Ruling no evidence is available on the Court CTS to confirm the averment.
4. The application is supported by an affidavit sworn by Njoki Mwangi on 9th December 2024. The Bank opposed the application through a Notice of Preliminary Objection dated 24th January 2025, contending that the affidavit offends Rule 9 of the Oaths and Statutory Declarations Rules for lack of proper commissioning.
5. The Bank also filed a Replying Affidavit sworn on 23rd January 2025 and written submissions. The applicants were yet to file any submissions at the time of writing this Ruling but they were heard in oral submissions as was the Bank through learned counsels Mr Ragot and Mr Nyanjwa respectively.
Analysis and Determination
6. The issues for determination are whether the applicant’s supporting affidavit is fatally defective and whether the applicants have met the threshold for grant of a temporary injunction.
The Preliminary Objection
7. The Bank contends that the affidavit supporting the application is incurably defective, citing Zaheer Jhanda & Another v IEBC & 2 Others [2013] eKLR, where the Court struck out an affidavit for not being duly commissioned. I have perused the impugned affidavit and confirm that it is neither marked, sealed, nor properly commissioned in compliance with Rule 9 of the Oaths and Statutory Declarations Rules.
8. Ordinarily, such an affidavit would be struck out. However, considering the interests of substantive justice, and consistent with the overriding objective in Sections 1A and 1B of the Civil Procedure Act and also for finality of the application, I shall proceed to determine the application on its merits.
9. The principles for grant of a temporary injunction are settled in the case of Giella v Cassman Brown & Co. Ltd [1973] EA 358. The applicant must establish:
a) A prima facie case with a probability of success;
b) That they will suffer irreparable harm which cannot be compensated by damages;
c) If in doubt, the matter should be decided on a balance of convenience.
10. These principles were further reinforced in Nguruman Ltd v Jan Bonde Nielsen & 2 Others [2014] eKLR, where the Court of Appeal emphasized that all three limbs must be satisfied sequentially.
11. The applicants allege that statutory notices were not served upon as required by law. However, the Bank has exhibited copies of the 90-day notice under Section 90 of the Land Act, the 40-day redemption notice under Section 96(2), and notices to the guarantors. Also present is the evidence that service of these was effected via email and registered post, which are recognized modes of service for purposes of Section 90 of the Land Act and the charge instrument. The applicants have not controverted this evidence.
12. The Bank also annexed loan statements, which constitute prima facie evidence of the entries thereto. Section 176 of the Evidence Act provides in this regard that:
Subject to the provisions of this Chapter of this Act, a copy of any entry in a banker’s book shall in all legal proceedings be received as prima facie evidence of such entry, and of the matters, transaction and accounts therein recorded.
13. The veracity of the statements of account has not been challenged. The averment that the Bank has refused to provide such statements is therefore rendered moot. In the circumstances, I am not persuaded that the applicants have demonstrated a prima facie case with a probability of success.
14. I further observe that although the applicants may suffer the loss of the suit property upon its disposal, such loss does not, in law, constitute irreparable harm. The property was voluntarily offered as security. It is well established that once land is charged, it becomes a commodity available for realization by the chargee in the exercise of the statutory power of sale. As reaffirmed in Andrew Muriuki Wanjohi v Equity Building Society & Another [2006] eKLR and Samson Mwathi v Housing Finance Company of Kenya [2019] eKLR , a chargor who pledges property as collateral cannot later be heard to complain of irreparable harm when the chargee enforces its statutory remedies following default.
15. The balance of convenience tilts in favour of the Bank, who has complied with statutory requirements and is seeking to realize a debt admittedly in default. Granting an injunction in these circumstances would only serve to defeat the contractual and statutory rights of the chargee. It would also mean allowing the debt to escalate which eventually may be outstripped by the value of the security.
16. Having failed to establish the threshold under Giella v Cassman Brown, the application dated 9th December 2024 lacks merit. It is dismissed with costs. The interim orders granted earlier are hereby discharged.
It is so ordered.