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Court of AppealDismissedNotice of Motion dated 11th March 2024 (Rule 5(2)(b) application in intended appeal)· [2024] KECA 918 (KLR)

Mavoko Water & Sewerage Company v Credit Bank Kenya Limited & 1 other

Court of Appeal
26 July 2024
2,392 words in judgment
View original judgmentRead on Kenya Law Watch case
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·~10 min to read original · ~4 min brief

The bottom line

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The Court of Appeal refused to stop Credit Bank from selling charged property because Mavoko Water's intended appeal was not arguable.

What this practically means

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Executive summary

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This was an application under rules 1(2) and 5(2)(b) of the Court of Appeal Rules by Mavoko Water & Sewerage Company, seeking an injunction to restrain Credit Bank Kenya Limited from disposing of or alienating property LR 12867/13 in Mavoko pending an intended appeal. The applicant, which operates a sewerage plant serving approximately 30,000 Mavoko residents on a small portion of the charged property, had earlier been joined to the High Court suit as an interested party and had obtained a conditional injunction that was later vacated for non-compliance. The applicant contended that the appeal would be rendered nugatory if the property were auctioned whole, and relied on authorities including Stanley Kang'ethe Kinyanjui and Reliance Bank. The bank opposed, characterising the applicant as a surrogate of the defaulting 1st respondent, which owed Kshs. 817,819,352.06, and pointed to a history of serial injunction applications and failed settlement offers. The Court of Appeal, per a single judgment of the full bench (Musinga, P, Asike-Makhandia and Mumbi Ngugi, JJ A), applied the twin rule 5(2)(b) principles as delineated in Trust Bank v Investech Bank, with public interest noted as a late entrant per Gatirau Peter Munya. It held the intended appeal was not arguable: the plant sits on the 1st respondent's private charged property; the applicant had not legally acquired the portion; the sale agreement excluded the chargee and contemplated takeover only after ten years; and the applicant was a surrogate of the 1st respondent. Neither limb of the test being satisfied as to arguability, the court declined to consider the nugatory and public-interest limbs and dismissed the motion with costs to the bank. No conservatory orders issued and the decision below was not disturbed.

Key legal issues

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01

Arguability of the intended appeal

Holding

The intended appeal was not arguable; the claim to manage the sewerage plant on the charged private property lacked merit, the applicant had not acquired the portion claimed, the sale agreement did not involve the chargee, and the applicant was a surrogate of the defaulting borrower

Reasoning

The court doubted whether the mandate question should occupy it, since the sewerage plant sits on the 1st respondent's private property charged to the 2nd respondent. The applicant had not legally acquired the portion, the agreement's clause suggested takeover only after 10 years, the chargee was not party to the agreement, and no part of the charged property could be hived off without the chargee's consent. The applicant's conduct and non-compliance with prior conditional orders supported the surrogate finding.

p. 4
02

Nugatory aspect and public interest

Holding

Not reached, because both limbs must be satisfied and the arguability limb had failed

Reasoning

Since the twin test under rule 5(2)(b) requires satisfaction of both the arguability and nugatory principles, the court found no need to address the nugatory aspect or public interest after failing the first limb. Public interest was described as a late entrant among the considerations, relevant only depending on the nature of the dispute.

p. 4

Legal principles established

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  • Rule 5(2)(b) jurisdiction is original and discretionary; an applicant must show both that the appeal is arguable and that it will be rendered nugatory absent the orders sought
  • Both limbs of the rule 5(2)(b) test must be demonstrated; failure on the arguability limb disposes of the application without considering nugatory aspect or public interest

Court orders

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  1. 1.The Motion dated 11th March 2024 is dismissed with costs to the 2nd respondent
On appeal from
High Court
Jurisdiction invoked
Rules 1(2) and 5(2)(b) of the Court of Appeal Rules

Key timeline

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Practical implications

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Frequently asked questions

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Later judgments citing this (1)

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Judgments in the corpus that rely on this one. Where the Court said how it treated the authority, that is shown.

Cite this brief

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Cite this brief

Caselaw, "Mavoko Water & Sewerage Company v Credit Bank Kenya Limited & 1 other", Case Analysis (2024). Notice of Motion dated 11th March 2024 (Rule 5(2)(b) application in intended appeal). Source: https://new.kenyalaw.org/akn/ke/judgment/keca/2024/918/eng@2024-07-26

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