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Court of AppealDismissedCivil Application No. 141 of 2014 (UR 114)· [2015] KECA 964 (KLR)

Stephen Boro Githia v Nicholas Ruthiru Gatoto, Ndarugu Merchants & Rural Urban Credit Finance (Under receivership)

Court of Appeal
6 February 2015
1,251 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 halt a ruling cancelling a land auction sale because the bank never proved it served the required statutory notice.

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 (G.B.M. Kariuki, Mwilu and Kiage, JJ.A) dismissing an application for stay of execution of the judgment and decree of Ogolla, J. of the High Court dated 23 January 2014 in H.C.C.C. No. 4275 of 1994. The High Court had nullified and cancelled the transfer to the applicant of L.R. No. Kiganjo/Kiamwangi/208, sold at a public auction conducted by the 2nd respondent in exercise of the 3rd respondent's power of sale over property charged by the 1st respondent, and ordered restoration of the original charge. The applicant moved under Rule 5(2)(b) and Sections 3A and 3B of the Appellate Jurisdiction Act seeking a stay and preservation of the status quo pending his intended appeal. The court applied the settled two-limb test: an applicant must demonstrate both an arguable appeal and that the appeal would be rendered nugatory absent a stay. On the first limb, the court found the appeal not arguable, agreeing with Ochieng v Ochieng that in the absence of proof of service of the statutory notice under section 74(1) of the (repealed) Registered Land Act, an auction sale is void and incapable of passing valid title. On the second limb, the court accepted the 1st respondent's uncontroverted sworn evidence, supported by photographs, that he was in possession and that the applicant resided elsewhere, defeating the claimed nugatory aspect. The application was dismissed with costs to the 1st respondent. The decision binds subordinate courts and the High Court on the Rule 5(2)(b) principles it restates.

Key legal issues

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01

Whether the applicant had an arguable appeal

Holding

No; the failure to prove service of the statutory notice under section 74(1) of the Registered Land Act presents an insurmountable difficulty to the appeal.

Reasoning

The High Court nullified the sale for non-service of the mandatory statutory notice under section 74 of the Registered Land Act. Following Ochieng v Ochieng, absence of proof of service renders an auction sale void and incapable of passing valid title. The court stood unpersuaded that any arguable point survived that defect, though the applicant could still attempt to persuade the bench hearing the appeal proper.

p. 2
02

Whether the appeal would be rendered nugatory absent a stay

Holding

No; the applicant does not reside on the suit property and did not controvert the 1st respondent's sworn averments of possession.

Reasoning

The 1st respondent deposed, with photographs, that he was in possession after the High Court dismissed the applicant's stay application, and that the applicant lives elsewhere. The applicant did not challenge these averments, which the court accepted as reflecting the correct position on the ground, defeating the claimed nugatory aspect.

p. 3

Legal principles established

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  • An applicant under Rule 5(2)(b) must satisfy both limbs: an arguable appeal and that the appeal would be rendered nugatory absent a stay.
  • In the absence of proof of service of the statutory notice, a sale by auction is void and incapable of passing valid title to a purchaser.

Court orders

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  1. 1.Application for stay of execution dismissed with costs to the 1st respondent

Authorities

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Legislation

  • Rules of this Court (Court of Appeal Rules)Rule 5(2)(b)
  • Appellate Jurisdiction Act, Cap 9Sections 3A and 3B
  • Registered Land Act, Cap 300 (now repealed)Section 74(1)

Cases cited (4)

  • OCHIENG & ANOR Vs. OCHIENG & OTHERS
    [1995-98] 2 EA 260

    Once a chargee fails to prove service of a statutory notice, any sale of the charged property is void and incapable of conferring title.

  • GITHUNGURI Vs. JIMBA CREDIT CORP. LTD
    [1988] KLR 83

    Settled principles governing exercise of Rule 5(2)(b) jurisdiction.

  • MAGNATE VENTURES LTD Vs. E.N.G. KENYA LTD
    [2009] KLR 538

    Settled principles governing exercise of Rule 5(2)(b) jurisdiction.

  • DAVID MATUMA & 21 OTHERS Vs. LUKENYA RANCHING & FARMING CO-OP SOCIETY LTD
    [2001] e KLR

    A finding of no arguable appeal suffices to dispose of a Rule 5(2)(b) application without considering the nugatory aspect.

On appeal from
High Court of Kenya at Nairobi
H.C.C.C. No. 4275 of 1994
Jurisdiction invoked
Rule 5(2)(b) of the Rules of this Court and Sections 3A and 3B of the Appellate Jurisdiction Act, Cap 9

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 Boro Githia v Nicholas Ruthiru Gatoto, Ndarugu Merchants & Rural Urban Credit Finance (Under receivership)", Case Analysis (2015). Civil Application No. 141 of 2014 (UR 114). Source: https://new.kenyalaw.org/akn/ke/judgment/keca/2015/964/eng@2015-02-06

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