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Court of AppealDismissedCivil Application No. 13 of 2010· [2010] KECA 305 (KLR)

Al Jalal Enterprises Limited v Nic Bank Limited & 1 other

Court of Appeal
30 April 2010
2,019 words in judgment
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The bottom line

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Kenya's Court of Appeal refused to stop bank receivers who had already taken over a property, because the company waited too long to file its injunction application.

What this practically means

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Executive summary

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The applicant, Al Jalal Enterprises Limited, moved the Court of Appeal under rule 5(2)(b) of the Court of Appeal Rules seeking an injunction restraining receivers appointed on 24th November 2009 from taking over and managing the applicant company and its assets, pending an intended appeal against a ruling of Kimaru, J. delivered on 22nd January 2010 in H.C.C.C. No. 738 of 2008. That ruling had dismissed the applicant's application to set aside a consent order, adopted by the High Court on 24th November 2009, under which Chege Waiganjo and Nduati Warui were appointed joint receivers over the suit property, a commercial building in Eastleigh secured for a loan from NIC Bank Limited. The applicant argued the consent was fraudulently secured by its former advocate and complained that the receivers moved in despite the application being certified urgent; the respondents countered that the receivers took possession lawfully under the consent order and that the prayers were overtaken by events. The court found the intended appeal arguable on the fraud question, but held that the temporary orders of 17th December 2009 had been set aside by the judge's ruling of 22nd January 2010, leaving the receivers free to move in pursuant to the consent order. Since the receivers had already taken possession before the application was filed and no restraining order was in place, the court could not enjoin acts already completed. Distinguishing Haircare Beauticians Ltd, and applying Madhupaper International Ltd v Kerr, the court dismissed the application with costs to the respondent.

Key legal issues

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01

Whether the intended appeal was arguable

Holding

The court found the intended appeal arguable because the main issue would be whether the consent order was fraudulently secured.

Reasoning

The court applied the first limb of the rule 5(2)(b) test. It observed that the principal question to be argued on appeal was whether the consent under which the receivers were appointed was fraudulently secured, and held that this constitutes an arguable issue, even though the applicant ultimately failed on the nugatory/timing limbs.

p. 3
02

Whether the injunction could be granted against the receivers

Holding

The injunction was refused because the receivers had already lawfully taken possession pursuant to the consent order adopted by the High Court, after the temporary orders of 17th December 2009 were set aside.

Reasoning

The court found that the temporary orders obtained on 17th December 2009 had been set aside by the ruling of Kimaru, J. on 22nd January 2010, leaving the receivers free and entitled to move in under the consent order. The application was filed on 9th February 2010, when no restraining order was in force. The court distinguished Haircare Beauticians because there the respondent had stolen a match over the process of the court by acting before the application was heard, whereas here the receivers acted under a valid subsisting order.

p. 4
03

Effect of filing an injunction application after the acts sought to be restrained have occurred

Holding

An application for injunction brought after the acts complained of have already taken place is too late and the court cannot grant the relief sought, even if the application might otherwise have merit.

Reasoning

The court held that although the intended appeal raised an arguable issue, the applicant waited until 9th February 2010 to file the application, long after the receivers had moved in pursuant to the consent order. The court reasoned that an injunction cannot issue against what has already taken place, and dismissed the application as having been filed too late for the reliefs to be granted.

p. 4

Legal principles established

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  • An applicant under rule 5(2)(b) must satisfy the court both that the intended appeal is arguable and that the appeal, if successful, would be rendered nugatory unless the order sought is granted.
  • An appellate court cannot issue an injunction against conduct that has already taken place; where receivers have lawfully moved in pursuant to a subsisting consent order, an injunction to restrain that entry will be refused.

Court orders

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  1. 1.The application under rule 5(2)(b) of the Court of Appeal Rules seeking an injunction against the receivers was dismissed
  2. 2.Costs of the application were awarded to the respondent
On appeal from
High Court of Kenya at Nairobi
H.C.C.C. No. 738 of 2008
Jurisdiction invoked
Rule 5(2)(b) of the Court of Appeal Rules (injunction pending filing, hearing and determination of an intended appeal)

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, "Al Jalal Enterprises Limited v Nic Bank Limited & 1 other", Case Analysis (2010). Civil Application No. 13 of 2010. Source: https://new.kenyalaw.org/akn/ke/judgment/keca/2010/305/eng@2010-04-30

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