Levnel Enterprises Limited & another v Grofin Sgb Kenya Limited & another [2020] KECA 255 (KLR)
The bottom line
#Kenya's Court of Appeal refused to block the sale of charged property, holding that you cannot stay a negative order and the borrowers failed the two-part test.
What this practically means
#Executive summary
#Key legal issues
#Arguability of the intended appeal on the ground of non-service of the statutory notice of sale
The intended appeal was not arguable because the statutory notice was served on the 2nd applicant's postal address and indebtedness was not denied
The court noted that the applicants' sole challenge was to the sale of the charged property for failure to serve the statutory notice of sale. However, the record showed the notice was sent to the 2nd applicant's postal address, and the 2nd applicant did not deny the debt, only alleging an 'irregularity' of the sale. On that material the arguability limb of the Rule 5(2)(b) test was not met.
Nugatory value and staying a negative order
A refusal of an injunction is a negative order that is not capable of being stayed, and the respondent financial institution's ability to refund any sum recovered meant the appeal would not be rendered nugatory
Relying on Kenya Commercial Bank Limited v Tamarind Meadows Limited & 7 others, the court held that an order dismissing an injunction is a negative order which cannot be stayed. Further, no material established that the respondent financial institution could not refund the sum recoverable, so absent stay the appeal would not be rendered nugatory.
Legal principles established
#- An applicant under Rule 5(2)(b) must demonstrate both an arguable appeal and that the appeal would be rendered nugatory if the orders sought are not granted; failure on either limb is fatal.
- Where the order sought to be stayed is a negative order (a refusal of an injunction), the nugatory-prong will generally not be satisfied, particularly where the respondent is capable of refunding any sum recovered.
Court orders
#- 1.The Notice of Motion dated 25th June, 2020 is disallowed
- 2.The applicants shall bear the costs of the application
- On appeal from
- High Court of Kenya at Nairobi
- Civil Appeal No. 179 of 2019 (ruling dated 16th June 2020, arising from Civil Case No. 129 of 2019)
- Jurisdiction invoked
- Rule 5(2)(b) of the Court of Appeal Rules; Article 159 of the Constitution cited in the application
Key timeline
#Practical implications
#Frequently asked questions
#Cite this brief
#Cite this brief
Caselaw, "Levnel Enterprises Limited & another v Grofin Sgb Kenya Limited & another [2020] KECA 255 (KLR)", Case Analysis (2020). Civil Application No. 172 of 2020. Source: https://new.kenyalaw.org/akn/ke/judgment/keca/2020/255/eng@2020-10-23
Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.