Skip to content
AI-generated case briefs sourced from Kenya Law · Not legal advice
AI-generated case brief
Case Brief · caselaw.co.ke
Court of AppealDismissedCivil Application No. 287 of 2007

Penelope Combo & another v National Bank of Kenya Ltd [2008] KECA 312 (KLR)

Court of Appeal of Kenya
29 February 2008
1,435 words in judgment
View original judgmentRead on Kenya Law Watch case
AI-assisted case brief
·~6 min to read original · ~4 min brief

The bottom line

#

Kenya's Court of Appeal refused to stop a bank selling a family home because money damages could compensate the owners if they later won their appeal.

What this practically means

#

Executive summary

#
This was an interlocutory application by Notice of Motion dated 22nd November 2007 under rule 5(2)(b) of the Court of Appeal Rules, in which Penelope Combo and Anthony Combos sought an injunction and a stay of proceedings in the High Court pending an intended appeal against the ruling of Lesiit J delivered on 26th October 2007 in HCCC No. 440 of 2003. The applicants were joint registered owners of the Kitisuru property charged to National Bank of Kenya Ltd to secure bridging finance advanced to Olerai Nurseries Ltd for a flower project intended to be refinanced by European Investment Bank funding which, they alleged, the bank failed diligently to pursue. They claimed the statutory notice was defective, that the charge was improperly executed, and that the bank's statutory power of sale had not accrued. A single panel of O'Kubasu, Githinji and Deveerell JJA delivered a unanimous ruling. Applying the settled twin principles for rule 5(2)(b) relief - that the appeal must be arguable and that, absent relief, its success would be rendered nugatory - the court accepted that there was a real risk the matrimonial home would be sold before the appeal could be heard. It nevertheless endorsed the High Court's finding that the applicants' loss could be adequately compensated by an award of damages, and concluded that the case for the stay sought had not been established. The application was dismissed with costs to the bank. The decision is a concise restatement and application of the rule 5(2)(b) test, and is authority that adequate compensability in damages defeats the nugatory-ness limb even where the subject property is the applicants' matrimonial home.

Questions the Court framed

#

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

  1. 1.Whether the intended appeal against the ruling of Lesiit J is arguable and not frivolous
  2. 2.Whether, absent an injunction or stay of proceedings, the success of the intended appeal would be rendered nugatory

Key legal issues

#
01

Whether the twin principles for relief under rule 5(2)(b) were satisfied

Holding

Although the court found a real risk the Kitisuru property would be sold before the appeal could be heard, the intended appeal was not shown to be more than arguable in a manner warranting relief because the applicants' loss was compensable in damages, so the application failed

Reasoning

The court restated the settled rule 5(2)(b) principles from Kagunyi Thande v Housing Finance Co. of Kenya Ltd, itself drawing on Githunguri v Jimba Credit Corporation Ltd No 2 and J.K. Industries Ltd v Kenya Commercial Bank Ltd. It accepted there was a real risk the matrimonial home would be sold before the appeal was heard, but aligned itself with the High Court's finding that damages would adequately compensate the applicants, meaning the nugatory-ness limb could not be satisfied.

p. 3
02

Whether the High Court's interlocutory finding on adequacy of damages was correct

Holding

The Court of Appeal expressly endorsed Lesiit J's finding that any loss from the sale of the Kitisuru property could be adequately compensated by an award of damages

Reasoning

Lesiit J had dismissed the applicants' Order XXXIX application, finding their loss compensable by damages and that the balance of convenience favoured the bank. On the rule 5(2)(b) application, this court adopted that finding as fatal to the nugatory-ness limb, since a remedy in damages means the appeal's success would not be rendered nugatory by the sale.

p. 3

Legal principles established

#
  • An applicant under rule 5(2)(b) must satisfy two cumulative principles: the appeal or intended appeal must be arguable, and the appeal's success must be rendered nugatory unless the injunction or stay is granted
  • The jurisdiction under rule 5(2)(b) is both original and discretionary

Court orders

#
  1. 1.The application by Notice of Motion dated 22nd November 2007 was dismissed with costs to the respondent National Bank of Kenya

The bench

#

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

majority
majority
majority
On appeal from
High Court of Kenya at Nairobi, Milimani Commercial Courts
H.C.C.C. No. 440 of 2003
Jurisdiction invoked
Rule 5(2)(b) of the Court of Appeal Rules

Relief refused

#

Injunction restraining the bank from advertising for sale, selling by auction or otherwise interfering with LR No. 7741/71 (Kitisuru Property) pending the intended appeal

The case for granting the stay sought was not established because the applicants' loss, if any, could be adequately compensated by damages

p. 3

Stay of further proceedings in Milimani HCCC No. 440 of 2003 pending the intended appeal

The court agreed with Lesiit J that the applicants' loss could be adequately compensated by an award of damages, so the nugatory-ness test failed

p. 3

Costs

The application was dismissed with costs to the respondent National Bank of Kenya

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.

For an applicant to succeed he must not only show that his appeal or intended appeal is arguable, but also that unless the court grants him an injunction or stay as the case may be, the success of that appeal will be rendered nugatory.
p. 3Twin principles for relief under rule 5(2)(b)
The Jurisdiction of the Court under rule 5(2) (b) is not only original but also discretionary.
p. 3Nature of rule 5(2)(b) jurisdiction
We therefore dismiss the application by Penelope Combos and Anthony Combos by Motion dated 22nd November 2007 with costs to the respondent National Bank of Kenya.
p. 3Final orders - dismissal with costs

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.

Cite this brief

#

Cite this brief

Caselaw, "Penelope Combo & another v National Bank of Kenya Ltd [2008] KECA 312 (KLR)", Case Analysis (2008). Civil Application No. 287 of 2007. Source: https://new.kenyalaw.org/akn/ke/judgment/keca/2008/312/eng@2008-02-29

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