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Case Brief · caselaw.co.ke
Court of AppealPartially AllowedCivil Appeal (Application) No. 141 of 2009 (UR 95/2009)· [2009] KECA 176 (KLR)

Mwaniki Wa Ndegwa v 1. National Bank of Kenya Ltd 2. Mary Mbuki Mugambi 3. Wamwa Trading Co. Ltd 4. Michael Thairu T/A Spur Hinterland Freight

Court of Appeal of Kenya
25 September 2009
1,656 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 stopped the sale of a Lavington property pending appeal, but only after ordering the owner to keep paying KSh 150,000 monthly into a joint account.

What this practically means

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Executive summary

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This is an interlocutory ruling of the Court of Appeal at Nairobi (Tunoi, Aganyanya and Visram, JJA) on an application under rule 5(2)(b) of the Court of Appeal Rules by Mwaniki Wa Ndegwa, seeking an injunction restraining disposal of L.R. No. 3734/198 Lavington, Nairobi, and a stay of execution of the judgment of Emukule J (High Court, HCCC No. 86 of 2000, dated 4th April 2008), which had dismissed his suit challenging the enforceability of a charge granted to secure credit facilities to him and Mary Mbuki Mugambi. Pending his appeal (Civil Appeal No. 124 of 2008), the bank had sold the property by public auction on 22nd May 2009 to Wamwa/Wauwa Trading Co. Ltd, though a fourth party claimed to have been the highest bidder. Applying the settled rule 5(2)(b) twin tests, the court found, without deciding, that the grounds of appeal - including the extent of a guarantor's liability and the validity of the charge and statutory notices - were arguable, and that the appeal would be rendered nugatory if the property were disposed of before the appeal was heard. The application was allowed but on condition: the applicant was to pay Shs. 150,000 per month into a joint interest-bearing account, failing which the application would stand dismissed. Costs of the application were made costs in the appeal. The decision below was not disturbed; the merits remain for the full appeal.

Key legal issues

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01

Arguability of the intended appeal

Holding

The court was satisfied, without expressing any firm view on the merits, that the grounds of appeal were arguable and not frivolous.

Reasoning

The applicant raised 12 grounds, including the extent of a guarantor's liability to the chargee, the validity of a charge not stating the interest rate, and the validity of certificates under sections 69 and 100A of the Transfer of Property Act. Because the appeal was pending and could be heard at any time, the court refrained from expressing any firm view on the issues but found them arguable from the many angles presented and the rival submissions.

p. 3
02

Whether the appeal would be rendered nugatory

Holding

The appeal would be rendered nugatory if the suit property was disposed of before the disposal of the appeal, though the court noted the bank and the purchaser were the most prejudiced parties and conditioned the relief accordingly.

Reasoning

The property had been auctioned, a memorandum of sale executed and a deposit of Shs. 12,000,000 paid. The applicant remained in occupation earning about Shs. 200,000 monthly rent, and the 4th respondent had bid Shs. 55,000,000. The court reasoned that the bank and purchaser would suffer greater frustration from a multiplicity of endless suits, and balanced this by attaching a monthly-payment condition to the stay and injunction.

p. 3

Legal principles established

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  • An applicant under rule 5(2)(b) must demonstrate that the intended appeal is arguable and that it would be rendered nugatory if the orders sought are not granted; such relief may properly issue on conditions where third parties such as a chargee and auction purchaser would otherwise be prejudiced.

Court orders

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  1. 1.Prayers Nos. 2 and 3 of the amended notice of motion granted, restraining disposal of L.R. No. 3734/198 Lavington and staying execution of the judgment and decree in HCCC No. 86 of 2000 pending determination of Civil Appeal No. 124 of 2008
  2. 2.The applicant to pay Shs. 150,000/- per month with effect from 30th September 2009 into an interest-bearing account to be opened jointly by counsel for the applicant, the 1st respondent and the 3rd respondent
  3. 3.In default of payment of any one instalment the application shall stand dismissed
  4. 4.Costs of the application to be in the appeal
On appeal from
High Court of Kenya at Milimani Commercial Courts
H.C.C.C. No. 86 of 2000
Jurisdiction invoked
Rule 5(2)(b) of the Court of Appeal Rules

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, "Mwaniki Wa Ndegwa v 1. National Bank of Kenya Ltd 2. Mary Mbuki Mugambi 3. Wamwa Trading Co. Ltd 4. Michael Thairu T/A Spur Hinterland Freight", Case Analysis (2009). Civil Appeal (Application) No. 141 of 2009 (UR 95/2009). Source: https://new.kenyalaw.org/akn/ke/judgment/keca/2009/176/eng@2009-09-25

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