John Kiprugut Kurgat t/a Jophik Enterprises v Guaranty Trust Bank (K) Limited & another [2016] KECA 133 (KLR)
The bottom line
#Kenya's Court of Appeal stopped the sale of charged land pending appeal, but only because the owner met strict conditions including a Kshs 1 million deposit.
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 injunction is refused, the intended appeal will be rendered nugatory
Key legal issues
#Conditions for an injunction pending appeal under Rule 5(2)(b)
The applicant must establish an arguable appeal and that the appeal will be rendered nugatory if the order is refused; both conditions were satisfied here
The Court restated the settled twin principles governing rule 5(2)(b) applications as captured in Ishmael Kagunyi Thande v HFCK. It found the memorandum of appeal raised arguable issues - the applicant's locus standi as principal debtor and whether the statutory power of sale was exercisable where the debt was allegedly fully paid - and that sale of the property would render the appeal nugatory.
Meaning of an arguable appeal
An arguable appeal need not succeed; it suffices that it is deserving of the Court's consideration
Relying on Dennis Mogambi Mong'are v Attorney General, the Court held that it need not form a concluded view on the merits; identified triable questions - locus standi of a principal debtor to stop sale of charged property, and exerciseability of the statutory power of sale where evidence suggests the debt was fully repaid - sufficed.
Object of Rule 5(2)(b)
The object is preservation of the subject matter of the appeal to ensure its just and effective determination
Adopting Githinji JA's statement in Equity Bank Limited v West Link Mbo Limited, the Court framed the nugatory inquiry around preservation of the subject matter, and in the circumstances held the charged property should be preserved pending the hearing and determination of the appeal, subject to the protective conditions imposed.
Legal principles established
#- To succeed on a rule 5(2)(b) application, an applicant must demonstrate both that the intended appeal is arguable and that it will be rendered nugatory unless the order is granted
- An arguable appeal is one that is deserving of the Court's consideration, not one that must necessarily succeed
Court orders
#- 1.Prayer 3 of the application dated 7th April 2016 allowed - an injunction issued restraining the respondents from selling, transferring and alienating Title Number Tulwet/Tulwet Block 7(Terige)/57 pending the hearing and determination of the appeal
- 2.The applicant to lodge the record of appeal within 45 days from delivery of the Ruling
- 3.The applicant to within 30 days deposit Kshs. 1,000,000.00 in a joint interest-bearing account in the names of advocates for the applicant and the 1st respondent pending the hearing and determination of the appeal
- 4.The applicant to within 30 days pay the auctioneers scale charges and the advertising costs incurred in connection with the aborted sale scheduled for 14th April 2016
- 5.In default of any one of the conditions, the application dated 7th April 2016 to stand dismissed with costs to the 1st respondent
The bench
#One judgment of the whole court — no separate or dissenting opinions.
Wrote the judgment
Wrote the judgment
Wrote the judgment
- On appeal from
- Environment and Land Court of Kenya at Eldoret
- Eldoret ELC No. 431 of 2013
- Jurisdiction invoked
- Rule 5(2)(b) of the Court of Appeal Rules (injunction pending the hearing and determination of an intended appeal)
Relief refused
#Unconditional injunction pending appeal
The injunction was granted only subject to conditions aimed at preserving the subject matter and protecting the 1st respondent
Costs
No general costs order; in default of any of the conditions, the application shall stand dismissed with costs to the 1st 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.
We accordingly allow prayer 3 of the application dated 7th April 2016 on the following conditions
In default of any one of these conditions, the application dated 7th April 2016 shall stand dismissed with costs to the 1st respondent.
For an application to succeed he must not only show his appeal or intended appeal is arguable, but also that unless the court grants him an injunction or stay as the case may be, the success of the appeal will be rendered nugatory.
The applicant shall within 30 days from the date of delivery of this Ruling deposit the sum of Kshs. 1,000,000.00 in a bank account in the joint names of the advocates for the applicant and the advocates for the 1st respondent pending the hearing and determination of the appeal.
Key timeline
#Practical implications
#Frequently asked questions
#Cite this brief
#Cite this brief
Caselaw, "John Kiprugut Kurgat t/a Jophik Enterprises v Guaranty Trust Bank (K) Limited & another [2016] KECA 133 (KLR)", Case Analysis (2016). Civil Application No. 26 of 2016. Source: https://new.kenyalaw.org/akn/ke/judgment/keca/2016/133/eng@2016-04-13
Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.