Silvergate Academy Limited v National Bank of Kenya Limited
The bottom line
#Kenya's Court of Appeal refused to stop a bank from selling a school's property because the school failed to show its appeal had any real chance of success.
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 sought is not granted, the intended appeal would be rendered nugatory
Key legal issues
#Whether the intended appeal was arguable
The intended appeal was not arguable; the trial judge correctly applied the Giella conditions and his findings could not be faulted
The court reviewed the material placed before the trial judge, who had considered all the Giella conditions and found none demonstrated. The rates dispute was merely a dispute over accounts, and the valuation complaint was premature since the property had not been sold. The judge's discretion was properly exercised.
Whether the appeal would be rendered nugatory absent an injunction
The nugatory condition was not demonstrated; no allegation was made that the respondent could not compensate the applicant if the appeal succeeded
No allegation was made that the respondent would be unable to compensate the applicant in the event the intended appeal succeeded. The indebtedness, now probably in excess of Kshs.30,000,000, was freely admitted, so no nugatory prejudice was shown.
Whether the absence of an amended plaint undermined the application
The injunction application was premised on an intended amended plaint that was never lodged, leaving no basis for the order sought
The trial judge had allowed leave to amend the plaint and considered the injunction on the basis of the intended amendment. By the time the motion was canvassed before the Court of Appeal, no amendment had been lodged and no amended plaint appeared on the record, so there was no basis for the order sought.
Legal principles established
#- An injunction pending appeal under rule 5(2)(b) requires the applicant to satisfy both an arguable appeal and that the appeal would be rendered nugatory
- An appellate court will not interfere with a discretionary decision unless the judge misdirected himself in law, misapprehended the facts, took or failed to take account of relevant considerations, or the decision is plainly wrong
- A dispute as to accounts cannot bar a chargor from exercising its statutory power of sale
Court orders
#- 1.The Notice of Motion dated 4th June 2015 is dismissed with costs
The bench
#One judgment of the whole court — no separate or dissenting opinions.
- On appeal from
- High Court
- H.C.C.C. No. 476 of 2013
- Jurisdiction invoked
- Rule 5(2)(b) of the Court of Appeal Rules
Relief refused
#Injunction restraining the respondent from exercising its statutory power of sale or interfering with the suit property pending the intended appeal
The applicant failed to demonstrate either twin prerequisite under rule 5(2)(b): an arguable appeal and that the appeal would be rendered nugatory
Costs
The Notice of Motion dated 4th June 2015 is 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.
This Court can only grant an injunction pending appeal under Rule 5(2)(b) of the Rules of this Court if the applicants satisfy us that both the intended appeal is arguable and further that unless the order of injunction in terms sought or a stay of execution is granted the intended appeal would be rendered nugatory
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.
it is trite law that a dispute as to accounts cannot bar a chargor from exercising its statutory power of sale.
In the end we have reached the conclusion that the Notice of Motion dated 4 th June 2015 is without merit and it is ordered dismissed with costs.
Key timeline
#Practical implications
#Frequently asked questions
#Cite this brief
#Cite this brief
Caselaw, "Silvergate Academy Limited v National Bank of Kenya Limited", Case Analysis (2016). Civil Application No. NAI. 151 of 2015. Source: https://new.kenyalaw.org/akn/ke/judgment/keca/2016/837/eng@2016-01-22
Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.