Ruhangi & 2 others v Standard Chartered Bank of Kenya Ltd & 2 others

High Court, at Nairobi December 1, 2000

Hewett J

Civil Case No 1885 of 1999

Mortgages and Charges – statutory power of sale – injunction not to issue against innocent purchaser for value without notice.

The plaintiffs owned certain parcels of land. As guarantors of Ruhangi Properties Limited, they charged those parcels of land to the 1st defendant.

The borrower fell into arrears and the Bank sought to exercise its statutory power of sale. The 2nd defendant was the auctioneer and the 3rd defendant the auction purchaser. The properties were registered under the Registered Land Act, cap 300. The plaintiffs sought to challenge the resultant sale upon conclusion of registration of the properties in the 3rd defendant’s name.

Held:

1. Once registration of land sold in exercise of the statutory power of sale is complete, section 77 (3) of the Registered Land Act indicates that the Registrar has accepted it as sufficient evidence that the power of sale has been duly exercised and any person suffering damage by an irregular exercise of the power shall have his remedy in damages only against the person exercising the power.

2. Under order 6 rule 8 of the Civil Procedure Rules, a pleading alleging fraud must set out the particulars. Fraud, in addition to requiring particulars, requires a higher standard of proof.

Cases

1. Lakeland Motors Limited v Harbhajan Singh Sembi Civil Appeal No 24 of 1998

2. Auto Travel Ltd v Diamond Trust of Kenya Ltd Civil Case No 902 of 2000

3. Mbuthia, George Gikubu v Jimba Credit Corporation Civil Case No 937 of 1986

4. Jimba Credit Finance Corporation & another v Mbuthia [1988] KLR 1

5. Central Kenya Ltd v Trust Bank Ltd & 4 others Civil Appeal No 215 of 1996

Statutes

1. Registered Land Act (cap 300) sections 77 (1), (3); 143

2. Civil Procedure Rules (cap 21 Sub Leg) order VI rule 8

3. Auctioneers Rules (cap 526 Sub Leg) rules 15(b)(d); 17; 17(1)(e)

4. Agricultural Finance Corporation Act (cap 323) section 33

Kirinyaga District Farmers Society v Kirinyaga

District Cooperative Union Limited

High Court, at Nairobi November 23, 2000

Hewett J

Civil Case No 226 of 2000

Co-operative Societies – disputes between co-operative societies – whether the High Court has original jurisdiction in such disputes – meaning of “dispute” within the meaning of the Co-operative Societies Act.

Both the plaintiff and defendant were co-operative societies under the Co-operative Societies Act, No 12 of 1997. The plaintiff claimed from the defendant Kshs 19,759,303/-, interest and costs. On the plaintiff’s filing an application to enter judgment on admission or alternatively to strike out the defence and enter summary judgment, the defendant took a preliminary point that since the suit was between two co-operative societies, the Court had no jurisdiction under section 76 of the Act. It was argued that the proper forum was the Co-operatives Tribunal.

Held:

1. Rules of evidence do not necessarily apply to proceedings before the Co-operative Tribunal and the Tribunal can regulate its own procedure

2. The High Court of Kenya has, by section 81 of the Co-operative Societies Act, the appellate jurisdiction from a decision by the Tribunal and the High Court’s decision is final.

3. Mere refusal to pay upon a claim which is not really disputed does not necessarily give rise to a ‘dispute’ calling an arbitration clause into operation. It does not follow that Courts cannot be resorted to without previous recourse to arbitration to enforce a claim which is not disputed but which the trader merely persists in not paying.

Preliminary objection upheld, suit struck out.

Cases

1. Gatanga Coffee Growers Co-operative Society Ltd v Gitau [1970] EA 361

2. Lukenya Ranching & Farming Co-operative Society Ltd v Kavoloto [1970] EA 414

3. Njoroge, Ernest Muiruri & 2 others v Kabira Karanja & 4 others Civil Appeal No 114 of 1997

4. Kanguramai Farmers Co-op Society Ltd v Irati Farmers Co-op Society Ltd & another Civil Case No 1364 of 1999

5. Kandara Farmers Co-op Society & 9 others v Joseph Kanyua & 18 others Civil Case No 2646 of 1998

6. Geomax Consulting Engineers v KPT Civil Case No 1210 of 1996

7. London & North Western Railways v Jones [1915] 2 KB 35

Texts

Sutton, DSJ (Ed) Russel on Arbitration London: Sweet & Maxwell

Statutes

1. Co-operative Societies Act, 1997 (Act No 12 of 1997)

2. Co-operative Societies Act (cap 490) section 76, 77, 78, 81

3. Co-operative Societies Act [Uganda] sections 80(1)(2)