https://new.kenyalaw.org/akn/ke/judgment/keca/2026/1629

Kariuki v Family Bank Ltd & another (Civil Appeal (Application) E008 of 2025) [2026] KECA 1629 (KLR) (31 July 2026) (Ruling) Neutral citation: [2026] KECA 1629 (KLR) Republic of Kenya In the Court of Appeal at Eldoret Civil Appeal (Application) E008 of 2025 PM Gachoka, WK Korir & L Ndolo, JJA July 31, 2026 Between Stephen Karanja Kariuki Applicant and Family Bank Limited 1st Respondent Onesmus Macharia t/a Watts Auctions 2nd Respondent (Application for injunction pending the hearing and determination of an appeal against the Ruling of the High Court of Kenya at Eldoret (Ominde, J.) delivered on 31st January 2025inHCCC No E020 of 2024) Ruling 1.By the notice of motion dated 1st March 2025, the applicant seeks an interlocutory injunction restraining the respondents, whether by themselves, their servants and/or agents from selling, transferring or in whatever way alienating the land parcel known as ELDORET MUNICIPALITY/BLOCK 14/1130, pending the hearing and determination of an intended appeal against the decision of the High Court delivered on 31st January 2025, in Eldoret High Court Civil Case No E020 of 2024. 2.In his affidavit in support of the motion, the applicant reiterates the grounds in his memorandum of appeal dated 22nd February 2025. In sum, the applicant faults the learned trial Judge for failing to take into account that in its quest to exercise the statutory power of sale, the 1st respondent did not comply with the statutory notice requirements under section 90 of the Land Act. The applicant further complains that the 2nd respondent did not serve him with a notification of sale and a redemption notice as required under rule 15 of the Auctioneers Rules. In addition, the applicant states that there was no proper valuation to determine the forced sale value of the suit property, as set out in section 97(2) of the Land Act. Moreover, the applicant avers that the learned Judge failed to consider the irreparable harm that would be occasioned to him if the 1st respondent is allowed to exercise the statutory power of sale. 3.The 1st respondent opposes the application by a replying affidavit sworn on 18th March 2025, by its Manager, Legal Services, Wambani Deya. 4.Deponing on the background leading to the dispute, Deya states that by a letter of offer dated 23rd October 2021, the 1st respondent agreed to advance to the applicant, the sum of Kshs. 30,000,000 which was secured by a charge. The applicant however defaulted on repayment of the loan, prompting the 1st respondent to initiate the process of exercising its remedies as a chargee. 5.Deya gives a chronology of steps taken by the 1st respondent towards compelling the applicant to regularise his loan account, including demand letters, statutory and redemption notices issued to the applicant. 6.It is further deponed that the 1st respondent undertook a valuation of the charged property, upon which it was advertised for public auction. 7.Deya supports the decision of the learned trial Judge in declining to grant an order of injunction against the 1st respondent as all the statutory notices had been issued. He points out that the applicant remains indebted to the 1st respondent and has not taken steps to remedy the situation. 8.The application was heard virtually on 8th June 2026, with learned counsel Mr. Kiprop appearing for the applicant and learned counsel Mr. Odiyo appearing for the 1st respondent. The parties relied on their written submissions as filed, which they briefly highlighted. In his submissions dated 5th May 2026, the applicant cited the decision in Nyaboke vs NCBA Bank Kenya PLC & Another [2021] KECA 323 (KLR) where this Court stated the following:“We reiterate at this point that an applicant in any application of this nature is obligated in law to demonstrate both the arguability and the nugatory aspect in order to succeed on an application under Rule 5 (2) (b) of the Court of Appeal Rules…We are cognisant of the fact that in the first limb of an arguable appeal, the Applicant need only demonstrate one arguable ground, and further that an arguable appeal is not necessarily one that will succeed but one that warrants the court’s interrogation and an invitation by the court to the opposite party to make a response thereto.” 9.The applicant’s position is that he has an arguable appeal which would be rendered nugatory if the orders sought arenot granted. On its part, the 1st respondent submits that it invoked its statutory power of sale within the law, urging that the applicant voluntarily offered the property as security for financial accommodation thereby converting it into a commercial asset available for realisation in the event of default. 10.The applicant’s application is brought under rule 5(2)(b) of the Court of Appeal Rules, which provides as follows:2.Subject to subrule (1), the institution of an appeal shall not operate to suspend any sentence or to stay execution, but the Court may-a.…b.in any civil proceedings where a notice of appeal has been lodged in accordance with rule 77, order a stay of execution, an injunction or a stay of any further proceedings on such terms as the Court may think just. 11.It is on solid ground that for an applicant to successfully move the Court under rule 5(2)(b) they must satisfy the two conjunctive conditions being, that they have an arguable appeal (the arguability test) and that the appeal would be rendered nugatory (the nugatory test) if the orders sought are not granted. 12.In Republic vs Kenya Anti-Corruption Commission & 2 Others [2009] KLR 31 this Court rendered itself as follows:“The law as regards the principles that guide the Court in such an application brought pursuant to rule 5(2)(b) of the rules are nowwell settled. The Court exercises unfettered discretion which must be exercised judicially. The applicant needs to satisfy the Court, first, that the appeal or intended appeal is not frivolous, that is to say that it is an arguable appeal. Second, the Court must also be persuaded that were it to dismiss the application for stay and later the appeal or intended appeal succeeds, the results or success could be rendered nugatory. In order that the applicant may succeed, he must demonstrate both limbs and demonstrating only one limb would not avail him the order sought if he fails to demonstrate the other limb.” 13.Regarding the arguability test the threshold is low, in that even a single point meriting inquiry by the Court would suffice. The applicant alleges that, in seeking to realise security, the 1st respondent did not comply with the provisions of the Land Act regarding statutory notices. The applicant further complains that he was not served with a notification of sale and a redemption notice. He adds that the forced sale value was not backed by a proper valuation. In our view, these grounds would constitute an arguable appeal as contemplated in law. The first requirement under rule 5(2)(b) has therefore been satisfied. 14.On the nugatory test, we are guided by this Court’s decision in Stanley Kang’ethe Kinyanjui vs Tonny Ketter & 5 Others [2013] eKLR where it was stated that the term ‘nugatory’ must be given its full meaning. In that case, it was held that whether or not an appeal will be rendered nugatory depends on whether or not what is sought to be stayed would be either irreversible or incapable of being recompensed by an award of damages. 15.It is not in contest that the applicant is indebted to the 1st respondent and the subject property is the one voluntarily offered by the applicant as security. We note that the 1st respondent is a licensed and regulated commercial bank. We are therefore satisfied that should the applicant succeed on appeal, any misstep by the 1st respondent in exercising its statutory power of sale would be recompensed by an award of damages. 16.For the foregoing reasons, we have reached the conclusion that the applicant has not satisfied the nugatory limb of rule 5(2)(b) of the Court of Appeal Rules. 17.The application dated 1st March 2025 therefore fails and is dismissed, with costs to the respondents. DATED AND DELIVERED AT ELDORET THIS 31ST DAY OF JULY, 2026.M. GACHOKA C.Arb, FCIArbJUDGE OF APPEAL...............................W. KORIRJUDGE OF APPEAL...............................L.M. NDOLOJUDGE OF APPEALI certify that this is a true copy of the original.SignedDEPUTY REGISTRAR