Airwave Properties Limited & another v Letshego Kenya Limited & another (Civil Case

E197 of 2023) [2024] KEHC 11032 (KLR) (Commercial and Tax) (19 September 2024) (Ruling)
Neutral citation: [2024] KEHC 11032 (KLR)

REPUBLIC OF KENYA
IN THE HIGH COURT AT NAIROBI (MILIMANI COMMERCIAL COURTS)
COMMERCIAL AND TAX
CIVIL CASE E197 OF 2023
JWW MONG'ARE, J
SEPTEMBER 19, 2024

BETWEEN
AIRWAVE PROPERTIES LIMITED ................................................... 1ST PLAINTIFF
ELIJAH NJORE NJOROGE ................................................................ 2ND PLAINTIFF

AND
LETSHEGO KENYA LIMITED ....................................................... 1ST DEFENDANT
REGENT AUCTIONEERS ............................................................. 2ND DEFENDANT

RULING

1. Before the court is the Plaintis’ Notice of Motion application dated 9/5/2023 led pursuant to
section 1A, 1B, 3, 3A and 63(e) of the Civil Procedure Act and order 40 rules 1,2,3(1) and 4(1) of the
Civil Procedure Rules.

2. The Plaintis seeks for a temporary injunction, pending determination of this suit, restraining the
Defendants and/or their agents from dealing in any manner with the property known as LR No.
Ngenda/kimunyu/2582 Kimunyu, Kiambu County. Further the Plaintis seeks for an order to have
the interest rates and penalties charged by the 1st Defendant on the loan account of the 1st Plainti
declared illegal and an order for the taking of accounts between the parties herein.

3. The application is supported by the grounds that pursuant to a charge executed over LR No. Ngenda/
kimunyu/2582 Kimunyu, Kiambu County (the suit property) by the 2nd Plainti, as guarantor to the
1st Plainti, the 1st Defendant agree to oer the Plainti banking facilities of Kshs.10,000,000/=.

4. The Plaintis contend that the loan account fell into a few months’ arrears pursuant to which the
parties agreed to a mode of regularising the account which the 1st Plainti adhered to and that

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 unbeknown to the Plaintis, the Defendants took steps to dispose of the suit property by public
auction on 10/5/2023.

5. The Plaintis stated that they were not served with the statutory notice under section 90(1) of the
Land Act 2012 nor the 40 days’ notice to sell under section 96(2) of the Land Act 2012 and that they
only found out about the sale from a stranger who informed them.

6. Further that the 1st Defendant levied illegal and arbitrary levies, penalties and interest on the loan
account of the Plainti; that the 1st Defendant has on various occasions, assured the 1st Plainti that
the loan will be restructured and conceded that the interest rates charged were contrary to the law.
That consequently the Defendant is barred by the doctrine of estoppel from going back on its express
representations to the Plaintis.

7. In opposition to the application, the 1st Defendant led a replying adavit sworn on 24/5/2023 by
Stella Nganga, its legal ocer.

8. She averred that on 28/5/2021, the 1st Defendant advanced a loan of Kshs.11,475,000/= to the 1st
Plainti and the Plaintis agreed the advancement of the loan by execution of a Memoranda of
Acceptance on 13/5/2021.

9. Ms Nganga averred that the 1st Defendant instructed Prestige Management Valuers Limited to value
the suit property and thereafter instructed the 2nd Defendants who issued the Plaintis with a 45 days’
redemption notice but the same was ignored by the Plaintis.

10. That the 2nd Defendant consequently published an advertisement for a public auction of the suit
property on 24/4/2023 for an auction slated for 10/5/2023.

11. It was contended that the 1st Defendant intended to exercise its power of sale over the suit property
since the Plainti defaulted in its obligations to service the loan advanced to it and that the Defendants
have followed all the due process in exercising their statutory power of sale.

12. Ms. Nganga swore a supplementary adavit on 8/7/2023 in which she averred that the Plaintis are
misleading the court by stating that at the time the charge documents were executed the suit property
was valued at Kshs.20,000,000/= with a forced sale value of Kshs.22,500,000/= while the market was
actually Kshs.18,000,000/= with a forced sale value of Kshs.13,500,000/=.

13. That the Plaintis have not produced any evidence to support the assertion that the Plaintis agreed to
restructure the loan and that the Plaintis did not raise any objection to the interest rate and penalties
in the charge documents.

