Purbai Gopal Ramji Patel v Asset Recovery Services Ltd & another [2009] KECA 17 (KLR)
The bottom line
#The Court of Appeal blocked the sale of a Kshs.100 million Nairobi property, ruling that the buyer's right to sell it was genuinely disputable.
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 intended appeal is arguable (not frivolous)
- 2.Whether the appeal, if successful, would be rendered nugatory
Key legal issues
#Whether an assignee of book debts under a deed of assignment can exercise a chargee's statutory power of sale without the charge itself being transferred
The Court found this a triable, arguable issue - it did not decide it finally, only that it was not frivolous.
The applicant contended that a deed of assignment of actionable claims does not vest the charge conferring the power of sale in the assignee. The respondent relied on section 69D of the Transfer of Property Act, arguing the power may be exercised by one entitled to receive and give discharge. The Court held that, given the charge was registered under the Registration of Titles Act, the question was not frivolous.
Whether the appeal would be rendered nugatory if the power of sale were exercised
Yes - the appeal might be rendered nugatory because the respondent did not demonstrate means to repay the property value or damages, and the chargee was not a party to the suit.
The property was valued at approximately Kshs.100 million. The respondent's affidavit did not demonstrate sufficient means to repay that value or damages for wrongful sale. The chargee, City Finance Ltd, was not a party and no notice of appeal was served on it, and the deed of assignment provided no indemnity to the assignee for exercising the power of sale.
Legal principles established
#- An applicant under rule 5(2)(b) must demonstrate both an arguable appeal and that the appeal would be rendered nugatory if successful.
Court orders
#- 1.An injunction granted in terms of prayer one (1) of the application dated 15th July, 2009
- 2.Costs of the motion 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 Commercial Courts
- H.C.C.C. No. 352 of 2009
- Jurisdiction invoked
- Rule 5(2)(b) of the Court of Appeal Rules
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.
it is trite law that the applicant must firstly show that the intended appeal is not frivolous or in other words that he has an arguable appeal and secondly show that the appeal, if successful, would be rendered nugatory
the 1st respondent has not demonstrated in the affidavit in support of the application that it has sufficient means to repay Kshs.100 million being the estimated value of the suit property or any damages which might be awarded for any wrongful exercise of the power of sale
In the result we grant an injunction in terms of prayer one (1) of the application dated 15th July, 2009. The costs of the motion shall be in the intended appeal. It is so ordered.
Issues in the judgment
#The judgment refers to the Transfer of Property Act (TPA) as conferring the statutory power of sale, but the charge was registered under the Registration of Titles Act Cap 281; the judgment does not reconcile this apparent tension, and the court's arguability finding rests on it.
Key timeline
#Practical implications
#Frequently asked questions
#Cite this brief
#Cite this brief
Caselaw, "Purbai Gopal Ramji Patel v Asset Recovery Services Ltd & another [2009] KECA 17 (KLR)", Case Analysis (2009). Civil Application 213 of 2009. Source: https://new.kenyalaw.org/akn/ke/judgment/keca/2009/17/eng@2009-12-18
Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.