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Court of AppealPartially AllowedCivil Application No. 68 of 2008

Harit Sheth T/A Harit Sheth Advocate v Shamas Charania [2010] KECA 376 (KLR)

Court of Appeal
12 March 2010
1,487 words in judgment
View original judgmentRead on Kenya Law Watch case
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·~6 min to read original · ~4 min brief

The bottom line

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Kenya's Court of Appeal stopped execution of a Kshs.32 million judgment against an advocate, holding that a substantial decree relative to a party's means justifies a stay pending appeal.

What this practically means

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Executive summary

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This was a single-judge-panel ruling of the Court of Appeal at Nairobi on an application under rule 5(2)(b) of the Court of Appeal Rules by advocate Harit Sheth seeking stay of execution and further proceedings pending the hearing of Civil Appeal No. 252 of 2008. The intended appeal challenged a reserved ruling of Kimaru, J of 9th April 2008 in H.C.C.C. No. 1651 of 2001, in which summary judgment of Kshs.32 million was entered against the applicant in favour of Shamas Charania. The respondent had paid the sum to the applicant as stakeholder in a failed property sale; the High Court held the defence was sham and that the applicant had released the money to Mathaga Limited without the plaintiff's consent and controlled both that company and Deltron Ltd. The Court of Appeal found the intended appeal arguable without deciding its merits, and accepted that the Kshs.32 million decretal sum was substantial relative to the applicant's practice such that execution would render the appeal nugatory. Drawing on Oraro & Rachier Advocates v Co-operative Bank of Kenya Ltd and applying the then-new overriding objective provisions in sections 1A and 1B of the Civil Procedure Act and 3A and 3B of the Appellate Jurisdiction Act, the court granted the stay in terms of prayer 1 of the motion dated 18th April 2008, declined to require security in the interests of justice, and ordered costs of the application to be in the appeal. The High Court ruling itself was not disturbed; the intended appeal remains pending before the same Court.

Questions the Court framed

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The issues the Court set itself to decide, in its own words.

  1. 1.Whether the intended appeal from the ruling of Kimaru, J granting summary judgment is arguable
  2. 2.Whether, if successful, the appeal would be rendered nugatory unless stay of execution and further proceedings is granted
  3. 3.Whether the applicant should provide security as a condition of stay

Key legal issues

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01

Arguability of the intended appeal

Holding

The court was satisfied, without deciding, that the appeal was arguable and not frivolous.

Reasoning

The court considered the conflicting claims of the parties, the history of the dispute and litigation, and the grounds of appeal in the pending Civil Appeal No. 252 of 2008. It did not decide the merits but found the grounds sufficient to meet the arguability threshold under rule 5(2)(b), including the contention that summary judgment cannot be granted where fraud is alleged or a limitation defence is pleaded.

p. 3
02

Nugatory value of the appeal

Holding

The sum of Kshs.32 million was relatively substantial relative to the applicant's legal practice, and attachment would render the appeal nugatory.

Reasoning

Relying on Oraro & Rachier Advocates v Co-operative Bank of Kenya Ltd, the court weighed the size of the decretal sum against the station of the applicant's practice. Counsel deponed that attachment would force closure of the practice and loss of goodwill and reputation. The court accepted that unless stay was granted, a successful appeal would be rendered nugatory.

p. 3
03

Application of the overriding objective to stay applications

Holding

The overriding objective provisions in the Civil Procedure Act and the Appellate Jurisdiction Act, in force from 23rd July 2009, inform the exercise of the court's discretion on stay.

Reasoning

The court held that under the new jurisprudential concepts it must, in interpreting the two Acts or exercising any power, consider the overriding objective: acting justly, proportionality, a level playing ground, and equality of arms so that parties are placed on an equal footing as far as practicable. This principle informed the decision to allow the application.

p. 3

Legal principles established

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  • An applicant under rule 5(2)(b) must satisfy the court that the intended appeal is arguable and that, if successful, it would be rendered nugatory unless stay is granted.
  • In exercising its powers, the Court must apply the overriding objective in sections 1A and 1B of the Civil Procedure Act and sections 3A and 3B of the Appellate Jurisdiction Act, including proportionality and equality of arms.

Court orders

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  1. 1.An order of stay of execution and further proceedings in terms of prayer No. 1 of the notice of motion dated 18th April, 2008 pending the hearing and determination of Civil Appeal No. 252 of 2008
  2. 2.Costs of the application to be in the appeal

The bench

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One judgment of the whole court — no separate or dissenting opinions.

majority
majority
On appeal from
High Court of Kenya at Milimani Commercial Courts
H.C.C.C. No. 1651 of 2001
Jurisdiction invoked
Rule 5(2)(b) of the Court of Appeal Rules

Relief refused

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Security for the decretal sum as a condition of the stay

The court considered whether security should be provided but declined in the interests of justice

p. 3

Costs

Costs herein shall be in the appeal.

Quotable passages

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Verbatim from the judgment, each located to the page it appears on in the official PDF — so these can be cited and checked directly.

In the result, we grant an order of stay in terms of prayer No.1 of the notice of motion dated 18th April, 2008. Costs herein shall be in the appeal.
p. 3Final orders - stay granted
We are, however, satisfied without deciding, that the appeal is certainly arguable and not frivolous.
p. 3Arguability threshold under rule 5(2)(b)
We accept, therefore, that unless stay is granted the appeal if successful would be rendered nugatory, and taking into account the principle aim of the overriding objective as recently introduced into the said Acts, we would allow this application.
p. 3Nugatory test and overriding objective

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, "Harit Sheth T/A Harit Sheth Advocate v Shamas Charania [2010] KECA 376 (KLR)", Case Analysis (2010). Civil Application No. 68 of 2008. Source: https://new.kenyalaw.org/akn/ke/judgment/keca/2010/376/eng@2010-03-12

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