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Court of AppealPartially AllowedNot stated in the judgment (interlocutory application; intended appeal from Nairobi H.C. COMM E716 of 2021)

Nyaboke v Ncba Bank Kenya Plc & another (Civil Application E308 of 2021) [2021] KECA 323 (KLR)

Court of Appeal of Kenya
20 December 2021
RNR. N. NambuyePNP. NyamweyaJLJ. Lesiit
2,366 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 froze a Lavington property sale pending appeal, confirming missing statutory notices can ground a challenge to a lender's auction.

What this practically means

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Executive summary

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This was an interlocutory application under Rule 5(2)(b) of the Court of Appeal Rules, supported by Sections 3A and 3B of the Appellate Jurisdiction Act, in which the Applicant sought to restrain the 1st Respondent from transferring, alienating or disposing of LR No. 330/250 in Lavington, Nairobi, or interfering with her possession, pending an intended appeal against a High Court ruling in Nairobi H C COMM E716 of 2021 which had dismissed her bid for a temporary injunction. The dispute arose from a loan facility advanced to the Applicant's spouse, secured by a charge over the suit property (Penthouse Number C7). Following default, the chargee exercised statutory power of sale by public auction. The Applicant argued the appeal was arguable on the ground that the High Court found no statutory notices were issued under sections 90(2) and 96(2) of the Land Act yet upheld the auction, and that her equity of redemption was extinguished at an interlocutory stage. The Respondents contended the sale was finalised, the equity of redemption was extinguished, and the purchaser was protected by section 99 of the Land Act. The Court, applying the settled twin principles of arguability and nugatory effect, found one bona fide arguable ground sufficed and the grounds raised were not frivolous. On the nugatory limb, it noted the Respondents produced no evidence of transfer to a third party, the Applicant remained in possession, and damages would be inadequate given the contested property value. The Court allowed the application, preserving the status quo as at 17th November 2021 as to possession and registration, conditioned on the Applicant filing the intended appeal within ninety days, failing which the orders lapse, with costs of the application to abide the outcome of the appeal.

Key legal issues

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01

Arguability of the intended appeal

Holding

The appeal was arguable because the Applicant raised bona fide grounds on the legality of the statutory sale and the determination of her suit at an interlocutory stage; the Court refrained from making definitive findings on the merits

Reasoning

The Applicant needed to demonstrate only one bona fide arguable ground. Grounds that the High Court found no statutory notices were issued under sections 90(2) and 96(2) of the Land Act yet upheld the auction, and that her equity of redemption was declared extinguished at an interlocutory stage, were found arguable and fit for full canvassing. The Court expressly declined to make definitive findings of fact or law at that stage.

p. 4
02

Whether the appeal would be rendered nugatory

Holding

The appeal would be rendered nugatory if the status quo on possession and title were disturbed, because the Respondents produced no evidence of transfer to a third party and damages would not be an adequate remedy

Reasoning

The Court weighed the Respondents' claim that the purchaser's remedy was damages against the Applicant's assertion that damages would be inadequate given the contested value of the property. Since the record showed no evidence of transfer of the suit property to any third party or its registration status, and the Applicant remained in possession, preservation of the status quo as at 17th November 2021 was necessary to prevent the appeal from being rendered nugatory.

p. 4

Legal principles established

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  • An applicant under Rule 5(2)(b) must satisfy both the arguability and the nugatory limbs to obtain relief
  • The Court becomes seized of a Rule 5(2)(b) application only after a Notice of Appeal has been filed under Rule 75

Court orders

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  1. 1.An order preserving the status quo obtaining as at 17th November, 2021 with regard to the possession and ownership of LR No. 330/250, Lavington, pending the hearing and determination of the intended appeal
  2. 2.The Applicant to file and serve the intended appeal within ninety (90) days
  3. 3.Upon default in filing the intended appeal, the orders preserving the status quo to automatically lapse
  4. 4.Status quo to mean both the physical possession and registration status of the suit property as at 17th November, 2021
  5. 5.Costs of the application dated 30th August 2021 to abide the outcome of the intended appeal
On appeal from
High Court of Kenya
Nairobi H C COMM E716 of 2021
Jurisdiction invoked
Section 3A and 3B of the Appellate Jurisdiction Act and 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 (3)

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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, "Nyaboke v Ncba Bank Kenya Plc & another (Civil Application E308 of 2021) [2021] KECA 323 (KLR)", Case Analysis (2021). Not stated in the judgment (interlocutory application; intended appeal from Nairobi H.C. COMM E716 of 2021). Source: https://new.kenyalaw.org/akn/ke/judgment/keca/2021/323/eng@2021-12-20

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