Automated Summary
Key Facts
The plaintiff, Evelyn Ndzambe Vundi, filed a civil suit against Standard Chartered Bank Kenya Limited and Oasis Green Growers C Ltd in November 2023. She created a legal charge over her property (Land Reference No. 7413/23) as security for a loan facility extended to the second defendant by the first defendant. The plaintiff seeks to halt an impending auction of the property and an order directing the bank to pursue the second defendant as the principal debtor. She claims she was not served with the required 90-day statutory notice under the Land Act and received only a 40-day notice in October 2023. The plaintiff asserts the second defendant is financially capable of clearing the outstanding loan, arguing the bank should prioritize recovering from the principal debtor rather than her property.
Transaction Type
Loan facility secured by property charge
Issues
- The plaintiff claimed she was not served the 90-day statutory notice under section 90 of the Land Act 2012. The court found this claim implausible, noting the 2020 notice was sent by registered post and email to the address recorded on the charge documents, and the 2023 40-day notice was similarly delivered and acknowledged by the plaintiff.
- The court analyzed Clause 2(a)(ii) of the plaintiff's 2017 personal guarantee, which explicitly stated she would pay the bank any unpaid amounts as if she were the principal obligor. The court held that parties are bound by contractual terms and the bank was entitled to pursue the plaintiff directly without first chasing the principal debtor, Oasis Green Growers C Ltd.
- The court determined whether the plaintiff made out a prima facie case for injunctive relief under Order 40 Rule 1 of the Civil Procedure Rules. The court referenced the Mrao Ltd V First American Bank of Kenya Ltd case, emphasizing that a prima facie case requires showing an infringement of a right with probability of success on trial, not merely raising issues. The plaintiff failed to meet this threshold.
Holdings
- The court determined that the plaintiff failed to establish a prima facie case for injunctive relief. The court emphasized that the plaintiff must demonstrate a right apparently infringed, which she did not achieve. Key findings included the plaintiff's acknowledgment of the 2nd defendant's default, the validity of the Personal Guarantee terms allowing the bank to pursue her directly, and the implausibility of her claim that the 90-day statutory notice was not received. The court noted that notices were sent via registered post and email to the address provided in the charge documents.
- The court dismissed the plaintiff's application dated 30th November 2023 with costs. It ruled that she did not meet the threshold for injunctive relief under Order 40 Rule 1 of the Civil Procedure Rules 2010, as there was no apparent infringement of a right requiring the injunction. The decision was based on the plaintiff's inability to satisfy the first condition for injunctive relief, rendering the other factors (damages, balance of convenience) moot.
Remedies
The application dated 30th November 2023 seeking injunctive orders against the defendants from dealing with the subject property pending the hearing of the suit was dismissed with costs by the court on 14th June 2024.
Legal Principles
- The court dismissed the plaintiff's application for an interim injunction due to failure to establish a prima facie case under Order 40 Rule 1 of the Civil Procedure Rules 2010, as outlined in the ruling on Evelyn N zam bi Vundi v Standard Chartered Bank Kenya Limited & another [2024] KEHC 7345 (KLR).
- The plaintiff was required to demonstrate a prima facie case showing a right apparently infringed by the defendants, as established in Mrao Ltd V First American Bank of Kenya Ltd & 2 Others [2003] KLR 125 and reiterated in Nguruman Ltd V Jan Bonde Nielsen & 2 Others [2014] eKLR. The court found this burden not met.
Precedent Name
- Mrao Ltd V First American Bank of Kenya Ltd & 2 Others
- Nguruman Ltd V Jan Bonde Nielsen & 2 Others
- Giella V Cassman Brown & Co Ltd
Key Disputed Contract Clauses
Clause 2(a)(ii) of the plaintiff's 2017 Personal Guarantee obligated her to pay any unpaid loan amounts as if she were the principal debtor, which the court upheld as enforceable without requiring the bank to first pursue the principal debtor.
Cited Statute
Land Act 2012
Judge Name
F. Mugambi
Passage Text
- "The plaintiff admits having received the latter notice. Having noted that the two notices were sent via the same means and address the claim that the former notice was not received is not plausible."
- "...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 the applicant's case upon trial. That is clearly a standard which is higher than an arguable case."
- "I am therefore not satisfied that the plaintiff has established that she has a prima facie case... The application dated 30th November 2023 is dismissed with costs."
Damages / Relief Type
Injunction dismissed with costs