John Kiprgut Kurgat t/a Jophik Enterprises v Guaranty Trust Bank (Kenya) Ltd & another [2020] KECA 785 (KLR)
The bottom line
#Kenya's Court of Appeal refused to stop a bank from selling charged land, confirming that merely disputing the debt amount is not enough for an injunction.
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 Court of Appeal should interfere with the trial court's exercise of discretion in declining the interlocutory injunction
- 2.Whether the chamber summons application dated 19th May 2015 was res judicata in light of the earlier application determined by Munyao, J
- 3.Whether the appellant, not being the registered owner of the suit property, had locus standi to apply for the injunction
- 4.Whether the appellant established a prima facie case with a probability of success, including on the validity of the statutory notice and notification of sale
- 5.Whether the application for an order of accounts should have been granted
Key legal issues
#Interference with discretionary decisions on appeal
The Court of Appeal will not interfere with the trial court's exercise of discretion merely because it would have reached a different conclusion; interference is limited to the five established grounds.
In an interlocutory appeal on an injunction pending trial, the trial court exercises judicial discretion. Following Lucy Wangui Gachara v Minudi Okemba Lore and United India Insurance Co. Ltd v East African Underwriters, the appellate court may only intervene where the judge misdirected himself in law, misapprehended the facts, took into account irrelevant considerations, failed to take account of relevant considerations, or where the decision is plainly wrong.
Res judicata
The application was res judicata; the same parties had litigated the same question of the 1st respondent's statutory power of sale in the earlier application decided by Munyao, J, and no special circumstances justified departure.
It was not disputed that an earlier application seeking similar orders had been dismissed by Munyao, J. The appellant contended the respondents were not parties to the earlier application, but the record showed the 1st respondent was the 1st defendant and the appellant the 2nd defendant. The substance of both applications concerned the exercise of the statutory power of sale. The Wafubwa exception for special circumstances was found inapplicable.
Locus standi of a non-registered owner seeking an injunction
Non-registration of the applicant as owner of the property does not, of itself, defeat locus; an applicant for an interlocutory injunction need not establish title, only a right apparently threatened with violation.
Relying on Nguruman Limited v Jan Bonde Nielsen, the court held that at the interlocutory stage the court only asks whether on the face of it the applicant has a right threatened with violation, proved on a balance of probabilities. Title need not be established. However, this did not assist the appellant because he otherwise failed to satisfy the triple test.
Prima facie case and validity of the statutory notice
The appellant failed to establish a prima facie case with a probability of success: the statutory notice was not defective, there was no evidence the property was matrimonial property, and a dispute over the amount owed does not warrant an injunction.
Applying Mrao Ltd v First American Bank of Kenya Ltd, a prima facie case requires more than an arguable case - evidence of an infringement of a right and a probability of success at trial. The record showed the chargee had a valid interest and was realising its security in line with the charge. The repayment claim and the challenge to interest charges were matters for the trial court.
Legal principles established
#- An appellate court will not interfere with a discretionary decision of the trial court unless the judge misdirected himself in law, misapprehended the facts, took into account or failed to take into account relevant considerations, or the decision is plainly wrong.
- An applicant for an interlocutory injunction need not establish title to the property; it is enough that he shows a fair and bona fide question as to the existence of the right alleged, proved on a balance of probabilities.
- A mere dispute as to the amount owed does not, by itself, justify an order of injunction restraining the exercise of a chargee's statutory power of sale.
- The doctrine of res judicata applies where the matter is directly and substantially in issue in a previous suit between the same parties litigating under the same title and finally decided, and departure is only permissible in special circumstances.
Court orders
#- 1.Appeal dismissed with costs to the respondents
- 2.Orders issued as proposed by J. Mohammed, JA
The bench
#One judgment of the whole court — no separate or dissenting opinions.
Wrote the judgment
Wrote the leading judgment. Held that an appellate court will not interfere with a trial judge's exercise of discretion except on limited grounds; that the chamber summons application was res judicata, the parties and subject matter being the same as in an earlier application decided by Munyao, J, with no special circumstances justifying departure; that the appellant, though not the registered owner, was not automatically barred from seeking an injunction, but he failed to establish a prima facie case, as the statutory notice was not shown to be defective and a mere dispute over the amount owed does not justify an injunction; the application for taking accounts was best left to the trial court. Appeal dismissed with costs.
In the result, I am satisfied that the trial court exercised its jurisdiction properly and reached the proper conclusion. I therefore decline the appellant's invitation to interfere with the learned Judge's decision. The appeal is hereby dismissed with costs to the respondents.p. 4
Wrote the judgment
Concurred with the leading judgment of J. Mohammed, JA, agreeing that the trial Judge properly exercised his discretion in declining the injunction and that the appeal should be dismissed with costs; the orders were as proposed by J. Mohammed, JA.
I concur that this appeal should be dismissed with costs.p. 5
- On appeal from
- Environment and Land Court of Kenya at Eldoret
- Eldoret ELC 431 of 2013
- Jurisdiction invoked
- First appeal to the Court of Appeal under Rule 32(3) of the Court Rules (Court of Appeal Rules); first appellate jurisdiction over a decision of the Environment and Land Court
Relief refused
#Interlocutory injunction restraining sale, transfer or interference with the suit property
The application was res judicata and the appellant failed to establish a prima facie case with a probability of success; the statutory notice was not shown to be defective
Order for taking of accounts of payments made to the 1st respondent
The allegations of improper charging of interest and any overpayment are matters for the trial court where the appellant can lay out his evidence
Costs
The appeal was 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.
The appeal is hereby dismissed with costs to the respondents.
I therefore decline the appellant's invitation to interfere with the learned Judge's decision.
an appellate court will not interfere with the exercise of discretion by the trial court, even if, in the shoes of the trial court, it would have come to a different conclusion.
we are satisfied that the trial court did not err in finding that the issues raised in the application were res judicata.
an applicant in an interlocutory application for injunction does not need to establish title to the property.
This Court has held that a dispute in the amount owed is not enough to grant an order of injunction
Issues in the judgment
#The coram lists three judges (Githinji, Okwengu & J. Mohammed, JJ.A) and the judgment refers to 'we/our', but the certified copy in the record contains only the judgment of J. Mohammed, JA and a concurring judgment of Okwengu, JA; no separate judgment by Githinji, JA appears.
The application is inconsistently dated in the judgment - first described as dated 19th May 2005, later as dated 19th May 2015.
The trial Judge's name is inconsistently spelled as 'Ombwayo' and 'Ombwayo/Ombwayo' versus 'Ombwayo' in the memorandum of appeal and 'Omwbayo' in the body.
Key timeline
#Practical implications
#Frequently asked questions
#Cite this brief
#Cite this brief
Caselaw, "John Kiprgut Kurgat t/a Jophik Enterprises v Guaranty Trust Bank (Kenya) Ltd & another [2020] KECA 785 (KLR)", Case Analysis (2020). Civil Appeal No 46 of 2016. Source: https://new.kenyalaw.org/akn/ke/judgment/keca/2020/785/eng@2020-04-03
Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.