https://new.kenyalaw.org/akn/ke/judgment/keca/2026/1053

Mbeya v Consolidated Bank of Kenya & another (Civil Application E269 of 2024) [2026] KECA 1053 (KLR) (29 May 2026) (Ruling) Neutral citation: [2026] KECA 1053 (KLR) Republic of Kenya In the Court of Appeal at Nairobi Civil Application E269 of 2024 DK Musinga, JW Lessit & A Ali-Aroni, JJA May 29, 2026 Between George Mugoye Mbeya Applicant and Consolidated Bank of Kenya 1st Respondent Peter M Gachie t/a Regent auctioneers 2nd Respondent (Being an application for an injunction pending appeal from the Ruling of the High Court of Kenya at Nairobi (Mabeya, J.) delivered on 19th April 2024 in HC/COMM/E397 OF 2022 Civil Case E397 of 2022 ) Ruling 1.Before this Court is a Notice of Motion dated 28th May 2024 which is brought under the provisions of sections 3 and 3A of the Appellate Jurisdiction Act and Rule 5(2)(b) of the Rules of this Court. The main orders sought in the application are that pending the hearing and determination of this application, the respondents be restrained from auctioning, offering for sale, transferring, assigning, entering upon, trespassing on, taking possession of, and/or in any way dealing with Apartment No. 9 Block C on Land Reference No. 330/683; and that similar injunctive relief do issue pending the hearing and determination of the intended appeal from the ruling made by the High Court at Nairobi (Mabeya, J.) on 19th April 2024 in HC/COMM/E397/2022. 2.The background to the application is that the applicant is the registered proprietor of Apartment No. 9, Block C on Land Reference No. 330/683 (the suit property), having acquired it in 2013 through a mortgage facility advanced by the 1st respondent bank. A dispute subsequently arose between the parties regarding the loan account, particularly following the applicant’s attempt at early redemption. The applicant maintains that he fully serviced the loan and in fact overpaid, but the bank declined to discharge the security and instead initiated steps towards its realization. This led to the filing of High Court Commercial Case No. E397 of 2022 together with an application seeking injunctive relief. However, in a ruling delivered on 19th April 2024, the High Court (Mabeya, J.) dismissed that application with costs. 3.Aggrieved by that decision and in the face of a fresh advertisement for sale of the charged property by public auction scheduled for 5th June 2024 (now past), the applicant lodged a notice of appeal dated 19th April 2024 and moved this Court through this instant application. 4.On the face of the application and in the affidavit in support, the applicant contends that the intended appeal raises arguable issues with high prospects of success. Among the grounds of arguability as set out in the draft memorandum of appeal annexed to the affidavit are that the learned judge erred in law and in fact by failing to properly evaluate the legality and propriety of the statutory notices allegedly issued by the respondent, including the question whether the requisite notices were served upon all relevant parties such as the spouse/guarantor; by determining that the in duplum rule was not applicable to the applicant; by failing to find that the applicant has a right to be provided with loan statement accounts by the bank; and by failing to determine that the bank is the custodian of the account statement of the applicant and the rightful entity to determine when the loan became unserviceable and not the applicant. 5.On the nugatory aspect, the applicant contends that unless the orders sought are granted, the respondents will proceed with the sale of the suit property by public auction, thereby depriving him and his family of their home. He asserts that the property constitutes a matrimonial home in which his family resides, and that its loss would occasion eviction and irreparable harm not adequately compensable by damages. Further, should the sale proceed and the property pass to third parties, the substratum of the intended appeal would be destroyed, thereby rendering any eventual success merely academic. In those circumstances, the applicant maintains that the appeal would be rendered nugatory unless this Court intervenes to preserve the subject matter pending appeal. 6.The application is opposed vide a replying affidavit sworn by James Mwangi, a Debt Recoveries Officer of the 1st respondent. It is averred from the onset that this application is an abuse of the court process on the basis that the applicant has already filed and is pursuing a similar application for stay pending appeal before the trial court, which is coming up in court on 7th October 2024 (now past), for purposes of taking a ruling date. 7.It is further averred that the application which forms the subject of the intended appeal was heard and dismissed by the trial court for lack of merit, particularly in relation to injunctive orders sought to restrain the 1st respondent from exercising its statutory power of sale. The court delivered its ruling on 19th April 2024, and despite this, the applicant has not taken any steps to remedy the default by making payments towards the settlement of the loan facility. 8.The 1st respondent contends that the present application was only filed after it initiated the process of exercising its statutory power of sale over the suit property. It is averred that the applicant’s indebtedness is not disputed, including the fact that he was advanced a loan facility of Kshs. 14,000,000, which remains unpaid. As such, the 1st respondent posits that this application has been brought in bad faith with the sole intention of delaying and frustrating its lawful efforts to recover the outstanding debt. 9.The 1st respondent asserts that the applicant has failed to demonstrate any substantial loss that cannot be compensated by damages and avers that it is a reputable banking institution capable of refunding any sums should the appeal succeed. On the contrary, the 1st respondent contends that it continues to suffer prejudice due to the applicant’s continued default with the outstanding amount as at 14th June 2024, standing at approximately Kshs. 12,034,242.99, which continues to accrue interest. 10.It is also averred that the applicant has not shown seriousness in pursuing the intended appeal, as no record of appeal has been filed, and no effort has been made to secure proceedings. Additionally, the applicant has not offered any security, and instead appears to be using the court process to buy time and avoid repayment. 