ADREC Limited v Family Bank Limited & another [2020] eKLR Case Summary

Court
High Court of Kenya at Nairobi, Milimani Law Courts, Commercial and Tax Division
Category
Civil
Judge(s)
F. Tuyiott
Judgment Date
October 14, 2020
Country
Kenya
Document Type
PDF
Number of Pages
2

Case Brief: ADREC Limited v Family Bank Limited & another [2020] eKLR


1. Case Information:
- Name of the Case: Adrec Limited v. Family Bank Limited & Toplink Auctioneers
- Case Number: HCCA NO. E 038 OF 2020
- Court: High Court of Kenya at Nairobi, Milimani Law Courts, Commercial & Tax Division
- Date Delivered: 14th October 2020
- Category of Law: Civil
- Judge(s): F. Tuyiott
- Country: Kenya

2. Questions Presented:
The central legal issues before the court were whether the Appellant, Adrec Limited, could obtain an injunction to restrain the 1st and 2nd Respondents from selling the charged property pending the appeal, and whether the statutory notices were validly served as per the requirements of the Land Act.

3. Facts of the Case:
Adrec Limited (the Appellant) sought an injunction against Family Bank Limited (the 1st Respondent) and Toplink Auctioneers (the 2nd Respondent) to prevent the sale of a property known as L.R No. Kajiado/Kaputiei North/31500. The Appellant claimed that it had not received the requisite statutory notices under the Land Act and alleged that the Bank had allowed fraudulent transactions leading to significant financial loss. The Bank countered that it had served the necessary notices and that the Appellant was in default.

4. Procedural History:
The Appellant's application for an injunction was initially dismissed by the lower court on 24th August 2020. The Appellant then filed an appeal and sought a similar injunction pending the outcome of the appeal. The court considered the arguments presented by both sides regarding the validity of the notices and the alleged fraudulent activities.

5. Analysis:
- Rules: The court referenced Order 42 Rule 6 of the Civil Procedure Rules, which governs the granting of stay of execution, and the Land Act's provisions regarding the duty of a chargee to obtain a recent valuation before exercising the right of sale.
- Case Law: The court cited the case of Giella v. Cassman Brown, which established the criteria for granting an injunction: the applicant must demonstrate a prima facie case, the risk of irreparable harm, and the balance of convenience.
- Application: The court found that the Appellant did not demonstrate a prima facie case nor the likelihood of irreparable harm. It noted that the statutory notices were served to the chargor (Adrec) as required, and the Appellant's claims regarding the fraudulent transactions did not negate the acknowledged default on their part.

6. Conclusion:
The court dismissed the Appellant's motion for an injunction, concluding that the Appellant failed to meet the legal standards for such relief. The ruling underscored the importance of compliance with statutory notice requirements and the implications of default in loan agreements.

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

8. Summary:
The High Court of Kenya ruled against Adrec Limited's request for an injunction to prevent the sale of its property by Family Bank Limited and Toplink Auctioneers. The court found that the Appellant did not demonstrate the necessary legal grounds for an injunction, emphasizing the statutory obligations of the Bank and the consequences of the Appellant's default. This case highlights the critical nature of compliance with statutory notice requirements in property transactions and the legal ramifications of defaulting on financial obligations.

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