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Court of AppealDismissedCivil Application No. 56 of 2015 (UR 45/15)· [2016] KECA 539 (KLR)

Kaskazi Beach Hotel v Kenya Union of Domestic, Hotels, Educational Institutions & Hospital [2016] KECA 539 (KLR)

Court of Appeal
27 May 2016
911 words in judgment
View original judgmentRead on Kenya Law Watch case
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The bottom line

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The Court of Appeal refused to halt payment of Kshs.9.4 million in employee salary arrears, holding that unpaid wages outweigh an employer's appeal convenience.

What this practically means

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Executive summary

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This is a single-judgment ruling of the Court of Appeal at Mombasa (Makhandia, Ouko and M'inoti, JJ.A.) dismissing an application by Kaskazi Beach Hotel for an injunction and/or stay of execution and stay of proceedings pending an intended appeal against a ruling of Rika, J. in the Employment & Labour Relations Court at Mombasa. The trial court had, immediately after inter partes arguments, ordered the hotel to pay 96 employees salary arrears from January 2015 within 14 days, with any disputed amount to be computed by the County Labour Officer. The applicant argued that the orders were final in effect and sought stay under Rule 5(2)(b) of the Court of Appeal Rules, contending an arguable appeal, risk of a nugatory appeal and balance of convenience. The union opposed, arguing there was no order capable of being stayed, that the strictures for stay were unmet, and that no security had been furnished. Applying the twin Rule 5(2)(b) tests, the court found the intended appeal arguable: the question whether the judge judicially exercised his discretion in granting a mandatory injunction compelling payment at an interlocutory stage was a live point, even though such an injunction can properly issue at that stage per Locabail. However, the nugatory limb failed: the union undertook restitution should the appeal succeed, and because the claim concerned employees' salary and livelihood, it would be unconscionable to stay the orders or the proceedings. The application was dismissed, with costs in the intended appeal. The decision below was not disturbed; the ruling binds no trial court beyond restating established stay principles.

Key legal issues

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01

Whether the intended appeal challenging the grant of a mandatory injunction at an interlocutory stage is arguable

Holding

The intended appeal is arguable because the central question will be whether the trial judge judicially exercised his discretion in granting a mandatory injunction compelling payment of salary arrears at an interlocutory stage

Reasoning

The court accepted that a mandatory injunction can issue at an interlocutory stage, citing Locabail International Finance Ltd v Agro Export. However, whether in the circumstances the payment of Kshs.9,448,000 in salary arrears could properly be compelled at an interlocutory stage, i.e. whether the discretion was judicially exercised, was a live, non-frivolous question fit for full argument. Even a single arguable ground suffices.

p. 2
02

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

Holding

The intended appeal would not be rendered nugatory because the union undertook to ensure restitution if the appeal succeeds, and it would be unconscionable to stay orders concerning employees' salary and livelihood

Reasoning

The nugatory test was not satisfied. The union stated that if the appeal succeeded after payment, it would ensure restitution to the applicant. Further, the claim concerned salary, the livelihood of the claimants, making it unconscionable on the facts to stay the orders of the court below or the proceedings. The application therefore failed and was dismissed with costs in the intended appeal.

p. 2

Legal principles established

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  • An applicant under Rule 5(2)(b) must demonstrate both that the intended appeal is arguable and that it will be rendered nugatory if the application fails
  • An arguable appeal is not one which must necessarily succeed, but one which ought to be argued fully before the court; one which is not frivolous, and even a single arguable ground suffices

Court orders

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  1. 1.Dismissal of the applicant's motion dated 3rd November 2015 seeking stay of execution and stay of proceedings
  2. 2.Costs of the application to be costs in the intended appeal

Authorities

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Legislation

  • Court of Appeal RulesRule 5(2)(b)

Cases cited (3)

  • Nguruman Ltd v Jan Bonde Nielsen & 2 ors
    Civil App. No. 77 of 2012 (Nrb)
  • Joseph Gitahi Gachau & Another v Pioneer Holdings (A) Ltd
    Civil Application No. 124 of 2008
  • Locabail International Finance Ltd v Agro Export & others
    (1986) 1 ALL ER 901
On appeal from
Employment & Labour Relations Court at Mombasa
E.& L.R.C. Cause No. 504 of 2015
Jurisdiction invoked
Rule 5(2)(b) of the Court of Appeal Rules (application for stay of execution and injunction pending appeal)

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, "Kaskazi Beach Hotel v Kenya Union of Domestic, Hotels, Educational Institutions & Hospital [2016] KECA 539 (KLR)", Case Analysis (2016). Civil Application No. 56 of 2015 (UR 45/15). Source: https://new.kenyalaw.org/akn/ke/judgment/keca/2016/539/eng@2016-05-27

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