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Court of AppealDismissedCivil Application No. Nai. 266 of 1997 (112/97 UR)

Mavoloni Company Limited v Standard Chartered Estate Management Ltd

Court of Appeal
19 November 1997
JGJ. E. GicheruAAA. M. AkiwumiGPG. S. Pall
0 words in judgment
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The bottom line

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Kenya's Court of Appeal refused to stop an already-completed farm sale, ruling that money damages could compensate the applicant and that disobeying court orders forfeits equitable help.

What this practically means

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Executive summary

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Mavoloni Company Limited charged two farms to Standard Chartered Estate Management Ltd, which advertised them for sale by public auction on 11th September 1997 in exercise of its statutory power of sale. The applicant rushed to the High Court seeking an interlocutory injunction, contending that the charge was invalid for non-compliance with sections 109 and 110 of the Registered Land Act, namely lack of attestation of its common seal and lack of verification of execution. Hayanga, J. dismissed the application, holding that the applicant, having consented to a decree in an earlier suit (H.C.C.C. No. 3610 of 1995) admitting indebtedness of Kshs.55,000,000 and permitting the statutory power of sale, was estopped and the application was res judicata. The applicant then sought an interlocutory injunction from the Court of Appeal pending an intended appeal. The Court accepted that the intended appeal raised arguable points, but held that the second limb of the test was not satisfied: the applicant had failed to comply with Juma, J.'s conditional order to deposit a banker's bond of Kshs.30,000,000, and the farms had been sold by public auction on 15th October 1997, leaving nothing to enjoin. Damages would adequately compensate the applicant since the farms were not unique. The court further held that the applicant, having disobeyed court orders and declined to challenge the auction in the High Court, had not come to court with clean hands. The application was dismissed with costs.

Questions the Court framed

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The issues the Court set itself to decide, in its own words.

  1. 1.Whether the intended appeal is arguable
  2. 2.Whether, if the intended appeal succeeds, it would be rendered nugatory in the absence of an injunction
  3. 3.Whether the applicant is entitled to an interlocutory injunction pending the intended appeal, in light of the consent decree, res judicata, estoppel and the completed sale of the charged farms

Key legal issues

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01

Whether the intended appeal was arguable

Holding

The court found the intended appeal raised arguable points and was not frivolous, but arguability alone was insufficient.

Reasoning

Counsel for the applicant argued that the consent judgment did not validate an otherwise invalid charge, that the issues in the former suit differed, and that sections 109 and 110 of the Registered Land Act had been breached. The court, having considered the authorities and arguments, accepted that these raised arguable points, but proceeded to the second limb of the test.

p. 2
02

Whether the appeal would be rendered nugatory without an injunction

Holding

It would not, because the farms had already been sold at auction and the applicant could be adequately compensated in damages.

Reasoning

The applicant failed to comply with the condition imposed by Juma, J. of depositing a banker's bond for Kshs.30,000,000, and the respondent, entitled to do so, sold the farms by public auction on 15th October 1997. There was therefore nothing left to enjoin, and nothing particularly unique about the farms such that damages would not suffice.

p. 2
03

Whether the applicant was entitled to equitable relief given its conduct

Holding

The applicant, having breached the orders of Juma, J. and declined to challenge the auction in the High Court, had not come to court with clean hands and could not invoke an equitable remedy.

Reasoning

The court observed that the auction sale was not yet completed, so the applicant could still challenge its validity in the High Court on grounds of alleged fraud. Instead, despite its reprehensible conduct in not complying with the orders of Juma, J., the applicant sought an equitable remedy from the Court of Appeal, which equity would not grant.

p. 2

Legal principles established

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  • An applicant for an interlocutory injunction pending an intended appeal must show not only that the appeal is arguable, but also that the appeal, if successful, would be rendered nugatory without the injunction.
  • Where the subject matter of a sought injunction has already been sold, and the applicant can be adequately compensated in damages, the nugatory-ness test fails.
  • A litigant who disobeys court orders and does not come to court with clean hands may be denied equitable relief.

Court orders

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  1. 1.The applicant's application for an interlocutory injunction pending the intended appeal is dismissed with costs

The bench

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One judgment of the whole court — no separate or dissenting opinions.

JG
majority
AA
majority
GP
majority
On appeal from
High Court of Kenya at Nairobi
H.C.C.C. No. 2362 of 1997 (O.S.)
Jurisdiction invoked
Rule 5(2)(b) of the Court of Appeal Rules (application for interlocutory injunction pending an intended appeal)

Relief refused

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Interlocutory injunction to restrain the sale of the charged farms pending the intended appeal

The farms had already been sold by public auction, leaving nothing to enjoin; damages would adequately compensate the applicant; and the applicant had not come to court with clean hands having failed to comply with the orders of Juma, J.

p. 2

Costs

The application is dismissed with costs to the respondent.

Quotable passages

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Verbatim from the judgment, each located to the page it appears on in the official PDF — so these can be cited and checked directly.

But in order to satisfy us that the present application should be granted, it must also be shown that the intended appeal if successful, would be rendered nugatory.
p. 2Two-limb test for injunction pending appeal
Moreover, if the applicant succeeds in its intended appeal, it can be adequately compensated in damages since there is nothing really particularly unique about the farms.
p. 2Adequacy of damages defeating nugatory-ness
The applicant has not come to court with clean hands.
p. 2Clean hands doctrine
In the result the applicant's present application is dismissed with costs. It is so ordered.
p. 2Final orders

Issues in the judgment

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minor

The judgment states counsel 'cited various authorities in support of his arguments' but does not name any of them, so no cases can be recorded in casesCited.

Key timeline

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Practical implications

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Frequently asked questions

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Later judgments citing this (12)

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Judgments in the corpus that rely on this one. Where the Court said how it treated the authority, that is shown.

Cite this brief

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Cite this brief

Caselaw, "Mavoloni Company Limited v Standard Chartered Estate Management Ltd", Case Analysis (1997). Civil Application No. Nai. 266 of 1997 (112/97 UR). Source:

Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.