A long-running dispute over a property in Mombasa claimed to be a matrimonial home came to an end after the Court of Appeal upheld a ruling that effectively extinguished the legal challenge against a bank’s intended auction of the property.
The case, centred on allegations by one, Fatma Hassan Hadi, that her husband had charged their matrimonial home to Diamond Trust Bank Kenya Limited, court records show.
She claimed this was done without her knowledge or consent, in violation of land and matrimonial property laws.
At the heart of the dispute was the plot at Mainland North in Mombasa, a property Fatma said she and her husband, Khalil Hud Ahmed, had purchased in 2008 and used as their family home.
According to her case, she only became aware in May 2019 that the property was set to be sold by public auction scheduled for June 14, 2019.
The announcement, published in a newspaper, triggered her move to court seeking urgent orders to stop the sale.
She argued that the property had been used as a matrimonial home and that the bank had accepted it as security for a loan without obtaining her spousal consent.
"She (Fatma) averred that she had never been shown a copy of the charge instrument nor informed of the appellant’s (bank) decision to charge the matrimonial home," the judgement states.
She said this was contrary to the provisions of the Land Act, the Land Registration Act, and the Matrimonial Property Act.
Fatma asked the Environment and Land Court to declare the charge illegal, null and void, and to permanently restrain Diamond Trust Bank from auctioning or otherwise disposing of the property.
"A permanent injunction restraining the appellant from auctioning, selling, transferring, disposing of, or otherwise dealing with the suit property; and for costs of the suit," states the ruling in further orders sought.
In response, the bank opposed the application, arguing that the dispute had been filed in the wrong court.
It contended that the matter was essentially a commercial banking dispute that should have been handled by the High Court rather than the Environment and Land Court.
"In its ruling dated 13th November 2019, the ELC found that the suit was properly before the court and proceeded to grant the orders of injunction as sought," the documents show, despite the objection raised.
The bank, dissatisfied with the ruling, appealed to the Court of Appeal.
While that appeal was pending, the bank filed a defence and counterclaim, maintaining that the charge was valid and enforceable because the necessary spousal consent had been obtained.
The bank further argued that the charge was valid and enforceable and that it was entitled to exercise its statutory power of sale due to default in repayment.
However, the turning point in the dispute came in June 2022, when the Court of Appeal delivered a decisive judgment.
The appellate court held that the Environment and Land Court had no jurisdiction to entertain the dispute in the first place.
As a result, it set aside the ELC’s earlier orders and struck out both the suit and the injunction that had stopped the auction.
That ruling effectively collapsed the foundation of Fatma’s case, although further procedural issues later emerged at the ELC regarding the fate of the bank’s counterclaim.
Following the Court of Appeal’s decision, the ELC proceeded to close the file in November 2022 on the basis that the main suit had been struck out.
However, one of the defendants (Godfrey Mutubia) challenged that closure, arguing that the counterclaim had not been determined and should remain alive for hearing.
In July 2023, the ELC agreed with that argument and reviewed its earlier order, reopening the file and directing that the preliminary objection on the counterclaim be heard.
The court reasoned that the counterclaim was independent and could still be sustained despite the striking out of the main suit.
Diamond Trust Bank returned to the Court of Appeal challenging that decision.
In its latest judgment delivered in Mombasa in May 2026, the appellate court overturned the ELC ruling, holding that once a court is found to have lacked jurisdiction, all proceedings arising from that suit become a nullity in law.
The court stated that the earlier finding that the ELC lacked jurisdiction meant there was no valid suit capable of sustaining any counterclaim or further proceedings.
It further held that the trial court had no legal basis to reopen the matter or treat the counterclaim as surviving independently.
“The implication of the Court of Appeal’s earlier judgment was that the Environment and Land Court had no jurisdiction to entertain any further proceedings founded on the incompetent suit,” the judges held, adding that any reliance on procedural rules to sustain the counterclaim was misplaced.
The appellate court emphasised the long-standing legal principle that where proceedings are void for want of jurisdiction, nothing valid can arise from them.
It concluded that both the suit and the counterclaim could not stand once jurisdiction had been found to be lacking.
As a result, the Court of Appeal allowed Diamond Trust Bank’s appeal, set aside the ELC ruling that had reopened the file, and effectively brought the matter to a close.
