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Court of AppealAllowedCivil Application No NAI 162 of 1995· [1995] KECA 133 (KLR)

Kenya Ports Authority v Kustrom (K) LTD. [1995] KECA 133 (KLR)

Court of Appeal
31 July 1995
877 words in judgment
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The bottom line

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What this practically means

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Executive summary

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The Court of Appeal at Nairobi (Akiwumi, Tunoi and Shah JJ A) ruled on an application under rule 5(2)(b) of the Court of Appeal Rules by Kenya Ports Authority seeking stay of execution of rulings of Osiemo J of the High Court at Machakos in HCCC No 93 of 1995. Default judgment had been entered against the applicant for failing to file a defence in time; its application to set aside the judgment was dismissed on 13 June 1995 with a conditional stay requiring deposit of the decretal sum of about Shs 10,000,000 within 14 days. The applicant did not deposit, and on 29 June 1995 the judge refused to extend the stay, holding the applicant had no right to be heard, without giving it a chance to explain its default. The Court of Appeal applied the settled rule 5(2)(b) principles, citing Githunguri v Jimba Credit Corporation Ltd and JK Industries Ltd v Kenya Commercial Bank Ltd. It found the intended appeal was not frivolous, noting the arguable point that the respondent had not given notice of claim as mandated by section 65 of Cap 391, and triable issues existed. On the nugatory limb, the decree was substantial, the respondent's capital base was unproven, while the applicant's ability to pay was beyond doubt. The court allowed the application, granted an unconditional stay of execution pending the hearing and final determination of the intended appeal, with costs of the application to be costs in the intended appeal. The ruling is binding on the High Court on the exercise of the rule 5(2)(b) jurisdiction.

Key legal issues

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01

Merit of the intended appeal under rule 5(2)(b)

Holding

The intended appeal was not frivolous; the applicant demonstrated substantial points, including non-compliance with the statutory notice requirement under section 65 of Cap 391 and triable issues in its defence.

Reasoning

The court perused the draft memorandum of appeal and counsel's submissions that the respondent had not given the notice of claim mandated by section 65 of Cap 391, and that the defence disclosed triable issues. It concluded the applicant had shown prima facie substantial points, satisfying the first limb of the settled rule 5(2)(b) principles.

p. 2
02

Nugatory value of the appeal if stay is refused

Holding

The appeal would be rendered nugatory if the substantial decretal sum were paid to a respondent whose capital base was unproven and whose ability to repay was uncertain.

Reasoning

The decree was substantial (about Shs 10,000,000). The court was not told the respondent's capital base and could not say the decretal sum, if paid, would not be beyond the applicant's reach and control to recover. Conversely the applicant's ability to pay was beyond doubt, so conditions were unnecessary and an unconditional stay was granted.

p. 2

Legal principles established

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  • An applicant under rule 5(2)(b) must first demonstrate that the intended appeal is not frivolous, showing prima facie substantial points to present on appeal.
  • The second limb of the rule 5(2)(b) test is whether the appeal, if successful, would be rendered nugatory absent a stay, assessed against the substance and ability to pay of the parties.
  • Where the decretal sum is substantial and the respondent's capacity to repay is unproven, while the applicant's ability to pay is beyond doubt, stay ought to issue.

Court orders

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  1. 1.Stay of execution granted without conditions pending the hearing and final determination of the intended appeal
  2. 2.Costs of the application to be costs in the intended appeal

Authorities

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Legislation

  • Court of Appeal Rulesrule 5(2)(b)
  • Kenya Ports Authority Act (Cap 391)section 65
  • Cap 391 of the Laws of Kenyaincorporation of the applicant

Cases cited (2)

  • Githunguri v Jimba Credit Corporation Ltd
    Civil Application No 161 of 1988 (unreported)
  • JK Industries Ltd v Kenya Commercial Bank Ltd
    1982-1988 1 KAR p 1088
On appeal from
High Court of Kenya at Machakos
HCCC No 93 of 1995
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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Cite this brief

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Cite this brief

Caselaw, "Kenya Ports Authority v Kustrom (K) LTD. [1995] KECA 133 (KLR)", Case Analysis (1995). Civil Application No NAI 162 of 1995. Source: https://new.kenyalaw.org/akn/ke/judgment/keca/1995/133/eng@1995-07-31

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