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Court of AppealAllowedCivil Application No. NAI 316 of 2014· [2015] KECA 406 (KLR)

New Kenya Co-operative Creameries Ltd v Olgha Auma Adede [2015] KECA 406 (KLR)

Court of Appeal
25 September 2015
1,569 words in judgment
View original judgmentRead on Kenya Law Watch case
AI-assisted case brief
·~6 min to read original · ~4 min brief

The bottom line

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The Court of Appeal can grant a stay even after the lower court refused one — Kenyan employers losing at trial still have a real second chance.

What this practically means

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Executive summary

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This is a single judgment of a three-judge bench of the Court of Appeal at Nairobi (Githinji, Mwilu and Kantai, JJ.A.) in an application under Sections 3A and 3B of the Appellate Jurisdiction Act and Rule 5(2)(b) of the Court's rules for stay of execution pending an intended appeal against a judgment of the Industrial Court (Maureen Onyango, J.) awarding the respondent Kshs.2,329,350 for unfair dismissal. The applicant, New Kenya Co-operative Creameries Ltd, had failed in a similar stay application before the trial court. The respondent opposed, arguing there was no proper appeal, that the applicant was abusing process by renewing the application, and that the applicant, a large dairy business, could not suffer substantial loss. The court reaffirmed the twin principles governing Rule 5(2)(b) applications: the applicant must show an arguable appeal and that the appeal would be rendered nugatory absent stay. It held its jurisdiction is original, so the trial court's refusal had no bearing. The draft grounds on gratuity for an employee with only 9 months' service and general damages for unfair dismissal raised arguable issues of law. On the nugatory limb, the respondent had not demonstrated ability to refund the decretal sum. The application was allowed, stay of execution granted pending the intended appeal, and costs of the Motion were made to abide the intended appeal.

Key legal issues

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01

Whether the Court of Appeal may entertain a Rule 5(2)(b) stay application after the trial court refused a similar application

Holding

Yes; the jurisdiction is original and the trial court's refusal is irrelevant.

Reasoning

The court held that its jurisdiction under Rule 5(2)(b) is both original and discretionary. What the applicant must show is satisfaction of the two principles - arguability and nugatory-ness. The applicant's failure before the trial court has no bearing on the exercise of this Court's independent jurisdiction under the rule.

p. 1
02

Whether the intended appeal was arguable

Holding

Yes; the draft grounds on gratuity entitlement and general damages raised issues of law capable of canvass on appeal.

Reasoning

The draft memorandum of appeal questioned the award of gratuity of Kshs.739,350 to an employee who had served 9 months of a contract requiring 3 years for gratuity, and the award of general damages for unfair dismissal not envisaged by the contract. These were issues of law which the applicant was entitled to canvass in the intended appeal.

p. 3
03

Whether the intended appeal would be rendered nugatory without stay

Holding

Yes; the respondent did not demonstrate ability to refund the decretal sum of Kshs.2,329,350.

Reasoning

The respondent had not shown or demonstrated ability to refund the substantial decretal sum if the appeal succeeded. Her assertion of the applicant's size and assets reversed the correct principle, which requires demonstration of the nugatory aspect by the party resisting stay on that basis. Stay was therefore warranted.

p. 3

Legal principles established

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  • To succeed on a Rule 5(2)(b) application, an applicant must satisfy two principles: an arguable appeal and that the appeal will be rendered nugatory unless stay is granted.
  • The Court of Appeal's jurisdiction under Rule 5(2)(b) is original; a refusal of stay by the trial court has no bearing on the exercise of that jurisdiction.
  • On the nugatory-principle, it is the applicant who benefits from demonstrating the nugatory aspect; the burden is not shifted to the respondent.

Court orders

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  1. 1.Stay of execution of the lower court's judgment pending hearing and determination of the intended appeal
  2. 2.Costs of the Motion to abide the intended appeal

Authorities

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Legislation

  • Appellate Jurisdiction ActSections 3A and 3B
  • Court of Appeal RulesRule 5(2)(b)
  • Industrial Court Actappeals on points of law only

Cases cited (3)

  • Ishmael Kagunyi Thande v Housing Finance Company of Kenya
    Civil Application No. NAI 157 of 2006 (unreported)
  • Githunguri vs Jimba Credit Corporation Ltd, No. 2
    [1988] KLR 838
  • J.K. Industries Ltd vs Kenya Commercial Bank Ltd.
    [1982-1988]
On appeal from
Industrial Court of Kenya (Employment and Labour Relations Court)
Industrial Cause No. 37 of 2011
Jurisdiction invoked
Sections 3A and 3B of the Appellate Jurisdiction Act and 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, "New Kenya Co-operative Creameries Ltd v Olgha Auma Adede [2015] KECA 406 (KLR)", Case Analysis (2015). Civil Application No. NAI 316 of 2014. Source: https://new.kenyalaw.org/akn/ke/judgment/keca/2015/406/eng@2015-09-25

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