Capital Realty Limited v Housing Finance & another [2020] KEHC 3209 (KLR)

Facts

The Plaintiff, Capital Realty Limited, sought a loan from the 1st Defendant, Housing Finance, to develop a parcel of land into 76 Town Houses. The 1st Defendant agreed to advance loans and charge the land as collateral. The Plaintiff entered into agreements with third parties to sell the Town Houses, which the 1st Defendant later sought to sell through a statutory power of sale.

Issues

1. Whether the Plaintiff sold the Town Houses with the knowledge, consent, and authority of the 1st Defendant.
2. Whether the third parties acquired a legal and/or equitable interest in the suit premises.
3. Whether the 1st Defendant is estopped from denying the subsequent sales.
4. Whether the third parties were privy to the terms of the Loan and Escrow Agreements.

Reasoning

The Court found that the Plaintiff entered into agreements with third parties to sell the Town Houses, which were necessary to complete the project. The 1st Defendant's failure to raise objections in a timely manner and its subsequent reneging on the transactions caused irreparable harm to the third parties.

Outcome

The Court granted an injunction to prevent the 1st Defendant from exercising its statutory power of sale.

Authorities cited