Elizabeth Jerono Yator v Consolidated Bank of Kenya Limited & another [2019] KECA 266 (KLR)
The bottom line
#Kenya's Court of Appeal refused to stop the sale of a charged property, confirming sentimental attachment to collateral carries no legal weight.
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 (not frivolous)
- 2.Whether, if the injunction is not granted, the intended appeal would be rendered nugatory
- 3.Whether the applicant's conduct disentitles her to the equitable discretionary relief of an injunction
Key legal issues
#Whether the intended appeal was arguable
The court doubted arguability: the suit in the High Court was between the same parties, over the same property and cause of action as the compromised ELC No. 17 of 2015, and the applicant admitted the debt in writing and never complied with the consent order.
Although the applicant advanced twenty-seven intended grounds, the court held one arguable ground suffices and an arguable appeal need not succeed. Testing the grounds against the uncontested background - the charge securing a loan to Lomson, the default, the earlier suit compromised by consent assigning the debt to the applicant, and her written admission of indebtedness - the grounds would collapse. Omitting Lomson from the second suit did not avoid res judicata.
Whether the intended appeal would be rendered nugatory if the sale proceeded
No - the value of the suit property was known (the applicant herself valued it at Kshs 7,000,000/=) and the 1st respondent was a reputable bank able to pay damages, so any loss could be made good by monetary compensation.
The nugatory limb failed because the property was a commercial commodity of ascertainable value; the chargee was a reputable bank against whom damages could be enforced, and no suggestion was made that it could not pay. Sentimental attachment to a charged home is legally inconsequential.
Whether the applicant's conduct affected her entitlement to equitable injunctive relief
Yes - an injunction is discretionary and equitable, and the applicant's broken promises and non-compliance with the consent order meant her conduct did not inspire confidence.
Because an injunction pending appeal is an equitable and discretionary remedy, the court scrutinises the applicant's conduct before, during and after the proceedings. The applicant defaulted on the consent order she had freely entered into and made representations the respondent characterised as misrepresentations, so she was not worthy of the injunctive reliefs sought.
Whether the High Court determined the main suit at an interlocutory stage
The court observed that the learned Judge, by determining issues at the core of the applicant's suit in an interlocutory ruling, overstepped his mandate, but expressly declined to act on this as it was not a ground raised in the application.
Relying on Deynes Muriithi, a trial court should not issue interlocutory orders couched as final orders or determine the merits of the main suit at an interlocutory stage. The Judge framed and resolved issues (extinguishment of the charge, statutory power of sale) central to the substantive suit. However, the court held this was not a ground raised before it and left it at that, so it formed no basis of the decision.
Legal principles established
#- An applicant under Rule 5(2)(b) must satisfy twin conditions: that the appeal is arguable and that it would be rendered nugatory unless the injunction is granted; a single arguable ground suffices and an arguable appeal need not succeed, only be fit for full argument.
- Once property is charged as security for financial accommodation it becomes a commodity for sale, and sentimental attachment to it is inconsequential; loss on an irregular sale of a property of known value is compensable in damages, defeating the nugatory-ness test.
- A consent judgment or order is a final determination barring re-litigation of the same issues between the same parties or those litigating through them (res judicata).
Court orders
#- 1.Application for injunction pending appeal under Rule 5(2)(b) dismissed
- 2.Costs of the application awarded to the respondents
The bench
#One judgment of the whole court — no separate or dissenting opinions.
- On appeal from
- High Court of Kenya at Eldoret
- H.C.C.C. No. 12 of 2018
- Jurisdiction invoked
- Rule 5(2)(b) of the Court of Appeal Rules, 2010 (injunction pending appeal)
Relief refused
#Injunction restraining the respondents from selling, transferring or alienating ELDORET MUNICIPALITY/BLOCK 9/912 pending the hearing and determination of the intended appeal
The intended appeal was doubtful as to arguability given res judicata and the applicant's conduct, and the appeal would not be rendered nugatory because the known value of the property could be recovered in monetary compensation
Costs
Application dismissed with costs to the respondents
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.
it is trite that the applicant must satisfy two conditions under that rule; which are firstly, that the appeal is not frivolous but arguable, and secondly, that unless the injunction is granted, the appeal is likely to be rendered nugatory.
we are satisfied that the intended appeal will not be rendered nugatory if the injunction sought is not granted.
once a property has been given as security for financial accommodation, it becomes a commodity for sale and therefore the sentimental attachment to the same becomes inconsequential and must be sold in accordance with the law.
The upshot is that we find no merit in the application which is accordingly dismissed with costs to the respondents.
Issues in the judgment
#Date discrepancy: the judgment states the ex-parte injunction was issued 'On the 8th of December 2016' and that the sale was scheduled for 9th December 2016, but elsewhere narrates the applicant rushing to court after the 1st respondent 'instructed the 2nd respondent... to proceed to sell' following default under a consent order said to have been made in ELC No. 17 of 2015 - a case numbered 2015 yet described as compromised by a repayment plan starting 'on or before 31st August, 2013', an internally inconsistent chronology.
The coram lists 'ODEK, JJA' while the signature block reads 'OTIENO-ODEK', creating a slight inconsistency in the judge's name rendering.
Key timeline
#Practical implications
#Frequently asked questions
#Cite this brief
#Cite this brief
Caselaw, "Elizabeth Jerono Yator v Consolidated Bank of Kenya Limited & another [2019] KECA 266 (KLR)", Case Analysis (2019). Civil Application No. 75 of 2019 (UR 53/2019). Source: https://new.kenyalaw.org/akn/ke/judgment/keca/2019/266/eng@2019-10-17
Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.