COS O System Services Limited & another v SBM Bank Limited [2020] eKLR Case Summary

Court
High Court of Kenya at Nairobi, Milimani Law Courts, Commercial and Tax Division
Category
Civil
Judge(s)
D. S. Majanja J.
Judgment Date
October 23, 2020
Country
Kenya
Document Type
PDF
Number of Pages
3

Case Brief: COS O System Services Limited & another v SBM Bank Limited [2020] eKLR


1. Case Information:
- Name of the Case: Cos O System Services Limited & James Ngugi Gachuhi v. SBM Bank Limited
- Case Number: Civil Appeal No. E036 of 2020
- Court: High Court of Kenya at Nairobi, Milimani Law Courts, Commercial and Tax Division
- Date Delivered: 23rd October 2020
- Category of Law: Civil
- Judge(s): D. S. Majanja J.
- Country: Kenya

2. Questions Presented:
The central legal issues presented in this case revolve around whether the Appellants, Cos O System Services Limited and James Ngugi Gachuhi, should be granted a stay of sale of the suit property despite their default in meeting the conditions set by the court, particularly in light of economic hardships caused by the COVID-19 pandemic.

3. Facts of the Case:
The Appellants, Cos O System Services Limited and James Ngugi Gachuhi, sought an injunction to prevent the sale of a property by SBM Bank Limited, the Respondent. The injunction was granted on 1st September 2020, with specific payment conditions imposed on the Appellants. However, the Appellants defaulted on these conditions, leading the Respondent to advertise the property for sale on 29th September 2020. The Appellants argued that due to the economic impact of the COVID-19 pandemic, they were unable to meet the original payment terms, prompting them to file a new application seeking to vary the payment conditions.

4. Procedural History:
The case began in the Magistrates Court, where an initial ruling was made on 19th July 2017. The Appellants appealed to the High Court, leading to the injunction ordered on 1st September 2020. After defaulting on the agreed payments, the Respondent moved to proceed with the sale. The Appellants then filed a Notice of Motion on 25th September 2020, seeking to suspend the sale and modify the payment terms.

5. Analysis:
- Rules: The court considered the provisions of the Civil Procedure Act (Chapter 21 of the Laws of Kenya), particularly sections 1A and 1B, which emphasize proportionality and justice for both parties in civil proceedings.

- Case Law: The court referenced previous cases such as *Tarbo Transporters Ltd v. Absalom Dova Lumbasi* and *Samvir Trustee Limited v. Guardian Bank Limited*, which established principles regarding the balance of justice and the court's discretion in granting relief to parties who may have defaulted under certain conditions.

- Application: The court acknowledged the Appellants' reasons for their inability to meet the payment conditions, attributing their default to the economic hardships brought about by the COVID-19 pandemic. The court found that the Appellants did not deliberately fail to comply and that they acted promptly upon realizing their financial constraints. As such, the court decided to extend the time for payment and modified the payment terms to allow for a lower monthly installment.

6. Conclusion:
The court ultimately ruled in favor of the Appellants, allowing their application to modify the payment conditions. The court extended the time for the first installment and set a new payment schedule, thereby preventing the immediate sale of the suit property. The decision underscored the court's commitment to balancing the interests of both parties while considering the broader economic context.

7. Dissent:
There were no dissenting opinions noted in this case, as the ruling was delivered by Judge D. S. Majanja without indication of disagreement from other judges.

8. Summary:
The High Court of Kenya allowed the Appellants' motion to vary the payment conditions related to the stay of sale of their property, recognizing the impact of the COVID-19 pandemic on their financial situation. This case highlights the court's willingness to adapt legal obligations in response to extraordinary circumstances while ensuring that both parties' rights are respected. The ruling serves as a significant precedent regarding the court's discretion in civil matters involving economic hardships.

Document Summary

Below is the summary preview of this document.

  • COS-O-System-Services-Limited--another-v-SBM-Bank-Limited-[2020]-eKLR-Case-Summary_2539_0.jpg

This is the end of the summary preview.

Related Documents

View all summaries