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Court of AppealDismissedCivil Appli 315 of 2008 (UR 209/2008)· [2009] KECA 240 (KLR)

LOUIS ROGER OUANDJI V BANK OF INDIA & ANOTHER [2009] KECA 240 (KLR)

Court of Appeal of Kenya
10 July 2009
PWP.N. WakiJOJ.W. Onyango OtienoDAD.K.S. Aganyanya
1,976 words in judgment
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The bottom line

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Kenya's Court of Appeal refused to freeze a bank's sale of mortgaged land because the appeal looked weak and money damages could compensate the borrower.

What this practically means

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Executive summary

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This was a single-judge-panel ruling (three Judges of Appeal) on a motion dated 8th December 2008 under rule 5(2)(b) of the Court of Appeal Rules in which Louis Roger Ouandji sought an injunction restraining Bank of India from transferring or alienating LR No. 330/1290 pending an intended appeal against a ruling of Kimaru, J. dated 13th November 2008, which had dismissed his application for a temporary injunction in H.C.C.C. No. 84 of 2008. The dispute arose from a mortgage over LR No. 330/417 securing a loan facility of up to Kshs.60 million; on default the bank exercised its statutory power of sale, and part of the subdivided property was auctioned to Tractor Bell Limited for Shs.60.5 million. The applicant alleged breach of contract, illegal interest and penalty charges, fraud in the exercise of the power of sale, sale of an unregistered subdivision and undervalue. Before the Court of Appeal, counsel for the applicant argued that the mortgage deed was improperly executed, that the deposit was paid in advance of the auction contrary to Mwathi v Kenya Commercial Finance Co., that title documents did not exist, and that the purchaser was a non-existent company. The court held that most of these issues had not been raised in the pleadings or before the superior court and could not be entertained, and expressed doubts on the remaining grounds. On the nugatory limb, the court found damages were quantifiable and no incapacity to pay was alleged. The application was dismissed with costs. The decision below was not disturbed, as this was an interlocutory application pending an intended appeal.

Key legal issues

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01

Whether the intended appeal was arguable

Holding

The court doubted the prospects of success; the principal issues raised (execution of the mortgage deed, existence of the purchaser, advance deposit, sale of part only) were not pleaded below or were frivolous.

Reasoning

The court examined the submissions and found the key grounds - propriety of execution of the mortgage deed, legal existence of the purchaser, advance payment of the deposit and sale of part of the mortgaged property - were either not raised in the pleadings or below, or were answered by the mortgage deed and notification of sale which authorised sale of part and receipt of Shs.500,000 in advance. The court expressed doubts on the remaining grounds.

p. 3
02

Whether the intended appeal would be rendered nugatory without an injunction

Holding

It would not, because damages were quantifiable and no incapacity to pay was averred; only part of the security was sold and the other part faced no immediate threat.

Reasoning

The subject property was offered as security on the clear understanding it could be alienated on default. Only part was sold, leaving the applicant with the other portion. The applicant's own pleadings sought damages as an alternative prayer, showing quantifiability, and there was no assertion that the bank or the purchaser could not satisfy any award of damages.

p. 3

Legal principles established

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  • An applicant for an injunction pending appeal under rule 5(2)(b) must satisfy the twin requirements of showing that the intended appeal is arguable and that, if the order sought is not granted, the success of the intended appeal would be rendered nugatory.
  • Issues not raised in the pleadings or before the superior court cannot be raised for the first time on an application for injunction pending appeal.
  • An intended appeal will not be rendered nugatory where damages are quantifiable and there is no averment that the respondents are incapable of meeting them.

Court orders

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  1. 1.The application for an injunction pending appeal is dismissed with costs
On appeal from
High Court of Kenya at Nairobi
H.C.C.C. No. 84 of 2008
Jurisdiction invoked
Rule 5(2)(b) of the Court of Appeal Rules - application for injunction pending the hearing and determination of an intended appeal

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, "LOUIS ROGER OUANDJI V BANK OF INDIA & ANOTHER [2009] KECA 240 (KLR)", Case Analysis (2009). Civil Appli 315 of 2008 (UR 209/2008). Source: https://new.kenyalaw.org/akn/ke/judgment/keca/2009/240/eng@2009-07-10

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