Analysis and Determination:

15. From the record, I note that a loan facility of Kshs.11,475,000/= was advanced to the 1st Defendant
pursuant to a letter of oer dated 11/5/2021. The letter of oer also provided that the interest to
be charged would be 15% per annum and would be secured by a legal charge over the suit property,
registered in the name of the 2nd Plainti. The letter of oer was accepted by the 1st Plainti through
a Memorandum of Acceptance signed by its director and the 2nd Defendant. Consequently, a charge
was registered against the suit property in favour of the 1st Defendant to secure the loan amount. The
letter of oer, memorandum of acceptance and charge instrument are marked as ‘SN-1’, ‘SN-2’ and
‘SN-4a’ in the 1st Defendant’s replying adavit.

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16. It is not in dispute that the 1st Plainti defaulted in making loan repayments and its loan account fell
into arrears. This led the 1st Defendant to begin the process of exercising its statutory power of sale.

17. What is before the court is an interlocutory injunction application seeking to restrain the Defendants
from selling the suit property in exercise of their statutory power of sale pending the determination
of this suit.

18. In the celebrated locus classica case of Giella v Cassman Brown [1973] EA 358 the principles to be
considered before granting an interim injunction have been established as follows; (i) the Applicant
must prove a prima facie case with a probability of success (ii) the Applicant must illustrate that he will
suer irreparable loss and damage if the injunction is not granted (iii) If the court is in doubt, it will
determine the matter on a balance of convenience.

19. The court will consider the rst limb on whether the Plaintis have illustrated that they have a prima
facie case with a probability of success.

20. In the case of Mrao Ltd V First American Bank Of Kenya Ltd & 2 Others; Civil Appeal No 39 Of
2002 the court described a prima facie case as follows:-

“… a prima facie case in civil cases it is a case in 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 to call for an explanation or rebuttal from the latter.”

21. The Plaintis submitted that the statutory notices were not served upon them. On their part the
Defendants asserted that they served the requisite notices to the Plaintis.

22. The 1st Defendant attached in its replying adavit, a demand letter, a statutory notice dated 7/9/2022
under section 90 of the Land Act, a 40 days’ notice to sell dated 28/12/2022 and a 45-day redemption
notice dated 3/3/2023 sent to each of the Plaintis via registered post. Further the 2nd Plainti was
served with the notices through WhatsApp as evidenced in the annexure ‘SN-12’ in the replying
adavit. A receipt of the registered mail was also annexed to prove that the notices were served through
registered mail.

23. The Plaintis alleged that the 1st Defendant agreed to restructure the loan facility to remove the
illegal interest levied on the account. However, I note that no evidence of such an agreement was
availed by the Plaintis to the court as proof of such agreement. I am persuaded that the same remains
unsubstantiated allegation and cannot come to the aid of the Plainti.

24. The Plainti’s further alleged that the 1st Defendant levied exorbitant interest rates on the loan amount.
Yet again the Plaintis failed to avail evidence to buttress this allegation and similarly the said allegation
remains such, an allegation with no evidential value.

25. Having made the observations above and keeping in mind that the Plaintis did not deny defaulting
in the loan repayment nor of the existence the charge created over the suit property, I nd that the
Plaintis have failed to illustrate that their rights have been infringed by the Defendants so as to call for
an explanation or rebuttal from the latter; the Plaintis have therefore failed the rst test in that they
have not established a prima facie case as stipulated in the Mrao case (supra).

26. The conditions set out in Giella (supra) are sequential. Since the Plaintis have failed to establish a
prima facie case there is no need to consider the other limbs before granting the interim injunction.

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 This is as was held in the Court of Appeal case of Nguruman Limited v Jan Bonde Nielsen & 2 others
[2014] eKLR where it was stated:

“ If prima facie case is not established, then irreparable injury and balance of convenience need
no consideration. The existence of a prima facie case does not permit “leap-frogging” by the
applicant to injunction directly without crossing the other hurdles in between.” (Emphasis
added).”

27. In conclusion, the upshot of the foregoing, is that the court holds and nds that the instant application
lacks merit and the same is hereby dismissed with costs awarded to the Defendants. It is so ordered.
DATED, SIGNED AND DELIVERED VIRTUALLY AT NAIROBI THIS 19TH DAY OF
SEPTEMBER, 2024.
………………………………………..
J.W.W. MONG’ARE
JUDGE
In the Presence of:-
Mr. Mutuku for the Plainti/Applicant.
Mr. Ontita for the Defendant/Respondent.
Amos - Court Assistant

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