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Court of AppealDismissedCivil Application No. NAI. 214 of 2018 (UR 170/2018)· [2019] KECA 88 (KLR)

Salim Hussein Dungarwalla v Uzima Press Limited & 2 others

Court of Appeal
22 November 2019
1,762 words in judgment
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The bottom line

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Kenya's Court of Appeal refused to protect a land buyer pending appeal because he showed no risk of losing the property—arguing a good case alone is not enough.

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 (Karanja, Okwengu and M'inoti JJ.A.) on a rule 5(2)(b) application for an injunction pending an intended appeal by Salim Hussein Dungarwalla (substituted by Neelam Dungarwalla). The applicant had sued Uzima Press Limited for specific performance of a 2005 agreement for the sale of LR No. 1870/X/24 for Kshs 27 million. The Environment and Land Court (Bor, J.) dismissed the suit on 4th July 2018, holding that Uzima Press had validly rescinded the agreement after the applicant allegedly fraudulently altered it to show a price of Kshs 37 million, and allowed Uzima's counterclaim entitling it to transfer the property to Right End Properties Limited for Kshs 40 million. By the time of the hearing, the property had already been transferred to the 2nd respondent, which was common ground. The Court found the intended appeal arguable on the questions of proof of fraud and the validity of rescission, but held that the applicant had produced no material showing the appeal would be rendered nugatory: he did not suggest the 2nd respondent intended to dispose of the property, and even if it were alienated he could be adequately compensated for its full value. Emphasising that both rule 5(2)(b) principles must be satisfied, the Court dismissed the application and ordered that its costs abide the outcome of the intended appeal. The decision below was not disturbed.

Key legal issues

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01

Whether the intended appeal was arguable

Holding

The intended appeal was arguable because the applicant raised bona fide issues on the standard of proof of fraud and the propriety of the rescission of the contract.

Reasoning

The applicant intended to contend that fraud was not proved to the required standard and that there was no proper rescission. The court held these were bona fide issues entitled to full consideration at the hearing of the appeal, while expressly declining to opine on their merits at the interlocutory stage.

p. 2
02

Whether the intended appeal would be rendered nugatory in the absence of the injunction

Holding

The applicant failed to demonstrate nugatory-ness; he produced no material showing the 2nd respondent intended to dispose of the property, and even upon alienation he could be adequately compensated in damages.

Reasoning

The suit property had already been transferred to the 2nd respondent, and the applicant neither suggested the 2nd respondent intended to sell or transfer it to a third party nor that the respondents could not compensate him for its full value. The court declined to act on speculation. Having failed the second principle, the application had to be dismissed notwithstanding arguability.

p. 2

Legal principles established

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  • An applicant under rule 5(2)(b) must establish both that the intended appeal is arguable and that it will be rendered nugatory if the relief is not granted; satisfying only one limb is insufficient.
  • Whether an appeal will be rendered nugatory depends on the peculiar circumstances of each application, and the burden rests on the applicant to demonstrate nugatory-ness, which cannot be met by surmise and speculation.
  • An arguable appeal need not raise a multiplicity of points; a single bona fide arguable point suffices.
  • A decision on an interlocutory application does not involve a determination of, or opinion on, the merits of the appeal proper.

Court orders

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  1. 1.Application for injunction pending appeal dismissed
  2. 2.Costs of the application to abide the outcome of the intended appeal
On appeal from
Environment and Land Court at Nairobi
ELCC No. 2315 of 2007
Jurisdiction invoked
Rule 5(2)(b) of the Court of Appeal Rules (injunction pending intended appeal)

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, "Salim Hussein Dungarwalla v Uzima Press Limited & 2 others", Case Analysis (2019). Civil Application No. NAI. 214 of 2018 (UR 170/2018). Source: https://new.kenyalaw.org/akn/ke/judgment/keca/2019/88/eng@2019-11-22

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