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|Case Number:||Civil Appeal 17 of 2019|
|Parties:||National Bank of Kenya Limited v Francis Wanjohi Njiraini t/a Karinga Grains Store|
|Date Delivered:||10 Dec 2020|
|Court:||High Court at Nyeri|
|Citation:||National Bank of Kenya Limited v Francis Wanjohi Njiraini t/a Karinga Grains Store  eKLR|
|Case Outcome:||Appeal dismissed|
|Disclaimer:||The information contained in the above segment is not part of the judicial opinion delivered by the Court. The metadata has been prepared by Kenya Law as a guide in understanding the subject of the judicial opinion. Kenya Law makes no warranties as to the comprehensiveness or accuracy of the information|
IN THE HIGH COURT OF KENYA
CIVIL APPEAL NO. 17 OF 2019
NATIONAL BANK OF KENYA LIMITED...................................................APPELLANT
FRANCIS WANJOHI NJIRAINI T/A KARINGA GRAINS STORE......RESPONDENT
1. A brief overview of the case is as follows; the respondent filed a suit against the appellant in the lower court together with an application dated 26/04/2018 seeking interim injunctive orders restraining the appellant, its servants and agents from disposing of or interfering with TITLE No. KIINE/KIANGAI/2411; in its ruling dated 27/02/2019 the lower court granted the interim orders sought pending the hearing and determination of the main suit;
2. The appellant herein being dissatisfied with the ruling delivered by the Hon. K. M. Njalale, Senior Principal Magistrate, in SPMCC No.27 of 2018 sought redress by filing the instant appeal; hereunder is a summary of the appellant’s grounds of appeal;
i. The trial magistrate misdirected herself by applying unsound legal principles and failed to consider the appellant’s evidence.
ii. The trial magistrate erred in law and in fact in finding that the respondent had satisfied the threshold for the grant of an injunction.
iii. The trial magistrate misapplied the law and unfairly denied the appellant its statutory right of sale.
iv. The trial magistrate was biased and declined to apply the law on realization of securities. She wrongly held that the respondent could not be compensated by way of damages and that it would therefore suffer irreparable harm, yet the suit property being a commodity of sale is capable of being quantified in monetary terms.
v. The trial magistrate erred in law and in fact by granting an injunction based on the dispute on the amount owed. She also did not check whether the appellant followed the right process in realizing the security.
3. The parties’ respective advocates were directed to canvass the appeal by filing and exchanging their respective written submissions; hereunder is a brief summary of the rival submissions;
4. Counsel for the appellant submitted that the learned magistrate wrongly presumed that once a prima facie case was made out a temporary injunction has to be issued; and also misunderstood the concept of prima facie by stating that issues raised in the application could only be determined at a full hearing; case law relied on Mrao Ltd vs First American Bank of Kenya Ltd & 2 Others  eKLR; where the court set out the test for a prima facie case;
5. On whether the respondent would suffer irreparable damage that could not be compensated by damages, it was incumbent upon the party seeking the interim order to demonstrate the damages could not be quantified in monetary terms; in the instant case the loss could be quantified as the appellant had conducted a valuation as required by Section 97 of the Land Act; the appellant submitted that the learned magistrate went against this legal position; case law relied on Bii vs Kenya Commercial Bank Ltd  eKLR 458; David Ngugi Ngaari vs KCB Ltd  eKLR and Mrao Ltd vs First American Bank of Kenya Ltd & 2 Others  eKLR.
6. Section 99(4) of the Land Act provides for a remedy in damages to a person prejudiced by an unauthorized, improper or irregular exercise of power of sale against the person excising that power;
7. That the respondent had willingly offered his matrimonial home with advice from his advocates and with full knowledge that in the event he defaulted in repaying the loan the property became a commodity for sale;
8. The appellant followed due process in exercising its right of sale; starting with a 30 day notice in which the respondent was given to pay the outstanding arrears in the total sum of Kshs.1,830,125/95; the details were itemised in the letter which the respondent chose to ignore leading to the issuance of the three (3) month statutory notice dated 18/07/2018 notifying him that the appellant would exercise its statutory power of sale under the provisions of Section 90(3) and 96(1) of the Land Act; this notice was also ignored prompting the issuance of a 40 day Notice of Intention to Sell; then Leakey Auctioneers were appointed and a 45 day Redemption Notice was issued together with a Notification of Sale;
9. The property had been valued at a market value of Kshs.700,000/- and a forced sale value of Kshs.525,000/-; and as at 30/04/2018 the outstanding debt stood at Kshs.2,085,329.83; if the due process had not been followed for the issuance of the Statutory Notices then the only right the respondent had would be that the notices be regularized otherwise the dispute on amounts owed is not a sufficient ground to bar the exercise of the statutory power of sale; case law relied on Palmy Company Limited vs Consolidated Bank of Kenya Limited  eKLR;
10. Counsel submitted that the balance of convenience tilted in its favour;there is a real danger that with the continued default the debt may outstrip the value of the suit property and cause the appellant to incur irreparable damage; case law relied on Wanjohi vs Equity Building Society & Anor  eKLR;
