DHARMESH KUMAR RAMJI VIRPAL SHAH v INVESTMENTS & MORTGAGE BANK LIMITED & ANOTHER [2007] KECA 366 (KLR)
The bottom line
#Kenya's Court of Appeal dismissed a stay of proceedings because an arguable appeal alone is not enough; the applicant also had to prove the appeal would be wasted without one.
What this practically means
#Executive summary
#Key legal issues
#Whether the intended appeal against the ruling dismissing the production-of-documents application is arguable.
Yes. The Court was satisfied, after perusing the draft Memorandum of Appeal and hearing counsel, that the applicant discharged his onus that the intended appeal is arguable and not frivolous.
The Court examined the draft Memorandum of Appeal and heard submissions from counsel on both sides. It applied the first limb of the settled rule 5(2)(b) test: whether the intended appeal was arguable rather than frivolous. The draft grounds attacked the Judge's refusal to order production of documents - audited accounts, Central Bank inspection reports, loan terms, particulars of securities and statements of account - which the applicant said were materially relevant to the issues in the suit. On that material the Court was satisfied the onus of arguability was discharged.
Whether the intended appeal would be rendered nugatory if stay of proceedings is withheld.
No. The applicant failed to discharge the onus on the second limb of the rule 5(2)(b) test, which was fatal to the application.
Relying on the passage it quoted from Silverstein v Chesoni, the Court reasoned that without a stay the appeal in the High Court would proceed and might be determined; if the applicant's intended appeal later succeeded, the High Court proceedings would have been rendered unnecessary, but an appropriate order for costs could remedy that, so the appeal in the Court of Appeal would not be rendered nugatory. Costs being an adequate remedy, the second limb failed. Because both limbs must be satisfied, the finding on arguability could not save the application.
Whether a stay of proceedings can still issue where the trial in the superior court has been concluded.
No. With the trial concluded and submissions set down, the appropriate course is to raise any complaints about the conduct of the proceedings on appeal against the final judgment.
The Court was told from the Bar that the trial in the superior court had concluded and a date for submissions had been fixed. At that stage a stay of proceedings would serve no practical purpose, as there were no further steps of trial to suspend pending the intended appeal. The Court therefore reasoned that any remaining grievances about the conduct of the proceedings, or otherwise, could properly be pursued in an appeal against the superior court's final judgment, giving an independent basis for refusing the stay.
Whether the Notice of Motion was incompetent because the applicant's counsel lacked capacity, not having come on record in the superior court (Order III Rule 6, Civil Procedure Rules).
Not determined. The preliminary objection was left undecided because the application failed on its merits in any event.
Counsel for both respondents objected that the Notice of Motion was incompetent because the advocate who filed it had not come on record for the applicant in the superior court, offending Order III Rule 6 of the Civil Procedure Rules. The Court chose to dispose of the entire application rather than rule on capacity first. Since the application was found unmerited, it saw no reason to decide the preliminary objection, leaving the competency question unresolved and of no practical consequence.
Legal principles established
#- Under rule 5(2)(b) an applicant must satisfy both limbs - that the intended appeal is arguable and that it would be rendered nugatory if the order sought is withheld; satisfying only arguability is not enough.
- Where the trial in the superior court has been concluded, grievances about the conduct of the proceedings are to be pursued on appeal against the final judgment rather than by a stay of proceedings.
- Where an application fails on its merits, the Court need not determine a preliminary objection raised against the application's validity.
Court orders
#- 1.The application for stay of proceedings pending the intended appeal is dismissed.
- 2.The dismissal is with costs, i.e. the costs of the application are awarded to the respondents.
- On appeal from
- High Court of Kenya, Milimani Commercial Courts
- HCCC No. 2335 of 1997
- Jurisdiction invoked
- Rule 5(2)(b) of the Court of Appeal Rules ('rule 5 (2) (b) of the Rules of this Court') - application for stay of proceedings pending an intended appeal
Key timeline
#Practical implications
#Frequently asked questions
#Cite this brief
#Cite this brief
Caselaw, "DHARMESH KUMAR RAMJI VIRPAL SHAH v INVESTMENTS & MORTGAGE BANK LIMITED & ANOTHER [2007] KECA 366 (KLR)", Case Analysis (2007). Civil Application No. 39 of 2007. Source: https://new.kenyalaw.org/akn/ke/judgment/keca/2007/366/eng@2007-03-30
Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.