Digital City Limited v Multi Tools (Kenya) Limited [2009] KECA 88 (KLR)
The bottom line
#The Court of Appeal halved a KSh 1 million deposit requirement but warned that claiming you cannot pay means nothing without bank statements to prove it.
What this practically means
#Executive summary
#Questions the Court framed
#The issues the Court set itself to decide, in its own words.
- 1.Whether the intended appeal is arguable
- 2.Whether the appeal will be rendered nugatory if the deposit condition is not stayed
Key legal issues
#Whether the applicant demonstrated an arguable appeal
The intended appeal was arguable because the learned Judge had found triable issues, including the discrepancy between the bounced cheques and the sum claimed, and the respondent's own statement of accounts showed a lower outstanding sum than claimed
The Court noted the High Court had found at least one triable issue - the discrepancy between cheques paid, bounced and the sum claimed in the plaint. The respondent's own running statement of accounts from 11th February 2005 to 31st January 2008 showed only Shs.469,526.50 due, materially less than the Shs.2,022,996.50 claimed. That finding was unchallenged before the Court, so the arguability threshold was met.
Whether the appeal would be rendered nugatory if the deposit condition stood
The applicant's unsupported claim of insufficiency of funds could not stand alone, but the Court was troubled by the absence of any apparent basis for the Shs.1 million figure, which appeared to be merely half the claim, contrary to the respondent's own accounts; the Court therefore granted a stay on a reduced condition
The applicant asserted it could not raise the Shs.1 million and might be forced out of business, but produced no bank statements or cash-flow evidence. Counsel for the respondent highlighted this. The Court nonetheless questioned how the Judge arrived at the Shs.1 million figure, which appeared to be half the plaint claim rather than the balance of Shs.469,526.50 shown in the respondent's own accounts. Balancing these considerations, the Court granted a stay subject to a reduced deposit of Shs.500,000/- within ten days.
Legal principles established
#- An arguable appeal under Rule 5(2)(b) need not be an appeal that will succeed
- A bare assertion of inability to pay, unsupported by evidence such as bank statements or cash-flow documents, cannot establish the nugatory aspect under Rule 5(2)(b)
Court orders
#- 1.Stay of the superior court's order granted on condition that the applicant deposits Shs.500,000/- in the account specified in the Judge's order within ten (10) days of the date of the order
- 2.If the applicant fails to comply within the stated period, its notice of motion dated 25th September 2009 shall stand dismissed with costs
- 3.Otherwise the costs of the motion shall be in the appeal
The bench
#One judgment of the whole court — no separate or dissenting opinions.
Wrote the judgment
Wrote the judgment
Wrote the judgment
- On appeal from
- High Court of Kenya at Nairobi
- H.C.C.C. No. 78 of 2008
- Jurisdiction invoked
- Rule 5(2)(b) of the Court of Appeal Rules
Relief refused
#Unconditional stay of the entire order requiring deposit of Shs.1 million
The Court varied the condition, requiring only Shs.500,000/- and imposing an automatic dismissal sanction for non-compliance
Costs
If the applicant fails to comply within the stated period, the notice of motion shall stand dismissed with costs; otherwise the costs of the motion shall be in the appeal.
Quotable passages
#Verbatim from the judgment, each located to the page it appears on in the official PDF — so these can be cited and checked directly.
It is not to be forgotten that an arguable appeal is not one that must or will succeed.
We do not think it would be right to simply accept the applicant’s bald statement that it is unable to pay.
Taking into account all the circumstances of the case, we grant to the applicant a stay of the order made by the superior court on condition that the applicant shall deposit in the account specified in the Judge’s order the sum of Shs.500,000/- within ten (10) days of the date of this order.
Issues in the judgment
#The judgment inconsistently refers to the High Court case as H.C.C.C. No. 78 of 2008 in the cause heading and as H.C.C.C. No. 78 of 2009 in the body of the ruling
Key timeline
#Practical implications
#Frequently asked questions
#Cite this brief
#Cite this brief
Caselaw, "Digital City Limited v Multi Tools (Kenya) Limited [2009] KECA 88 (KLR)", Case Analysis (2009). Civil Appli 294 of 2009 (UR 202/2004). Source: https://new.kenyalaw.org/akn/ke/judgment/keca/2009/88/eng@2009-10-16
Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.