11. The respondent sought equity before the lower court yet he had failed to do equity; hehad not disclosed to the lower court that the appellant had restructured his loans when he had failed to repay the agreed instalments; he had lied to the lower court that he had not been served with the requisite notices; and had approached a court of equity with tainted hands;
12. After being granted the injunctive orders the respondent has not taken any steps to repay the loan; and has not shown any goodwill to indicate his willingness to pay the debt;
13. The appellant urged the court to re-assess and re-evaluate the facts and allow the appeal;
14. In response counsel for the respondent stated that the impugned orders were properly granted by the lower court in line with the principles for interlocutory injunctions as set out in the case of Giella vs Cassman Brown & Co Ltd; which are:
i. The plaintiff must establish that he has a prima facie case with high chances of success;
ii. The plaintiff must demonstrate the suffering of irreparable loss that cannot be compensated by an award of damages;
iii. If in doubt the court can decide on a balance of convenience;
15. In its ruling, the lower court was guided by the definition of a “prima facie case” in the cases of Moses C. Muhia Njoroge & Others vs Jane W. Lesaloi and 5 Others and the case of Mrao Ltd vs First American Bank & 2 Others; the lower court was also guided by the principle that in an interlocutory application the court is not required to make final findings on contested facts and law but only needed to weigh the relative strengthof the parties’ cases; case law relied on Keziah Njambi Maingi & Anor vs Barclays Bank of Kenya Limited  eKLR;
16. The respondent stated that he had fully repaid the loan and produced a loan statement that indicated full repayment of the loan; as for the appellant it produced no loan account statement and had presented no evidence of default in payment; that the remedy prescribed in Andrew Wanjohi vs Equity Building Society & Anor  eKLR was only available to the appellant if it showed default in payment;
17. His further contention was that he had not been served with any statutory notices and that the notices and certificates that were produced were ineligible;
18. That the balance of convenience titled in favour of the respondent; and he urged this court to dismiss the appeal with costs.
ISSUES FOR DETERMINATION
19. After reading the respective written submissions of the parties this court has framed the following issue for determination;
i. Whether the trial court misapplied the law and evidence and wrongfully exercised its discretion in granting the interim injunctive orders;
20. This court as an appellate court has a duty not to interfere with the exercise of the discretion of a trial court unless it is satisfied that the court misdirected itself in some matter and as a result arrived at a wrong decision; or it is manifestly clear from the case as a whole that the trial court had been clearly wrong in the exercise of its discretion and as a result there has been injustice; case referred to Mbogo & Anor vs Shah  EA 95;
Whether the trial court misapplied the law and evidence and wrongfully exercised its discretion in granting the interim injunctive orders;
21. The respondent’s application required the lower court to exercise its discretion based on evidence and sound legal principles when granting the interim injunctive order; it is noted from the Ruling that the lower courtwas guided by the renowned case of Giella vs Cassman Brown Ltd (supra) and American Cynamid Co. vs Ethicom Limited and Mrao Ltd vs First American Bank of Kenya & 2 Others; and was satisfied that the respondent had established the three elements which are; (i) a prima facie case with a reasonable probability of success (ii) that damages were not an adequate remedy (iii) and that the balance of convenience lay in favour of maintaining the status quo;the lower court then proceeded to grant the respondent the orders sought;
22. Upon re-assessing and re-evaluating the evidence on record this court finds that the lower court in its ruling analysed the three tests at great length and made a determination as follows;
‘Consequently I find that the application has merits and that the applicant has satisfied the tests for granting the injunction sought as laid down in the above cited authorities. The issues raised are pertinent and can only be resolved at a full hearing. Accordingly I allow the application dated 26th April, 2018 in terms of prayer 3……….’
23. This court finds no reason to interfere with the trial court’s exercise of its discretion as it is satisfied that the lower court considered the facts placed before it and only needed to weigh the relative strengths of the parties’ cases; and is further satisfied thatthe trial court applied sound legal principles in making its determination; refer to Giella vs Cassman Brown Ltd (supra); it would have been indeed premature to have required the trial court to make final findings on contested facts and law; and finds the case law cited by the appellant on these issues as not being applicable in this instance;
24. The trial court is found to have properly applied the law and properly exercised its discretion in granting the interim injunctive orders;
FINDINGS AND DETERMINATION
25. In the light of the foregoing reasons this court makes the following findings and determinations;
i. The appeal is found lacking in merit and it is hereby dismissed;
ii. The trial court is found to have properly applied the law and properly exercised its discretion in granting the interim injunctive orders;
iii. The case is hereby remitted back to the magistrate’s court for hearing and determination of the main suit.
iv. The costs shall be in the cause;
Dated, Signed and Delivered at Nyeri this 10th day of December, 2020
HON. A. MSHILA