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Court of AppealAllowedCivil Application No. NAI 101 of 2015 [UR 82/2015]· [2015] KECA 444 (KLR)

Aguthi Enterprises Limited v Hussein Ibrahim Nuni [2015] KECA 444 (KLR)

Court of Appeal of Kenya
31 July 2015
GKGBM KariukiJMJ. MohammedJOJ. O. Odek
2,519 words in judgment
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The bottom line

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Kenya's Court of Appeal halted a High Court eviction order, confirming that anyone facing an irreversible loss like eviction can get a stay pending appeal.

What this practically means

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Executive summary

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The applicant sought, by Notice of Motion under Sections 3, 3A and 3B of the Appellate Jurisdiction Act and Rule 5(2)(b) of the Court of Appeal Rules, a stay of execution of and temporary injunction against the ruling of Mutungi, J of the High Court at Nairobi delivered on 25th March 2015 in HCCC No. 432 of 2014, pending an intended appeal. The dispute arose from a lease agreement over property LR No. 36/II/38; the High Court had granted an injunction restraining the applicant from terminating, selling, leasing or charging the suit property and a mandatory injunction requiring it to hand over possession to the respondent. The Court of Appeal, coram GBM Kariuki, J. Mohammed and Odek, JJ.A, restated the settled twin principles for Rule 5(2)(b) applications: the applicant must show an arguable appeal and that the appeal would be rendered nugatory absent the orders. It found the appeal arguable on whether a valid contract existed between the parties, given the applicant's contention that the lease was unsigned and had no clear commencement date. It further found that the appeal would be rendered nugatory if the applicant were evicted, since the applicant remained in possession and eviction was not reversible. The court allowed the application and stayed the High Court orders pending the intended appeal, with costs to abide the outcome of the appeal.

Key legal issues

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01

Test for stay of execution pending appeal under Rule 5(2)(b)

Holding

The applicant must establish both that the appeal is arguable and that it would be rendered nugatory absent a stay; both limbs were satisfied here.

Reasoning

The court restated the settled twin principles from Ishmael Kagunyi Thande v Housing Finance Kenya Ltd and the Kinyanjui v Ketter guidelines. It found the appeal arguable on whether a valid contract existed, given the dispute over signature and commencement date of the first lease, and held the appeal would be rendered nugatory if the applicant were evicted, since eviction would be irreversible pending appeal.

p. 9
02

Nature and centrality of Rule 5(2)(b) jurisdiction

Holding

Rule 5(2)(b) is an original and discretionary interlocutory jurisdiction aimed at preserving the subject matter of a pending appeal and the status quo.

Reasoning

Relying on Equity Bank Ltd v West Link Mbo Ltd and Total Kenya Ltd v Kenya Revenue Authority, the court emphasized that the jurisdiction is interlocutory and designed to preserve the subject matter of the appeal. The balance tilts in favour of maintaining the status quo because any loss on either side may render the appeal nugatory.

p. 8

Legal principles established

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  • An applicant under Rule 5(2)(b) must satisfy the twin principles that the appeal or intended appeal is arguable and that, unless an injunction or stay is granted, the success of the appeal will be rendered nugatory
  • An arguable appeal need not be one that must succeed; a single bona fide arguable ground suffices
  • In considering a Rule 5(2)(b) application the court must not make definitive or final findings of fact or law, to avoid embarrassing the ultimate hearing of the appeal

Court orders

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  1. 1.The orders issued by the High Court, Mutungi, J dated 25th March, 2015 be and are hereby stayed pending the hearing and determination of the intended appeal
  2. 2.Costs shall abide the outcome of the intended appeal

Authorities

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Legislation

  • Appellate Jurisdiction Act Cap. 9Sections 3, 3A and 3B
  • Court of Appeal RulesRule 5(2)(b)
  • Court of Appeal RulesRule 75

Cases cited (13)

  • Ishmael Kagunyi Thande v Housing Finance Kenya Ltd
    Civil Appln No. Nai 157 of 2006 (unreported)
  • Githunguri v Jimba Credit Corporation Ltd, No. 2
    (1988) KLR 838
  • J.K. Industries Ltd v Kenya Commercial Bank Ltd
    (1982-88) KLR
  • Equity Bank Limited v West Link Mbo Limited
    Civil Appln No. NAI 78 of 2011
  • Stanley Kangethe Kinyanjui v Tony Ketter & 5 Others
    [2013] eKLR
  • Ruben & 9 Others v Nderitu & Another
    (1989) KLR 459
  • Halai & Another v Thornton & Turpin (1963) Ltd.
    (1990) KLR 365
  • David Morton Silverstein v Atsango Chesoni
    Civil Application No. Nai 189 of 2001
  • Damji Pragji Mandavia v Sara Lee Household & Body Care (K) Ltd
    Civil Application No. Nai 345 of 2004
  • Joseph Gitahi Gachau & Another v Pioneer Holdings (A) Ltd & 2 others
    Civil Application No. 124 of 2008
  • Reliance Bank Ltd v Norlake Investments Ltd
    [2002] 1 EA 227
  • International Laboratory for Research on Animal Diseases v Kinyua
    [1990] KLR 403
  • Total Kenya Ltd v Kenya Revenue Authority
On appeal from
High Court of Kenya at Nairobi
HCCC No. 432 of 2014 (ELC No. 432 of 2014)
Jurisdiction invoked
Sections 3, 3A and 3B of the Appellate Jurisdiction Act Cap. 9 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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Later judgments citing this (4)

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Judgments in the corpus that rely on this one. Where the Court said how it treated the authority, that is shown.

Cite this brief

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Cite this brief

Caselaw, "Aguthi Enterprises Limited v Hussein Ibrahim Nuni [2015] KECA 444 (KLR)", Case Analysis (2015). Civil Application No. NAI 101 of 2015 [UR 82/2015]. Source: https://new.kenyalaw.org/akn/ke/judgment/keca/2015/444/eng@2015-07-31

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