Van Den Berg Limited v Kenya Revenue Authority & another [2020] KECA 231 (KLR)

Court of Appeal

6 November 2020

W. Ouko WKW. Karanja ASAsike-Makhandia

702 words in judgment

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The bottom line

The Court of Appeal refused to freeze a KRA tax dispute because the company had already taken the same issue to the Tax Appeals Tribunal.

What this practically means

Executive summary

Van Den Berg Limited applied to the Court of Appeal under Rule 5(2)(b) of the Court of Appeal Rules for a temporary injunction pending the hearing and determination of its intended appeal against a High Court ruling in JR. Misc. Civil App. No. 165 of 2016. In that ruling, Bwonwong'a, J. had upheld the respondents' objection to the High Court's jurisdiction over a tax dispute concerning Kshs. 1,309,207,399 assessed against the applicant, resulting in the judicial review application for certiorari and prohibition being struck out with costs. The applicant argued before the Court of Appeal that its appeal was arguable and that, absent an injunction, a successful appeal would be rendered nugatory given the colossal sum demanded. The respondents opposed, pointing out that the applicant had, following the impugned ruling, already filed an appeal before the Tax Appeals Tribunal - the forum the High Court held was competent - and that the appeal therefore could not be rendered nugatory. The Court of Appeal (Ouko, P., Karanja and Asike-Makhandia, JJ.A) applied the established Rule 5(2)(b) test of arguability and nugatory value. It found that although ten grounds were lodged, the only real issue was whether the High Court lacked jurisdiction, and that by filing before the Tribunal and expressly invoking its jurisdiction on the strength of the High Court decision, the applicant had acknowledged the proper forum; simultaneously engaging both the Court and the Tribunal on the same question was an abuse of process. The application was dismissed with costs on 6th November, 2020.

Key legal issues

Arguability of the intended appeal

Holding

Although the applicant lodged ten grounds of appeal, the court confined the real issue to whether the High Court lacked jurisdiction over the tax dispute, a question it found not genuinely arguable given subsequent events.

Reasoning

The court observed that the applicant had already filed an appeal before the Tax Appeals Tribunal following the High Court ruling, expressly invoking that tribunal's jurisdiction on the basis of the High Court decision. By doing so the applicant effectively acknowledged the Tribunal as the proper forum, undermining any claim that the jurisdictional question remained live for the appellate court.

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Nugatory value of the appeal and abuse of process

Holding

The court held that refusing the injunction would not render the appeal nugatory because the dispute had moved to the Tribunal, and that pursuing the same question in both fora was an abuse of process.

Reasoning

The court was satisfied, from annexures to the replying affidavit, that the dispute had moved to the Tax Appeals Tribunal and that this was uncontroverted. Since the applicant had already invoked the Tribunal's jurisdiction, the cogency of the intended appeal was compromised, and the court found the application for conservatory relief devoid of merit and dismissed it with costs.

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Legal principles established

The test on an application for an injunction pending appeal under Rule 5(2)(b) requires the applicant to demonstrate an arguable appeal and that the appeal will be rendered nugatory without conservatory measures.
A party cannot simultaneously pursue the same question before the Court of Appeal and the Tax Appeals Tribunal; doing so constitutes an abuse of court process.

Court orders

1.The application for temporary injunction pending the hearing and determination of the appeal was dismissed with costs to the respondents

Authorities

Legislation

Court of Appeal RulesRule 5(2)(b)

Cases cited (1)

Stanley Kangethe Kinyanjui vs. Tony Ketter & 5 others
[2013] eKLR

On appeal from: High Court of Kenya at Nairobi; JR. Misc. Civil App. No. 165 of 2016
Jurisdiction invoked: Rule 5(2)(b) of the Court of Appeal Rules (application for injunction pending the determination of an intended appeal)

Key timeline

Practical implications

Frequently asked questions

Cite this brief

Caselaw, "Van Den Berg Limited v Kenya Revenue Authority & another [2020] KECA 231 (KLR)", Case Analysis (2020). Civil Application No. 214 of 2020. Source: https://new.kenyalaw.org/akn/ke/judgment/keca/2020/231/eng@2020-11-06

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