Target Carriers Limited (In Receivership) v Lyndon D’souza t/a Road Runner Carriers [2006] KECA 169 (KLR)
The bottom line
#Kenya's Court of Appeal refused to pause a ruling restoring vehicles to a buyer, because the company appealing could not show a single arguable point.
What this practically means
#Executive summary
#Key legal issues
#The test governing an application for stay of execution pending appeal under rule 5(2)(b) of the Court of Appeal Rules.
The applicant must show, first, that the appeal or intended appeal is arguable and, secondly, that unless a stay or injunction is granted, the appeal if successful will be rendered nugatory. Both tests must be satisfied; failure on the first disposes of the application.
The court described the two principles as well settled and as guiding its jurisdiction under rule 5(2)(b). The power is discretionary and, like all judicial discretion, must be exercised on the basis of facts and the law. Because the tests are cumulative, the court in this case found it unnecessary to consider whether the appeal, if later successful, would be rendered nugatory once it concluded that no arguable point existed.
Whether the intended appeal against the order restoring the vehicles to the respondent was arguable.
It was not. The High Court's findings that there was no fixed charge over the motor vehicle, that the bank's interest was not noted in the registration books, that the respondent was an innocent purchaser for value without notice, and that the log books remained with the applicant which used them to effect the transfers, left no arguable point.
Clause 14.2 of the debenture required the borrower to deposit log books in the joint names of the bank and the borrower together with blank transfer forms. The applicant signed and handed over blank transfer forms, but the log books were never in joint names and remained with the applicant, which used them to transfer the vehicles to the respondent. Why the log books were not in joint names was a matter peculiarly within the knowledge of the bank and the applicant. On those facts no arguable point was shown.
Whether the court needed to consider the nugatory limb of the rule 5(2)(b) test once the arguability limb failed.
No. Having answered the arguability question in the negative, the court expressly found it unnecessary to consider whether denial of the stay would render a later successful appeal nugatory.
Because the two tests under rule 5(2)(b) are cumulative, failure on the first is fatal to the application. The court answered the arguability question in the negative and therefore declined to address the second limb, confirming that an applicant who fails to demonstrate an arguable point cannot obtain a stay merely by asserting potential nugatory-ness.
Legal principles established
#- On an application under rule 5(2)(b) of the Court of Appeal Rules for a stay of execution or injunction pending appeal, the applicant must demonstrate two things: that the appeal or intended appeal is arguable, and that unless the stay or injunction is granted, the appeal if successful will be rendered nugatory.
- The two rule 5(2)(b) tests are cumulative: an applicant must satisfy both, and failure to establish an arguable point disposes of the application without the court considering the nugatory limb.
- The power to grant a stay under rule 5(2)(b) is discretionary and must be exercised on the basis of facts and the law.
Court orders
#- 1.The notice of motion dated 7th June 2006 was dismissed.
- 2.Costs of the application were awarded to the respondent.
- On appeal from
- High Court of Kenya at Nairobi, Milimani Commercial Courts
- H.C.MISC. C. NO. 207 OF 2005
- Jurisdiction invoked
- Rule 5(2)(b) of the Court of Appeal Rules
Key timeline
#Practical implications
#Frequently asked questions
#Cite this brief
#Cite this brief
Caselaw, "Target Carriers Limited (In Receivership) v Lyndon D’souza t/a Road Runner Carriers [2006] KECA 169 (KLR)", Case Analysis (2006). Civil Appli 155 of 2006. Source: https://new.kenyalaw.org/akn/ke/judgment/keca/2006/169/eng@2006-07-14
Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.