Kihingo Village (waridi Gardens) Management One Limited v William Edward Pike & 8 others
The bottom line
#The Court of Appeal refused to preserve a company's board control during an appeal because the feared harm was not irreversible and the changes had already happened.
What this practically means
#Executive summary
#Key legal issues
#Competence of the application in the absence of a company resolution authorising it
The application was a proper candidate for striking out as incompetent because the unrebutted averment showed no shareholders' or board meeting authorised the deponent to swear the affidavit or instruct counsel
The 3rd respondent swore that no meeting was ever called authorising the supporting affidavit or the instruction of advocates, and that the company has only two shareholder-directors. The applicant filed no rebuttal and did not annex the resolution or proxy said to authorise the application. The court held that the burden shifted to the applicant, whose failure to controvert meant the averments stood as true, rendering the application incompetent; the court nonetheless went on to determine the merits for completeness.
Whether the intended appeal is arguable
The grounds in the draft memorandum of appeal are arguable, their ultimate success notwithstanding
Applying the Kinyanjui v Ketter principles, the court found the seven grounds faulting the High Court's construction of section 133 of the Companies Act, the Articles of Association and the casting-vote provisions were not frivolous. Citing Gachau and Mandavia, it reiterated that a single bona fide arguable ground suffices; the applicant passed the first limb of the Rule 5(2)(b) test.
Whether the intended appeal would be rendered nugatory if the injunction is not granted
The nugatory threshold was not met: no deposition showed irreversible liabilities, and the acts sought to be forestalled had already been effected
The applicant's fears that respondents might commit the company to third-party liabilities were speculative; there was no deposition that such liabilities would be irreversible, which the court identified as the core criterion. Further, the applicant failed to rebut the respondents' assertion that new directors had been registered and bank signatories changed, so any orders would be issued in vain.
Legal principles established
#- An applicant under Rule 5(2)(b) must demonstrate both that the appeal is arguable and that it will be rendered nugatory if the relief is not granted
- An arguable appeal need not succeed; it suffices that it raises a bona fide issue, and a single arguable ground is enough
- The nugatory principle turns on irreversibility: whether what is sought to be stayed is reversible or, if not, whether damages would reasonably compensate the aggrieved party
- A party who avers a material fact in a replying affidavit bears the benefit of it unless controverted; once unrebutted, the averment stands as true and the burden lay on the applicant to controvert
- A court should guard against issuing orders in vain where the relief sought would have no practical effect
Court orders
#- 1.The notice of motion dated 14th January, 2021 seeking an injunction pending appeal is dismissed
- 2.Costs of the application awarded to the respondents
- On appeal from
- High Court of Kenya, Commercial and Tax Division, Nairobi
- Milimani Commercial Court Civil Suit No. E229 of 2019
- Jurisdiction invoked
- Rule 5(2)(b) of the Court of Appeal Rules 2010
Key timeline
#Practical implications
#Frequently asked questions
#Cite this brief
#Cite this brief
Caselaw, "Kihingo Village (waridi Gardens) Management One Limited v William Edward Pike & 8 others", Case Analysis (2021). Civil Application No. E025 of 2021. Source: https://new.kenyalaw.org/akn/ke/judgment/keca/2021/682/eng@2021-04-23
Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.