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Court of AppealPartially AllowedCivil Application No. Nai. 94 of 1997 (45/97UR)

KENSAN INSURANCE BROKERS LIMITED & ANOTHER vs KENINDIA ASSURANCE COMPANY LIMITED [1997] KECA 270 (KLR)

Court of Appeal
21 May 1997
513 words in judgment
View original judgmentRead on Kenya Law Watch case
AI-assisted case brief
·~2 min to read original · ~4 min brief

The bottom line

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Kenya's Court of Appeal granted a stay of execution only on condition the full decretal amount was deposited, confirming hardship alone cannot justify a stay.

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 (Omolo, Akiwumi and Lakha, JJ.A.) on an application under rule 5(2)(b) of the Court of Appeal Rules by the unsuccessful defendants, Kensan Insurance Brokers Limited and Jim Choge, seeking a stay of execution of a High Court order of Wambiliangah, J. dated April 17, 1997 dismissing their application to set aside an ex parte judgment entered against them on March 7, 1997, whereby their defence was struck out and judgment of about K.Shs. 13 million was entered for Kenindia Assurance Company Limited. The court identified the twin requirements for a rule 5(2)(b) stay: an arguable appeal and the risk that the appeal would be rendered nugatory absent a stay. It found the intended appeal arguable, holding that summary judgment is a strong remedy to be granted only in the clearest of cases and with extreme caution. However, counsel for the applicants properly conceded that the respondent could repay the decretal amount if the appeal succeeded and that hardship alone could not render the appeal nugatory. Although the second limb therefore failed, the respondent's counsel conceded not to object to a stay upon sufficient security. The court granted a conditional stay requiring the applicants to deposit the whole decretal amount into a joint account of the parties' advocates with a bank of repute within thirty days, failing which the stay would lapse. Because the respondent had flouted the rules of procedure in preparing and executing the decree, the court made no order for costs as a mark of disapproval. The decision binds subordinate courts and the High Court on the twin rule 5(2)(b) requirements.

Questions the Court framed

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The issues the Court set itself to decide, in its own words.

  1. 1.Whether the intended appeal is arguable (not frivolous)
  2. 2.Whether, unless a stay is granted, the intended appeal will be rendered nugatory

Key legal issues

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01

The twin requirements for stay of execution under rule 5(2)(b)

Holding

The applicants satisfied the arguability limb but failed the nugatory-ness limb; stay was nonetheless granted conditionally on the respondent's concession, subject to deposit of the decretal amount

Reasoning

The court reaffirmed that both requirements must be met: the intended appeal must be arguable, and the appeal must be rendered nugatory if stay is refused. Arguability was conceded as satisfied. On nugatory-ness, counsel for the applicants properly conceded that the respondent could repay the decretal amount if the appeal succeeded, and that hardship alone could not render the appeal nugatory. The court granted stay only because the respondent conceded not to object upon sufficient security, imposing a deposit condition.

p. 1
02

Whether hardship or sympathy can found the nugatory requirement

Holding

Hardship does not, in the circumstances, supply the basis for finding an appeal would be rendered nugatory

Reasoning

Counsel urged that refusal of stay would cause considerable hardship. The court accepted hardship may exist but held that no authority was cited showing that sympathy and/or hardship can supply the basis for rendering an appeal nugatory. The inability of the respondent to repay the decretal amount, not hardship, is what ordinarily establishes nugatory-ness.

p. 1
03

Sanctioning breaches of the rules of procedure in execution

Holding

The court declined costs against the applicants as a mark of disapproval of the respondent's flagrant breaches of the rules in preparing and executing the decree

Reasoning

Although the application succeeded only conditionally, the court noted that the respondent flouted the rules of procedure in the preparation and execution of the decree. As a mark of disapproval of these flagrant breaches, the court made no order for costs, effectively leaving each party to bear its own costs of the application.

p. 1

Legal principles established

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  • Summary judgment being a strong and summary remedy, it may be granted only in the clearest of cases and with extreme caution
  • Under rule 5(2)(b), an applicant for stay must satisfy both limbs: an arguable appeal and that the appeal will be rendered nugatory unless stay is granted; sympathy or hardship cannot substitute for nugatory-ness

Court orders

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  1. 1.Stay of execution of the order of the superior court granted on condition that the applicants deposit the whole decretal amount into a joint account of the parties' advocates with a bank of repute within thirty days, failing which the stay shall lapse
  2. 2.No order for costs of the application

The bench

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One judgment of the whole court — no separate or dissenting opinions.

majority
majority
majority
On appeal from
High Court
Jurisdiction invoked
Rule 5(2)(b) of the Court of Appeal Rules

Relief refused

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Unconditional stay of execution

The applicants could not show that the appeal would be rendered nugatory without a stay; hardship alone does not satisfy the nugatory requirement

p. 1

Costs of the application

The respondent flouted the rules of procedure in preparing and executing the decree, and the court marked its disapproval by making no order for costs

p. 2

Costs

No order for costs of the application; each party to bear their own costs as a mark of the court's disapproval of the respondent's flagrant breaches of the rules of procedure

Quotable passages

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Verbatim from the judgment, each located to the page it appears on in the official PDF — so these can be cited and checked directly.

the learned judge was granting the very strong and summary remedy which he must only do in the clearest of cases and with extreme caution
p. 1Summary judgment - caution required
while we are satisfied that the applicants have an arguable appeal we are not satisfied on the second requirement that unless a stay is granted the intended appeal will be rendered nugatory
p. 1Rule 5(2)(b) - twin requirements for stay
no decision was cited to show that sympathy and/or hardship can supply the basis that could, in the circumstances of this case, be considered to render an appeal nugatory
p. 1Hardship cannot substitute for nugatory-ness
we grant the application for stay on condition that the applicants shall deposit into a joint account of the parties' advocates the whole decretal amount with a Bank of repute within thirty (30) days hereof failing which the stay shall lapse
p. 1Final orders - conditional stay
As a mark of our disapproval of the respondent's flagrant breaches of the rules in this regard, we do not make any order for costs of this application
p. 2Final orders - costs

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, "KENSAN INSURANCE BROKERS LIMITED & ANOTHER vs KENINDIA ASSURANCE COMPANY LIMITED [1997] KECA 270 (KLR)", Case Analysis (1997). Civil Application No. Nai. 94 of 1997 (45/97UR). Source: https://new.kenyalaw.org/akn/ke/judgment/keca/1997/270/eng@1997-05-21

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