Acres and Homes Ltd v Insurance Company of East Africa Ltd [2011] KECA 276 (KLR)
The bottom line
#The Court of Appeal refused to protect a property buyer who paid only a deposit, confirming that injunctions pending appeal require proving both an arguable appeal and real risk of wasted success.
What this practically means
#Executive summary
#Questions the Court framed
#The issues the Court set itself to decide, in its own words.
- 1.Whether the intended appeal is arguable
- 2.Whether, if the appeal succeeded, its success would be rendered nugatory unless an injunction pending appeal is granted
Key legal issues
#Threshold for grant of injunction pending appeal under rule 5(2)(b) of the Court of Appeal Rules
The application failed because the applicant could not show an arguable intended appeal; where that threshold is not met, the nugatory aspect need not be considered.
The court restated the settled twin principles: an applicant must show the appeal is arguable and that its success would be rendered nugatory absent the order. The applicant's own conduct - failure to complete payment within the agreed and extended completion periods, non-payment of any money beyond the 10% deposit, and default on proposed variation instalments - meant the intended appeal had no arguable basis. The High Court's finding that the applicant, not the vendor, was in breach was not shown to be wrong.
Whether the variation of the sale agreement and the withdrawal of the completion notice defeated the respondent's rescission
On the material, the applicant had not honoured the terms of the proposed variation, and there was no basis to hold the intended appeal on that question arguable.
The applicant argued that the respondent's agreement to a deed of variation withdrew the completion notice by operation of law and conduct. The court traced the correspondence: the completion date had already been extended to 19th August 2009 and passed; the proposed supplementary agreement required payments which the applicant never made, citing financing difficulties. The applicant, apart from the 10% deposit, had paid nothing. Its assertion of readiness and willingness to perform was contradicted by the facts.
Legal principles established
#- An applicant under rule 5(2)(b) must establish both that the appeal or intended appeal is arguable and that, if successful, the appeal would be rendered nugatory unless the injunction or stay is granted; satisfying one condition alone is not enough.
Court orders
#- 1.The application dated 21st October, 2010 is dismissed with costs
The bench
#One judgment of the whole court — no separate or dissenting opinions.
Wrote the judgment
Wrote the judgment
Wrote the judgment
- On appeal from
- High Court of Kenya at Nairobi
- H.C.C.C. No. 22 of 2010
- Jurisdiction invoked
- Rule 5(2)(b) of the Court of Appeal Rules
Relief refused
#Order of injunction pending the hearing and determination of the intended appeal restraining the respondent from advertising for sale, leasing, mortgaging or otherwise dealing with L.R. No. 7788/7 I.R. 12137 Rosslyn Green Estate, Nairobi
The applicant failed to satisfy the twin requirements of rule 5(2)(b): the intended appeal was found to be unarguable, and one limb alone is insufficient
Costs
The application was dismissed with costs to the respondent.
Quotable passages
#Verbatim from the judgment, each located to the page it appears on in the official PDF — so these can be cited and checked directly.
The principles which guide the court in an application under rule 5(2)(b) are now well settled. For an applicant to succeed he must show that his appeal or intended appeal is not only arguable, but also that unless he is granted an injunction or stay as the case may be, and he were eventually to be successful in that appeal, that success would be rendered nugatory
Satisfying one condition without the other is not enough.
That being our view of the matter we find no basis for holding that the applicant’s intended appeal is arguable.
In the result, the application dated 21st October, 2010 fails and it is accordingly dismissed with costs.
Issues in the judgment
#The judgment states the sale agreement was dated 31st October, 2008 in one passage but 31st December, 2008 in a later passage.
Key timeline
#Practical implications
#Frequently asked questions
#Cite this brief
#Cite this brief
Caselaw, "Acres and Homes Ltd v Insurance Company of East Africa Ltd [2011] KECA 276 (KLR)", Case Analysis (2011). Civil Application No. Nai. 245 of 2010 (UR 175/2010). Source: https://new.kenyalaw.org/akn/ke/judgment/keca/2011/276/eng@2011-04-13
Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.