11.In the alternative, the 1st respondent avers that should the court be inclined to grant any relief, the applicant ought to be compelled to deposit the entire outstanding loan amount in a joint interest- earning account in the names of both parties’ advocates. 12.The 1st respondent also disputes the applicant’s assertion that the suit property is matrimonial property, stating that there exists a valid spousal consent and a duly executed deed of assignment of rental income. It is further averred that the applicant has approached the court with unclean hands and is therefore undeserving of equitable relief. 13.Finally, it is averred that the application does not meet the threshold for grant of stay of execution as no arguable appeal has been demonstrated, and no proper appeal is before the Court. The 1st respondent, therefore, prays that the application be dismissed with costs. 14.At the hearing of this application, learned counsel Mr. Barrack appeared for the applicant, while the 1st respondent was represented by learned counsel Mr. Kirimi. There was no appearance on behalf of the 2nd respondent despite service with a hearing notice. Both counsel briefly highlighted their respective client’s written submissions. 15.Counsel for the applicant contended that the intended appeal is arguable, principally on the trial court’s failure to properly apply the in duplum rule. He contended that although the applicant had taken a loan of Kshs. 12,570,419/-, by the time the 1st respondent advertised the suit property for sale on 20th May 2024, the applicant had paid a total of Kshs. 24,100,188/- thereby exceeding the principal by about Kshs. 11,000,000/-. It was contended that the learned judge erred in holding that the in duplum rule was inapplicable and in disregarding the fact that the suit property is the applicant’s family home, occupied by his wife and children and yet found that no prejudice would be suffered by the applicant. Counsel further challenged the process leading to the intended sale, asserting that the applicant’s wife, as guarantor, was not served with the requisite notices. 16.On the nugatory aspect, counsel maintained that unless a stay is granted, the respondent will proceed with the sale of the suit property, thereby rendering the applicant and his family homeless and the appeal an academic exercise, if successful. He maintained that the applicant is keen on pursuing the appeal, pointing to the filed memorandum of appeal and request for proceedings. Regarding the issue of the deposit of security, counsel reiterated that the alleged outstanding sum is disputed, that the loan was fully repaid, and it would therefore be unjust to compel the applicant to deposit the contested amount in a joint interest- earning account pending appeal. 17.On his part, Mr. Kirimi, for the 1st respondent contended that the applicant had failed to satisfy the twin principles under rule 5(2)(b). On arguability, he contended that no proper appeal had been demonstrated, noting that although the impugned ruling was delivered on 19th April 2024 and the present application filed on 28th May 2024, the applicant had not served any substantive record of appeal or sufficient documentation to show the existence of an arguable appeal. 18.On the nugatory aspect, counsel submitted that the dispute is purely monetary and any loss is compensable by damages, the 1st respondent being a regulated financial institution capable of refunding any sums if the appeal succeeds. He maintained that the applicant had not demonstrated that the appeal would be rendered nugatory. In the alternative, he urged that if the Court were inclined to grant relief, the applicant should be ordered to deposit the undisputed sum of Kshs. 12,034,242.99 in a joint interest-earning account. 19.We have considered the application, the affidavits, the rival submissions and the law. It is trite law that in applications of this nature, the applicant must demonstrate, first, that the intended appeal is arguable, and secondly, that unless the orders sought are granted, the appeal will be rendered nugatory. See Stanley Kang’ethe Kinyanjui v Tony Ketter & 5 Others [2013] eKLR. 20.On arguability, the law is clear that an arguable appeal is not one that must necessarily succeed, but one that raises at least a single bona fide issue deserving consideration by the Court. Having considered the draft memorandum of appeal and the grounds relied on in the application, we are satisfied that the intended appeal raises at least one arguable issue. In particular, the question whether the learned judge properly applied the in duplum rule in light of the amounts allegedly repaid vis-à-vis the principal sum advanced is not idle and warrants interrogation by this Court. Similarly, the issue of whether all requisite statutory notices were duly issued and served, including upon the applicant’s spouse or guarantor, is a matter that cannot be said to be frivolous at this stage. Without making any definitive findings, we are persuaded that the applicant has surmounted the first limb. 21.Turning to the nugatory aspect, it is trite law that whether or not an appeal will be rendered nugatory depends on whether what is sought to be stayed, if allowed to happen, is reversible, or if it is not reversible, whether damages would reasonably compensate the aggrieved party. The subject matter herein is immovable property, whose value is ascertainable. It is not in dispute that the 1st respondent is a reputable bank and would be able to compensate the applicant in the event that the intended appeal is successful. It cannot, therefore, be said that the intended appeal shall be rendered nugatory if the orders sought are not granted. 22.As the applicant has failed to satisfy the twin requirements for the grant of the interlocutory orders as sought, we hereby dismiss this application with costs to the 1st respondent. Lastly, we wish to apologize to the parties for the delay in the delivery of this short ruling. It was due to an administrative oversight in our record keeping. DATED AND DELIVERED AT NAIROBI THIS 29TH DAY OF MAY 2026.D. K. MUSINGA (PRESIDENT).............................JUDGE OF APPEALJ. LESIIT.............................JUDGE OF APPEALALI-ARONI.............................JUDGE OF APPEALI certify that this is a true copy of the original.Signed DEPUTY REGISTRAR .