Joseph Kinoru Kahonge v Barclays Bank of Kenya Ltd & another [2001] KECA 63 (KLR)
The bottom line
#Kenya's Court of Appeal stopped a bank auction of land, but only because the owner agreed to deposit the disputed Kshs.14.8 million within 30 days.
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 applicant's intended appeal against the refusal of a temporary injunction is arguable and not frivolous.
- 2.Whether, unless an injunction is granted, the intended appeal, if successful, would be rendered nugatory.
- 3.Whether the injunction should issue unconditionally or on terms protecting the 1st respondent's security.
Key legal issues
#The test for granting an injunction pending appeal under rule 5(2)(b) of the Court of Appeal Rules
An applicant must satisfy two limbs: that the appeal or intended appeal is arguable and not frivolous, and that unless the injunction is granted the appeal, if successful, will be rendered nugatory.
The court restated the settled two-limb test, citing Githunguri v Jimba Credit Corporation Ltd. It stressed that the jurisdiction is discretionary and must be grounded in evidence and sound legal principles, with the applicant bearing the duty of placing the necessary material before the court. Both limbs were held satisfied on the facts, justifying the grant of relief pending the intended appeal.
Whether the intended appeal was arguable
Yes. The applicant's denial of directorship raised no arguable point, but the release of all co-guarantors except him, without any document he executed, and the fact that only his property was slated for auction raised an arguable point on the bona fides of the planned sale.
The applicant did not deny signing the letter of 6th June 1998 describing himself as a director, so prima facie he signed it as such; on that matter the court saw no arguable point. But liability under the guarantees was joint and several, the other guarantors had been released and had acted on the arrangement, yet no document executed by the applicant showed he was party to it. That, plus only his property being slated for auction, raised an arguable point, the applicant's duty being limited to showing an arguable appeal.
Whether the intended appeal would be rendered nugatory if the injunction were refused
Yes. The property due to be auctioned was land; issues involving rights in land are sensitive, and if the applicant lost the property and later succeeded, damages might not fully compensate him, rendering his success futile.
The court treated the threatened auction of land as potentially irreparable: money damages may not make good the loss of land in Kenya, where rights in land are sensitive. If the applicant lost the property at auction and ultimately succeeded in the intended appeal, his success would be futile because damage might not fully compensate him for the loss. This satisfied the second limb and led the court to consider the terms on which relief should issue.
Whether the injunction should issue unconditionally
No. The injunction was granted conditional on the applicant depositing the claimed Kshs.14,848,082 in an interest-bearing account in the joint names of counsel within 30 days, failing which the application stands dismissed with costs.
Although the application was allowed, the court declined an unconditional grant. The applicant had executed the personal guarantee, given his property as supplemental security, conceded the loan was not fully repaid, and authorised release of the company's machinery; prima facie he was not completely innocent. The condition balanced preservation of the applicant's land pending appeal with protection of the bank's security, the deposit to be held in an interest-bearing account in the joint names of the parties' counsel.
Legal principles established
#- An applicant for an injunction pending appeal under rule 5(2)(b) of the Court of Appeal Rules must satisfy two limbs: that the appeal or intended appeal is arguable and not frivolous, and that unless the injunction is granted the appeal, if successful, will be rendered nugatory.
- The discretion to grant an injunction pending appeal must be founded on evidence and sound legal principles, and the duty of placing that evidence before the court falls squarely on the applicant.
- In a rule 5(2)(b) application the applicant's duty is limited to demonstrating the existence of an arguable appeal, not to conclusively proving the merits.
- Where the property threatened with sale is land, the nugatory limb may be satisfied because damages might not fully compensate for the loss of land.
Court orders
#- 1.An injunction granted restraining the 1st respondent from selling or offering for sale Land Parcel No. LR.No.36/11/1031, conditional on the applicant depositing the claimed Kshs.14,848,082 in an interest-bearing bank account with the 1st respondent in the joint names of his counsel and the 1st respondent's counsel within 30 days of the ruling.
- 2.In default of the deposit within 30 days, the applicant's application to stand dismissed with costs.
- 3.Otherwise, the costs of the application to be in the intended appeal.
The bench
#One judgment of the whole court — no separate or dissenting opinions.
- On appeal from
- High Court of Kenya at Nairobi (Milimani)
- H.C.C.C. No. 3 of 2001
- Jurisdiction invoked
- Rule 5(2)(b) of the Court of Appeal Rules - the Court of Appeal's discretionary jurisdiction to grant an injunction pending an intended appeal
Relief refused
#An unconditional injunction pending the intended appeal
The applicant had executed the personal guarantee, given his property as supplemental security, conceded the loan was not fully repaid and authorised release of the company's machinery; prima facie he was not completely innocent, so the injunction issued only on terms.
Costs
If the applicant fails to deposit the claimed Kshs.14,848,082 within 30 days of the ruling, the application will stand dismissed with costs; otherwise the costs of the application shall be in the intended appeal.
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.
In an application under rule 5(2)(b) aforesaid, for an applicant to succeed he is principally obliged to show, firstly, that his appeal or intended appeal is arguable and not frivolous.Secondly, that unless he is granted an injunction the appeal or intended appeal if successful will be rendered nugatory
In such an application the court exercises discretionary jurisdiction which discretion has to be based on evidence and sound legal principles.
However his duty in an application of this nature is limited to showing the existence of an arguable appeal.
The applicant does not deny signing the letter and, prima facie, therefore he must have signed the letter as a director in the 2nd respondent. We see no arguable point on that matter.
That fact and also the fact that only the applicant's property is slated for auction raises an arguable point on the bona fides of the planned sale of the applicant's property.
The property due to be auctioned is land. In this country issues involving rights in land are sensitive.
In view of that we grant him an injunction as prayed, but conditional on him depositing the claimed Kshs.14,848,082/= in an interest bearing bank account with the 1st respondent in the joint names of his counsel and that of the 1st respondent, within 30 days of this ruling, failing which his application will stand dismissed with costs.
Otherwise the costs of this application shall be in the intended appeal.
Issues in the judgment
#Internal year inconsistency: the cause title numbers the application 'NAI. 18 OF 2000' although it is an intended appeal from a ruling delivered on 18th January 2001 in a suit numbered H.C.C.C. No. 3 of 2001; the parenthetical '(11/2001 UR)' suggests a 2001 number.
Key timeline
#Practical implications
#Frequently asked questions
#Later judgments citing this (1)
#Judgments in the corpus that rely on this one. Where the Court said how it treated the authority, that is shown.
- Premier Bag & Cordage Limited v Paul Gicobi Marui [2014] KEELC 108 (KLR)[2014] KEELC 108 (KLR)16 Oct 2014
Cite this brief
#Cite this brief
Caselaw, "Joseph Kinoru Kahonge v Barclays Bank of Kenya Ltd & another [2001] KECA 63 (KLR)", Case Analysis (2001). Civil Application No. NAI. 18 of 2000 (11/2001 UR). Source: https://new.kenyalaw.org/akn/ke/judgment/keca/2001/63/eng@2001-02-16
Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.