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Court of AppealDismissedCivil Application No NAI 182 of 2014 (UR 141/2014)· [2014] KECA 246 (KLR)

Collin Bett T/A C.K. Bett Traders v Ecobank Kenya Limited & another [2014] KECA 246 (KLR)

Court of Appeal of Kenya
14 November 2014
2,617 words in judgment
View original judgmentRead on Kenya Law Watch case
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The bottom line

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Kenya's Court of Appeal refused to stop the sale of a charged property because the borrower missed both legal tests and broke a prior court-approved deal.

What this practically means

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Executive summary

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The applicant, Collin Bett, sought an injunction under rule 5(2)(b) of the Court of Appeal Rules restraining Ecobank Kenya Limited and Watts Enterprises from selling Title No Kajiado/Kaputei North/19044 pending an intended appeal against a High Court ruling of 30th June 2014 (Mutende, J.) dismissing his injunction application. The dispute arose from loan facilities secured by a charge over the property; after default, a consent order of 5th June 2012 required a fresh statutory notice, payment of Kshs 200,000 in auctioneer's costs to Watts Enterprises within 40 days, and lawful exercise of the statutory power of sale. The High Court found the statutory notice valid, that the applicant breached the consent, and that damages would adequately compensate him. Applying the settled twin principles for rule 5(2)(b) applications, the Court of Appeal held the applicant failed on both limbs: he did not demonstrate an arguable appeal, having taken no steps to redeem the property after admitting his debt under the consent order, and the appeal would not be rendered nugatory since the property could be valued and the bank could compensate him in damages. The court further held that charged property, even a home, becomes a commodity for sale, and that the applicant's breach of the consent order made him undeserving of equitable relief. The application was dismissed with costs to the 1st respondent.

Key legal issues

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01

Arguability of the intended appeal

Holding

The applicant failed to raise an arguable appeal; the court entertained serious doubts as to arguability given the applicant's inaction and breach after the consent order

Reasoning

The court noted that after the consent order in which the applicant admitted the debt and the issuance of the statutory notice, the applicant took no steps to redeem the property and appeared intent on obstructing the bank's statutory power of sale. A doubtful case on arguability does not satisfy the first limb, though the view is preliminary.

p. 4
02

Nugatory value of the intended appeal

Holding

The appeal would not be rendered nugatory because the suit property is capable of valuation and the applicant can be compensated in damages by the bank

Reasoning

The applicant did not suggest the bank would be unable to repay the amount realised from the sale. Citing Daniel Kamita Gichuhi and St. Ann's Limited, the court held that where property offered as security is at stake, valuation and damages provide adequate compensation, so no nugatory prejudice arises.

p. 4
03

Effect of the applicant's conduct on equitable relief

Holding

The applicant's breach of the consent order, including late payment of the auctioneer's costs, rendered him undeserving of an injunction

Reasoning

Under the consent the applicant was to pay Kshs 200,000 within 40 days, i.e. before 15th July 2012, but paid on 24th October 2012. Following David Kamau Gakuru, the court held that as an equitable remedy an injunction should not issue to a party whose conduct shows him undeserving of it.

p. 5

Legal principles established

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  • An applicant under rule 5(2)(b) must demonstrate both that the intended appeal is arguable and that it would be rendered nugatory if stay or injunction is not granted
  • Where charged property can be valued and the applicant compensated in damages, the nugatory principle is not satisfied
  • A charged property, even a residential one, becomes a commodity for sale and sentimental attachment cannot resist the statutory power of sale
  • Conduct in breach of a consent order disentitles an applicant to equitable relief by way of injunction

Court orders

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  1. 1.The application under rule 5(2)(b) is dismissed
  2. 2.Costs of the application awarded to the 1st respondent

Authorities

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Legislation

  • Court of Appeal Rulesrule 5(2)(b)
  • Registered Land Act (now repealed)section 65(2)

Cases cited (12)

  • Madhupaper International Limited v Kerr
    [1985] KLR 840
  • Githunguri v Jimba Credit Corporation Ltd
    [1988] KLR 825
  • Githinji v Amrit & Another
    [2004] eKLR
  • Patel v Transworld Safaris Ltd
    [2004] eKLR (Civil Application No. Nai. 197 of 2003)
  • Ishmael Kagunyi Thande v Housing Finance of Kenya Ltd
    [2006] eKLR (Civil Application No. NAI 157 of 2006)
  • Kenya Medical Lab Technicians & Technologists Boards v Prime Communications Limited
    [2014] eKLR (Civil Application No.56 of 2013 (UR.36/2013))
  • Ahmed Musa Ismael v Kumba Ole Ntamorua & 4 Others
    [2014] eKLR (Civil Application No 256 of 2013)
  • Daniel Kamita Gichuhi & Another v Consolidated Bank Of Kenya
    [2007] eKLR (Civil Application No. NAI159 of 2007)
  • St. Ann's Limited v Plan farm Limited & Another
    Civil Appeal No. 79 Of 2009
  • Shimmers Plaza Limited v National Bank of Kenya Ltd
    [2013] eKLR (Civil Application 38 of 2013)
  • Joseph Gitahi Gachau & Another v Pioneer Holdings (A) Limited & 2 Others
    [2009] eKLR (Nairobi Civil Appeal No. 124 of 2008)
  • David Kamau Gakuru v National Industrial Credit Bank Ltd
    [2002] eKLR (Civil Appeal No. 84 of 2001)
On appeal from
High Court of Kenya at Machakos
H.C.C.C. No 120 of 2012
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 (2)

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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, "Collin Bett T/A C.K. Bett Traders v Ecobank Kenya Limited & another [2014] KECA 246 (KLR)", Case Analysis (2014). Civil Application No NAI 182 of 2014 (UR 141/2014). Source: https://new.kenyalaw.org/akn/ke/judgment/keca/2014/246/eng@2014-11-14

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