Gacheru v Family Bank Limited (Civil Application E387 of 2024) [2024] KECA 1605 (KLR)
The bottom line
#The Court of Appeal stopped a bank from auctioning a family home, holding that unconsented, unregistered additional loans raise serious questions worth a full appeal.
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 injunction is not granted, the appeal will be rendered nugatory
Key legal issues
#Arguability of the intended appeal
The grounds that the top-up facility was advanced without the applicant's knowledge or consent, that fraud was alleged, and that no charge instrument was executed or registered for the additional Kshs.3,500,000/- are not frivolous and deserve ventilation on appeal.
The Court applied the settled test that it is sufficient if a single bona fide arguable ground is raised, and that an arguable appeal is one that is not frivolous and ought to be argued fully before the court. On the material, the questions of consent to the further advance, alleged fraud, and non-registration of a further charge were bona fide issues meriting full argument.
Whether the appeal would be rendered nugatory
Because the exercise of the statutory power of sale would dispossess the applicant of his family home and transfer it to third parties, the appeal would be rendered nugatory if it succeeded after the sale.
The Court adopted the broader meaning of 'nugatory' as extending beyond worthless to trifling, and asked whether what is sought to be stayed is reversible or compensable in damages. Since a sale would transfer the property to third parties and the family would suffer eviction and relocation, the harm would not be adequately remedied by damages, satisfying the second limb.
Legal principles established
#- Under Rule 5(2)(b), an applicant must satisfy the twin principles of arguability of the intended appeal and that the appeal will be rendered nugatory if the order is not granted; once both are satisfied, the relief follows.
- The Rule 5(2)(b) jurisdiction is original, independent and discretionary, but must be exercised judiciously and rationally.
- An arguable appeal is not one that must necessarily succeed, but one that is not frivolous and ought to be argued fully; a single bona fide arguable ground suffices.
- On nugatory-ness, where the sale of property will transfer it to third parties and dispossess the aggrieved party of a family home, the appeal will be rendered nugatory even though damages might in theory be available.
Court orders
#- 1.Application allowed; injunction restraining realization of the security by public auction pending the filing, hearing and determination of the intended appeal
- 2.Costs of the application to abide the outcome of the appeal
The bench
#One judgment of the whole court — no separate or dissenting opinions.
- On appeal from
- High Court
- Civil Suit No. E480 of 2024
- Jurisdiction invoked
- Rule 5(2)(b) of the Court of Appeal Rules
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.
Our jurisdiction under Rule 5 (2) (b) is original, independent, and discretionary. It must however, be exercised judiciously and rationally, and not out of impulsiveness or sympathy.
The discretion of this court under Rule 5(2)(b) to grant a stay or injunction is wide and unfettered provided it is just to do so.
In our considered view, these grounds are not frivolous. They deserve a chance to be ventilated on appeal.
It does not only mean worthless, futile or invalid. It also means trifiing as was stated in Reliance Bank Ltd v Norlake Investments Ltd [2002] 1 EA 227 at page 232.
In the end, we find that the applicant has satisfied the twin principles as required under Rule 5 (2) (b) of this Court’s rules. We therefore allow the application and order that the costs of the application abide the outcome of the appeal.
Issues in the judgment
#The judgment does not name the respondent in full anywhere in the text; the respondent is referred to only generically and by the deponent Sylvia Wambani, though the firm Mutua Waweru & Company Advocates appears for it.
Key timeline
#Practical implications
#Frequently asked questions
#Cite this brief
#Cite this brief
Caselaw, "Gacheru v Family Bank Limited (Civil Application E387 of 2024) [2024] KECA 1605 (KLR)", Case Analysis (2024). Civil Application (Rule 5(2)(b)) arising from Civil Suit No. E480 of 2024. Source: https://new.kenyalaw.org/akn/ke/judgment/keca/2024/1605/eng@2024-11-08
Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.