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Court of AppealPartially AllowedCivil Application No. NAI. 69 of 2017· [2018] KECA 331 (KLR)

Guardian Bank Limited v Book Point Limited & another [2018] KECA 331 (KLR)

Court of Appeal of Kenya
21 September 2018
3,415 words in judgment
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The bottom line

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Kenya's Court of Appeal struck out a strike-out application filed one day late and paused a Kshs. 178 million execution pending appeal.

What this practically means

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Executive summary

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This ruling of the Court of Appeal at Nairobi (Ouko, P, Gatembu Kairu and M'inoti, JJ.A) disposed of two consolidated interlocutory applications arising from a long-running lease dispute over Bidd Chambers, Nairobi. The High Court (Sergon, J) had on 3rd March 2017 dismissed Guardian Bank's application to set aside a notice to show cause issued under Order XXI rule 18 for execution against it for Kshs. 178,514,179.00 under an amended decree. Guardian sought a stay of proceedings in the High Court under Rule 5(2)(b) pending an intended appeal (Civil Appeal No. 90 of 2017); Bookpoint in turn applied under Rule 84 to strike out Guardian's notice of appeal on the ground that leave to appeal had neither been sought nor obtained, execution proceedings requiring leave. The court first dealt with Bookpoint's application. It held that the proviso to Rule 84 requires such an application within thirty days of service of the notice of appeal; counting from service on 10th March 2017 and applying Rules 3(a) and 3(b), the window closed on 10th April 2017. Bookpoint's application, filed on 11th April 2017, was one day late and therefore incompetent; it was struck out with no orders as to costs, the court noting the appeal raised weighty issues. On Guardian's application, applying the twin Rule 5(2)(b) principles in Ishmael Kagunyi Thande, the court found the intended appeal arguable - particularly whether the amended decree was indeed a decree of the court - and that execution over disputed, allegedly embellished amounts would render the appeal nugatory. It granted a stay of further proceedings in HCCC No. 1807 of 2002 pending determination of the appeal, with costs of that application to abide the appeal's outcome. The decision below was not disturbed; the court's orders preserve the status quo pending the substantive appeal.

Key legal issues

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01

Timeliness of an application to strike out a notice of appeal under the proviso to Rule 84

Holding

The thirty days ran from service on 10th March 2017; excluding that date under Rule 3(a) and extending to the next working day under Rule 3(b), the window lapsed on 10th April 2017. The application filed on 11th April 2017 was out of time and incompetent, even though late by only one day.

Reasoning

The court computed the period strictly: the date of service is excluded under Rule 3(a); because the thirtieth day fell on a Sunday, Rule 3(b) extended the period to Monday 10th April 2017. Filing on 11th April was non-compliance. The court noted that such late applications are incompetent and struck out, and although sympathetic to a one-day delay, held the rule must be enforced, adding without prejudging that the appeal raised weighty issues.

p. 4
02

Whether the intended appeal was arguable under Rule 5(2)(b)

Holding

The issues raised by Guardian, including whether the amended decree on which execution is sought is indeed a decree of the court and whether sums never pleaded or proved were incorporated into the decree, were not frivolous and therefore arguable.

Reasoning

Applying the settled twin principles in Ishmael Kagunyi Thande, the court found the intended appeal raised genuine questions, notably whether the amended decree underpinning the notice to show cause was properly a decree of the court, and whether the Judge erred in sanctioning embellishment of the decree and in undertaking his own calculations of the outstanding amount.

p. 4
03

Whether the appeal would be rendered nugatory absent a stay

Holding

The court granted a stay of further proceedings in the High Court pending determination of Civil Appeal No. 90 of 2017, considering the amount involved, the circumstances in which the decree was generated, and that the substantive appeal was already filed.

Reasoning

Invoking the object of Rule 5(2)(b) as the preservation of the subject matter of the appeal to ensure its just and effective determination, and following Reliance Bank v Norlake on considering the amount involved, the court was satisfied that execution over disputed, allegedly embellished sums would render the appeal nugatory.

p. 4

Legal principles established

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  • An application to strike out a notice of appeal under Rule 84 of the Court of Appeal Rules must be brought within thirty days from the date of service of the notice of appeal; an application filed outside that period is incompetent and must be struck out.
  • An applicant under Rule 5(2)(b) must demonstrate both that the appeal or intended appeal is arguable and that, unless the relief is granted, the success of the appeal will be rendered nugatory.
  • An arguable appeal is one that is deserving of the Court's consideration; it need not necessarily succeed.

Court orders

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  1. 1.Bookpoint's application (Civil Application No. NAI. 72 of 2017) to strike out the notice of appeal struck out as incompetent with no orders as to costs
  2. 2.Orders in terms of prayer 3 of the notice of motion dated 30th March 2017 granted: a stay of further proceedings in Nairobi HCCC No. 1807 of 2002, Book Point Limited vs Guilders International Bank Ltd & Guardian Bank Limited, pending the hearing and determination of Civil Appeal No. 90 of 2017
  3. 3.Costs of Guardian's application to abide the outcome of the appeal
On appeal from
High Court of Kenya at Nairobi
Nairobi H.C.C.C. No. 1807 of 2002
Jurisdiction invoked
Rule 5(2)(b) and Rule 84 of the Court of Appeal Rules (appellate jurisdiction under Article 164 of the Constitution)

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, "Guardian Bank Limited v Book Point Limited & another [2018] KECA 331 (KLR)", Case Analysis (2018). Civil Application No. NAI. 69 of 2017. Source: https://new.kenyalaw.org/akn/ke/judgment/keca/2018/331/eng@2018-09-21

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