Chamgaa Company Limited & another v Twictor Investments Limited & another [2017] KECA 428 (KLR)
The bottom line
#The Court of Appeal halted enforcement of a High Court judgment cancelling land titles, because enforcing it first would cause Kshs. 90 million in losses that could not be recovered if the appeal succeeded.
What this practically means
#Executive summary
#Key legal issues
#Whether the intended appeal was arguable
The draft memorandum containing eleven grounds, including questions on the statutory power of sale, the ITPA, lis pendens and orders granted without being prayed for, raised arguable, non-frivolous grounds; one arguable ground suffices.
The court examined the draft memorandum's major grounds - estoppel of a party who benefited from a contractual relationship, granting relief not prayed for, cancellation of title requiring proof of fraud, the applicability of section 52 of the ITPA, section 99 of the Land Act, 2012, and lis pendens - and concluded the grounds were not frivolous but certainly arguable, satisfying the first limb.
Whether the intended appeal would be rendered nugatory if stay is refused
Yes. The unchallenged valuation of Kshs. 90,000,000/- in buildings, stock and machinery, the presence of 37 tenants, and the absence of any indication that the 1st respondent could refund that sum if the appeal succeeded, meant execution would render the appeal nugatory.
The applicants deposed that enforcing the judgment would expose the 2nd applicant to losses exceeding Kshs. 90,000,000/- through demolition and reconstruction. Those depositions were not disputed or countered by the 1st respondent, and an unchallenged valuation report by Centenary Valuers supported them. The court found the fears of ruin well founded and the nugatory limb satisfied.
Whether conditional directions should issue to preserve the appeal given the imminent expiry of the lease
Yes. Because the lease over the suit property was due to expire on 1st May 2018, the 2nd applicant, as current registered proprietor, was directed to commence renewal and extension of the lease forthwith, to prevent the appeal being wasted if the property reverted to the Government.
The court held that each case must be decided on its own peculiar circumstances. Here the peculiar circumstance was the lease expiring on 1st May 2018. Denying stay could allow the property to revert and create a messy situation if the appeal later succeeded, so the only party legally able to pursue renewal, the 2nd applicant, was directed to do so.
Legal principles established
#- An applicant for stay of execution under rule 5(2)(b) must satisfy both limbs: an arguable appeal and that the appeal will be rendered nugatory if stay is refused; failure to satisfy both renders the application untenable.
- An arguable appeal need not be one that must succeed; it suffices that it is not frivolous, and the applicant need only establish one arguable ground.
- The Court's discretion under rule 5(2)(b) is original, wide and unfettered, but each case must be decided on its own peculiar circumstances and facts.
Court orders
#- 1.An order of stay of execution of the judgment and decree of the High Court dated 2nd March 2017, pending the hearing and determination of the intended appeal
- 2.A direction that the 2nd applicant, Tesha (K) Limited, forthwith commence the process of renewal and extension of the lease to the suit property, within fourteen (14) days from the date of the ruling
- 3.Costs of the application to abide the outcome of the intended appeal
- On appeal from
- High Court of Kenya at Nairobi
- H.C. C.C. No. 932 of 2002
- Jurisdiction invoked
- Rule 5(2)(b) of the Court of Appeal Rules, read with sections 3, 3A and 3B of the Appellate Jurisdiction Act
Key timeline
#Practical implications
#Frequently asked questions
#Cite this brief
#Cite this brief
Caselaw, "Chamgaa Company Limited & another v Twictor Investments Limited & another [2017] KECA 428 (KLR)", Case Analysis (2017). Civil Application No. 78 of 2017 (UR 59/2017). Source: https://new.kenyalaw.org/akn/ke/judgment/keca/2017/428/eng@2017-07-14
Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.