Cosmas Stephen Nabungolo v African Banking Corporation Ltd [2018] KECA 132 (KLR)
The bottom line
#Kenya's Court of Appeal refused to block the auction of a debtor's property, ruling that a bank that can pay damages makes an appeal pointless to preserve.
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 the intended appeal would be rendered nugatory if the temporary injunction is not granted
Key legal issues
#The twin principles for relief under Rule 5(2)(b)
The applicant must demonstrate both that the appeal is arguable and that it would be rendered nugatory if the orders sought are not granted; the principles are summarised in Stanley Kang'ethe Kinyanjui v Tony Ketter & 5 Others.
The Court reiterated the established Rule 5(2)(b) test. Arguability requires only that the appeal is not frivolous, with a single arguable ground sufficing. The nugatory limb is assessed case by case, weighing the conflicting claims of both sides, including whether the situation is reversible or compensable in damages. Both limbs must be satisfied before relief is granted.
Whether the intended appeal was arguable
The intended appeal was arguable; the draft grounds on the judge's application of interlocutory injunction principles and the issuance of final orders at an interlocutory stage were arguable grounds.
Without predetermining the merits, the Court found the draft memorandum raised arguable grounds, notably whether the learned judge failed to apply correctly the principles for granting interlocutory injunctions and whether he issued final orders at an interlocutory stage. An arguable ground need not succeed.
Whether the appeal would be rendered nugatory
The nugatory limb failed: the respondent, a reputable bank, was capable of compensating the applicant in damages if the appeal succeeded, and that contention was not contradicted.
The respondent was executing its statutory power of sale, and the applicant had by implication acknowledged the debt through repayment proposals. The respondent's contention that it could compensate the applicant by damages should the appeal succeed was unrebutted. Damages being an adequate remedy, the appeal would not be rendered nugatory.
Legal principles established
#- An applicant under Rule 5(2)(b) must satisfy both the arguability and the nugatory limbs of the test; failure on either limb is fatal.
- An arguable appeal need not be one that must succeed; a single arguable ground suffices.
- Whether an appeal would be rendered nugatory depends on whether what is sought to be stayed is reversible, or if not, whether damages would reasonably compensate the aggrieved party; a respondent able to pay damages may defeat the nugatory limb.
Court orders
#- 1.Application for temporary injunction pending appeal dismissed
- 2.Costs of the application to the respondent
The bench
#One judgment of the whole court — no separate or dissenting opinions.
- On appeal from
- Environment and Land Court
- Kitale Environment & Land Court Case No. 105 of 2017
- Jurisdiction invoked
- Rule 5(2)(b) of the Court of Appeal Rules
Relief refused
#Temporary injunction restraining the respondent and Igare Auctioneers from selling the applicant's properties pending the intended appeal
The applicant failed to establish the nugatory aspect of the Rule 5(2)(b) test
Costs
The application is accordingly dismissed with costs (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.
For the application under Rule 5(2)(b) of this Court’s Rules to succeed, the applicant must prove both the arguability of the appeal and the nugatory aspect.
The application is accordingly dismissed with costs.
Issues in the judgment
#The advertisement date is inconsistently stated within the judgment: the notice of appeal recites an advertisement at page 41 of the Standard Newspaper of Tuesday 26th June 2018 in prayer (a) but 22nd June 2018 in prayer (b), while paragraph [3] refers to the Standard Newspaper of 26th June 2018.
Key timeline
#Practical implications
#Frequently asked questions
#Cite this brief
#Cite this brief
Caselaw, "Cosmas Stephen Nabungolo v African Banking Corporation Ltd [2018] KECA 132 (KLR)", Case Analysis (2018). Civil Appeal (Application) No. 66 of 2018. Source: https://new.kenyalaw.org/akn/ke/judgment/keca/2018/132/eng@2018-11-15
Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.