Al Jalal Enterprises Limited v Nic Bank Limited & another [2010] KECA 305 (KLR)
The bottom line
#Kenya's Court of Appeal refused to stop bank receivers who had already taken over a property, because the company waited too long to file its injunction application.
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
- 2.Whether, unless the injunction is granted, the intended appeal, if ultimately successful, would be rendered nugatory
- 3.Whether the application for an injunction can issue in respect of receivership actions that have already taken place
Key legal issues
#Whether the intended appeal was arguable
The court found the intended appeal arguable because the main issue would be whether the consent order was fraudulently secured.
The court applied the first limb of the rule 5(2)(b) test. It observed that the principal question to be argued on appeal was whether the consent under which the receivers were appointed was fraudulently secured, and held that this constitutes an arguable issue, even though the applicant ultimately failed on the nugatory/timing limbs.
Whether the injunction could be granted against the receivers
The injunction was refused because the receivers had already lawfully taken possession pursuant to the consent order adopted by the High Court, after the temporary orders of 17th December 2009 were set aside.
The court found that the temporary orders obtained on 17th December 2009 had been set aside by the ruling of Kimaru, J. on 22nd January 2010, leaving the receivers free and entitled to move in under the consent order. The application was filed on 9th February 2010, when no restraining order was in force. The court distinguished Haircare Beauticians because there the respondent had stolen a match over the process of the court by acting before the application was heard, whereas here the receivers acted under a valid subsisting order.
Effect of filing an injunction application after the acts sought to be restrained have occurred
An application for injunction brought after the acts complained of have already taken place is too late and the court cannot grant the relief sought, even if the application might otherwise have merit.
The court held that although the intended appeal raised an arguable issue, the applicant waited until 9th February 2010 to file the application, long after the receivers had moved in pursuant to the consent order. The court reasoned that an injunction cannot issue against what has already taken place, and dismissed the application as having been filed too late for the reliefs to be granted.
Legal principles established
#- An applicant under rule 5(2)(b) must satisfy the court both that the intended appeal is arguable and that the appeal, if successful, would be rendered nugatory unless the order sought is granted.
- An appellate court cannot issue an injunction against conduct that has already taken place; where receivers have lawfully moved in pursuant to a subsisting consent order, an injunction to restrain that entry will be refused.
Court orders
#- 1.The application under rule 5(2)(b) of the Court of Appeal Rules seeking an injunction against the receivers was dismissed
- 2.Costs of the application were awarded to the respondent
The bench
#One judgment of the whole court — no separate or dissenting opinions.
- On appeal from
- High Court of Kenya at Nairobi
- H.C.C.C. No. 738 of 2008
- Jurisdiction invoked
- Rule 5(2)(b) of the Court of Appeal Rules (injunction pending filing, hearing and determination of an intended appeal)
Relief refused
#Injunction restraining the receivers appointed on 24th November 2009 from taking over control and managing the applicant company and its assets
The receivers had already moved in and taken possession pursuant to the consent order of 24th November 2009 after the temporary orders were set aside; the application was filed too late for the court to grant the reliefs sought.
Costs
Application dismissed with costs to the respondent
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.
In an application under rule 5(2)(b) of this Court's Rules, an applicant is required to satisfy the Court that the intended appeal or appeal is arguable and that unless the order sought is granted, the appeal if ultimately successful would be rendered nugatory.
Hence from the foregoing it is clear that by the time the application was filed there was no order restraining the receivers from moving in. It therefore follows that by the time the application came up for hearing before us on 17th March, 2010, the court could not issue an injunction against what had already taken place.
Having considered all that has been urged before us for and against this application, we have come to a firm conclusion that the application (even assuming that it had merit) was filed too late for this Court to grant the reliefs sought. We have no alternative but to order that the application be and is hereby dismissed with costs to the respondent.
Issues in the judgment
#The judgment quotes a passage from Haircare Beauticians Ltd containing apparent typographical errors: "conduct unlawful of wrongful as passport to favor" and the word "Easleigh" appears for Eastleigh elsewhere in the ruling.
Key timeline
#Practical implications
#Frequently asked questions
#Cite this brief
#Cite this brief
Caselaw, "Al Jalal Enterprises Limited v Nic Bank Limited & another [2010] KECA 305 (KLR)", Case Analysis (2010). Civil Application No. 13 of 2010. Source: https://new.kenyalaw.org/akn/ke/judgment/keca/2010/305/eng@2010-04-30
Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.