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Court of AppealDismissedCivil Appli 270 of 2009 (UR 187/2009)

Peter G. N. Nganga v Daniel Gichanga Kariuki t/a Watts Enterprises (A Firm) & another [2009] KECA 11 (KLR)

Court of Appeal of Kenya
11 December 2009
2,870 words in judgment
View original judgmentRead on Kenya Law Watch case
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·~11 min to read original · ~4 min brief

The bottom line

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Kenya's Court of Appeal refused to stop a bank selling charged land because the applicant could recover the land's value in damages.

What this practically means

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Executive summary

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This was a single-judge-application ruling by a three-judge bench of the Court of Appeal at Nairobi under rule 5(2)(b) of the Court of Appeal Rules, seeking an injunction restraining the National Bank of Kenya and an auctioneer from selling charged land parcel Kajiado/Olooloitikoshi/Kitengela/2913 pending the hearing of Civil Appeal No. 140 of 2007, which challenged a ruling of Kasango J of 5 February 2007 dismissing the applicant's notice of motion in HCCC No. 40 of 2003. The court recited a protracted history: a 1994 charge securing a loan to Olympic Fruit Processors Ltd guaranteed by the applicant; dismissal of the bank's 1999 debt suit (HCCC No. 390 of 1999) for want of prosecution by Ondeyo J in 2003; the applicant's 2003 suit seeking declarations that the bank's power of sale had not crystallised; Ringera J's dismissal of the initial injunction application; a withdrawn appeal (Civil Appeal No. 55 of 2003); Ochieng J's 2005 dismissal of a further application (under appeal as Civil Appeal No. 1 of 2006); and finally Kasango J's 2007 dismissal. Applying the settled twin test, the court reluctantly accepted arguability but held the nugatory limb unsatisfied: the applicant had turned the property over to the commercial sector as security, could recover its value and damages from a reputable, asset-rich bank if the appeal succeeded, and claimed no sentimental attachment. The application was dismissed with no order as to costs.

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, Civil Appeal No. 140 of 2007, is arguable
  2. 2.Whether, if the orders sought are not granted, the success of the intended appeal would be rendered nugatory

Key legal issues

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01

Whether the twin tests for an injunction pending appeal under rule 5(2)(b) were satisfied

Holding

The court gave the applicant the benefit of the doubt on arguability but refused the injunction because the nugatory limb failed: any loss is recoverable in damages from a reputable, asset-rich bank

Reasoning

The court traced a history of serial interlocutory applications aimed solely at restraining the bank from selling the charged property. It found the appeal arguably arguable but held that the applicant, having used the property as commercial security for a third party's loan, could claim the property's value and damages if the appeal succeeded. He never asserted the bank could not reimburse him, nor any sentimental attachment, so refusal would not render success nugatory.

p. 4

Legal principles established

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  • An applicant under rule 5(2)(b) must demonstrate, first, that the appeal or intended appeal is arguable, and second, that if the orders sought are not granted, the success of the appeal, should it succeed, will be rendered nugatory

Court orders

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  1. 1.The notice of motion dated 31st August 2009 seeking an injunction pending appeal is dismissed
  2. 2.No order as to costs

The bench

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

majority
majority
On appeal from
High Court of Kenya at Milimani
H.C.C.C. No. 40 of 2003
Jurisdiction invoked
Rule 5(2)(b) of the Court of Appeal Rules

Relief refused

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Injunction restraining the respondents from selling, disposing of, transferring, alienating, offering for sale, charging or otherwise interfering with the suit property pending the outcome of Civil Appeal No. 140 of 2007 (with alternative relief to like effect)

Although the court reluctantly found the appeal arguable, the applicant failed to establish that the appeal's success would be rendered nugatory, since he could recover the value of the property and damages from the bank, an asset-rich institution, and had shown no sentimental attachment to the property

p. 4

Costs

No order as to costs - each party to bear their own costs of the application

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.

For an applicant to benefit under that rule he must demonstrate, first that the appeal or intended appeal upon which that application is premised is arguable and second, that if the orders sought are not granted, the success of that appeal, should it succeed, will be rendered nugatory.
p. 3Twin test for injunction pending appeal under rule 5(2)(b)
we are not persuaded that if the application is refused, the success of the appeal will be rendered nugatory.
p. 4Failure of the nugatory limb
That being our view of the matter, this application cannot succeed. It is dismissed. However, in the circumstances of this dispute, we make no order as to costs.
p. 4Disposition and costs

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, "Peter G. N. Nganga v Daniel Gichanga Kariuki t/a Watts Enterprises (A Firm) & another [2009] KECA 11 (KLR)", Case Analysis (2009). Civil Appli 270 of 2009 (UR 187/2009). Source: https://new.kenyalaw.org/akn/ke/judgment/keca/2009/11/eng@2009-12-11

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