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Court of AppealDismissedCivil Application No. NAI 264 of 2013 (UR 1192/2013)· [2015] KECA 817 (KLR)

Stephen Wanyee Roki v K-Rep Bank Limited & 2 others [2015] KECA 817 (KLR)

Court of Appeal
13 February 2015
2,048 words in judgment
View original judgmentRead on Kenya Law Watch case
AI-assisted case brief
·~8 min to read original · ~4 min brief

The bottom line

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The Court of Appeal dismissed a borrower's bid to block registration of auctioned land, confirming that injunction applicants must prove both an arguable appeal and real, irreparable harm.

What this practically means

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Executive summary

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This is a ruling of the Court of Appeal at Nairobi (Nambuye, Mwilu and M'Inoti, JJ.A.) delivered on 13 February 2015 on an application by Stephen Wanyee Roki under rule 5(2)(b) of the Court of Appeal Rules for an injunction to prohibit registration of LR No. Dagoretti/Riruta 3753 and LR No. Dagoretti/Riruta 4724 in the name of the 3rd respondent, David Waweru, pending an intended appeal against the ruling of Njagi, J. of 20 November 2012, which had dismissed the applicant's interlocutory injunction in HCCC No. 1 of 2011. The dispute arose from an overdraft from K-Rep Bank secured by a charge over the suit properties, whose sale at public auction to the 3rd respondent followed default and statutory notices under section 74 of the repealed Registered Land Act. The applicant, appearing in person, argued the properties were undersold (Kshs 3,000,000 against a claimed value of Kshs 8.4 million) and that the sale was collusive. All three respondents opposed, maintaining the sale was valid, the 3rd respondent was a bona fide purchaser for value, and damages would suffice. The Court restated the two cumulative conditions under rule 5(2)(b) - an arguable appeal and nugatory-ness - and held the applicant failed both: the alleged under-valuation alone was insufficient because no forced sale fetches market value, and the collusion claim rested on mere suspicion; in any event, damages would be an adequate remedy. The application was dismissed with costs to the respondents.

Key legal issues

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01

Whether the applicant demonstrated an arguable appeal under rule 5(2)(b)

Holding

The Court found no arguable appeal; the applicant did not challenge the charge, his indebtedness, or due service of the statutory notices, and the alleged under-valuation and collusion were unsupported

Reasoning

The applicant's only substantive complaint was that the suit properties, sold for Kshs 3,000,000, were worth Kshs 8.4 million. The Court held that under-valuation alone cannot ground an injunction because no forced sale fetches market value, and the collusion claim rested on mere suspicion. The applicant did not dispute the charge, the debt, or service of the statutory notice issued three months before the auction. The properties had already been sold to an apparently bona fide purchaser for value, leaving nothing to preserve.

p. 4
02

Whether the intended appeal, if successful, would be rendered nugatory

Holding

Even assuming an arguable appeal, damages would be an adequate remedy, so the appeal could not be rendered nugatory

Reasoning

The Court applied the principle that nugatory-ness turns on reversibility or the adequacy of damages. The suit premises had a pecuniary value as shown in valuation reports, and the applicant had not remotely suggested that the respondents would be unable to pay any damages found due. An award of damages would therefore adequately compensate him, defeating the second limb of the rule 5(2)(b) test independently of the first.

p. 4

Legal principles established

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  • An applicant under rule 5(2)(b) must satisfy two conditions: an arguable appeal and that the appeal, if successful, would be rendered nugatory; satisfying only one is insufficient
  • An arguable appeal need not succeed; it suffices that it raises a single bona fide issue worthy of consideration by the Court
  • Whether an appeal will be rendered nugatory depends on whether what is sought to be stayed is reversible, or whether damages will reasonably compensate the aggrieved party
  • Alleged under-valuation alone is not a ground for injunction because no forced sale ever fetches the market value

Court orders

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  1. 1.Dismissal of the application for injunction pending the hearing and determination of the intended appeal
  2. 2.Costs of the application awarded to the respondents

Authorities

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Legislation

  • Rules of the Court of Appealrule 5(2)(b)
  • Registered Land Act, cap. 300 (now repealed)section 74

Cases cited (14)

  • GITHUNGURI V JIMBA CREDIT CORPORATION LTD (NO. 2)
    [1988] KLR, 838
  • MWANIKI NDEGWA V NATIONAL BANK OF KENYA LTD & 3 OTHERS
    CA NO 141 OF 2009
  • GEORGE GITAU WAINAINA V KCB & 2 OTHERS
    CA NO NAI 59 OF 2010
  • PETER NG'ANG'A MUIRURI V PETER NG'ANG'A MUIRURI & ANOTHER
    CA NO 78 OF 2009
  • SITAKHA V MWAMODO & 4 OTHERS
    [1986] KLR 445
  • TANUI & 4 OTHERS V BIRECH & 11 OTHERS
    [1991] KLR 510
  • HUMPHREY KILAMBO MCHARO V KCB LTD & ANOTHER
    CA NO NAI 51 OF 2005
  • PRISCILAH KROBOUGHT GRANT V KENYA FINANCE CO LTD & 2 OTHERS
    CA NO NAI 27 OF 1995
  • DOWNHILL LTD V HARITH ALI EL-BUSAIDY & ANOTHER
    CA NO 254 OF 1999
  • JOSEPH OKOTH WAUDI V NATIONAL BANK OF KENYA
    CA NO 77 OF 2004
  • KENYA TEA GROWERS ASSOCIATION & ANOTHER V. KENYA PLANTERS & AGRICULTURAL WORKERS UNION
    CA NO NAI 72 OF 2001
  • AHMED MUSA ISMAEL V KUMBA OLE NTAMORUA & 4 OTHERS
    CA NO. 256 OF 2013
  • REPUBLIC V KENYA ANTI-CORRUPTION COMMISSION & 2 OTHERS
    [2009] KLR 31
  • STANLEY KANGETHE KINYANJUI V TONY KETTER & 5 OTHERS
    CA NO 31 OF 2012
On appeal from
High Court of Kenya at Nairobi
HCCC No. 1 of 2011
Jurisdiction invoked
Rule 5(2)(b) of the Rules of the Court of Appeal (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, "Stephen Wanyee Roki v K-Rep Bank Limited & 2 others [2015] KECA 817 (KLR)", Case Analysis (2015). Civil Application No. NAI 264 of 2013 (UR 1192/2013). Source: https://new.kenyalaw.org/akn/ke/judgment/keca/2015/817/eng@2015-02-13

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