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Court of AppealDismissedCivil Appli No. 294 of 2007 (200/2007 UR)· [2008] KECA 183 (KLR)

Stanbic Bank Kenya Limited v Kenya Revenue Authority [2008] KECA 183 (KLR)

Court of Appeal
8 February 2008
ROR.S.C OmoloPhilip Kiptoo TunoiP.K TunoiJOJ.W. Onyango Otieno
2,900 words in judgment
View original judgmentRead on Kenya Law Watch case
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The bottom line

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The Court of Appeal refused to stop KRA from collecting tax from Stanbic Bank, confirming courts cannot grant relief never properly requested.

What this practically means

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Executive summary

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Stanbic Bank Kenya Limited applied to the Court of Appeal under rule 5(2)(b) for an injunction restraining the Kenya Revenue Authority from demanding or recovering withholding tax of Ksh.7,954,342 in respect of Reuters services pending an intended appeal from Wendo J's ruling of 23rd November 2007, which had dismissed the bank's judicial review application for certiorari and prohibition against two KRA demand letters. Counsel for the bank conceded that an injunction could not issue because the superior court, dealing with judicial review proceedings, could not have granted one, but urged the Court to read prayer 3 of the motion as a stay application or to invoke its inherent powers to preserve the status quo. The Court declined. It held that under section 3(3) of the Appellate Jurisdiction Act the law applicable on appeal is the law applicable in the High Court, so no injunction was available. It further held that rule 5(2)(b) permits only three orders - stay of execution, stay of proceedings and injunction - and that its inherent powers are confined to those. Since the superior court had merely dismissed the motion with costs, its order was negative: no party was ordered to do or refrain from doing anything, so there was nothing capable of being stayed. Following Weco vs Oranga and two later decisions of the Court, the application failed. The Court found it unnecessary to address whether the KRA can be injuncted under section 3(2)(a) of the Kenya Revenue Authority Act, or the arguability and nugatory-effect limbs. The application was dismissed with costs to the respondent.

Key legal issues

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01

Availability of an injunction on appeal from judicial review proceedings

Holding

An injunction could not be granted because the superior court, seized of judicial review proceedings under Order 53 rule 3(1), could not in law have granted one, and the appellate court applies the same law.

Reasoning

Section 3(3) of the Appellate Jurisdiction Act directs that in hearing an appeal the Court applies the law applicable to the case in the High Court. The applicant's own counsel conceded this. Because the underlying proceedings were for certiorari and prohibition, an injunction was unavailable both below and on appeal, so the first prayer necessarily failed.

p. 3
02

Whether a negative dismissal can be stayed under rule 5(2)(b)

Holding

A dismissal with costs is a negative order; only a positive order compelling or forbidding action is capable of being stayed or enjoined.

Reasoning

The superior court merely declined the certiorari and prohibition orders and dismissed the motion with costs. It ordered no party to do or refrain from doing anything. Following Western College (Weco) vs Oranga and later decisions, there was nothing to execute or restrain, so neither stay nor injunction could issue. The Court found it unnecessary to consider arguability, nugatory effect, or the statutory bar on injuncting the KRA.

p. 5
03

Scope of the Court's inherent powers under rule 5(2)(b)

Holding

The inherent powers revolve around stay of execution, stay of proceedings and injunction only; the Court cannot create or re-interpret a prayer not sought.

Reasoning

Counsel for the applicant asked the Court to treat the general prayer 3 as a stay application or as seeking status quo ante. The Court held prayer 3 sought only liberty to apply for further orders, not a stay or preservation of status quo, and reading a stay into it would amount to abusing the Court's discretionary powers under rule 5(2)(b).

p. 3

Legal principles established

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  • On an appeal against judicial review proceedings, the Court of Appeal applies the law applicable in the High Court, and since judicial review proceedings cannot yield an injunction, none can issue on appeal.
  • Under rule 5(2)(b) the Court of Appeal may make only three orders: stay of execution, stay of proceedings and injunction, and there must be a positive, enforceable order of the superior court to stay.
  • Where the superior court merely dismisses an application with costs, the resulting order is negative and cannot be the subject of a stay of execution or injunction under rule 5(2)(b).
  • The Court will not re-cast or expand a prayer not sought in a notice of motion, even under its inherent powers.

Court orders

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  1. 1.The application dated 3rd December 2007 was dismissed
  2. 2.Costs of the application awarded to the respondent

Authorities

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Legislation

  • Kenya Revenue Authority Actsection 3(2)(a)
  • Government Proceedings Actsection 16(1)(i)
  • Appellate Jurisdiction Actsection 3(3)
  • Civil Procedure RulesOrder 53 rule 3(1)
  • Court of Appeal Rulesrule 5(2)(b)

Cases cited (3)

  • Western College of Arts and Applied Sciences (Weco) vs. Oranga
    (1976) KLR 63
  • Mombasa Seaport Duty Free Ltd vs. Kenya Ports Authority
    Civil Application No. Nai. 242 of 2006 (unreported)
  • Republic vs. Kenya Wildlife Services & 2 others
    Civil Application No. Nai. 12 of 2007 (unreported)
On appeal from
High Court of Kenya at Nairobi
H.C. Misc. Application No. 1371 of 2005
Jurisdiction invoked
Rule 5(2)(b) of the Court of Appeal Rules, with section 3(3) of the Appellate Jurisdiction Act (Cap 9) governing the applicable law

Key timeline

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Practical implications

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Frequently asked questions

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Later judgments citing this (2)

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Judgments in the corpus that rely on this one. Where the Court said how it treated the authority, that is shown.

Cite this brief

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Cite this brief

Caselaw, "Stanbic Bank Kenya Limited v Kenya Revenue Authority [2008] KECA 183 (KLR)", Case Analysis (2008). Civil Appli No. 294 of 2007 (200/2007 UR). Source: https://new.kenyalaw.org/akn/ke/judgment/keca/2008/183/eng@2008-02-08

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