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Court of AppealAllowedCivil Application No. NAI 77 of 2014 (UR 63/2014)· [2015] KECA 626 (KLR)

CFC Life Assurance Ltd v Fredrick Odongo Owegi [2015] KECA 626 (KLR)

Court of Appeal of Kenya
19 June 2015
Martha Karambu KoomeM.K. KoomeGKG.B.M. KariukiPhilomena Mbete MwiluP.M. Mwilu
2,758 words in judgment
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The bottom line

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Kenya's Court of Appeal stopped enforcement of a Ksh 23 million wrongful dismissal award against CFC Life Assurance until its appeal is heard, but only if the appeal is filed within 60 days.

What this practically means

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Executive summary

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This is a single-judgment ruling of a three-judge bench of the Court of Appeal at Nairobi (Koome, G.B.M. Kariuki and Mwilu, JJ.A) on a Notice of Motion dated 10th April 2014 brought under Rule 5(2)(b) of the Court of Appeal Rules, 2010, in which CFC Life Assurance Ltd sought stay of execution of a judgment of the Industrial Court (Mbaru, J.) delivered on 31st March 2014 in Industrial Cause No. 1001 of 2012. The judgment below declared the respondent's termination unlawful and unfair and ordered reinstatement or, in the alternative, payment of compensation of twelve months' salary, accrued salaries and three years' basic salary, with interest and costs. The Court addressed the twin Rule 5(2)(b) tests of arguability and nugatory effect, applying the principles in Butt v Rent Restriction Tribunal [1982] KLR 417 and the overriding objective under Section 3A of the Appellate Jurisdiction Act. It found the appeal arguable because the alternative framing of the orders raised prima facie questions on the interpretation of section 49 of the Employment Act, including whether the fourteen conditions in section 49(4) must each be interrogated with reasons before reinstatement is ordered. On nugatory effect, the respondent had not demonstrated capacity to compensate the applicant if the appeal succeeded. The Court also held, in rejecting repeated consent adjournments, that parties may not by their own consent remove matters from the hearing list. The application succeeded: execution of the judgment of 31st March 2014 was stayed pending the appeal, conditional on the applicant filing and serving the appeal within 60 days, the appeal to be heard on priority basis, with costs of the application abiding the outcome of the intended appeal. This ruling binds subordinate courts and tribunals on the applicable stay principles.

Key legal issues

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01

Whether the intended appeal is arguable

Holding

The appeal is arguable because the alternative drafting of the reinstatement and compensation orders raises prima facie questions on the interpretation of section 49 of the Employment Act, including whether the trial court must consider and give reasons on each of the 14 conditions in section 49(4) before ordering reinstatement.

Reasoning

The court found the orders problematic because they were made in the alternative, leaving unclear which order was to be implemented and what constitutes suitable re-engagement. It considered whether the trial court should explore all remedies and issue a determinate order a valid question, and noted the applicant's assertion that the 14 conditions in section 49(4) were not taken into account, presenting serious questions of law for the appeal.

p. 4
02

Whether the appeal would be rendered nugatory if stay is not granted

Holding

The nugatory test was satisfied because the respondent did not demonstrate capacity to refund or compensate the applicant should the appeal succeed against an award estimated at Ksh 23,243,241 plus possible reinstatement.

Reasoning

The respondent had not demonstrated that if the sum were paid to him and the appeal succeeded, he was financially capable of compensating the applicant. The court held that a successful litigant is entitled to the fruits of litigation unless circumstances justify denying immediate execution, but on these facts the twin conditions for stay under Rule 5(2)(b) were met.

p. 5

Legal principles established

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  • The twin tests for stay under Rule 5(2)(b) are arguability of the appeal and whether the appeal will be rendered nugatory if stay is not granted.
  • Counsel and parties cannot by their own consent take matters out of the Court of Appeal hearing list; matters are either to be heard, withdrawn, settled or dismissed.

Court orders

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  1. 1.The applicant directed to file and serve the appeal within 60 days from the date of the ruling, failing which the stay order will lapse
  2. 2.The Court of Appeal Registry to fix the appeal for hearing on a priority basis
  3. 3.Pending the hearing and determination of the appeal, the orders by Mbaru J. made on 31st March 2014 are stayed
  4. 4.Costs of the application to abide the outcome of the intended appeal

Authorities

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Legislation

  • Appellate Jurisdiction ActSection 3
  • Appellate Jurisdiction ActSection 3A
  • Appellate Jurisdiction ActSection 3B
  • Court of Appeal Rules, 2010Rule 5(2)(b)
  • Court of Appeal Rules, 2010Rule 20
  • Court of Appeal Rules, 2010Rule 75
  • Employment ActSection 49
  • Employment ActSection 49(4)
  • Employment ActSection 50
  • Industrial Court ActSection 12(3)(vi) and (vii)

Cases cited (1)

  • BUTT V RENT RESTRICTION TRIBUNAL
    [1982] KLR page 417
On appeal from
Industrial Court of Kenya (High Court of Kenya at Nairobi)
Industrial Cause No. 1001 of 2012
Jurisdiction invoked
Rule 5(2)(b) of the Court of Appeal Rules, 2010 read with Sections 3, 3A and 3B of the Appellate Jurisdiction Act

Key timeline

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Practical implications

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Frequently asked questions

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Later judgments citing this (1)

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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, "CFC Life Assurance Ltd v Fredrick Odongo Owegi [2015] KECA 626 (KLR)", Case Analysis (2015). Civil Application No. NAI 77 of 2014 (UR 63/2014). Source: https://new.kenyalaw.org/akn/ke/judgment/keca/2015/626/eng@2015-06-19

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