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Court of AppealAllowedCivil Application No. 120 of 2020· [2020] KECA 143 (KLR)

GNN v LNN [2020] KECA 143 (KLR)

Court of Appeal
4 December 2020
ASAsike-MakhandiaSKS. Gatembu KairuSKS. ole Kantai
1,963 words in judgment
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The bottom line

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Kenya's Court of Appeal paused execution of a High Court property ruling, protecting an appellant from losing land to a buyer before his appeal is heard.

What this practically means

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Executive summary

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This is a ruling of the Court of Appeal at Nairobi (Asike-Makhandia, Gatembu Kairu and ole Kantai, JJ.A) on a notice of motion dated 14th May 2020 brought by the applicant, GNN, under Rule 5(2)(b) of the Court of Appeal Rules and Section 3A of the Appellate Jurisdiction Act, seeking stay of execution of the judgment and decree of the High Court (M. Kasango, J.) delivered on 28th April 2020 in HCCC No. 231 of 2016 (OS). The High Court had decreed rectification of the register of a company so as to reflect the parties as sole directors with one share each, sale of a suit property by public auction with proceeds shared 60/40 in favour of the respondent, and interim sharing of rents. The dispute arose from the division of matrimonial property following the parties' 2006 divorce, the respondent claiming she was a director, shareholder and contributor to the acquisition of the property, a status the applicant denied. The applicant filed a notice of appeal and argued the appeal was arguable and would be rendered nugatory if the property were sold to a bona fide purchaser. Applying the twin principles governing Rule 5(2)(b) applications - arguability and nugatory aspect - the court found the draft grounds on the respondent's directorship, contribution, and the grant of unpleaded reliefs were not frivolous, and that execution would put the property beyond the applicant's reach, causing irreparable substantial loss. The application was allowed; stay of execution was granted on condition that the intended appeal be filed within 45 days, failing which the stay lapses automatically, with costs of the application abiding the outcome of the intended appeal.

Key legal issues

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01

Whether the intended appeal is arguable

Holding

The draft memorandum raised non-frivolous issues on the respondent's directorship, her contribution to acquisition of the property, and whether the trial court granted unpleaded reliefs; the appeal was arguable.

Reasoning

The court examined the draft memorandum of appeal and identified grounds on the respondent's status as director and shareholder, her contribution to the property's acquisition, and whether the trial court erred in granting orders not expressly prayed for. It held these were not idle or frivolous issues and could only be determined at a full hearing, satisfying the first limb of the Rule 5(2)(b) test.

p. 2
02

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

Holding

Since the decree had been served and the property would be sold to a bona fide purchaser whose title would be unimpeachable, and rents shared, execution would render the appeal nugatory.

Reasoning

The court noted the imminent risk of execution, the decree having been served. If the suit property were sold, it would pass to a bona fide purchaser whose title could not be challenged even if the applicant succeeded on appeal, and shared rents would not be easily recoverable. The applicant would suffer substantial loss that is irreparable, satisfying the second limb.

p. 2

Legal principles established

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  • The jurisdiction of the Court of Appeal under Rule 5(2)(b) is original, independent and discretionary, and is exercised judiciously and with reason.
  • A single arguable ground suffices for the arguability threshold under Rule 5(2)(b); an arguable ground need not succeed, only not be frivolous.
  • Whether an appeal will be rendered nugatory is assessed on the circumstances of each particular case, weighing the conflicting claims of both sides.

Court orders

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  1. 1.Stay of execution of the judgment and decree of the High Court dated 28th April, 2020
  2. 2.Appellant to file the intended appeal within forty-five (45) days from the date of the ruling, failing which the stay shall automatically lapse and the respondent shall be at liberty to execute the decree
  3. 3.Costs of the application to abide the outcome of the intended appeal

Authorities

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Legislation

  • Court of Appeal RulesRule 5(2)(b)
  • Appellate Jurisdiction ActSection 3A
  • Companies Act

Cases cited (6)

  • Teachers Service Commission v Sarah Nyanchama Ratemo
    Civil Application No. 227 of 2013
  • Nairobi Women's Hospital v Purity Kemunto
    [2018] eKLR
  • Stanley Kang'ethe Kinyanjui v Tony Keter & 5 Others
    [2013] eKLR
  • Trust Bank Limited & Ano. v Investech Bank Limited & 3 Others
    Civil Application Nai. 258 of 1999 (unreported)
  • Reliance Bank Ltd v Norlake Investments Ltd
    [2002] E.A. 227
  • Mukuma v Abuoga
    [1988] KLR 645
On appeal from
High Court of Kenya at Nairobi
HCCC No. 231 of 2016 (OS)
Jurisdiction invoked
Rule 5(2)(b) of the Court of Appeal Rules and Section 3A 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, "GNN v LNN [2020] KECA 143 (KLR)", Case Analysis (2020). Civil Application No. 120 of 2020. Source: https://new.kenyalaw.org/akn/ke/judgment/keca/2020/143/eng@2020-12-04

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