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Court of AppealAllowedCivil Appeal (Application) No. 122 of 2006

Paul Odhiambo Edward Gondi v National Bank of Kenya Ltd [2006] KECA 226 (KLR)

Court of Appeal of Kenya
26 May 2006
SBS.E.O. BosirePWP. N. WakiWDW. S. Deverell
950 words in judgment
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The bottom line

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Kenya's Court of Appeal halted the sale of a borrower's property because the High Court had ruled on a counterclaim the Bank never filed.

What this practically means

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Executive summary

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This is a single-judgment ruling of the Court of Appeal at Nairobi (Bosire, Waki and Deverell JJA) on a Notice of Motion under rules 1(2) and 5(2)(b) of the Court of Appeal Rules by Paul Odhiambo Edward Gondi, seeking stay of execution of, and an injunction pending appeal against, the judgment and decree of Emukule J of the High Court (H.C.C.C. No. 1938 of 2000, dated 13 April 2005) in a suit against the National Bank of Kenya Ltd. The court restated the settled twin test under rule 5(2)(b): the intended appeal must be arguable (not frivolous) and, if not stayed or injuncted, rendered nugatory. On arguability, the Bank's memorandum contained over seventy grounds, but a single arguable issue sufficed - and respondent's counsel conceded as much: the High Court had entered judgment for the defendant, including substantial monetary decrees, despite the Bank having filed no counterclaim. On the nugatory limb, the Bank had issued statutory notice and notification of sale through auctioneers over the applicant's property L.R. Nakuru Municipality Block 5/169, and the court accepted that execution would damage the applicant's business standing in a manner unlikely to be repaired even if the appeal succeeded. The court noted the applicant's willingness to deposit the admitted sum of Kshs. 392,340.20 in escrow but made no order on it, expressly declining to say more since the substantive appeal was unheard. The application was allowed in full: execution stayed and an injunction issued restraining sale of the property, both pending Nairobi Civil Appeal No. 271 of 2005, with costs of the application to be in the appeal. The decision below was not disturbed; the High Court judgment remains in place but its execution is suspended. As an interlocutory ruling it does not finally determine the appeal.

Questions the Court framed

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

  1. 1.Whether the intended appeal (Nairobi Civil Appeal No. 271 of 2005) is arguable and not frivolous
  2. 2.Whether the appeal would be rendered nugatory if stay of execution and injunction were not granted

Key legal issues

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01

Arguability of the intended appeal

Holding

The appeal raised at least one arguable issue: the High Court entered judgment for the defendant on a counterclaim the defendant never filed, despite finding the plaintiff had failed substantially in its suit.

Reasoning

The court found the superior court concluded the plaintiff failed substantially, yet proceeded to enter judgment for the defendant in terms including a payment of Kshs. 4,150,000 and Kshs. 393,537.20, even though the Bank had filed no counterclaim. Counsel for the respondent conceded the issue was arguable. A single arguable ground is enough at the interlocutory stage.

p. 1
02

Nugatory value of the intended appeal

Holding

The nugatory test was satisfied: the Bank intended to sell the applicant's Nakuru property, and execution would cause embarrassment to the applicant's business standing unlikely to be erased even if the appeal succeeded.

Reasoning

The Bank had issued a 45-day statutory notice and notification of sale through auctioneers for L.R. Nakuru Municipality Block 5/169. The court accepted counsel's submission that the applicant's business standing would suffer irreparably, and held the second limb of the rule 5(2)(b) test satisfied, warranting both stay and injunction.

p. 2

Legal principles established

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  • An application under rule 5(2)(b) requires the applicant to satisfy two conditions: that the intended appeal is arguable (not frivolous), and that it would be rendered nugatory if stay or injunction is not granted; a single arguable issue suffices.

Court orders

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  1. 1.Stay of execution of the decree of Emukule J dated 13th April 2005 in H.C.C.C. No. 1938 of 2000 pending hearing and final determination of Nairobi Civil Appeal No. 271 of 2005
  2. 2.Injunction restraining the National Bank of Kenya Limited, its servants, agents, advocates or auctioneers from advertising for sale, selling by public auction or private treaty or otherwise the applicant's property L.R. Nakuru Municipality Block 5/169 pending the hearing and final determination of Nairobi Civil Appeal No. 271 of 2005
  3. 3.Costs of and incidental to the application to be in the appeal

The bench

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

SB
majority
PW
majority
WD
majority
On appeal from
High Court of Kenya at Nairobi (Milimani Commercial Courts)
H.C.C.C. No. 1938 of 2000
Jurisdiction invoked
Rules 1(2) and 5(2)(b) of the Court of Appeal Rules

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.

It is now well settled that the original and discretionary jurisdiction bestowed upon this Court by rule 5(2)(b) of the Rules requires us to satisfy ourselves that the intended appeal is arguable or, in other words, not frivolous.
p. 1Rule 5(2)(b) - twin test
At this stage it will be sufficient to satisfy the issue as to the arguability of the appeal if there is only a single arguable issue raised.
p. 1Arguability threshold
The execution of the Decree of the Hon. Mr. Justice Emukule J. dated 13th April 2005 in H.C.C.C. No 1938 of 2000 be and is hereby stayed pending the hearing and final determination of Nairobi Civil Appeal No. 271 of 2005.
p. 2Final orders - stay of execution
An injunction be and is hereby issued restraining the National Bank of Kenya Limited, whether by itself or its servants or agents, or advocates or auctioneers or any of them from advertising for sale, selling by public auction or private treaty or otherwise howsoever the applicant’s property known as L.R. Nakuru Municipality Block 5/169 Nakuru Town pending the hearing and final determination of Nairobi Civil Appeal No. 271 of 2005.
p. 2Final orders - injunction

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, "Paul Odhiambo Edward Gondi v National Bank of Kenya Ltd [2006] KECA 226 (KLR)", Case Analysis (2006). Civil Appeal (Application) No. 122 of 2006. Source: https://new.kenyalaw.org/akn/ke/judgment/keca/2006/226/eng@2006-05-26

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