Paul Gatete Wangai & 13 others v Capital Realty Ltd & another [2020] eKLR Case Summary

Court
Environment and Land Court at Machakos
Category
Civil
Judge(s)
O. A. Angote
Judgment Date
October 23, 2020
Country
Kenya
Document Type
PDF
Number of Pages
3

Case Brief: Paul Gatete Wangai & 13 others v Capital Realty Ltd & another [2020] eKLR


1. Case Information:
- Name of the Case: Paul Gatete Wangai & Others v. Capital Realty Ltd & Another
- Case Number: ELC. CASE NO. 123 OF 2019 (Consolidated with Machakos ELC No. 133 of 2019)
- Court: Environment and Land Court at Machakos
- Date Delivered: 23rd October 2020
- Category of Law: Civil
- Judge(s): O. A. Angote
- Country: Kenya

2. Questions Presented:
The central legal issues presented before the court include:
- Whether the Plaintiffs, who purchased maisonettes from the 1st Defendant, have a valid claim against the 2nd Defendant, who holds a charge over the property.
- Whether the Plaintiffs are entitled to an injunction to prevent the 2nd Defendant from exercising its statutory power of sale over the maisonettes.

3. Facts of the Case:
The Plaintiffs, comprising fourteen individuals and entities, entered into sale agreements with the 1st Defendant, Capital Realty Ltd, for the purchase of thirteen maisonettes situated on a property known as Land Reference Number 12715/617. The Plaintiffs paid a total of Kshs. 147,975,680 for the properties, which they have occupied as their homes since receiving possession between April 2014 and April 2015. However, the 1st Defendant defaulted on loan repayments to the 2nd Defendant, Housing Finance Co. Ltd, which led to the issuance of statutory notices threatening to sell the properties due to the default.

4. Procedural History:
The Plaintiffs filed a Notice of Motion on 14th November 2019, seeking injunctive relief against the 1st and 2nd Defendants to restrain them from selling or dealing with the maisonettes pending the determination of the suit. The application was opposed by both Defendants, who argued that the Plaintiffs did not have valid claims due to the lack of consent from the 2nd Defendant for the sale of the properties. The case was consolidated with another related suit, and the court heard submissions from both parties regarding the validity of the sales and the rights of the Plaintiffs.

5. Analysis:
- Rules: The court considered relevant statutes including Sections 90 and 96 of the Land Act, which govern the rights of chargees to exercise statutory power of sale upon default. The court also referenced the conditions for granting an interlocutory injunction as established in *Giella v. Cassman Brown*.

- Case Law: The court referenced *Mrao v. First American Bank of Kenya Ltd* which defined a prima facie case and established that an applicant must demonstrate irreparable harm and the balance of convenience. The court also cited *Elijah Kipng’eno Arap Bii v. Kenya Commercial Bank Limited* regarding the compensability of property loss and the implications of charging property as security.

- Application: The court found that the Plaintiffs had not established a prima facie case, as the sales of the maisonettes were not valid without the consent of the 2nd Defendant, who held a charge over the property. The Plaintiffs were aware of the charge and the requirement for consent prior to sale. Additionally, the court noted that the Plaintiffs had not shown that they would suffer irreparable harm that could not be compensated by damages if the injunction were not granted.

6. Conclusion:
The court dismissed the Plaintiffs’ application for an injunction, concluding that they had not demonstrated a valid legal claim against the 2nd Defendant. The ruling emphasized that the charge held by the 2nd Defendant superseded the Plaintiffs' interests and that the statutory notices issued were valid.

7. Dissent:
There were no dissenting opinions noted in this case.

8. Summary:
The court ruled against the Plaintiffs, denying their request for an injunction to prevent the sale of the maisonettes by the 2nd Defendant. The decision highlighted the importance of obtaining consent from a chargee in property transactions and established that the Plaintiffs’ claims were subordinate to the rights of the chargee. This ruling reinforces the legal principles surrounding property sales, charges, and the rights of purchasers in Kenya.

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