Maxwell Hudson Kaduki Diggs & another v I & M Bank & 2 others [2018] KECA 465 (KLR)
The bottom line
#The Court of Appeal dismissed borrowers' bid to stop a completed land sale, ruling that misleading the court and offering property as loan security cost them any protection.
What this practically means
#Executive summary
#Key legal issues
#Whether the applicants demonstrated an arguable appeal
No arguable appeal was shown; the claim of arguability was fanciful given the admitted debt, the indulgence granted, and the concluded sale.
The applicants admitted the debt, obtained a postponement of the auction to sell the property privately, failed to do so, and a representative attended the auction. Their challenge to the statutory notices was an afterthought first raised after the sale. The Court found no genuine bona fide point warranting the intervention of the Court pending the intended appeal, while noting its view does not bind the bench hearing the appeal.
Whether the appeal would be rendered nugatory absent the orders sought
The nugatory limb did not arise because there was no arguable appeal; in any event, a bona fide purchaser for value holds title and the applicants can be compensated in damages.
There is a bona fide purchaser for value, the third respondent, who now holds title and is prima facie entitled to the property while the applicants are not. Having charged the property as loan security, the applicants commoditised it, making it assessable in liquid terms, so compensation in damages would render any ultimate finding of impropriety adequately remediable.
The duty of candour in applications to the Court
The motion's framing created the false impression of an imminent sale when the property had been auctioned over a year earlier, disqualifying the applicants from favourable discretion.
The application and its supporting urgency affidavit presented a fiction that the property was in danger of sale, which misled the Court into certifying the application as urgent. The sale had concluded before the applicants even moved the court below. Applying the maxim that he who comes to equity must do equity, the Court held that such calculated ambivalence forfeited any entitlement to discretionary relief.
Legal principles established
#- A party who misleads the court by deliberate falsehood, calculated ambivalence or attempts to mislead does not deserve the favourable discretion of the court; equity demands absolute candour.
- An arguable appeal means a genuine bona fide point calling for an answer, though it need not necessarily succeed.
- A chargee's order dismissing an injunction application is a negative order incapable of being stayed.
- A chargor who commoditises the suit property by offering it as loan security opens it to assessment in liquid terms, so damages, not injunctive relief, is the appropriate remedy.
Court orders
#- 1.The application dated 8th February 2018 was dismissed with costs
- On appeal from
- High Court of Kenya at Nairobi, Milimani
- ELC Case No. 357 of 2017
- Jurisdiction invoked
- Rule 5(2)(b) of the Court of Appeal Rules (application for stay of execution and injunction pending appeal); this being an interlocutory application arising from an intended appeal, no constitutional jurisdiction provision is stated.
Key timeline
#Practical implications
#Frequently asked questions
#Later judgments citing this (1)
#Judgments in the corpus that rely on this one. Where the Court said how it treated the authority, that is shown.
- Soy Developers Limited v Kenagri Products Limited & 4 others [2021] KEELC 3448 (KLR)[2021] KEELC 3448 (KLR)15 Apr 2021applied
Cite this brief
#Cite this brief
Caselaw, "Maxwell Hudson Kaduki Diggs & another v I & M Bank & 2 others [2018] KECA 465 (KLR)", Case Analysis (2018). Civil Application No. 32 of 2018 (UR 30/2018). Source: https://new.kenyalaw.org/akn/ke/judgment/keca/2018/465/eng@2018-07-13
Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.