Ngonya & another v Chege & 3 others (Civil Appeal 23 of 2020) [2021] KECA 139 (KLR)
The bottom line
#The Court of Appeal refused to preserve the status quo over charged land because the appeal looked weak and a bank can pay damages if it later wins.
What this practically means
#Executive summary
#Key legal issues
#Governing test for a rule 5(2)(b) application
The twin principles are that the appeal must be arguable and that it will be rendered nugatory if the orders are not granted.
The Court restated the settled principles for rule 5(2)(b) applications, citing National Bank of Kenya Limited & Another vs Geoffrey Wahome Muhotia & Another. It held that even where the application is couched as one for maintenance of status quo under the inherent jurisdiction, the same considerations apply because such an order preserves the existing state of affairs, for example by staying a sale pending appeal.
Whether the appeal was arguable
Arguability was doubtful because the suit property is registered in the name of the 2nd respondent, who did not oppose the application and lawfully charged it to the 3rd respondent.
The Court observed that the appellants were never registered as owners and that a claim of ownership by reference to a list of assets in a succession cause does not prove ownership. Residence on the property alone was not accepted as sufficient to establish an arguable appeal, though the Court assumed arguability arguendo for the purposes of the second limb.
Whether the appeal would be rendered nugatory
The nugatory test failed because the 3rd respondent is a reputable bank capable of compensating the appellants in damages if the appeal succeeds.
The Court found that damages would be an adequate remedy against the 3rd respondent. Conversely, delaying the statutory power of sale would allow the outstanding loan balance, already substantial and accruing interest, to escalate and outstrip the value of the suit property, prejudicing the chargee.
Legal principles established
#- An applicant under rule 5(2)(b) must demonstrate that the appeal is arguable and that, unless the orders sought are granted, the appeal if successful will be rendered nugatory; the same considerations apply to an application brought under the Court's inherent jurisdiction under sections 3A and 3B of the Appellate Jurisdiction Act seeking maintenance of the status quo.
- An arguable appeal is not one that must succeed; it is one that raises at least one bona fide issue deserving the Court's consideration.
Court orders
#- 1.Application for maintenance of the status quo ante pending the hearing and determination of the appeal dismissed
- 2.Costs of the application awarded to the 3rd respondent
- On appeal from
- High Court
- Jurisdiction invoked
- Sections 3A and 3B of the Appellate Jurisdiction Act and rule 5(2)(b) of the Court of Appeal Rules
Key timeline
#Practical implications
#Frequently asked questions
#Cite this brief
#Cite this brief
Caselaw, "Ngonya & another v Chege & 3 others (Civil Appeal 23 of 2020) [2021] KECA 139 (KLR)", Case Analysis (2021). Civil Appeal No 23 of 2020. Source: https://new.kenyalaw.org/akn/ke/judgment/keca/2021/139/eng@2021-11-11
Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.