Chemil Enterprises v New Three In One Company & 1 other
The bottom line
#Kenya's Court of Appeal stopped a Shs.3 million judgment from being enforced because the money might go to the wrong company and never be recovered.
What this practically means
#Executive summary
#Key legal issues
#Whether the intended appeal is arguable
The appeal is arguable: the method of assessing mesne profits was questionable, and it is arguable that the decree should not have been made in favour of TOP-IN-ONE, which was not the landlord or registered proprietor.
The High Court doubled the rounded-up valuation figure to Shs.120,000 per month, ignoring that the actual tenant in occupation paid Shs.9,000 per month. Further, the registered proprietors were partners of THREE-IN-ONE, not TOP-IN-ONE, though some directors overlapped. These were sufficient arguable points entitling CHEMIL to canvass them on appeal.
Whether the appeal would be rendered nugatory without stay
Yes. Execution would send a sum of about Shs.3,000,000 to a company of unknown worth which may not be the rightful party, and CHEMIL, a small firm, would suffer irreparably and might collapse.
TOP-IN-ONE was a private company with share capital of Shs.1,000,000 of unknown paid-up value. Recovery of mesne profits paid to a wrong party may be impossible. CHEMIL was not a large business concern and paying out such a sum could destroy it, satisfying the second limb of the rule 5(2)(b) test.
Correct legal basis for double rent as against mesne profits
The learned judge erred in doubling the monthly rental value; double rent under section 14 of the Distress for Rent Act applies only where a tenant holds over after a quit notice, and is not a measure of mesne profits.
The judge assessed market rental at Shs.60,000 and doubled it to Shs.120,000 'in accordance with the legal principles of law as he understood them'. The court held this conflated double rent with mesne profits and ignored the actual occupation by KOOME INVESTMENTS LIMITED at Shs.9,000 per month, making the assessment an arguable appellate issue.
Legal principles established
#- An applicant under rule 5(2)(b) must satisfy the court that the intended appeal is arguable and that, if stay is not granted, the success of the appeal would be rendered nugatory; where the decretal amount would be paid to a wrong party whose ability to repay is unknown, the nugatory test is satisfied.
- Double rent, as distinct from mesne profits, can only be claimed where a tenant gives notice to quit and then fails to quit, and only for the period of holding over after expiry of the quit notice.
Court orders
#- 1.Stay of execution of the decree of the High Court dated 1st December 2000 and issued on 21st February 2001, pending the hearing and determination of Civil Appeal No. 38 of 2001 (the third prayer of the notice of motion dated 28th May 2001)
- 2.Costs of the application to be costs in Civil Appeal No. 38 of 2001
- On appeal from
- High Court of Kenya at Nairobi
- H.C.C.S. No. 1821 of 1998
- Jurisdiction invoked
- Rule 5(2)(b) of the Court of Appeal Rules (application for injunction and stay pending appeal)
Key timeline
#Practical implications
#Frequently asked questions
#Cite this brief
#Cite this brief
Caselaw, "Chemil Enterprises v New Three In One Company & 1 other", Case Analysis (2001). Civil Application No. NAI. 165 of 2001 (87/2001 UR). Source: https://new.kenyalaw.org/akn/ke/judgment/keca/2001/139/eng@2001-06-29
Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.