Official Receiver (Suing as the Interim Liquator of Continental Bank of Kenya Ltd (In Liquidation) v Mugo Mukunya & 3 others [2001] KECA 78 (KLR)
The bottom line
#Kenya's Court of Appeal refused to freeze a High Court ruling because the liquidator proved the appeal was arguable but never showed evidence it would be worthless if it won.
What this practically means
#Executive summary
#Key legal issues
#Whether the intended appeal against the review orders of 3rd January 2001 is arguable.
The court was prepared to accept that the intended appeal may be arguable, but held that arguability alone cannot justify a stay.
The court examined the voluminous grounds of appeal against the ruling that set aside the orders of 14th October 1999, removed the caveat over L.R. No. 1160/585 and joined Tom Osimbo. Although the supporting affidavit asserted a good arguable case and the court was prepared to assume arguability, it stressed that the first limb of the stay test is not self-sufficient: relief also depends on the applicant establishing, on evidence, that a successful appeal would be rendered nugatory.
Whether the Applicant proved that the appeal would be rendered nugatory if stay were refused.
No - no evidence was adduced that Tom Osimbo could not satisfy the decree if the appeal succeeded, so the nugatory limb failed.
The Applicant had sued only for the balance of the purchase price and damages, monetary relief capable of satisfaction. Osimbo's replying affidavit deponed that his salary was sufficient to compensate the Applicant should the appeal succeed. The Applicant's own supporting affidavit of 26th January 2001 deponed only to arguability and nowhere asserted Osimbo's financial inability; the claim that the Applicant, being in receivership, could not deposit Kshs.6 million appeared only in the certificate-of-urgency affidavit.
Whether material deponed only in support of the certificate of urgency could sustain the stay application.
It could not: the deposition that the Applicant, being in receivership, could not afford the Kshs.6 million deposit was made only in the certificate-of-urgency affidavit and not in support of the application itself.
The court distinguished between the affidavit filed in support of the application and the affidavit supporting the certificate of urgency. Because the inability-to-deposit assertion appeared only in the latter, the application before the Court of Appeal was left without evidence on the very prejudice said to flow from the conditional stay granted in the High Court. This reinforced the conclusion that the nugatory limb was unproven and the application had to be dismissed.
Legal principles established
#- An applicant for stay of execution pending appeal must establish, by evidence, that the appeal would be rendered nugatory if stay is refused; a merely arguable appeal does not warrant a stay.
- Where the decree is monetary and the party against whom stay is sought has deponed to financial capacity to satisfy it, the nugatory limb fails unless the applicant depones, in support of the application itself, to that party's inability to compensate.
- Material going to the prejudice required for a stay must be placed before the court in the affidavit supporting the application itself; assertions made only in the affidavit supporting a certificate of urgency do not suffice.
Court orders
#- 1.The Applicant's application for stay of execution of the ruling and orders of the High Court (Commissioner of Assize Ransley) of 3rd January 2001 in H.C.C.C. No. 8 of 1998 is dismissed.
- 2.Costs to be in the intended appeal.
- On appeal from
- High Court of Kenya at Nairobi
- H.C.C.C. No. 8 of 1998
- Jurisdiction invoked
- Not expressly stated in the ruling. The application is for stay of execution of the High Court orders of 3rd January 2001 pending an intended appeal to the Court of Appeal; the only constitutional provision invoked on the face of the judgment is section 75(6)(a) of the Constitution, cited in the Applicant's affidavit.
Key timeline
#Practical implications
#Frequently asked questions
#Cite this brief
#Cite this brief
Caselaw, "Official Receiver (Suing as the Interim Liquator of Continental Bank of Kenya Ltd (In Liquidation) v Mugo Mukunya & 3 others [2001] KECA 78 (KLR)", Case Analysis (2001). Civil Application No. NAI. 20 of 2001 (UR.13/2001). Source: https://new.kenyalaw.org/akn/ke/judgment/keca/2001/78/eng@2001-03-02
Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.