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Court of AppealDismissedCivil Application No. 31 of 2019 (UR 37/2019)· [2020] KECA 687 (KLR)

Equip Agencies Limited & another v I & M Investment Bank & 2 others [2020] KECA 687 (KLR)

Court of Appeal
8 May 2020
1,750 words in judgment
View original judgmentRead on Kenya Law Watch case
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The bottom line

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Kenya's Court of Appeal refused to stop the sale of charged land because the property's known value and available damages made blocking the sale unnecessary.

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 (Warsame, Gatembu Kairu and J. Mohammed, JJ.A) on a notice of motion dated 1st February 2019, amended 16th April 2019, brought under Rule 5(2)(b) of the Court of Appeal Rules seeking an injunction to restrain the 1st respondent, I & M Investment Bank, from advertising for sale, selling, transferring or otherwise dealing with the suit property, Gilgil Township Block 2/210, pending the hearing and determination of an intended appeal against a ruling of the High Court (F. Tuiyott, J.) of 24th January 2019. That ruling had dismissed the applicants' application for interlocutory relief under Order 11 Rule 3(2)(g) of the Civil Procedure Rules, the Judge having found the application to be a disguised attempt to re-litigate matters previously decided. The applicants, Equip Agencies Limited (the chargor) and Gilgil Treatment Industries (a tenant in occupation with equipment on the property), contended that the charged debt had been repaid, that the auction of 24th January 2019 was a sham conducted at a gross undervalue, and that the sale to the 3rd respondent was null and void. The Court applied the settled two-limb Rule 5(2)(b) test, citing Ishmael Kagunyi Thande vs. Housing Finance of Kenya Limited. It found the intended appeal arguable, following Dennis Mogambi Mong'are vs. Attorney General & others. However, on the nugatory limb, the Court endorsed its own earlier ruling of 6th December 2019 in Civil Appeal (Application) No. 412 of 2019 between the same parties, noting that the value of the suit property is known in precise monetary terms and that the 1st respondent had undertaken to compensate the applicant should the appeal succeed. The Court added that Section 99(4) of the Land Act provides a remedy in damages for an irregular exercise of the statutory power of sale. The application was accordingly dismissed with costs to the respondents.

Key legal issues

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01

Whether the intended appeal is arguable

Holding

The intended appeal was found to be arguable, as an arguable appeal need not necessarily succeed but need only be deserving of the Court's consideration.

Reasoning

Counsel for the applicants complained that the learned Judge erred in ignoring the provisions of Order 11 Rule 3(2)(g) of the Civil Procedure Rules in refusing interlocutory relief, and in holding that the application was a disguised attempt to obtain orders previously denied. Relying on Dennis Mogambi Mong'are vs. Attorney General & others, the Court held an arguable appeal is simply one deserving of the Court's consideration, and was satisfied the intended appeal met that threshold.

p. 2
02

Whether the intended appeal would be rendered nugatory unless the injunction was granted

Holding

The nugatory limb failed: the value of the suit property is known in precise monetary terms, the 1st respondent has given an undertaking to compensate, and damages are available under Section 99(4) of the Land Act.

Reasoning

The Court aligned itself with its earlier ruling in Civil Appeal (Application) No. 412 of 2019 between the same parties, where it found the nugatory test not satisfied because the value of the property was known and the 1st respondent had undertaken to compensate. It further noted that Section 99(4) of the Land Act affords a remedy in damages for an unauthorised, improper or irregular exercise of the power of sale, so refusing the injunction would not render the appeal nugatory.

p. 3

Legal principles established

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  • An applicant under Rule 5(2)(b) must demonstrate both that the appeal is arguable and that it will be rendered nugatory if the orders sought are not granted.

Court orders

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  1. 1.The application is dismissed with costs to the respondents

Authorities

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Legislation

  • Civil Procedure RulesOrder 11 Rule 3(2)(g)
  • Land ActSection 99(3)
  • Land ActSection 99(4)
  • Court of Appeal RulesRule 5(2)(b)

Cases cited (2)

  • Ishmael Kagunyi Thande vs. Housing Finance of Kenya Limited
    Civil Application [2007] eKLR
  • Dennis Mogambi Mong’are vs. Attorney General & others
    [2012] eKLR
On appeal from
High Court of Kenya at Nairobi
Nairobi HCCC No. 417 of 2018 (Formerly Naivasha HCCC No. 9 of 2016)
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, "Equip Agencies Limited & another v I & M Investment Bank & 2 others [2020] KECA 687 (KLR)", Case Analysis (2020). Civil Application No. 31 of 2019 (UR 37/2019). Source: https://new.kenyalaw.org/akn/ke/judgment/keca/2020/687/eng@2020-05-08

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