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Court of AppealDismissedCivil Application No. 64 of 2015

Julius Musili Kyunga v Kenya Commercial Bank Ltd & 2 others [2016] KECA 619 (KLR)

Court of Appeal
22 April 2016
2,136 words in judgment
View original judgmentRead on Kenya Law Watch case
AI-assisted case brief
·~9 min to read original · ~4 min brief

The bottom line

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The Court of Appeal confirmed it can issue conservatory orders but refused to stop the plot transfer and eviction because money damages would adequately compensate the applicant.

What this practically means

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Executive summary

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This is a ruling of the Court of Appeal at Mombasa (Asike-Makhandia, Ouko and M'inoti, JJ.A.) on a motion under rule 5(2)(b) of the Court of Appeal Rules, sections 3A and 3B of the Appellate Jurisdiction Act and Article 159 of the Constitution. The applicant, Julius Musili Kyunga, sought conservatory orders restraining the transfer of Plot LR No 2812/1/MN to the 3rd respondent and his eviction, pending an intended appeal against Omollo J.'s ruling of 30th October 2015 in HCCC No. 324 of 2008, which granted him leave to amend his plaint but dismissed his prayer for a conservatory order as res judicata. The dispute arose from charges over the suit property securing loans from Kenya Commercial Bank, the bank's exercise of its statutory power of sale, and the sale by auction to the 3rd respondent in November 2008; earlier applications for an injunction had been dismissed by Ojwang J. in 2010 and by this Court in Civil Appeal No. 3 of 2013. The Court framed three issues: whether it could issue conservatory orders, whether the intended appeal was arguable, and whether it would be rendered nugatory. It accepted, following Njuguna S. Ndung'u and Equity Bank v West Link Mbo, that it may issue conservatory orders under its inherent jurisdiction, and found one arguable issue. However, it held that damages would be an adequate remedy since the applicant did not suggest the respondents could not pay, so the nugatory limb failed. The application was dismissed with costs.

Questions the Court framed

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The issues the Court set itself to decide, in its own words.

  1. 1.Whether the Court has jurisdiction to issue conservatory orders under rule 5(2)(b) of the Court of Appeal Rules
  2. 2.Whether the intended appeal is arguable
  3. 3.Whether the intended appeal would be rendered nugatory in the absence of the orders sought

Key legal issues

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01

Whether the Court of Appeal can issue conservatory orders under rule 5(2)(b)

Holding

Yes. The Court affirmed that although rule 5(2)(b) specifies stay of execution, stay of proceedings and injunction, the Court may in an appropriate case invoke its inherent jurisdiction to grant conservatory orders.

Reasoning

The Court adopted its prior decision in Njuguna S. Ndung'u v Ethics & Anti-Corruption Commission, quoting its earlier reasoning in Equity Bank Ltd v West Link Mbo Ltd that the power to preserve the substratum of an appeal is inherent in the Court and may be exercised ex-debito justitiae under rule 5(2)(b) read with sections 3A and 3B of the Appellate Jurisdiction Act and the Constitution. This was, however, of no avail to the applicant on the facts.

p. 3
02

Whether the intended appeal is arguable

Holding

Yes - the applicant raised at least one arguable issue, namely the constitutionality of section 69B of the repealed Transfer of Property Act and the alleged violation of his right to property, though an arguable point need not succeed.

Reasoning

The Court found that the amended plaint, asserting that the exercise of the statutory power of sale was unconstitutional and violated the applicant's right to property under Article 40, raised at least one arguable issue. Citing Kenya Tea Growers Association, the Court noted an arguable issue need not necessarily succeed at the hearing of the appeal.

p. 4
03

Whether the intended appeal would be rendered nugatory absent the orders

Holding

No. Damages would be an adequate remedy if the appeal succeeded, as the applicant did not suggest the respondents were incapable of paying.

Reasoning

The Court held that the applicant placed no material before it showing that success on appeal would be a mere pyrrhic victory. If he demonstrated unconstitutionality of section 69B and violation of his rights, damages would suffice. The applicant did not contend the respondents were incapable of paying, so the nugatory limb failed and the application was dismissed with costs.

p. 4

Legal principles established

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  • In addition to stay of execution, stay of proceedings and injunction, the Court of Appeal may, under rule 5(2)(b) read with sections 3A and 3B of the Appellate Jurisdiction Act, issue conservatory orders in appropriate cases under its inherent jurisdiction.
  • An applicant under rule 5(2)(b) must satisfy both limbs: that the intended appeal is arguable and that it will be rendered nugatory if it succeeds absent the orders sought; failure on either limb disposes of the application.
  • Where a litigant's constitutional claim regarding the exercise of a statutory power of sale succeeds, an award of damages will be an adequate remedy where the respondents are capable of paying.

Court orders

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  1. 1.The application for conservatory orders pending the hearing and determination of the intended appeal was dismissed with costs

The bench

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One judgment of the whole court — no separate or dissenting opinions.

majority

Wrote the judgment

William Ouko
W. OukoJA
Currently serving
majority

Wrote the judgment

majority

Wrote the judgment

On appeal from
High Court of Kenya at Mombasa
HCCC No. 324 of 2008
Jurisdiction invoked
Rule 5(2)(b) of the Court of Appeal Rules, Sections 3A and 3B of the Appellate Jurisdiction Act and Article 159 of the Constitution

Relief refused

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Conservatory order restraining transfer of Plot LR No 2812/1/MN and eviction of the applicant

The applicant failed to satisfy the second limb of the rule 5(2)(b) test, namely that the intended appeal would be rendered nugatory; damages would be an adequate remedy

p. 4

Costs

Application dismissed with costs to the respondents.

Quotable passages

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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 the extent that the applicant has not satisfied us that the intended appeal will be rendered nugatory if we do not issue the orders sought, and further to the extent that he is obliged to satisfy the two tests under rule 5(2) (b), this application fails and it is hereby dismissed with costs. It is so ordered.
p. 4Disposition - dismissal of the application
there appears to us to be no impediment in doctrine or practical good sense to the issuance of what the applicant has called "conservatory orders" under the same Rule as read with Sections 3A and 3B of the Appellate Jurisdiction Act on the overriding objective ("the oxygen principle") and the Constitution.
p. 3Jurisdiction to issue conservatory orders under rule 5(2)(b)
The applicant is obliged to satisfy us on two issues. Firstly that his intended appeal is arguable and secondly that it will be rendered nugatory if it succeeds in the absence of the order sought.
p. 3Twin tests under rule 5(2)(b)
We are satisfied that the applicant has raised at least one arguable issue, which in any event, need not necessarily succeed at the hearing of the appeal.
p. 4Arguability threshold

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, "Julius Musili Kyunga v Kenya Commercial Bank Ltd & 2 others [2016] KECA 619 (KLR)", Case Analysis (2016). Civil Application No. 64 of 2015. Source: https://new.kenyalaw.org/akn/ke/judgment/keca/2016/619/eng@2016-04-22

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