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Court of AppealDismissedCivil Appeal (Application) No. 45 of 2006

Abdul Kader Abdul Khaliq Said & 4 others v National Bank of Kenya Limited [2006] KECA 202 (KLR)

Court of Appeal of Kenya
16 June 2006
1,046 words in judgment
View original judgmentRead on Kenya Law Watch case
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The bottom line

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Kenya's Court of Appeal refused to protect land already sold at auction, because the buyer never got to be heard.

What this practically means

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Executive summary

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This was an application under Rule 5(2)(b) of the Court of Appeal Rules seeking an injunction to restrain National Bank of Kenya Limited from advertising, selling, transferring, alienating or otherwise disposing of Title Number Eldoret Municipality/Block 3/32 pending the Applicants' intended appeal against the refusal of an injunction by Emukule, J in HCCC No. 42 of 2005. The bank had advanced money to the 5th Applicant secured by a charge over the suit property and sought to exercise its statutory power of sale after default. The High Court had earlier, by a ruling of Ochieng, J dated 5th October 2005, granted an injunction conditional on the Applicants depositing Kshs.4,500,000 with the bank within sixty days, failing which the injunction would stand vacated. The Applicants did not comply, instead appealing against the condition and filing the present motion in February 2006. By then the property had been sold at a public auction on 14th March 2006 to Karuri Mwangi, the highest bidder, who had paid 25% of the bid price. The Court held that the motion had been overtaken by the completed sale, that it could not restrain a sale which had already taken place, and that it could not make an order adverse to the third-party purchaser who had not been served with or heard on the motion. The Court also observed that the Applicants had allowed their conditional order of stay to lapse and could only blame themselves. The motion was dismissed with costs to the Respondent.

Questions the Court framed

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The issues the Court set itself to decide, in its own words.

  1. 1.Whether the Applicants should be granted an injunction restraining the Respondent from advertising, selling, transferring, alienating or disposing of Title Number Eldoret Municipality/Block 3/32 pending the intended appeal
  2. 2.Whether an injunction can issue in respect of property already sold at a public auction to a third party who was not served with or heard on the motion

Key legal issues

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01

Whether an injunction pending appeal can issue over property already sold to an unheard third party

Holding

It cannot; the motion was overtaken by the auction sale and the purchaser, being neither served nor heard, could not be bound by an adverse order

Reasoning

The Court noted that the disputed land was sold at a public auction on 14th March 2006 to Karuri Mwangi, the highest bidder, who paid 25% of the bid price. He was not served with the motion. The Court held it would be unreasonable to restrain a completed sale and unjust to make an order adverse to the purchaser without hearing him.

p. 2
02

Effect of an applicant allowing a conditional injunction/stay to lapse

Holding

An applicant who had an order of stay and allowed it to lapse by non-compliance with its conditions can only blame themselves; they cannot obtain a fresh unconditional injunction on their own terms

Reasoning

Ochieng, J had granted an injunction conditional on depositing Kshs.4,500,000 within sixty days, failing which the injunction would stand vacated. The Applicants did not comply, appealed the condition, and moved the Court of Appeal months after the injunction had vacated. The Court treated their non-compliance and lapsed order as fatal to the motion.

p. 2

Legal principles established

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  • An appellate court cannot grant an injunction to restrain a sale that has already taken place, nor make an order adverse to the interests of a third-party purchaser who has not been served with or heard on the application

Court orders

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  1. 1.The Applicants' notice of motion dated 9th December 2005 and lodged in Court on 20th February 2006 be and is hereby dismissed
  2. 2.Costs of the motion to the Respondent

The bench

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One judgment of the whole court — no separate or dissenting opinions.

majority
majority
majority
On appeal from
High Court of Kenya at Nairobi (Milimani Commercial Courts)
H.C.S.C. No. 42 of 2005
Jurisdiction invoked
Rule 5(2)(b) of the Court of Appeal Rules - application for injunction pending the lodging, hearing and determination of an intended appeal

Relief refused

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Injunction restraining the Respondent from advertising, selling, transferring, alienating or disposing of Title Number Eldoret Municipality/Block 3/32 pending the intended appeal

The property had already been sold at a public auction on 14th March 2006 to a third party who was not served with the motion or heard by the Court; the applicants had also allowed the conditional stay/injunction granted by Ochieng, J to lapse

p. 2

Costs

The motion is dismissed with the costs thereof to the Respondent.

Quotable passages

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Verbatim from the judgment, each located to the page it appears on in the official PDF — so these can be cited and checked directly.

Their motion has been overtaken by the stated sale to a third party and it would be unreasonable for us to restrain a sale which has already taken place.
p. 2Mootness of injunction over completed sale
We cannot make an order adverse to his interest without hearing what he has to say.
p. 2Natural justice - third-party purchaser not heard
In any case the applicants had an order of stay and having allowed it to lapse, they can only blame themselves.
p. 2Consequence of allowing conditional stay to lapse
that the Applicants' notice of motion dated 9th December, 2005 and lodged in Court on 20th February, 2006 be and is hereby dismissed with the cost thereof to the Respondent.
p. 3Final orders - dismissal with costs

Issues in the judgment

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minor

The judgment refers to the motion as dated 9th December, 2005 in the final order, though the ruling's opening describes the notice of motion without stating its date; minor internal inconsistency in dates within the judgment text

minor

The reference to the High Court ruling date appears as 'dated 17th 2005' (day of month missing) in the header, though the body states 17th June, 2005

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, "Abdul Kader Abdul Khaliq Said & 4 others v National Bank of Kenya Limited [2006] KECA 202 (KLR)", Case Analysis (2006). Civil Appeal (Application) No. 45 of 2006. Source: https://new.kenyalaw.org/akn/ke/judgment/keca/2006/202/eng@2006-06-16

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