Kiru Traders Limited v Jamii Bora Bank Limited & 1 other
The bottom line
#The Court of Appeal let the bank proceed with the land sale because Kiru Traders failed to show its appeal was strong or that damages could not fix the loss.
What this practically means
#Executive summary
#Key legal issues
#Arguability of the intended appeal
The Court was not persuaded that the intended appeal was arguable; no details supported the allegation of fraudulent inducement, and the applicant took a top-up loan with no evidence of repayment.
The trial Judge had declined an injunction for failure to establish a prima facie case with a probability of success. Before the Court of Appeal, the applicant gave no particulars of the alleged fraud, and its own subsequent conduct - applying for a top-up facility and failing to repay - undermined the claim. The Court nonetheless left open the ultimate question for the appeal bench.
Nugatory value of the intended appeal
The nugatory test failed because the applicant adduced no evidence that the Bank would be unable to compensate it in damages if the appeal succeeded.
Land offered as security becomes a chattel; if the mortgagee's exercise of the statutory power of sale is later found wrongful, the loss of the equity of redemption is compensable in damages. Since the applicant, comprising forty coffee-farming members, did not demonstrate the Bank's inability to pay such damages, the appeal would not be rendered nugatory by the sale.
Legal principles established
#- An applicant under Rule 5(2)(b) must satisfy the twin tests of an arguable appeal and that the appeal will be rendered nugatory if stay or injunction is not granted.
- Once land is offered as security for a loan, it becomes a chattel, and where a mortgagee wrongly exercises the power of sale, the mortgagor's remedy lies in damages.
Court orders
#- 1.The applicant's motion dated 31st May, 2019 is dismissed
- 2.Costs of the application awarded to the 1st respondent
- On appeal from
- High Court of Kenya at Muranga
- Murang'a H.C.C.C. No. 12 of 2018
- 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, "Kiru Traders Limited v Jamii Bora Bank Limited & 1 other", Case Analysis (2021). Civil Application No. 81 of 2019. Source: https://new.kenyalaw.org/akn/ke/judgment/keca/2021/760/eng@2021-03-19
Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.