Nathalal Monji Rai Shantaben Nathalal Monji Rai Biharlal Nathalal Rai Jagdish Nathalal Rai Dharmendra Nathalal Rai Industrial Hardware (kenya) Ltd v Standard Chartered Bank Kenya Ltd
The bottom line
#Kenya's Court of Appeal confirmed that 'liberty to apply' clauses cannot reopen a consent order, and defaulting borrowers cannot block mortgage sales.
What this practically means
#Executive summary
#Key legal issues
#Effect of a 'liberty to apply' clause in a consent order
The clause does not entitle a party to apply to set aside or vary the consent order.
Adopting the English Court of Appeal decision in Cristel v Cristel, the court held that 'liberty to apply' means only that, when the order is drawn up, its working out may involve matters on which a decision of the court may be necessary. It confers no right to reopen or vary the order itself. Counsel's contrary submission was rejected as legally incorrect.
Availability of an injunction to restrain exercise of a mortgagee's statutory power of sale
No injunction lies where default and indebtedness are not denied and the necessary notices have been served.
The court, referring to Halsbury's Laws of England, Volume 32 (4th Edition), paragraph 725, found no legal basis for restraining the mortgagee. The plaintiffs had defaulted on the loan secured by the charge and guarantees, had not complied with the consent order, and had pursued a strategy of filing frivolous injunction applications to frustrate the sale.
Legal principles established
#- A 'liberty to apply' clause in an order does not confer any right to ask the court to vary or set aside the order; it applies only to matters arising in the working out of the order.
- A mortgagor cannot obtain an injunction restraining a mortgagee from exercising its statutory power of sale where default and indebtedness are not denied and the necessary notices have been served.
Court orders
#- 1.Appeal dismissed
- 2.Costs of the appeal to the defendant (Standard Chartered Bank Kenya Ltd)
- On appeal from
- High Court of Kenya at Nairobi
- H.C.C.C. No. 577 of 1997
- Jurisdiction invoked
- First appeal to the Court of Appeal from the High Court (not expressly stated in the judgment)
Key timeline
#Practical implications
#Frequently asked questions
#Cite this brief
#Cite this brief
Caselaw, "Nathalal Monji Rai Shantaben Nathalal Monji Rai Biharlal Nathalal Rai Jagdish Nathalal Rai Dharmendra Nathalal Rai Industrial Hardware (kenya) Ltd v Standard Chartered Bank Kenya Ltd", Case Analysis (1999). Civil Appeal No. 194 of 1998. Source: https://new.kenyalaw.org/akn/ke/judgment/keca/1999/174/eng@1999-03-26
Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.