Automated Summary
Key Facts
The case involves a dispute over the sale of a charged property. The plaintiff, Stephen Njihia Mbugua, obtained a loan from the 2nd defendant (Housing Finance Company Limited) secured by a charge on the subject property. He claims he has cleared all arrears and that the defendants failed to issue proper statutory notices before advertising the property for auction, violating Section 96(2) of the Land Act. The defendants counter that the plaintiff remains in arrears (Kshs. 179,101.14 as of 29/2/2020) and that they issued a statutory notice under Section 90(1) in 2019. The court found the statutory notice defective as it did not reflect the current arrears and concluded that the sale notice under Section 96(2) was not properly issued, granting an injunction to restrain the sale until compliance.
Issues
- The court determined that the plaintiff met the prima facie case requirement for an injunction by demonstrating non-compliance with statutory notice procedures under Sections 90 and 96 of the Land Act, and that the balance of convenience favored granting the injunction.
- The court assessed whether the 2nd Defendant complied with Section 90(1) of the Land Act by issuing a valid statutory notice specifying the correct arrears amount, finding the notice defective due to discrepancies in the stated debt.
- The court noted a dispute over the plaintiff's arrears status, with the plaintiff claiming full repayment and the defendant asserting ongoing defaults of Kshs. 179,101.14 as of 29/2/2020. This matter was deferred to the main suit for evidentiary determination.
Holdings
- The court found that the statutory notice issued by the defendant under Section 90 of the Land Act was defective because the amounts specified in the notice did not match the current arrears as per the statement of accounts. This non-compliance with the statutory requirements is sufficient to support the grant of an injunction.
- The court granted an injunction to restrain the sale of the subject property until the defendant provides a proper notice to sell and a notification of sale in accordance with Sections 90 and 96 of the Land Act.
- The court determined that the notification of sale under Section 96(2) was not properly issued because it followed a defective notice under Section 90. The failure to issue a proper notice to sell the property amounts to a clog on the chargor's equity of redemption.
Remedies
- The court directed that each party shall bear their own costs in relation to the application for a temporary injunction.
- The court granted a temporary injunction restraining the defendants from trespassing, advertising, selling, transferring, or disposing of the subject land parcel (KWALE/GAU KINONDO/558/UNIT 11) until proper statutory notices under Section 96(2) of the Land Act are issued.
Legal Principles
The court outlined that the grant of an interlocutory injunction requires three sequential criteria: (1) a prima facie case with a probability of success, (2) insufficient damages to remedy harm, and (3) a balance of convenience favoring the applicant. The judgment references established precedents (Giella vs. Cassman Brown & Co. Ltd. [1973] EA 358; Mrao Limited –vs- First American Bank Ltd. [2003] eKLR 125) to emphasize that the applicant must demonstrate a clear and material right threatened with violation, not merely raise an arguable case.
Precedent Name
- Mrao Limited –vs- First American Bank Ltd & 2 Others
- Giella vs. Cassman Brown & Co. Ltd
- Nguruman Limited –vs- Jan Bonde Nielsen & 2 Others
Cited Statute
Land Act, 2012
Judge Name
D. O. Chepkwony
Passage Text
- In light of the discussions above, the upshot of my finding is that I am inclined to grant an injunction to restrain the sale of the suit property as long as a proper notice to sell the property and a Notification of Sale under Section 96(2) of the Land Act have not been issued.
- "So what is a prima facie case" I would say that in civil cases, it is a case which on the material presented to the Court, a tribunal properly directing itself will conclude that there exists a right which has apparently been infringed by the opposite party as to call for an explanation or rebuttal from the latter...But as I earlier endeavored to show, and I cite ample authority for it, a prima facie case is more than an arguable case. It is not sufficient to raise issues. The evidence must show an infringement of a right, and the probability of success of the Applicant's case upon trial. That is clearly a standard, which is higher than an arguable case."
- The amount in arrears as described under paragraph 25 of the replying affidavit, which I believe is the current amount the Plaintiff is indebted, is not in consonant with the amount claimed in the statutory notice dated 28/1/2019. And even without further investigations it suffices to state that the statutory notice is ex facie defective for want of form.