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ELRCDismissedNot stated in judgment· [2021] KEELRC 80 (KLR)

Elias Maundu Makau v I&M Bank Limited [2021] KEELRC 80 (KLR)

Employment and Labour Relations Court
20 December 2021
NMNzioki Wa Makau
2,062 words in judgment
View original judgmentRead on Kenya Law Watch case
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The bottom line

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Kenya's Employment Court refused to stop a former employer from selling a worker's house over a loan dispute, saying the Land Court must handle it.

What this practically means

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Executive summary

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The Claimant, a former employee of the Respondent, filed a Notice of Motion dated 26th August 2020 seeking interim relief arising from loan facilities granted by his former employer: a prohibitory order restraining recall of the entire debt on his house loan, staff personal loan and car loan; an order compelling discharge of the Respondent's interest in the log book of motor vehicle KCG 265Z; and an injunction restraining sale of his residential house at Phernom Park Estate erected on LR No. 209/21054. He asserted he remained current in repayments, had repaid the car loan and insurance premium finance in full, and that the Respondent's actions were retaliatory, connected to litigation over his alleged constructive dismissal. The Respondent filed a preliminary objection contending the loan disputes were purely commercial and outside the Court's jurisdiction, and grounds of opposition asserting the Applicant was a loan defaulter. The Claimant relied on Mukisa Biscuit and Giella v Cassman Brown; the Respondent relied on National Bank of Kenya v Pipeplastic, Jim Kennedy Kiriro Njeru, and Innocent Enoce Omboko, urging application of the Pre-Dominant Purpose Test. Applying that test, Nzioki Wa Makau J found that the dispute over the attempted forced sale of the house predominantly concerns land and the charge, so jurisdiction lies with the Environment and Land Court. The Court declined jurisdiction over the house and vehicle matters and dismissed the Motion with no order as to costs.

Key legal issues

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01

Whether the ELRC has jurisdiction over disputes arising from employer-granted loan facilities after termination of employment

Holding

The Court declined jurisdiction over the matters relating to the charge over the residential house and the vehicle discharge, applying the Pre-Dominant Purpose Test and finding the disputes predominantly about land and charges, within the ELC's remit

Reasoning

The Respondent invoked the Pre-Dominant Purpose Test from Innocent Enoce Omboko v County Assembly of Busia, arguing the dominant issues concern land and charges. The Court agreed that the attempt at forced sale of the house and discharge of the vehicle charge are matters for the ELC, which is best placed to deal with charges, and accordingly declined to determine those prayers.

p. 3

Legal principles established

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  • In a transaction involving both land and other goods or services, jurisdiction is determined by the predominant purpose of the transaction

Court orders

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  1. 1.The Motion dated 26th August 2020 is dismissed
  2. 2.No order as to costs

Authorities

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Legislation

  • Employment ActNot specified

Cases cited (8)

  • Samuel Waweru v Geoffrey Muhoro Mwangi
    [2014] eKLR
  • Mukisa Biscuit Manufacturing Co. Ltd v West End Distributors Ltd
    [1969] EA 696
  • John Njuguna Kimunya v Tersiah Wachuka Kimunya & Another
    [2016] eKLR
  • East African Development Bank v Hyundai Motors Kenya Limited
    [2006] eKLR
  • Giella v Cassman Brown
    (1973) E.A 358
  • National Bank of Kenya Ltd v Pipeplastic Sankolit (K) Ltd. & Another
    [2001] eKLR
  • Jim Kennedy Kiriro Njeru v Equity Bank (K) Limited
    [2019] eKLR
  • Innocent Enoce Omboko v County Assembly of Busia & Another
    [2021] eKLR
Jurisdiction invoked
Jurisdiction of the Employment and Labour Relations Court considered vis-à-vis the Environment and Land Court; the court applied the Pre-Dominant Purpose Test and declined jurisdiction over the charge/forced sale issues

Key timeline

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Practical implications

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Frequently asked questions

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Cite this brief

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Cite this brief

Caselaw, "Elias Maundu Makau v I&M Bank Limited [2021] KEELRC 80 (KLR)", Case Analysis (2021). Not stated in judgment. Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2021/80/eng@2021-12-20

Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.