TRANSWESTERN CANE HARVESTERS LIMITED & ANOTHER V BARCLAYS BANK OF (K) LIMITED [2009] KECA 203 (KLR)
The bottom line
#Kenya's Court of Appeal refused to stop a bank selling charged land, ruling the appeal could still succeed even if the property were sold.
What this practically means
#Executive summary
#Key legal issues
#Whether the intended appeal was arguable
The intended appeal was arguable because it raised, inter alia, the interpretation of section 39 of the Central Bank of Kenya Act and the Central Bank of Kenya (Amendment) Act 2004, including issues of retrospective operation and alleged unconstitutionality.
The court reviewed the intended grounds of appeal, including whether the overdraft facility was covered by the second applicant's charge, the alleged interest rate illegality, and the retrospective effect of the CBK (Amendment) Act 2004. It concluded these issues could not be said to be frivolous, satisfying only the first limb of the rule 5(2)(b) test.
Whether the intended appeal would be rendered nugatory if the injunction was not granted
The nugatory test was not satisfied. A charged property is a marketable security; the presence of an academy on the land did not establish that the appeal would be rendered nugatory, since a successful purchaser might continue running the academy and the applicants would not be without remedy on success.
The court held that consideration of irreparable damage from sale of property hosting a school falls outside its mandate on a rule 5(2)(b) application. Should the applicants succeed in the intended appeal, adequate remedies would be available against the respondent or through the purchaser, so the sale would not render the appeal nugatory.
Legal principles established
#- On an application under rule 5(2)(b), an applicant must establish both that the intended appeal is arguable (not frivolous) and that, if it were to succeed, it would be rendered nugatory unless the order sought is granted; a single arguable issue suffices.
- A solitary arguable issue is sufficient to satisfy the first limb of the rule 5(2)(b) test.
- The principles governing interlocutory relief in the High Court (the Giella test) are different from the twin considerations applying to a rule 5(2)(b) application in the Court of Appeal; whether a school stands on charged land and claims of irreparable damage are not relevant to that second limb.
- Once a property is charged it becomes a marketable security, and an applicant whose appeal succeeds will not be without remedy even if the charged property is sold.
Court orders
#- 1.The notice of motion dated 20th April 2009 seeking an injunction pending appeal is dismissed with costs to the respondent
- On appeal from
- High Court of Kenya at Kisii
- H.C.C.C. No. 97 of 2008
- Jurisdiction invoked
- Rule 5(2)(b) of the Court of Appeal Rules - application for injunction/stay pending the lodging, hearing and determination of an intended appeal
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.
- (Plaintiff company) v (Defendant bank) - application for injunctive relief over charged properties[2009] KEHC 1646 (KLR)9 Oct 2009
Cite this brief
#Cite this brief
Caselaw, "TRANSWESTERN CANE HARVESTERS LIMITED & ANOTHER V BARCLAYS BANK OF (K) LIMITED [2009] KECA 203 (KLR)", Case Analysis (2009). Civil Appeal (Application) No. 106 of 2009 (UR 67/2009). Source: https://new.kenyalaw.org/akn/ke/judgment/keca/2009/203/eng@2009-07-17
Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.