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Court of AppealDismissedCivil Appli 124 of 2008

Gachau & another v Pioneer Holdings (A) Limited & 2 others (Civil Application 124 of 2008) [2009] KECA 201 (KLR)

Court of Appeal of Kenya
3 July 2009
Philip Kiptoo TunoiP.K. TunoiSBS.E.O. BosireEGE.M. Githinji
1,201 words in judgment
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The bottom line

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Kenya's Court of Appeal refused to stop an eviction from a charged matrimonial home, holding that sentimental attachment cannot override a lender's power of sale.

What this practically means

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Executive summary

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This was an application under Rule 5(2)(b) of the Court of Appeal Rules seeking an interim injunction restraining the respondents from evicting the applicants, taking possession of, transferring, or interfering with the applicants' quiet possession of L.R. No. 14970/49, Nairobi, pending the hearing and determination of Civil Appeal No. 67 of 2008. The intended appeal challenged a ruling of Ang'awa, J. delivered on 9th May 2007 dismissing the applicants' application for a temporary injunction in a suit challenging the sale of the suit property by public auction on 11th November 2005 pursuant to the exercise of a statutory power of sale by the 1st and 2nd respondents, mortgagees who alleged default on a loan of Shs.3,500,000/-. The applicants argued that the mode of repayment agreed upon was not considered, that the property was sold far below market value, and that it was their matrimonial home. The Court of Appeal, composed of Tunoi, Bosire and Githinji, JJA, assumed without deciding the appeal was arguable, but held that it would not be rendered nugatory without the injunction because damages would be an adequate remedy. The court articulated an important principle: couples who charge matrimonial property to secure a loan convert it into a commodity for sale on default, and no sentimental attachment to the property, however great, per se operates against the mortgagee's statutory power of sale. 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 the appeal will be rendered nugatory unless an interim injunction is granted pending the hearing and determination of Civil Appeal No. 67 of 2008

Key legal issues

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01

Whether the intended appeal is arguable

Holding

The court assumed, without expressing views on the merits, that the appeal was arguable.

Reasoning

The court considered the rival submissions, the ruling of the learned Judge below and the pleadings, and was satisfied the appeal was arguable. It stressed that arguability does not mean an appeal that must necessarily succeed, but one that ought to be argued fully. A single Judge had earlier so held on an extension-of-time application.

p. 2
02

Whether the appeal would be rendered nugatory without an interim injunction

Holding

It would not; damages would be an adequate remedy, so the application failed on the second limb.

Reasoning

The court recognised the applicants' position as occupants of a matrimonial home in their sunset years but held that charging matrimonial property converts it into a commodity for sale on default, and sentimental attachment does not bar the mortgagee's statutory power of sale. Damages would adequately compensate the ultimate successful party.

p. 2
03

Effect of charging a matrimonial home to secure a loan

Holding

Sentimental value or attachment to a mortgaged matrimonial home does not, per se, operate against the mortgagee's exercise of statutory power of sale.

Reasoning

The court articulated a general principle relevant to matrimonial homes offered as security: couples must realise that charging matrimonial property converts it into a commodity available for purchase by all and sundry upon default, and that no sentimental attachment, however great, per se defeats the statutory power of sale.

p. 2

Legal principles established

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  • An applicant under Rule 5(2)(b) must satisfy the twin tests of an arguable appeal and that the appeal will be rendered nugatory if the order sought is not granted; failure on either limb is fatal.
  • Sentimental attachment to a charged matrimonial home does not, of itself, operate against the mortgagee's exercise of its statutory power of sale.
  • Couples who charge their matrimonial property to secure a loan convert that property into a commodity for sale available for purchase by all and sundry if they default.

Court orders

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  1. 1.Dismissal of the application for injunction pending the hearing and determination of Nairobi Civil Appeal No. 67 of 2008
  2. 2.Costs of the application to the respondents

The bench

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

Philip Kiptoo Tunoi
majority
SB
majority
EG
majority
On appeal from
High Court of Kenya at Nairobi
Elc No. 1715 of 2007 (Formerly High Court Civil Suit No. 1402 of 2005)
Jurisdiction invoked
Rule 5(2)(b) of the Court of Appeal Rules

Relief refused

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Interim injunction restraining the respondents from evicting the applicants, taking possession, transferring or interfering with the applicants' quiet possession of L.R. No. 14970/49 Nairobi pending the appeal

Neither limb of the Rule 5(2)(b) test was satisfied; the appeal, though arguable, would not be rendered nugatory and damages would be an adequate remedy

p. 2

Costs

The application was dismissed with costs.

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.

the twin aspects of the principle governing such an application as this having not been satisfied, the application must fail
p. 2Rule 5(2)(b) twin test
Accordingly, we dismiss this application with costs.
p. 2Final orders - dismissal with costs
no sentimental value or attachment to the mortgaged property, however great, per se, would operate against the exercise of statutory power of sale by the morgagee
p. 2Matrimonial home charged as security
This, in essence, does not mean an appeal which must necessarily succeed, but of course, one which ought to be argued fully before the Court.
p. 2Meaning of an arguable appeal

Issues in the judgment

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minor

The judgment misspells 'mortgagee' as 'morgagee' in the key passage on statutory power of sale.

Key timeline

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Practical implications

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Frequently asked questions

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Later judgments citing this (5)

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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, "Gachau & another v Pioneer Holdings (A) Limited & 2 others (Civil Application 124 of 2008) [2009] KECA 201 (KLR)", Case Analysis (2009). Civil Appli 124 of 2008. Source: https://new.kenyalaw.org/akn/ke/judgment/keca/2009/201/eng@2009-07-03

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