Skip to content
AI-generated case briefs sourced from Kenya Law · Not legal advice
Caselaw
AI-generated case brief
Case Brief · caselaw.co.ke
Court of AppealDismissedCivil Application No. 152 of 2020· [2021] KECA 763 (KLR)

Patrick James Mbogo & another v Bank of Africa Kenya Limited [2021] KECA 763 (KLR)

Court of Appeal of Kenya
19 March 2021
Martha Karambu KoomeM. K. KoomeDMD. K. MusingaKMK. M'inoti
1,539 words in judgment
View original judgmentRead on Kenya Law Watch case
AI-assisted case brief
·~6 min to read original · ~4 min brief

The bottom line

#

The Court of Appeal refused to stop the bank from selling mortgaged property, confirming that money damages are usually enough to compensate if a bank's sale turns out to be wrongful.

What this practically means

#

Executive summary

#
This is a Rule 5(2)(b) application for an injunction pending an intended appeal to the Court of Appeal at Nairobi, decided by a coram of Koome, Musinga and M'inoti, JJ.A. on 19 March 2021. The applicants had obtained loan facilities of Kshs.70,000,000 from Bank of Africa Kenya Limited in about 2011, secured by three Kajiado/Kitengela properties, for construction of residential apartments. On default, the respondent moved to realise the securities by public auction. The applicants then filed two suits - HCCC No. 346 of 2016 and HCCC No. 341 of 2018 - over the same dispute. On 25 November 2019, Odero J struck out HCCC No. 341 of 2018 as sub judice, the same cause of action being live in the earlier suit. The applicants filed a Notice of Appeal and sought orders restraining the respondent from dealing with the suit properties pending the intended appeal. Applying the settled twin principles from Ismael Kagunji Thande v Housing Finance Kenya Ltd, the court held the intended appeal was not arguable, given the uncontested facts establishing the duplicative suit and the statutory power of sale. On the nugatory limb, the court held that damages are the established remedy for wrongful exercise of a mortgagee's power of sale, that such damages are ascertainable, and that there was no suggestion the bank could not pay, leaving the applicants free to litigate in the pending 2016 suit. The motion was dismissed with costs to the respondent. The ruling binds subordinate courts on the twin-test framework and the adequacy of damages in wrongful-sale claims.

Key legal issues

#
01

Arguability of the intended appeal

Holding

The intended appeal was not arguable; the High Court correctly applied the sub judice rule under Section 6 of the Civil Procedure Act to strike out the duplicative suit.

Reasoning

The court found it common ground that the applicants had been advanced Kshs.70,000,000, defaulted, and that the respondent exercised its statutory power of sale. The applicants filed a second suit over the same subject matter and parties while HCCC No. 346 of 2016 was pending. The trial judge correctly applied the sub judice rule. On these uncontested facts, the Court was not persuaded that the intended appeal was arguable.

p. 2
02

Whether the intended appeal would be rendered nugatory

Holding

No nugatory aspect was demonstrated: damages are an ascertainable and adequate remedy against a banking institution, and the applicants remain free to litigate in the pending suit.

Reasoning

The court reiterated the settled principle that where a mortgagee wrongfully exercises the power of sale, the remedy lies in damages. The damages here can be ascertained, and there was no allegation that the respondent, a banking institution, would be unable to compensate the applicants. The applicants were also at liberty to pursue their cause of action in the still-pending HCCC No. 346 of 2016.

p. 2

Legal principles established

#
  • An applicant under Rule 5(2)(b) must satisfy the twin principles of an arguable appeal and that the appeal will be rendered nugatory absent a stay or injunction; failure on either limb is fatal.
  • Where a mortgagee wrongfully exercises its statutory power of sale over charged property, the remedy of the chargor lies in damages, which are adequate where the mortgagee is a bank able to pay.

Court orders

#
  1. 1.The Notice of Motion dated 16th June, 2020 is dismissed
  2. 2.Costs of the application awarded to the respondent
On appeal from
High Court of Kenya at Milimani, Nairobi
HCCC No. 341 of 2018
Jurisdiction invoked
Rule 5(2)(b) of the Court of Appeal Rules; Sections 1A, 1B, 3 and 3A of the Civil Procedure Act; Article 159 of the Constitution of Kenya, 2010

Key timeline

#

Practical implications

#

Frequently asked questions

#

Cite this brief

#

Cite this brief

Caselaw, "Patrick James Mbogo & another v Bank of Africa Kenya Limited [2021] KECA 763 (KLR)", Case Analysis (2021). Civil Application No. 152 of 2020. Source: https://new.kenyalaw.org/akn/ke/judgment/keca/2021/763/eng@2021-03-19

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