Joseph N. K. Arap Ngok & another v Eabs Bank Limited [2015] KECA 909 (KLR)
The bottom line
#Kenya's Court of Appeal refused to stop a bank from selling charged land, confirming applicants must prove both an arguable appeal and that damages cannot fix the loss.
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 applicant had demonstrated an arguable appeal for purposes of rule 5(2)(b) of the Court of Appeal Rules
- 2.Whether the intended appeal, if it ultimately succeeded, would be rendered nugatory in the absence of an injunction
Key legal issues
#Twin principles under rule 5(2)(b) of the Court of Appeal Rules
An applicant seeking an injunction under rule 5(2)(b) must establish both an arguable appeal and that the appeal would be rendered nugatory if the orders sought are not granted.
The court restated that the two limbs are cumulative, not alternative. Citing Githunguri v Jimba Credit Corporation and Republic v Kenya Anti-Corruption Commission, it held the applicant discharges the onus only by establishing both principles, relying on Peter Mburu Ndururi v James Macharia Njore.
Arguable appeal
No arguable appeal was demonstrated; prima facie the applicant's advocate was duly served with the show-cause application, and it was not apparent that the High Court's discretion was wrongly exercised.
The draft memorandum challenged the exercise of discretion, but the record showed the advocate acknowledged service by stamp and signature and had denied service on affidavit misleadingly. On appeal, the court will not interfere with discretionary decisions of the High Court save in exceptional circumstances, per United India Insurance Co. Ltd v East African Underwriters (Kenya) Ltd.
Nugatory value and injunctions restraining statutory power of sale
The intended appeal would not be rendered nugatory because there was no material suggesting the financially reputable respondent could not compensate the applicant; a dispute on the amount due under a charge does not by itself justify restraining the statutory power of sale.
Relying on Stanley Kangethe Kinyanjui v Tony Ketter, the court noted the test is whether what is sought to be stayed is reversible or compensable in damages. Following Priscillah Krobought v Kenya Commercial Finance and Robert Kibagendi Otachi v Housing Finance, disputes on amounts due do not justify restraining sale.
Legal principles established
#- To succeed under rule 5(2)(b), an applicant must establish BOTH an arguable appeal and that the appeal will be rendered nugatory; establishing only one limb is insufficient.
- The Court of Appeal will not interfere with the exercise of discretion by a High Court judge save in exceptional circumstances, namely where the judge misdirected himself in law, misapprehended the facts, took into account irrelevant considerations, failed to take into account relevant considerations, or his decision is plainly wrong.
- The Court will not normally grant an injunction to restrain a mortgagee from exercising its statutory power of sale solely on the ground that there is a dispute on the amount due under the mortgage.
Court orders
#- 1.The application for injunction pending the hearing and determination of the intended appeal was dismissed
- 2.Costs of the application 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
- HCCC No. 297 of 2008
- Jurisdiction invoked
- Rule 5(2)(b) of the Court of Appeal Rules (injunction pending hearing and determination of an intended appeal)
Relief refused
#Injunction restraining EABS Bank Limited from selling Plot No. Nairobi/Block 97/1482 'A' & 'B', Fedha Estate, Nairobi, pending the hearing and determination of the intended appeal
The applicant failed to establish either principle under rule 5(2)(b): no arguable appeal was demonstrated, and no material showed the appeal would be rendered nugatory since the respondent could compensate the applicant in damages
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.
To obtain a remedy under rule 5(2)(b) is not an issue of “either or” as regards the two principles. To succeed the applicant has to establish both principles.
The Court of Appeal will not interfere with a discretionary decision of the judge appealed from simply on the ground that its members, if sitting at first instance, would or might have given different weight to that given by the judge to the various factors in the case.
Accordingly, this application has no merit, and is hereby dismissed with costs to the respondent.
Key timeline
#Practical implications
#Frequently asked questions
#Cite this brief
#Cite this brief
Caselaw, "Joseph N. K. Arap Ngok & another v Eabs Bank Limited [2015] KECA 909 (KLR)", Case Analysis (2015). Civil Application No. Nai 36 of 2015 (UR 34/2015). Source: https://new.kenyalaw.org/akn/ke/judgment/keca/2015/909/eng@2015-03-06
Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.