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Court of AppealAllowedCivil Application Nai. No. 67 of 2008· [2008] KECA 153 (KLR)

Henry Wanyama Khaemba v Standard Chartered Bank (K) Limited [2008] KECA 153 (KLR)

Court of Appeal
4 July 2008
2,521 words in judgment
View original judgmentRead on Kenya Law Watch case
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The bottom line

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Kenya's Court of Appeal stopped a bank from auctioning a Kshs.22 million property, confirming that a 'nugatory' appeal deserves protection even if money could later compensate.

What this practically means

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Executive summary

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This is a ruling of the Court of Appeal at Nairobi on a notice of motion under Rules 5(2)(b) and 1(2) of the Court of Appeal Rules, brought by Henry Wanyama Khaemba in an intended appeal against a ruling of Warsame, J in HCCC No. 560 of 2006. The High Court had discharged an injunction granted by Kasango, J and struck out the applicant's suit against Standard Chartered Bank with costs, holding it res judicata and an abuse of process in light of an earlier suit. The applicant sought certification of urgency, a temporary injunction restraining the bank from selling his charged property valued at Kshs.22 million, a stay of execution of the costs order, and expedition of the intended appeal. Applying the established twin test, the Court found the intended appeal arguable: it was not frivolous to argue whether the Central Bank of Kenya (Amendment) Act 2000 - which came into operation on 1st January 2001 and caps interest chargeable - applied, nor whether the suit was truly res judicata. On the nugatory limb, the applicant had already paid Kshs.5.8 million on his guarantee, and stood to lose both his property and that money if the bank sold it; the Court held it was not enough for the bank to say it could compensate the loss. The Court also held that a draft memorandum of appeal need not be annexed to a Rule 5(2)(b) application. The application was allowed; an injunction and a stay of the costs order were granted, with costs of the application in the intended appeal.

Key legal issues

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01

The twin requirements for relief under Rule 5(2)(b) of the Court of Appeal Rules

Holding

The Court applied the established test: the applicant must show the intended appeal is arguable and that it would be rendered nugatory without the order sought.

Reasoning

The Court adopted its prior statement in Samuel Naiba Kihara vs Housing Finance Company of Kenya Ltd, supported by earlier authorities. It found the issues on the applicability of the Central Bank (Amendment) Act 2000 interest provisions and on whether the suit was res judicata were not frivolous, satisfying the arguability limb. On the nugatory limb, the applicant risked losing property worth Kshs.22 million for a claim of Kshs.4.1 million interest after already paying Kshs.5.8 million, and mere capacity to compensate the loss was insufficient.

p. 5
02

Whether failure to annex a draft memorandum of appeal defeats a Rule 5(2)(b) application

Holding

It does not; the grounds of the intended appeal may be stated in the body of the application or the supporting affidavit.

Reasoning

The respondent's counsel complained that no draft memorandum of appeal was filed or annexed. The Court, however, read Rule 5(2)(b) itself, which permits the Court to order a stay or injunction where a notice of appeal has been lodged, and held that the rule imposes no requirement of a draft memorandum; the supporting affidavit here set out the grounds, including material non-disclosure and the res judicata findings.

p. 4

Legal principles established

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  • An applicant under Rule 5(2)(b) must satisfy the Court both that the intended appeal is arguable and that, absent the order sought, the appeal would be rendered nugatory.
  • On an application under Rule 5(2)(b), it is not necessary to file a draft memorandum of appeal; it is sufficient if the grounds of the intended appeal are stated in the body of the application or the supporting affidavit.
  • It is not enough for a respondent to resist relief under Rule 5(2)(b) merely by contending that it is capable of compensating the applicant for any loss.

Court orders

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  1. 1.Temporary injunction restraining the respondent from auctioning, alienating, disposing of or interfering with the applicant's ownership and/or possession of L.R. No. 209/3890 I.R 32478 Nairobi pending the hearing and determination of the intended appeal
  2. 2.Stay of execution of the order for costs awarded against the applicant in HCCC No. 560 of 2006 Nairobi, Milimani, pending the hearing and determination of the intended appeal
  3. 3.Costs of the application to be in the intended appeal

Authorities

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Legislation

  • Court of Appeal RulesRule 5(2)(b)
  • Court of Appeal RulesRule 1(2)
  • Court of Appeal RulesRule 74
  • Civil Procedure RulesOrder XXIV Rule 1
  • Central Bank of Kenya (Amendment) Act 2000Sections 39 and 39A
  • Central Bank of Kenya ActSection 39

Cases cited (4)

  • Samuel Naiba Kihara vs Housing Finance Company of Kenya Ltd and others
    Civil Application No. 11 of 2007 (unreported)
  • Madhupaper International Limited vs. Kerr
    [1958] KLR 840
  • J. K. Industries vs Kenya Commercial Bank Ltd & Another
    [1987] KLR 506
  • Githunguri vs Jimba Credit Corporation Ltd (No. 2)
    [1988] KLR 838
On appeal from
High Court of Kenya at Nairobi, Milimani Commercial & Tax Division
H.C.C.S. No. 560 of 2006
Jurisdiction invoked
Rules 5(2)(b) and 1(2) of the Court of Appeal Rules, in an intended appeal from the High Court

Key timeline

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Practical implications

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Frequently asked questions

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Cite this brief

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Cite this brief

Caselaw, "Henry Wanyama Khaemba v Standard Chartered Bank (K) Limited [2008] KECA 153 (KLR)", Case Analysis (2008). Civil Application Nai. No. 67 of 2008. Source: https://new.kenyalaw.org/akn/ke/judgment/keca/2008/153/eng@2008-07-04

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