Githunguri v Jimba Credit Corporation Ltd
The bottom line
#Kenya's Court of Appeal confirmed it can block a property sale pending appeal, but only if the appeal is arguable and the property owner pays something.
What this practically means
#Executive summary
#Key legal issues
#Nature of the Court of Appeal's jurisdiction under rule 5(2)
The jurisdiction arises once a notice of appeal is lodged under rule 74 and is an independent original discretion, not an appellate review of the judge's discretion.
The court rejected counsel's submission that it could interfere only if the judge misdirected himself. It held that rule 5(2) clothes the Court with discretion to grant a stay, injunction or stay of proceedings on such terms as it thinks just, to be exercised de novo.
Whether the intended appeal was arguable
The applicant showed prima facie serious questions of law, including on the construction of section 10 of the Banking Act, variation of the charge, consolidation of loans, and the adequacy of statutory notice under section 69A of the Transfer of Property Act.
The court considered four contentions: illegality under section 10 of the Banking Act; variation of the charge by the February 1987 correspondence; the charge securing only the Mukawa Hotels loan with clause 7(f) supporting non-consolidation; and defective 14-day notice where the Act mandated three months. It found these raised serious questions.
Whether the appeal would be rendered nugatory
If the charged premises were sold during the pendency of proceedings, the whole object of the suit and the appeal would be defeated, so the appeal would be nugatory.
The purpose of the suit and the interlocutory application was to prevent the threatened sale of the suit premises. A sale would render continued pursuit of the reliefs pointless, justifying the exercise of discretion in the applicant's favour.
Terms on which the injunction should issue
The injunction was granted on terms: payment of Kshs 5 million by December 31, institution of the appeal by December 15, pursuit of a hearing date by January 16, 1989, and the usual undertaking in damages.
Rule 5(2)(b) directs the court to grant an injunction on such terms as it thinks just. The applicant conceded an obligation to pay over 4 million shillings in interest under the varied agreement, so the court held him to his bargain with a rounded 5 million shillings payment.
Legal principles established
#- Rule 5(2) confers an independent original discretion on the Court of Appeal, which must apply its own mind de novo to the suitability of the relief sought; it is not an appeal from the High Court's discretion.
- The guiding principles for relief under rule 5(2) are that the appeal must be arguable and that, if successful, it should not be rendered nugatory.
Court orders
#- 1.Interlocutory injunction restraining the respondent from selling, disposing of, alienating or otherwise dealing with LR 209/2461, University Way, Nairobi, together with the buildings and improvements, on terms
- 2.Applicant to pay the corporation a round sum of Five million shillings on or before December 31 next, any excess over 1988 interest to be appropriated to reduction of the principal debt due from Mukawa Holdings Ltd
- 3.Applicant to institute the intended appeal not later than December 15 next and use his best endeavours to obtain a hearing date of the appeal not later than January 16, 1989
- 4.Applicant to give the usual undertaking in damages
- 5.Each party liberty to apply
- 6.Costs of the application to be costs in the cause
- On appeal from
- High Court at Nairobi
- Jurisdiction invoked
- Rule 5(2)(b) of the Court of Appeal Rules
Key timeline
#Practical implications
#Frequently asked questions
#Later judgments citing this (2)
#Judgments in the corpus that rely on this one. Where the Court said how it treated the authority, that is shown.
- Kenya Commercial Bank Limited v Robert Kimutai Korir[2018] KECA 861 (KLR)19 Jan 2018applied
- Royal Media Services Ltd v Attorney General & 2 others[2013] KECA 546 (KLR)5 Jul 2013
Cite this brief
#Cite this brief
Caselaw, "Githunguri v Jimba Credit Corporation Ltd", Case Analysis (1988). Civil Application No NAI 161 of 1988. Source: https://new.kenyalaw.org/akn/ke/judgment/keca/1988/141/eng@1988-11-08
Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.