Sanitary Equipment & Builders Ltd v Nairobi City Commission [1991] KECA 7 (KLR)
The bottom line
#Kenya's Court of Appeal confirmed that notices of appeal must be served on everyone directly affected, and courts cannot order non-parties like banks to pay without hearing them.
What this practically means
#Executive summary
#Questions the Court framed
#The issues the Court set itself to decide, in its own words.
- 1.Whether the Notice of Appeal filed by the respondent was incompetent for failure to serve it on all persons directly affected by the appeal, particularly the applicant
- 2.Whether the Court should strike out the Notice of Appeal under rule 80 of the Court of Appeal Rules
- 3.Whether the order of 20 April 1990 granting stay of execution should be vacated
- 4.Whether the Kenya Commercial Bank could be ordered to release the value of the banker's bond to the applicant
Key legal issues
#Service of notice of appeal on all persons directly affected
Service on the opponent of the Notice of Appeal is an essential step; failure to serve the directly affected party is a ground for striking out, but the court retains discretion under rule 80 to grant limited indulgence instead
The Notice of Appeal was expressed to be served only on Rimui and Mubia, advocates for the arbitrator, who could not be a party to the appeal. The Court agreed the firm had never been properly on the record and that service on the opponent was essential. However, rule 80 confers a discretion, and in view of the impossible order sought against the Bank, the Court chose limited indulgence with strict timelines rather than striking out.
Orders against non-parties
A court cannot make an order directed at a person who is not a party to the suit without hearing them; such a prayer violates elementary principles of justice
The applicant sought to compel the Kenya Commercial Bank, issuer of the stay bond, to pay Shs 4 million to it, though the Bank was not a party. The Court held the Bank could not be heard on the application and rejected the prayer, directing that the remedy is to sue the Bank if it fails to honour the bond.
Competency of the intended appeal
Whether the intended appeal is competent remains a matter for the main appeal; the grant of leave to appeal does not imply competency
The applicant argued no right of appeal existed and that the appeal was incompetent. The Court declined to decide the point finally, stating that the competency of the appeal will be decided in the main appeal, and that leave to appeal granted by Porter J does not carry with it a proposition that the appeal is competent.
Legal principles established
#- Rule 76(1) of the Court of Appeal Rules requires copies of a notice of appeal to be served on all persons directly affected by the appeal
- It is a fundamental error to seek an order directed at a person who is not a party to the suit or the appeal
- Under rule 80 the Court of Appeal has a discretion whether or not to strike out a notice of appeal for omission of an essential step, and may grant an indulgence rather than strike out
- A party aggrieved by a bank's failure to honour a bond must sue the bank rather than implead it in an appeal to which it is not a party
Court orders
#- 1.The respondent Commission is to have leave to file a fresh Notice of Appeal containing the correct names and address of the party to be served within seven days from today
- 2.The respondent shall serve that party within a further seven days
- 3.The respondent shall institute the appeal within 60 days thereafter
- 4.On failure to comply with any part of the order the Notice of Appeal shall be struck out
- 5.The prayer seeking to compel the Kenya Commercial Bank to pay Shs 4 million to the applicant is rejected
- 6.Application dismissed
The bench
#One judgment of the whole court — no separate or dissenting opinions.
- On appeal from
- High Court
- Miscellaneous Case No 10 of 1988
- Jurisdiction invoked
- Court of Appeal Rules (cap 9 Sub Leg), rules 5(2)(b), 76(1), 80 and 81
Relief refused
#Impleading the Kenya Commercial Bank and ordering it to pay the applicant the Shs 4 million represented by the banker's bond
The Bank is not a party to the main appeal or the application and could not be heard; the proper remedy is to sue the Bank if it fails to honour the bond
Costs
No order as to costs is recorded in the judgment
Quotable passages
#Verbatim from the judgment, each located to the page it appears on in the official PDF — so these can be cited and checked directly.
Rule 76(1) of the Court of Appeal Rules required that copies of the notice of appeal shall be served on all persons directly affected by the appeal.
It was a fundamental error to attempt to implead the Bank in the appeal as it was not a party thereto.
The respondent Commission is to have leave to file a fresh Notice of Appeal containing the correct names and address of the party to be served within seven days from today, and shall serve that party within a further seven days. They shall then institute the appeal within 60 days thereafter. On failure to comply with any part of the order the Notice of Appeal shall be struck out.
Issues in the judgment
#The Arbitration Act is referred to as cap 48 in the body of the ruling but as cap 49 in the statutes list
Key timeline
#Practical implications
#Frequently asked questions
#Cite this brief
#Cite this brief
Caselaw, "Sanitary Equipment & Builders Ltd v Nairobi City Commission [1991] KECA 7 (KLR)", Case Analysis (1991). Civil Application No NAI 24 of 1991. Source: https://new.kenyalaw.org/akn/ke/judgment/keca/1991/7/eng@1991-03-20
Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.