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Court of AppealDismissedCivil Application No. Nai. 336 of 2004 (UR 176/04)· [2005] KECA 265 (KLR)

Kings Motors Ltd v Shell & BP (Malindi) Kenya Ltd (Civil Application 336 of 2004) (Civ) [2005] KECA 265 (KLR)

Court of Appeal of Kenya
4 February 2005
EOE.O. O'KubasuEGE.M. GithinjiPWP.N. Waki
1,126 words in judgment
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The bottom line

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Kenya's Court of Appeal refused to pause an eviction order, confirming a company's name change does not affect its lease rights or obligations.

What this practically means

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Executive summary

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The applicants, Kings Motors Ltd, sought a stay of execution under rule 5(2)(b) of the Court of Appeal Rules of a High Court ruling by Kimaru, J. dated 25 November 2004 in H.C.C.C. No. 265 of 2004, which had granted a temporary mandatory injunction requiring them to vacate the suit property, Nakuru Municipality/Block 11/650, within 14 days and a temporary injunction restraining them from dealing with it. The suit property had been sub-leased to Agip (K) Ltd, later renamed Shell & BP (Malindi) Kenya Ltd, which held a 15-year lease paid in a lump sum and was under a covenant to construct a petrol service station. The landlord, dissatisfied with the tenant's lack of occupation and asserting breach of the covenant against transfer or subletting, handed the property to the applicants, who entered in September 2004 and were sued as trespassers. Applying the settled twin principles for rule 5(2)(b) applications - an arguable appeal and absence of nugatory-ness - the Court of Appeal (O'Kubasu, Githinji and Waki, JJ.A) held it highly doubted the intended appeal was arguable, given the findings that the lease remained subsisting and the applicants were trespassers installed in connivance with the landlord. Even assuming arguability, no nugatory element was shown: no affidavit evidenced damage to the applicants, a trespasser would hardly recover damages, the landlord had been fully paid, and the property remained available if the appeal succeeded. The application was dismissed with costs.

Key legal issues

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01

Whether the intended appeal was arguable

Holding

The Court highly doubted the appeal was arguable; the High Court had found the lease subsisting and the applicant a trespasser with no superior title

Reasoning

The High Court judge had found the lease between the tenant and landlord subsisting and not terminated under its provisions; the change of name did not affect the lease; and the applicant, installed in connivance with the landlord in blatant breach of the lease, was a trespasser unable to show a claim superior to the tenant's.

p. 2
02

Whether refusal of a stay would render the appeal nugatory

Holding

It would not; there was no affidavit showing damage to the applicants, a trespasser would hardly suffer legal damages, the landlord was fully paid rent for 15 years, and the suit property remained available if the applicants succeeded on appeal

Reasoning

The applicants produced no affidavit demonstrating what damage they would suffer and how it would be irreversible. It was doubtful a trespasser would suffer legal damages, while the landlord had been paid the entire 15-year rent in a lump sum. The property itself remained available should the applicants ultimately succeed, so no irreversible harm was shown.

p. 2

Legal principles established

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  • An applicant under rule 5(2)(b) must first show an arguable appeal and secondly that the appeal, if successful, would be rendered nugatory without a stay
  • A change of a company's name does not affect its contractual rights or obligations under section 20(4) of the Companies Act, so the renamed company steps into the shoes of the original tenant

Court orders

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  1. 1.The application for stay of execution pending the intended appeal is dismissed with costs

Authorities

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Legislation

  • Companies Actsection 20(4)
  • Court of Appeal Rulesrule 5(2)(b)
On appeal from
High Court of Kenya at Nakuru
H.C.C.C. No. 265 of 2004
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, "Kings Motors Ltd v Shell & BP (Malindi) Kenya Ltd (Civil Application 336 of 2004)  (Civ) [2005] KECA 265 (KLR)", Case Analysis (2005). Civil Application No. Nai. 336 of 2004 (UR 176/04). Source: https://new.kenyalaw.org/akn/ke/judgment/keca/2005/265/eng@2005-02-04

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