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Court of AppealDismissedCivil Appli. 79 of 2009 (UR 48/2009)· [2009] KECA 286 (KLR)

St. Ann’s Limited v Planfarm Limited& another [2009] KECA 286 (KLR)

Court of Appeal of Kenya
12 June 2009
2,664 words in judgment
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The bottom line

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Kenya's Court of Appeal refused to protect a borrower's auctioned property, stressing that naming the wrong party alone can sink a legal application.

What this practically means

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Executive summary

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St. Ann's Limited, a defaulting mortgagor whose charged property (L.R. 209/5135, South C, Nairobi) was sold by public auction on 9th September 2008 to the 2nd respondent, sued in the High Court seeking injunction and declaratory reliefs. By a ruling of 5th March 2009, Kimaru J dismissed the application, holding that the equity of redemption was extinguished upon the fall of the hammer, that under section 69B of the Transfer of Property Act the court could not set aside a sale conducted in fulfilment of conditions precedent, and that damages was the mortgagor's only remedy. St. Ann's filed a notice of appeal and moved the Court of Appeal under rule 5(2)(b) for an injunction pending appeal and a stay of proceedings. The respondents objected that the 1st respondent named in the application, Planfarm Limited, was not the 1st defendant in the superior court (Planfarm Investment Company Limited) and was a stranger to those proceedings. The Court agreed, holding that any order would be against a wrong party, and dismissed the application on that ground alone. On the merits, the Court expressed serious doubts on the arguability of the intended appeal given the unchallenged default and auction, and held the appeal would not be rendered nugatory since the charged property was easily valued and damages were an adequate remedy. The stay of proceedings ground was deemed abandoned. The notice of motion dated 24th March 2009 was dismissed with costs.

Key legal issues

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01

Misjoinder of the 1st respondent in the rule 5(2)(b) application

Holding

The application failed on the ground that the 1st respondent, Planfarm Limited, was not the 1st defendant in the superior court and was a stranger to those proceedings; no orders could be made against it.

Reasoning

In the superior court the 1st defendant was Planfarm Investment Company Limited, whereas the application before the Court of Appeal named Planfarm Limited. The Court accepted counsel's submissions that orders against a stranger to the suit would be orders against a wrong party, and that this alone warranted dismissal, before proceeding to consider the merits.

p. 4
02

Arguability of the intended appeal

Holding

The Court expressed serious doubts on the arguability of the intended appeal given the unchallenged facts of default in loan repayment and the sale of the charged property by public auction.

Reasoning

Although the Court was slow to declare an intended appeal unmeritorious at that stage, it noted the unchallenged facts that the applicant defaulted in repaying the loan, notices were issued, and the property was sold at public auction with the 2nd respondent as purchaser. On those facts the Court doubted that the appeal raised arguable points.

p. 5
03

Nugatory-ness of the intended appeal

Holding

Even assuming the appeal was arguable, it would not be rendered nugatory because the dispute related to charged property of easily ascertainable value, compensable by damages.

Reasoning

The property in dispute was security for a loan and could be easily valued. The applicant itself had claimed general damages in its plaint. The claim was therefore capable of compensation by an award of damages, so the second limb of the rule 5(2)(b) test was not satisfied.

p. 5

Legal principles established

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  • Under rule 5(2)(b) of the Court of Appeal Rules, an applicant must satisfy two principles: that the intended appeal is arguable (not frivolous), and that unless the injunction or stay is granted, the appeal, if successful, will be rendered nugatory.
  • The jurisdiction under rule 5(2)(b) is original and discretionary.
  • An appellate court will not grant orders against a party who was not a party to the proceedings in the superior court; an application naming such a stranger as respondent must be dismissed on that ground alone.
  • Where a dispute relates to charged property of ascertainable value, damages are an adequate remedy and the nugatory-ness limb of rule 5(2)(b) will not be satisfied.

Court orders

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  1. 1.The notice of motion dated 24th March, 2009 is dismissed with costs

Authorities

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Legislation

  • Court of Appeal RulesRule 5(2)(b)
  • Civil Procedure RulesOrder XXXIX Rules 1, 2, 2A and 3
  • Civil Procedure RulesSections 3, 63(e)
  • Transfer of Property ActSection 69(1)
  • Transfer of Property ActSection 100A(1)
  • Transfer of Property ActSection 69B
  • Transfer of Property ActSection 53

Cases cited (3)

  • GITHUNGURI V. JIMBA CREDIT CORPORATION (No. 2)
    [1988] KLR 838
  • J.K. INDUSTRIES LTD. V. KENYA COMMERCIAL BANK LTD.
    (1982-88) 1 KAR 1688
  • RELIANCE BANK LIMITED (IN LIQUIDATION) V. NORLAKE INVESTMENTS LIMITED
    Civil App. No. Nai. 98 of 2002 (unreported)
On appeal from
High Court of Kenya at Milimani Commercial Courts
H.C.C.C. No. 565 of 2008
Jurisdiction invoked
Rule 5(2)(b) of the Court of Appeal Rules

Key timeline

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Practical implications

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Frequently asked questions

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Later judgments citing this (3)

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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, "St. Ann’s Limited v Planfarm Limited& another [2009] KECA 286 (KLR)", Case Analysis (2009). Civil Appli. 79 of 2009 (UR 48/2009). Source: https://new.kenyalaw.org/akn/ke/judgment/keca/2009/286/eng@2009-06-12

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