A Fly540 aircraft/ Fly540.com
NAIROBI, Kenya Feb 4- Environmental and Land Court judge James Olalo has declined to stop auctioneers from selling property belonging to Fly540 Chief Executive Officer over a Sh678.7 million debt.
Donald Smith Earle- who runs Fly540 and a fellow investor risk losing prime properties in Malindi that include cottages and a restaurant
The ruling by Judge James Olola means that William Auctioneers are at liberty to begin auctioning the CEO’s assets.
The judge dismissed the case filed by Earle and his investment partner, Sonal Smith even after finding that the court had jurisdiction to hear and determine the dispute.
“The suit as filed is defective and misconceived. The same is struck out,” said justice Olola.
The judge said that though the plaintiffs had raised serious issues that required the attention of the court, they could not be heard because of failing to obtain the leave of the court before filing the case.
The plaintiffs filed the case back in 2020, asking the court to declare that they did not owe Chase Bank Sh678.7 million.
The two investors sued Kenya Deposit Insurance Corporation (KDIC) which acted as the bank’s receiver as well as William Auctioneers.
They wanted the defendants permanently barred from advertising and offering for sale or selling their properties.
Earle and his partner also asked the court for an order compelling KDIC to discharge original title deeds for the two properties, arguing that they might have been fraudulently used as security without their knowledge.
“The plaintiffs pray for an order of injunction restraining the defendants from selling the suit properties either through a public auction, private treaty, or in any manner whatsoever pending the hearing and determination of the suit,” they said.
They also wanted the court to order the corporation to release $1 million in addition to accrued interest, which they claimed is being held by Chase Bank.
According to KDIC, the dominant issues in this case that needed determination were whether the plaintiffs fully settled the loan advanced to them by the bank on account of a contractual relationship between a lender and borrower, and if not, how much would be a just and legal amount still owed.
In response, the plaintiffs denied that they had charged the suit properties to the bank on account of a loan advanced to Messrs Five Forty Aviation Ltd (Earle’s company).
They told the court that they use the two properties as their rural home and that they had developed a cottage and family restaurant, which if sold as proposed by the defendants would cause them grave and irreparable loss.
They wanted the title deeds discharged arguing that they might have been fraudulently used as security without their knowledge.
