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Court of AppealDismissedCivil Application No. NAI E239 of 2020· [2020] KECA 328 (KLR)

Jerusha Naimutie Shani & another v Emmanuel Mathews & another [2020] KECA 328 (KLR)

Court of Appeal
9 October 2020
Martha Karambu KoomeM. K. KoomeSKS. Gatembu KairuJMJ. Mohammed
1,847 words in judgment
View original judgmentRead on Kenya Law Watch case
AI-assisted case brief
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The bottom line

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Kenya's Court of Appeal refused to halt the transfer of auctioned land, confirming that banks need not issue a fresh sale notice after a postponed auction.

What this practically means

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Executive summary

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The applicants, widow and co-administrator of the estate of Melton Ole Shani (the Chargor), sought stay of execution under Rule 5(2)(b) of the Court of Appeal Rules of a judgment of the Environment and Land Court (C. Ochieng, J) delivered on 21st May, 2020, which granted the 1st respondent a permanent injunction and ordered them to give vacant possession of land parcel L.R. No. Loitoktok/Enkariak-Rongena/243 within 90 days. The suit property had been sold in a public auction after the Chargor defaulted on a loan from Kenya Commercial Bank, which exercised its statutory power of sale and transferred the property to the 1st respondent as highest bidder. The applicants argued the intended appeal was arguable on the validity and service of the 45-day statutory notice dated 25th September, 2001, estoppel from relying on earlier notices, and want of Land Control Board consent. The Court applied the settled twin principles from Ishmael Kagunyi Thande and Stanley Kangethe Kinyanjui: the applicant must show an arguable appeal and that the appeal would be rendered nugatory absent stay. Following Mbuthia vs Jimba Credit Finance Corporation, the Court held that no fresh notification of sale was required when a sale was postponed, found on the record that the 2001 notice was served and acknowledged on behalf of the Chargor's Estate, and concluded the appeal was not arguable. On nugatory value, the Court found the applicants had not demonstrated it, noting the property was sold under the statutory power of sale and that the bank, an established financial institution, could compensate them by damages if the appeal succeeded. The application was dismissed with costs to abide the outcome of the intended appeal.

Key legal issues

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01

Arguability of the intended appeal

Holding

The intended appeal is not arguable; the statutory notice dated 25th September, 2001 was served and acknowledged on behalf of the Chargor's Estate, and no fresh notification of sale was required after postponement

Reasoning

Applying Mbuthia vs Jimba Credit Finance Corporation by parity of reasoning, the Court held a chargee need not issue a further notice when a sale is suspended. The Court also found on the record that the notice dated 25th September, 2001 was served and acknowledged by Major (Rtd.) L. Ole Shani on behalf of the Chargor's Estate, disposing of the service and estoppel contentions.

p. 2
02

Nugatory value of the intended appeal

Holding

The appeal would not be rendered nugatory without stay because the property was sold under the statutory power of sale and the 2nd respondent is a sound financial institution capable of compensating the applicants by damages

Reasoning

The Court found that the applicants had not demonstrated that the intended appeal would be rendered nugatory, since the property was sold under the statutory power of sale upon failure to repay the loan. Following Integrated Wood Complex, the Court took into account that the respondent, an established financial institution, could pay back the amounts if the appeal succeeded.

p. 3

Legal principles established

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  • An applicant under Rule 5(2)(b) must establish both that the appeal or intended appeal is arguable and that it would be rendered nugatory if stay is not granted
  • A chargee is not obliged to issue a fresh notification of sale merely because a sale was suspended or postponed

Court orders

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  1. 1.Declined to grant a stay of execution pending the hearing and determination of the appeal
  2. 2.Dismissed the application dated 14th August, 2020
  3. 3.Costs to abide the outcome of the intended appeal

Authorities

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Legislation

  • Court of Appeal RulesRule 5(2)(b)
  • Registered Land Act (Repealed)Section 74
  • Land Control Actnull

Cases cited (4)

  • Ishmael Kagunyi Thande v Housing Finance Company Limited
    Civil Application No 156 of 2006 (UR)
  • Mbuthia vs Jimba Credit Finance Corporation & Another
    [1988] eKLR
  • Integrated Wood Complex Ltd & another V Kenya National Corporation Ltd
    [2005] eKLR
  • Stanley Kangethe Kinyanjui v Tony Ketter & 5 others
    [2013] eKLR
On appeal from
Environment and Land Court
Nairobi ELC Case No. 949 of 2017
Jurisdiction invoked
Rule 5(2)(b) of the Court of Appeal Rules

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, "Jerusha Naimutie Shani & another v Emmanuel Mathews & another [2020] KECA 328 (KLR)", Case Analysis (2020). Civil Application No. NAI E239 of 2020. Source: https://new.kenyalaw.org/akn/ke/judgment/keca/2020/328/eng@2020-10-09

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