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Court of AppealDismissedCivil Application No. 282 of 2019· [2020] KECA 851 (KLR)

Tarabana Company Ltd v Harcharan Singh Sehmi & 7 others [2020] KECA 851 (KLR)

Court of Appeal
6 March 2020
Martha Karambu KoomeM. K. KoomeFSF. SichaleSKS. ole Kantai
2,880 words in judgment
View original judgmentRead on Kenya Law Watch case
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The bottom line

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The Court of Appeal refused to pause enforcement of a ruling returning contested Nairobi land to the original leaseholders, partly because the buyer kept building and borrowing while the case was ongoing.

What this practically means

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Executive summary

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Tarabana Company Ltd moved the Court of Appeal under Rule 5(2)(b) of the Court of Appeal Rules seeking stay of execution of the judgment of Bor, J. of the Environment and Land Court delivered on 22nd July 2019 in ELC Case No. 1311 of 2014. The ELC had found the 1st - 3rd respondents proved ownership of LR No. 209/2759/9 (I.R No 6477), granted an injunction, ordered the register changed to reflect them as lessees, directed eviction within three months, and awarded general damages of Kshs. 25,000,000 against the 1st respondent while declining special damages and dismissing the 2nd respondent's counterclaim. Tarabana argued it was a bona fide purchaser for value from the 4th respondent, Rospatech Ltd, with an indefeasible title under Section 26(1) of the Land Registration Act, and that execution would divest it of property securing a Prime Bank loan without compensation, rendering the appeal nugatory. The 4th, 5th, 7th and 8th respondents supported the motion; the 1st - 3rd respondents opposed, contending the title derived from fraud and that the purchase price discrepancy (Kshs. 12.5 million in the agreement versus Kshs. 24 million in the transfer) showed the applicant was not a purchaser for value. Applying the Exclusive Estates principles, the court held the appeal was not arguable and that the applicant's own conduct - constructing and borrowing while the suit was pending, and resisting NLC investigations - defeated the nugatory claim. The motion was dismissed with costs to the 1st - 3rd respondents.

Key legal issues

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01

Arguability of the intended appeal

Holding

The intended appeal was not arguable. The suit premises belonged to the 1st - 3rd respondents whose lease was allocated to the 4th respondent while their extension application was pending, without the Registrar calling them for a hearing; the court also entertained doubts about whether the applicant was an innocent purchaser for value given the differential values in the sale agreement and transfer documents.

Reasoning

Applying the rule 5(2)(b) principles, the court examined the material before it without commenting on the merits. It found the 1st - 3rd respondents were the leaseholders who were never heard before being divested of their title, were evicted, and that the applicant charged the property for a Ksh. 60 million loan and built a multi-storied building while the suit was pending. The discrepancy in purchase prices cast doubt on bona fides.

p. 4
02

Nugatory value of the intended appeal

Holding

The appeal would not be rendered nugatory if stay was refused; the applicant had blown hot and cold by proceeding with construction and a loan during the trial and by resisting investigations into the title allocation while now seeking stay.

Reasoning

The court held the applicant's own conduct defeated its plea of prejudice: it built and secured a loan while the ELC suit was pending, knowing the risk, and had opposed NLC investigations on the footing that the ELC had jurisdiction over all issues. Having obtained a judgment against it, the applicant could not now invoke equity to seek stay. These arguments had no merit.

p. 4

Legal principles established

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  • In an application for stay of execution under rule 5(2)(b) of the Court of Appeal Rules, the principles governing the exercise of the Court's discretion are that the intended appeal must not be frivolous, and that if stay is not granted, the intended appeal will be rendered nugatory.

Court orders

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  1. 1.The application for stay of execution pending the hearing and determination of the intended appeal is dismissed
  2. 2.Costs of the application awarded to the 1st - 3rd respondents

Authorities

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Legislation

  • Court of Appeal RulesRule 5(2)(b)
  • Land Registration ActSection 26(1)
  • Land Registration ActSection 23
  • Land Registration ActSection 26

Cases cited (7)

  • Katende vs. Haridar & Co Ltd
  • Lawrence Mukiri vs. Attorney General & 4 Others
    [2013] eKLR
  • Salaries Remuneration Commission vs. Parliamentary Service Commission & 4 Others
    [2019] eKLR
  • Arthi Highway Developers Ltd vs. West End Butchery Ltd & 6 Others
    [2015] eKLR
  • Board of Governors, Moi High School, Kabarak & Another vs. Malcolm Bell
    [2013] eKLR
  • Exclusive Estates Ltd. vs. Kenya Posts & Telecommunications Corporation & Another
    (2005) 1 EA 53
  • Judicial Review Case No. 290 of 2016
On appeal from
Environment and Land Court at Nairobi
ELC Case No. 1311 of 2014
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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Later judgments citing this (2)

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Judgments in the corpus that rely on this one. Where the Court said how it treated the authority, that is shown.

Cite this brief

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Cite this brief

Caselaw, "Tarabana Company Ltd v Harcharan Singh Sehmi & 7 others [2020] KECA 851 (KLR)", Case Analysis (2020). Civil Application No. 282 of 2019. Source: https://new.kenyalaw.org/akn/ke/judgment/keca/2020/851/eng@2020-03-06

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