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Court of AppealAllowedNairobi High Court Civil Case No 2137 of 1983 (Notice of Motion under rule 5(2)(b))· [1995] KECA 131 (KLR)

Nyals (Kenya) Ltd v United Housing Estate Ltd [1995] KECA 131 (KLR)

Court of Appeal
14 July 1995
JGJ.E GICHERUAAA.M AKIWUMIALA.A LAKHA
1,581 words in judgment
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The bottom line

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Kenya's Court of Appeal stopped a tenant's eviction pending appeal, requiring continued rent payment while the case is decided.

What this practically means

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Executive summary

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This is a ruling of the Court of Appeal at Nairobi on a Notice of Motion by a tenant applicant under rule 5(2)(b) of the Court of Appeal Rules seeking a stay of execution of the decree in Nairobi High Court Civil Case No 2137 of 1983, pending its intended appeal. The dispute arose from a 1977 lease of a shop in Nairobi containing clause 4(e), permitting the lessor to redevelop the premises on six months' notice and either avoiding undue inconvenience or offering suitable alternative accommodation. The Commissioner of Assize, in a judgment delivered on 14 December 1993, held that clause 4(e) was not a 'break clause' bringing the tenancy within the definition of a controlled tenancy under section 2(1)(b)(ii) of the Landlord and Tenant (Shops, Hotels and Catering Establishments) Act (Cap 301). Counsel for the applicant argued the clause's construction was arguable and that success on appeal would be nugatory without a stay; counsel for the respondent contested frivolousness and, alternatively, sought conditional deposits of mesne profits. The Court held the intended appeal was not frivolous - the Commissioner had conceded there was no prior decision on whether such a clause is a break clause, making its construction a grave matter for appeal - and that refusal of a stay could remove the applicant's possession beyond recall, rendering a successful appeal nugatory. Following the Court of Appeal for Eastern Africa in Chogley v Bains, it granted a stay, conditional on payment of all rent due and diligent prosecution of the appeal, with costs of the motion in the intended appeal.

Key legal issues

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01

Whether the intended appeal is frivolous

Holding

The appeal is not frivolous because the correct construction of clause 4(e) of the lease - whether it constitutes a break clause under section 2(1)(b)(ii) of the Act - is a grave matter for determination on appeal.

Reasoning

The learned Commissioner of Assize himself conceded that there was no prior decision on whether a redevelopment clause such as clause 4(e) is a break clause. Whether such a clause per se allows termination of the lease is primarily a question of construction, and the correctness of the Commissioner's construction is plainly arguable. If the applicant succeeds, the tenancy would be controlled under the Act and its termination could only be in accordance with that Act.

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02

Whether the appeal would be rendered nugatory without a stay

Holding

Yes - if execution proceeds, the applicant's possession of the premises may be removed beyond recall, rendering any successful appeal nugatory.

Reasoning

Following the Court of Appeal for Eastern Africa in Chogley v Bains, where the subject matter is the right to possess on a statutory tenancy, the status quo must be maintained pending appeal. If the applicant is disturbed and the appeal later succeeds, the loss of possession and the ability to carry on business would be irrecoverable. A stay is therefore necessary to safeguard the applicant against substantial loss should it win its appeal.

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Legal principles established

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  • Under rule 5(2)(b), where an intended appeal is not frivolous and a successful appeal would be rendered nugatory without a stay, the Court should grant a stay of execution.
  • In tenancy/possession cases, the status quo must be maintained pending appeal to preserve the statutory tenancy, since disturbance would cause irrecoverable loss.

Court orders

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  1. 1.Stay of execution of the decree in Nairobi High Court Civil Case No 2137 of 1983 pending hearing and final determination of the intended appeal or until further orders
  2. 2.Condition: applicant to pay all rent due in respect of the suit premises and continue doing so pending disposal of the intended appeal
  3. 3.Condition: applicant undertakes to lodge and prosecute the intended appeal with speed and diligence
  4. 4.Costs of the motion to be in the intended appeal

Authorities

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Legislation

  • Court of Appeal Rulesrule 5(2)(b)
  • Landlord and Tenant (Shops, Hotels and Catering Establishments) Act, Chapter 301section 2(1), section 2(1)(b)(i), section 2(1)(b)(ii)

Cases cited (1)

  • Ismail Mohamed Chogley v Jagat Singh Bains
    Civil Appeal No 57 of 1952 (unreported)
On appeal from
High Court (Commissioner of Assize)
Nairobi High Court Civil Case No 2137 of 1983
Jurisdiction invoked
Rule 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 (8)

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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, "Nyals (Kenya) Ltd v United Housing Estate Ltd [1995] KECA 131 (KLR)", Case Analysis (1995). Nairobi High Court Civil Case No 2137 of 1983 (Notice of Motion under rule 5(2)(b)). Source: https://new.kenyalaw.org/akn/ke/judgment/keca/1995/131/eng@1995-07-14

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