instances where you need to serve notice before you can exercise a statutory power of sale.

This was clarified by the court in the case of James O Oketch V. E A Building Society
Where the court of Appeal stated that the law on the question as to whether statutory notice ought to be given by a chargee to the chargor are as follows:  Section 69 of ITPA.

In relation to when property passes, or vests, to the purchaser following the exercise of the mortgagee’s statutory power of sale and in the cause of deliberations in the same case, the court of appeal took time to state the law in the following terms that the purchaser acquires title to the suit property upon the fall of the hammer subject to the payment of the price so where the sale is through a public auction property falls at the fall of the hammer.

In restating this principle of law the court cited the provisions of the ITPA as amended by Act NO. 19 of 1985 the mortgagors rights stood extinguished upon a contract of sale or after an auction came into existence i.e. the title to the property is acquired and the right to redeem is distinguished following such a process. This position was retaliated in Sajab V. Amre Liwalla 1956 EACA 71 the court stated the position of a bona fide purchaser for value as follows provided security is offered the bona fide purchaser security for title therein cannot be impeached and the only remedy available to the Chargor lies in ac claim for damages against the Chargee.

Mbuthia V. Jimba Credit Finance & Another  the court emphasised that what that means in terms of the position of the purchaser is that the mortgagors right of redemption is lost as soon as the mortgagee sells the property by auction or enters into a private contract in respect thereof.

This is the position under the ITPA which stated that the title obtained by purchaser is good as against the whole world.  Under RLA sale of property would be subject to impeachment if fraud as a ground can be established provided this particular relief is done properly based on the fact that the chargee has been guilty of fraud, then the title can be questioned and that was the position as amplified in Patrick Kanyagia V. Damaris Wangeci and 2 others Civl Appeal 150 of 1993 unreported.

the court would be inclined to grant a stay that would restrain the exercise of the mortgagee’s statutory of sale and courts will be inclined to do so where the chargor or mortgagor has ably shown that he/she does have a prima facie case.  This was the holding of the court in Lavuna and others V. Civil Servants Housing Co. Ltd and Savings and Loans Ltd.  Where it is found that a proper statutory notice of intention to realise security in the property subject of the charge has been issued and where the mortagor is unable to show that he/she has a prima facie case, no such stay can be granted and that is the view expressed by the court in the case of GEORGE GIKUBU MBUTHIA & OTHERS V. SMALL ENTERPRISES the application for stay was found to be a mere delaying tactic and lacked merit.  No prima facie case was disclosed and no stay would issue.

Aberdare Investments V. Housing Finance and Another the application for stay was based on the assertion that the Chargee ought to exhaust other remedies available to him before taking recourse to his right to statutory power of story and the court held that the choice of remedy for recovery was up to the borrower, who could proceed to realised security under any of the available remedies.


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