Patrick Munyao & another v Standard Chartered Bank (K) [2020] eKLR Case Summary

Case Brief: Patrick Munyao & another v Standard Chartered Bank (K) [2020] eKLR


1. Case Information:
- Name of the Case: Patrick Munyao & Kenya Haulage Agency v. Standard Chartered Bank (K)
- Case Number: Civil Case No. 40 of 2018
- Court: High Court of Kenya at Mombasa
- Date Delivered: October 9, 2020
- Category of Law: Civil
- Judge(s): D.O. Chepkwony & P.J. Otieno
- Country: Kenya

2. Questions Presented:
The court must resolve whether the plaintiffs have satisfied the conditions necessary to compel the defendant to sign a discharge of charge concerning the property upon the plaintiffs depositing a specified sum in court.

3. Facts of the Case:
The plaintiffs, Patrick Munyao and Kenya Haulage Agency, applied for a loan facility from the defendant, Standard Chartered Bank, which was secured by a charge against a property. By October 29, 2014, the total outstanding loans amounted to Kshs. 11,213,595.21, of which the plaintiffs had repaid Kshs. 6,809,131, leaving a balance of Kshs. 4,404,464.21. Despite the defendant's acknowledgment of the debt, they have threatened to sell the property due to non-payment. The plaintiffs proposed a settlement of Kshs. 7,000,000, citing economic hardships caused by the COVID-19 pandemic, but the defendant has not responded favorably.

4. Procedural History:
The plaintiffs filed a Notice of Motion on June 18, 2020, seeking to compel the defendant to discharge the charge upon depositing Kshs. 7,000,000 in court. The defendant opposed the application, asserting that the plaintiffs were in default and that previous offers to settle had not been honored. The court considered the application alongside earlier proceedings where the plaintiffs had sought injunctive relief against the sale of the property.

5. Analysis:
- Rules: The court examined relevant statutes, including Article 159(2)(c) and 259(1) of the Constitution, and sections of the Civil Procedure Act, particularly regarding the requirements for granting injunctions and discharges of charges.
- Case Law: The court referenced the case of Giella v. Cassman Brown & Co. Ltd (1973) E.A. 358, which established the principles for granting injunctions. Additionally, the cases of Locabail International Finance Ltd v. Agroexpot & Others (1986) and Air Travel & Related Studies Ltd v. Equity Bank (Kenya) Ltd were cited to emphasize the higher standards required for mandatory injunctions.
- Application: The court determined that the plaintiffs had not met the burden of proof necessary for a mandatory injunction. It found that the debt owed was substantial and that the plaintiffs had not clearly established that the defendant was attempting to frustrate their rights. The court concluded that the dispute over the loan amount and interest was not straightforward and required further examination at trial.

6. Conclusion:
The court dismissed the plaintiffs' application, ruling that they had not demonstrated merit in their request for a mandatory injunction. The decision underscores the need for clarity in financial disputes and the court's reluctance to intervene in matters without clear evidence of wrongful conduct by the defendant.

7. Dissent:
There were no dissenting opinions noted in the ruling.

8. Summary:
The High Court of Kenya dismissed the application by Patrick Munyao and Kenya Haulage Agency to compel Standard Chartered Bank to discharge a charge on property, ruling that the plaintiffs had not satisfied the necessary legal conditions. This case highlights the complexities involved in financial disputes and the standards required for seeking injunctive relief in civil matters. The ruling serves as a reminder of the court's cautious approach to mandatory injunctions, particularly in cases involving disputed debts.