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Court of AppealPartially AllowedCivil Application (Rule 5(2)(b)) arising from ELC No. 22 of 2016

Solian Investment Limited v KSC International Limited in Receivership (Formerly Known as Kundan Singh Construction & 6 others (Civil Application E010 of 2024) [2024] KECA 1479 (KLR)

Court of Appeal
25 October 2024
3,278 words in judgment
View original judgmentRead on Kenya Law Watch case
AI-assisted case brief
·~13 min to read original · ~4 min brief

The bottom line

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Kenya's Court of Appeal froze two Kilifi properties pending an appeal, confirming injunctions can preserve land even when the dismissed case offers nothing to stay.

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 (Murgor, Laibuta and Odunga, JJAA) on a Notice of Motion dated April 8, 2024 by Solian Investment Limited, an application under rule 5(2)(b) of the Court of Appeal Rules seeking stay of execution and injunctions pending its intended appeal against the High Court's judgment of October 19, 2022 (Olola, J.) dismissing its suit claiming trespass over L.R No. 15351 CR 22091 North of Kilifi Creek. The applicant contended that the 1st respondent's title to Mtondia/Roka/11, derived from the Mtondia Roka Settlement Scheme, unlawfully engulfed its 4 Ha parcel, and that the appeal would be rendered nugatory because the property was charged to the 7th respondent, which had placed the 1st respondent under receivership and could dispose of it. The 1st and 7th respondents objected that there was nothing to stay in a negative order, that no draft memorandum of appeal was annexed, and that there was no evidence of intended disposal. The Court restated the twin rule 5(2)(b) requirements of an arguable appeal and nugatory-ness, holding that a single bona fide arguable point suffices, that the absence of a draft memorandum of appeal is not fatal where grievances are set out in the application, and that although nothing is capable of being stayed in a negative order, an injunction may issue in appropriate cases. Finding the intended appeal arguable and the suit property at risk during receivership, the Court restrained all parties from transferring, charging, selling or dealing with both L.R No. Mtondia/Roka/11 and L.R No. 15351 CR 22091 pending the appeal, with costs of the application in the intended appeal. The application was allowed.

Questions the Court framed

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The issues the Court set itself to decide, in its own words.

  1. 1.Whether the intended appeal is arguable
  2. 2.Whether, if the orders sought are not granted, the intended appeal will be rendered nugatory
  3. 3.Whether the absence of a draft memorandum of appeal renders the application unmerited
  4. 4.Whether an injunction can issue where what is being appealed against is a negative order dismissing the suit

Key legal issues

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01

Whether the intended appeal is arguable despite the absence of a filed memorandum of appeal

Holding

The absence of a draft memorandum of appeal is not fatal; the grounds set out in the application and supporting affidavit sufficed, and the issues raised were arguable, not frivolous.

Reasoning

The Court adopted Somak Travels Ltd v Gladys Aganyo, holding that arguability may be demonstrated by a filed memorandum, a draft memorandum, or by setting out grounds in the application or supporting affidavit. The applicant intended to argue that the learned Judge erred in affirming the 1st respondent's title contrary to land registry evidence, which the Court found to be a bona fide issue worthy of consideration.

p. 5
02

Whether relief can be granted where the judgment below is a negative order dismissing the suit

Holding

While a negative order gives rise to nothing capable of being stayed, an injunction may be granted in appropriate cases to preserve the subject matter of the appeal.

Reasoning

The Court accepted the settled position that a dismissal order contains nothing to stay. However, since the applicant also sought an injunction, and the 1st respondent was in receivership with the property charged to the 7th respondent, the Court held that preservation of the suit property was warranted notwithstanding the negative character of the judgment below.

p. 6
03

Whether the intended appeal would be rendered nugatory absent preservation orders

Holding

The appeal would be rendered nugatory if the charged property were disposed of by the receiver, as the applicant has no direct claim against the chargee and would need fresh proceedings to recover damages.

Reasoning

The 1st respondent was under receivership and the suit property charged to the 7th respondent. If the receiver disposed of the assets to satisfy the debt, the suit property would suffer the same fate. The applicant has no direct claim against the 7th respondent and would probably have to commence fresh proceedings; balancing the parties' interests, preservation was proper.

p. 6

Legal principles established

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  • To obtain relief under rule 5(2)(b) an applicant must satisfy the twin limbs of an arguable appeal and nugatory-ness, and both must be demonstrated.
  • A single bona fide arguable point suffices; the appeal need not show it will succeed, only that it raises an issue worthy of consideration.
  • Where the judgment appealed against is a negative order (dismissal of a suit), there is nothing to stay, but an injunction may nonetheless issue in appropriate cases.
  • Omission to annex a draft memorandum of appeal is not fatal where the applicant has set out its grievances in the application or supporting affidavit.
  • The rule 5(2)(b) jurisdiction is original, independent and discretionary, and arises only where a notice of appeal has been lodged.

Court orders

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  1. 1.Pending hearing and determination of the appeal, the respondents and their agents are restrained from transferring, charging, selling or dealing in any manner whatsoever with the properties known as L.R No. Mtondia/Roka/11 and L.R No. 15351 CR 22091 North of Kilifi Creek
  2. 2.The costs of the application will be in the intended appeal

The bench

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One judgment of the whole court — no separate or dissenting opinions.

majority
majority
majority
On appeal from
High Court
ELC No. 22 of 2016 - Solian Investment Limited vs. KSC International Limited in Receivership, Chief Land Registrar, Registrar of Lands Kilifi, Registrar of Titles, District Surveyor Kilifi & Attorney General
Jurisdiction invoked
Rule 5(2)(b) of the Court of Appeal Rules

Relief refused

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Stay of execution and/or implementation of the High Court judgment pending appeal (prayer 1 in substance overtaken by the injunction granted)

The trial court dismissed the applicant's suit, so no positive order capable of being stayed exists; instead the Court granted an injunctive order preserving both properties

p. 5

Costs

The costs of this application will be in the intended appeal.

Quotable passages

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Verbatim from the judgment, each located to the page it appears on in the official PDF — so these can be cited and checked directly.

pending hearing and determination of the appeal by the applicant against the Judgment and Order made on October 19, 2022 in ELC No. 22 of 2016 - Solian Investment Limited v KSC International Limited in Receivership, Chief Land Registrar, Registrar of Lands Kilifi, Registrar of Titles, District Surveyor Kilifi & the Attorney General - the respondents and their agents be and are hereby restrained from transferring, charging, selling or dealing in any manner whatsoever with the properties known as L.R No. Mtondia/Roka/11 and L.R No. 15351 CR 22091 North of Kilifi Creek.
p. 6Final orders - injunction preserving both properties pending appeal
Both limbs must be demonstrated before a party can obtain a relief under rule 5(2) (b)
p. 5Twin requirements for rule 5(2)(b) relief
By the term “arguable”, it is not meant an appeal or an intended appeal that will succeed, but one which raises a bona fide issue worth of consideration by the Court
p. 5Meaning of an arguable appeal
an order of injunction may, in appropriate cases, be granted even in cases where what is being appealed against is a negative order
p. 6Injunction notwithstanding a negative order
The costs of this application will be in the intended appeal.
p. 6Costs

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, "Solian Investment Limited v KSC International Limited in Receivership (Formerly Known as Kundan Singh Construction & 6 others (Civil Application E010 of 2024) [2024] KECA 1479 (KLR)", Case Analysis (2024). Civil Application (Rule 5(2)(b)) arising from ELC No. 22 of 2016. Source: https://new.kenyalaw.org/akn/ke/judgment/keca/2024/1479/eng@2024-10-25

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