Nilestar Holdings Ltd & 3 others v Green Valley Limited & 2 others [2012] KECA 237 (KLR)
The bottom line
#Kenya's Court of Appeal let a High Court rent order stand but ordered disputed rentals held in a joint interest-earning account to protect both sides.
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, absent the orders sought, the success of the intended appeal would be rendered nugatory
Key legal issues
#Whether the mandatory orders for payment of rent granted at an interlocutory stage were arguable grounds of appeal
It is not frivolous to question mandatory orders enforcing a clause of a disputed agreement at an interlocutory stage; the validity of the agreement and the right to its benefits is central to the issues framed in the High Court.
The court examined the 11 issues framed for determination before the High Court and found that the validity of the agreement and the parties' rights under its clauses are central to those issues. Determining with finality the application of one clause before all evidence was adduced and assessed may have been unjustified, making the intended appeal arguable even on that solitary ground.
Whether the nugatory test was satisfied for a stay of execution of the rent payment order
The nugatory aspect was not satisfied because there was no deposition that rentals collected would be available for refund if the applicants succeeded on appeal; the court instead fashioned a middle-course order for deposits into a joint interest-earning account.
Both parties claimed equal right to the rents pending determination of the suit. The affidavit in reply contained no deposition that the rentals would be available for refund if the applicants succeeded. Rather than a outright stay or refusal, the court directed the rentals to be deposited in an interest-earning account in the joint names of the advocates, with lawful outgoings paid from it, preserving the position of both sides pending appeal or trial.
Whether a stay of proceedings in the High Court should issue
Stay of proceedings was refused; expeditious recording of the evidence of the aged and ailing parties was in their interest, and the alleged bias was moot since the trial judge had been transferred.
The respondents pointed out that both principals were old and sickly - Magugu had suffered a stroke and Madatali was 90 years old - so it was in their interest that the suit be heard and determined expeditiously. The fear of bias was also no longer valid since Apondi J had been transferred and the matter would proceed before another judge.
Legal principles established
#- An applicant under rule 5(2)(b) must demonstrate that the intended appeal is arguable (not frivolous) and that, absent the orders, its success would be rendered nugatory.
- In interlocutory applications the court must also apply the overriding objective under sections 3A and 3B of the Appellate Jurisdiction Act.
- Final orders on a disputed contractual clause should not be made at an interlocutory stage before all the evidence is adduced and assessed.
Court orders
#- 1.That rentals accruing from the suit premises from the date of the High Court order be deposited in an interest-earning bank account in the names of the Advocates for both parties
- 2.That all lawful outgoings in respect of the suit premises be periodically paid out of that account pending determination of the intended appeal or the suit, whichever is earlier
- 3.Costs of the motion to be in the intended appeal
The bench
#One judgment of the whole court — no separate or dissenting opinions.
- On appeal from
- High Court of Kenya at Milimani Commercial Court
- H.C.C.C. No. 439 of 2004
- Jurisdiction invoked
- Rule 5(2)(b) of the Court of Appeal Rules; sections 3A and 3B of the Appellate Jurisdiction Act
Relief refused
#Stay of execution of orders No. 1 and 2 of the orders of the High Court given on 24th November 2010
The success of the intended appeal would not be rendered nugatory if not granted
Stay of proceedings in the High Court
In the special circumstances (aged and ailing parties), it is in the interests of the parties that their evidence be recorded and considered expeditiously
Refund to the applicants of all rents collected by Gichuki Kingara and Company from L.R. Nos. 209/908 and 209/918
Not granted; the court instead directed rentals to be deposited into a joint interest-earning account
Costs
Costs of the motion shall be in the intended 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.
Those orders may be granted if the applicants show not only that the intended appeal is not frivolous or is arguable even on a solitary ground, but also that unless the orders sought are granted, the success of the intended appeal shall be rendered nugatory.
it is not a frivolous issue to question the mandatory orders given at an interlocutory stage of proceedings, regarding enforcement of one of the clauses in a disputed agreement between the parties
the order that commends itself to us is to direct that the rentals accruing from the suit premises, from the date of the order of the High Court, be deposited in an interest earning bank account in the names of the Advocates for both parties.
All lawful outgoings in respect of the suit premises shall periodically be paid out of that account pending determination of the intended appeal or the suit whichever is the earlier.
Costs of the motion shall be in the intended appeal.
Issues in the judgment
#The date of delivery of the ruling (3rd February, 2012) is inconsistent with the application and case references suggesting a 2011 filing; not internally contradictory but the heading references 'Milimani HCCC No. 439 of 2004' orders dated 24th November 2010 while the application number is of 2011, which is chronological and consistent.
The respondents' names and parties appear as both 'Madatali Hasham Abraham' in the title and 'Madatali Hashan Abraham'/'Mandatali' in the body - an inconsistency in spelling within the judgment.
Key timeline
#Practical implications
#Frequently asked questions
#Cite this brief
#Cite this brief
Caselaw, "Nilestar Holdings Ltd & 3 others v Green Valley Limited & 2 others [2012] KECA 237 (KLR)", Case Analysis (2012). Civil Application No. Nai. 17 of 2011 (UR. 12/2011). Source: https://new.kenyalaw.org/akn/ke/judgment/keca/2012/237/eng@2012-02-03
Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.