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Court of AppealPartially AllowedCivil Appli 189 of 2009 (UR 130/2009)· [2009] KECA 94 (KLR)

Freight In Time Ltd v Image Apparels Limited [2009] KECA 94 (KLR)

Court of Appeal of Kenya
16 October 2009
EOE.O. O'KubasuEGE.M. GithinjiDAD.K.S. Aganyanya
1,656 words in judgment
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The bottom line

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Kenya's Court of Appeal paused contempt fines against Freight In Time's directors, but only after each paid Kshs.200,000 into court within fourteen days.

What this practically means

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Executive summary

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The applicant, Freight In Time Ltd, moved the Court of Appeal under rule 5(2)(b) of the Court of Appeal Rules for a stay of execution of a High Court ruling by Nambuye, J dated 3rd October 2008 in H.C. Misc. Civil Appln. No. 1623 of 2005. That ruling had arisen from a contempt application by Image Apparels Limited, in which the Judge disallowed attachment of property but fined six named directors and officers of the applicant Kshs.350,000 each, in default six months' imprisonment in civil jail, with costs to the applicant in the contempt proceedings. The applicant argued before the Court of Appeal that the contempt application was filed without leave (the earlier leave application having been withdrawn), that only one director was served, and that the order lacked a penal notice, so the superior court lacked jurisdiction. The respondent contended the judge had jurisdiction and the contempt remained unpurged. The court applied the established rule 5(2)(b) twin test from Trust Bank v Investech Bank: the applicant must show an arguable appeal and that refusal of stay would render it nugatory. It found the jurisdictional, service and penal-notice issues were arguable questions of law, holding that even one arguable point suffices (Goldenberg Commission v Kilach). The risk of the directors being committed to civil jail satisfied the nugatory limb. The appeal before the Court of Appeal was therefore allowed in the sense that a conditional stay was granted: each director to deposit Kshs.200,000 in court within fourteen days, failing which the application would stand dismissed. Costs of the application were to abide the outcome of the intended appeal. The decision binds subordinate courts and the High Court on the rule 5(2)(b) test.

Key legal issues

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01

The twin test for stay of execution under rule 5(2)(b)

Holding

The applicant must show the appeal is arguable (not frivolous) and that refusal of stay would render the appeal nugatory; these principles are considered against the facts of each case.

Reasoning

The court adopted the statement of principle in Trust Bank Limited v Investech Bank Limited, holding that rule 5(2)(b) jurisdiction is original and discretionary. Both limbs must be shown; the exercise is fact-sensitive. Here, the risk of directors being committed to civil jail satisfied the nugatory limb, and identified questions of law satisfied the arguability limb, justifying a conditional stay.

p. 3
02

Whether the intended appeal raised arguable points

Holding

The appeal was arguable: it raised questions of law on the superior court's jurisdiction to entertain contempt proceedings after withdrawal of leave, service of the order on only one director, and absence of a penal notice.

Reasoning

The court noted conflicting submissions on whether the High Court had jurisdiction over the contempt application given the withdrawn leave application, plus defects in service and the absence of a penal notice. Citing Githunguri v Jimba Credit Corporation and the Goldenberg Commission case, it held these were questions of law fit for appeal, and even one arguable point suffices.

p. 3
03

Whether the appeal would be rendered nugatory absent a stay

Holding

Yes - the directors of the applicant stood a real risk of being committed to civil jail, and the court accordingly granted a conditional stay.

Reasoning

The court observed that the directors faced imminent committal to civil jail under the High Court orders (fines of Kshs.350,000 each, defaulting to six months' imprisonment). Each case must be considered on its own circumstances; on the facts, the risk of imprisonment rendered the appeal nugatory if no stay issued, warranting a conditional stay with security.

p. 3

Legal principles established

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  • An applicant under rule 5(2)(b) must demonstrate both that the appeal is arguable and that it would be rendered nugatory if stay is refused.
  • A single arguable point suffices to satisfy the arguability test under rule 5(2)(b).

Court orders

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  1. 1.Stay of execution of the High Court ruling of 3rd October 2008 granted conditionally, on each director of the applicant depositing Kshs.200,000 in court within fourteen days
  2. 2.Failure to comply with the condition within the specified period the application will stand dismissed
  3. 3.Costs of the application to abide the outcome of the intended appeal
On appeal from
High Court of Kenya at Nairobi
H.C. Misc. Civil Appln. No. 1623 of 2005
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, "Freight In Time Ltd v Image Apparels Limited [2009] KECA 94 (KLR)", Case Analysis (2009). Civil Appli 189 of 2009 (UR 130/2009). Source: https://new.kenyalaw.org/akn/ke/judgment/keca/2009/94/eng@2009-10-16

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