NYALI CONSTRUCTION AND ELECTRICALS SERVICES LIMITED v BARCLAYS BANK OF KENYA LIMITED [2010] KECA 366 (KLR)
The bottom line
#Kenya's Court of Appeal refused to stop Barclays Bank selling charged property because money damages could adequately compensate the owner later.
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, if the intended appeal succeeds, the results would be rendered nugatory absent an injunction
Key legal issues
#The twin principles governing relief under rule 5(2)(b) of the Court of Appeal Rules
The applicant must satisfy both the arguability of the appeal and the nugatory-ness of its result; failure on either limb is fatal to the application.
The court restated the settled test from Bob Morgan Systems Ltd & Another v Jones: the powers under rule 5(2)(b) are exercised only where the appeal or intended appeal is arguable (not frivolous) and, if successful, would be rendered nugatory absent a stay or injunction. The court found the second limb failed because damages would adequately compensate the applicant, and declined to comment further on arguability since it was not hearing the appeal.
Whether damages would be an adequate remedy such that the intended appeal would not be rendered nugatory
Where the respondent is able to pay damages should the applicant succeed, the nugatory-ness limb fails and the application must be dismissed.
Counsel for the respondent submitted there would be no difficulty paying damages if the applicant succeeded on appeal. The court agreed, holding that this disposed of the second principle. Without both limbs satisfied, the application for an injunction pending appeal could not be granted, even though the suit property had been described as prime property and the applicant was in possession.
Legal principles established
#- An applicant under rule 5(2)(b) must demonstrate first that the appeal or intended appeal is arguable (not frivolous), and secondly that its success would be rendered nugatory if the stay or injunction is refused.
- The Court of Appeal will not grant a rule 5(2)(b) application where the respondent can compensate the applicant in damages, since the appeal would then not be rendered nugatory.
Court orders
#- 1.The application dated 23rd July 2008 is dismissed
- 2.Costs of the application are 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 Mombasa
- H.C.C.C. No. 315 of 2007
- Jurisdiction invoked
- Rule 5(2)(b) of the Court of Appeal Rules (application for injunction pending the lodging, hearing and determination of an intended appeal)
Relief refused
#Injunction restraining the respondent from advertising for sale, selling by public auction or private treaty, alienating, charging, interfering with or dealing with property known as Mombasa/Block 1/28 pending the intended appeal
The respondent would be able to pay damages if the applicant ultimately succeeded, so the appeal would not be rendered nugatory; the second rule 5(2)(b) principle was not satisfied
Costs
The application dated 23rd July, 2008 is hereby 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.
The powers of the Court under rule 5(2)(b), aforesaid, are specific. The Court will grant a stay or an injunction, as the case may be if satisfied, firstly, that the applicant has demonstrated that his appeal or intended appeal is arguable; and secondly, that unless a stay or injunction is granted his appeal or intended appeal, if successful, will be rendered nugatory.
We agree with that submission which answers the second principle set out above that the intended appeal will not be rendered nugatory.
The above being our view, the application dated 23rd July, 2008 is hereby dismissed with costs to the respondent.
as we are not hearing the appeal the less we talk about the chances of the appeal succeeding the better.
Issues in the judgment
#The judgment's heading refers to the superior court ruling as dated 23rd June 2003, while the body repeatedly states the ruling was delivered on 23rd June 2008; the later date is consistent with the narrative (application heard 11th December 2007, submissions before the judge on 30th April 2008).
Key timeline
#Practical implications
#Frequently asked questions
#Cite this brief
#Cite this brief
Caselaw, "NYALI CONSTRUCTION AND ELECTRICALS SERVICES LIMITED v BARCLAYS BANK OF KENYA LIMITED [2010] KECA 366 (KLR)", Case Analysis (2010). Civil Application 201 of 2008. Source: https://new.kenyalaw.org/akn/ke/judgment/keca/2010/366/eng@2010-03-12
Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.