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Court of AppealDismissedCivil Application E002 of 2022· [2022] KECA 780 (KLR)

Shah Rekhavanti Pankaj v Bank of Baroda & another

Court of Appeal
10 June 2022
1,598 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 refused to stop a property transfer because money damages could compensate the applicant, even though his appeal had arguable grounds.

What this practically means

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Executive summary

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This is a ruling of the Court of Appeal at Mombasa (SG Kairu, A Mbogholi-Msagha and P Nyamweya, JJA) on a Notice of Motion dated January 26, 2022 by Shah Rekhavanti Pankaj under Rule 5(2)(b) of the Court of Appeal Rules. The Applicant sought an injunction restraining the Respondents from handing over vacant possession of premises MN/1/1185 CR 10161 to the purchaser, and a stay of proceedings in the High Court (P. Otieno J., Mombasa Civil Case No E3 of 2020, ruling of November 27, 2020), pending an intended appeal against the dismissal of his application for injunctive relief challenging the auction of the suit property by the Bank's chargee power of sale. The Court confirmed jurisdiction under Rule 75, a Notice of Appeal having been lodged on December 11, 2020 within 14 days. Applying the twin limbs in Stanley Kangethe Kinyanjui vs Tony Ketter, the Court found the intended appeal arguable on the auction-procedure grounds, one arguable ground sufficing. However, on the nugatory limb, the Court held that the Applicant was neither a bidder nor purchaser, the Bank had realised its security, the property had been transferred on January 8, 2021 to a third party in possession, and any loss could be adequately compensated by damages. The application was accordingly dismissed with costs to the Respondents. The decision below was not disturbed; this ruling concerns only interim relief.

Key legal issues

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01

Whether the intended appeal is arguable

Holding

It is arguable; the Applicant raised concerns on the auction procedure meriting consideration, and need only demonstrate one arguable ground.

Reasoning

The Court noted that an arguable appeal need not be one that will succeed; a single arguable ground suffices. The Applicant's grounds challenging the judge's treatment of the auction process, public interest and privity of contract raised procedural concerns about the auction that merited consideration by the Court.

p. 3
02

Whether the appeal would be rendered nugatory absent stay

Holding

No; the Applicant was not a bidder or purchaser, the security has been realised and the property transferred to a third party in possession, and damages would adequately compensate.

Reasoning

It was undisputed that the Applicant neither bid at nor purchased the property. The Bank had realised its security, transfer was executed and the third party was in possession. Given these facts, any prejudice flowing from the sale, should the appeal succeed, could be remedied by an award of damages rather than by injunctive relief.

p. 3

Legal principles established

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  • The Court of Appeal is seized of a Rule 5(2)(b) application where a Notice of Appeal has been lodged within 14 days of the decision under Rule 75.
  • The twin limbs for stay under Rule 5(2)(b) are an arguable appeal and that the appeal would be rendered nugatory; one arguable ground suffices for the first limb.
  • An appeal is not rendered nugatory where the loss alleged can be adequately compensated by damages.

Court orders

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  1. 1.The Notice of Motion dated January 26, 2022 is dismissed with costs to the Respondents

Authorities

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Legislation

  • Court of Appeal RulesRule 5(2)(b)
  • Court of Appeal RulesRule 75
  • Land Registration ActSection 99(4)
  • Auctioneers Act

Cases cited (5)

  • Halai & Another vs Thornton & Turpin (1963) Ltd.
    (1990) KLR 365

    Requirement of a Notice of Appeal lodged within 14 days for the Court to be seized of a stay application.

  • Stanley Kangethe Kinyanjui vs Tony Ketter & 5 Others
    [2013] eKLR

    Twin limbs for stay: arguable appeal and nugatory appeal; test of reversibility or compensability in damages.

  • Kihagi & Another vs Jamii Bora Bank & 2 Others
    (2021) KECA

    Relied on by Applicant on sentimental value and nugatory appeal.

  • Cortec Mining Kenya Limited v A.G & 8 Others
    Civil Appeal 119 of 2015 (UR 95/2015)

    Relied on by Respondents: no positive order capable of being stayed.

  • Reliance Bank Limited vs Norlake Investments Ltd
    [2002] 1 E.A. 227

    Full meaning of 'nugatory': worthless, futile, invalid or trifling.

On appeal from
High Court of Kenya at Mombasa
Mombasa Civil Case No E3 of 2020
Jurisdiction invoked
Rule 5(2)(b) of the Court of Appeal Rules (application for stay of execution / injunction pending appeal)

Key timeline

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Practical implications

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Frequently asked questions

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Cite this brief

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Cite this brief

Caselaw, "Shah Rekhavanti Pankaj v Bank of Baroda & another", Case Analysis (2022). Civil Application E002 of 2022. Source: https://new.kenyalaw.org/akn/ke/judgment/keca/2022/780/eng@2022-06-10

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