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Court of AppealAllowed· [2021] KECA 17 (KLR)

Tabu v Capital Realty Limited & another (Civil Application E384 of 2020) [2021] KECA 17 (KLR)

Court of Appeal
23 September 2021
HOHannah OkwenguFSF. SichaleJMJ. Mohammed
2,473 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 halted the auction of two Syokimau townhouses, protecting a homebuyer with a valid claim pending her appeal.

What this practically means

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Executive summary

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The applicant, Sarah Ayimba Tabu, moved the Court of Appeal under Rule 5(2)(b) seeking a temporary injunction restraining Capital Realty Limited (1st respondent) and Housing Finance Co. Limited (2nd respondent) from selling, alienating, transferring or evicting her from two Town Houses on LR 12715/617, Syokimau, pending her intended appeal against a ruling of the Environment & Land Court (Angote, J.) dated 23rd October 2020. She asserted she had paid the full purchase price to the 1st respondent and that the 2nd respondent, as chargee, was estopped from disposing of the properties. The 2nd respondent, holding a charge securing a Kshs. 350 million facility in default, contended the applicant had no registrable interest, that damages would suffice, and that it had already auctioned Town House B19 with another auction scheduled for Town House C12. Applying the settled twin principles from Trust Bank v Investech and Stanley Kang'ethe Kinyanjui v Tony Ketter, the Court found a single bona fide arguable ground - whether the Judge erred in determining the applicant's claim summarily at an interlocutory stage despite finding she had an interest - and held the appeal would be rendered nugatory if the properties were auctioned to third parties, the applicant facing eviction from her home and undue hardship notwithstanding possible damages. The application was allowed, with costs to abide the outcome of the intended appeal. The decision binds subordinate courts on the Rule 5(2)(b) twin principles.

Key legal issues

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01

Whether the intended appeal is arguable

Holding

The intended appeal was arguable, particularly on whether the learned Judge erred in determining the applicant's claim summarily at an interlocutory stage after finding she had an interest in the Town Houses.

Reasoning

The Court applied the settled test that an arguable appeal need not necessarily succeed; a single bona fide arguable ground suffices. It found it arguable whether the Judge, having determined that the applicant had an interest in the Town Houses, erred in disposing of her claim summarily at an interlocutory stage. The Court declined to say more lest it embarrass the bench seized of the main appeal.

p. 4
02

Whether the appeal would be rendered nugatory if the injunction is not granted

Holding

The appeal would be rendered nugatory because the subject matter of the intended appeal would be auctioned to third parties, and the applicant faced the risk of eviction from her home and undue hardship despite being compensable in damages.

Reasoning

The Court held that in assessing nugatory-ness it must weigh the conflicting claims of both parties on their merits. Although the applicant could be compensated in damages, she faced the risk of eviction from her home and undue hardship. The Court drew on Housing Finance Company of Kenya v Hirji on undue hardship even in monetary matters, and found the subject matter would be auctioned to third parties.

p. 5

Legal principles established

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  • To succeed on an application under Rule 5(2)(b), an applicant must show that the appeal or intended appeal is arguable (not frivolous) and that, if successful, it will be rendered nugatory unless a stay or injunction is granted.
  • An arguable appeal is not one which must necessarily succeed, but one which ought to be argued fully before the court; one which is not frivolous.
  • In considering an application under Rule 5(2)(b), the court must not make definitive or final findings of fact or law, as doing so may embarrass the ultimate hearing of the main appeal.
  • The term 'nugatory' means not only worthless, futile or invalid, but also trifling; whether an appeal will be rendered nugatory depends on whether what is sought to be stayed is reversible or, if not reversible, whether damages will reasonably compensate the aggrieved party.

Court orders

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  1. 1.The application dated 4th December, 2020 is allowed
  2. 2.Costs shall abide the outcome of the intended appeal

Authorities

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Legislation

  • Court of Appeal RulesRule 5(2)(b)
  • Land ActSection 28

Cases cited (4)

  • Naftali Ruthi Kinyua v Patrick Thuita Gachure & Ano.
    [2015] eKLR
  • Trust Bank Limited and Another v. Investech Bank Limited and 3 Others
    [2000] eKLR
  • Stanley Kang’ethe Kinyanjui v Tony Ketter & 5 Others
    [2013] eKLR
  • Housing Finance Company of Kenya Limited v Sharok Kher Mohamed Ali Hirji & Ano.
    [2015] eKLR
On appeal from
Environment & Land Court
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, "Tabu v Capital Realty Limited & another (Civil Application E384 of 2020) [2021] KECA 17 (KLR)", Case Analysis (2021). . Source: https://new.kenyalaw.org/akn/ke/judgment/keca/2021/17/eng@2021-09-23

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