Collogne Investments Limited v Kenya Commercial Bank Limited & 1 other
The bottom line
#The Court of Appeal refused to stop KCB from finalising a Sh1 billion property sale because the borrower's intended appeal had no arguable grounds.
What this practically means
#Executive summary
#Key legal issues
#Twin principles for relief under Rule 5(2)(b)
The court must be satisfied both that the intended appeal is arguable and that it would be rendered nugatory if the orders sought are not granted.
The court restated the established two-limb test drawn from Multi-Media University v Naituli and Stanley Kangethe Kinyanjui v Tony Ketter, holding that the discretion under Rule 5(2)(b) is wide but must be exercised judicially upon satisfaction of both limbs.
Arguability of the intended appeal
The draft memorandum of appeal disclosed no arguable grounds: the debt was not contested and the grounds raised (relating to a missing or incomplete record and an alleged undertaking) were not canvassed before the trial court and arose post-ruling.
The applicant's grounds centred on the completeness of the court record and an undertaking allegedly given by the 1st respondent. The court found the undertaking related to a different case (HCCC No. 385 of 2020) to which the respondent was not a party, and that challenges to the exercise of trial-court discretion rarely succeed on appeal absent demonstration that the discretion was injudiciously exercised.
Injunction affecting a non-party purchaser
An injunction cannot issue affecting the proprietary rights of a third-party purchaser who has not been joined and has not been heard.
The suit property had been sold to Furniture Palace International (Kenya) Limited, which was not a party to the application. The court held it would be unfair and unjust to issue an injunction affecting its proprietary rights without an opportunity to be heard.
Nugatory aspect
Having failed on the arguability limb, the applicant's failure on that limb alone justified refusal; the nugatory limb need not be considered.
Because both limbs must be satisfied before relief can issue under Rule 5(2)(b), the court declined to consider the nugatory aspect once arguability had failed.
Legal principles established
#- Relief under Rule 5(2)(b) requires the applicant to demonstrate both that the intended appeal is arguable and that it will be rendered nugatory if the orders are not granted; failure on either limb is fatal.
- An appellate court will rarely interfere with the discretion exercised by the trial court unless the exercise is shown to have been injudicious.
- An injunction affecting the proprietary rights of a non-party cannot issue without giving that party an opportunity to be heard.
Court orders
#- 1.Declined to grant an injunction pending the hearing and determination of the intended appeal
- 2.Costs of the application to the 1st respondent
- On appeal from
- High Court at Nairobi
- Civil Case Number E269 of 2020
- Jurisdiction invoked
- Rule 5(2)(b) of the Court of Appeal Rules
Key timeline
#Practical implications
#Frequently asked questions
#Cite this brief
#Cite this brief
Caselaw, "Collogne Investments Limited v Kenya Commercial Bank Limited & 1 other", Case Analysis (2021). Civil Application No. E371 of 2020. Source: https://new.kenyalaw.org/akn/ke/judgment/keca/2021/665/eng@2021-04-23
Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.