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Court of AppealAllowedNot stated in the judgment· [2021] KECA 116 (KLR)

City Council of Nairobi v Asistiba & another; Co-operative Bank of Kenya (Garnishee) (Civil Application E268 of 2021) [2021] KECA 116 (KLR)

Court of Appeal of Kenya
22 October 2021
666 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 stopped a county government's bank account from being garnished pending its appeal, ruling that multiple execution attempts over the same decree shouldn't run simultaneously.

What this practically means

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Executive summary

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This is a ruling of the Court of Appeal (Nairobi) on a Notice of Motion by the applicant, a county government, seeking a stay of execution under Rule 5(2)(b) of the Court of Appeal Rules together with Sections 3A and 3B of the Civil Procedure Act, and an injunction restraining garnishee proceedings. The underlying High Court suit, decided by Sergon, J. on 17th October 2017, declared a public auction of the respondents' property unlawful and awarded the respondents Kshs.12,000,000 with costs. Execution followed via an order of mandamus issued on 7th December 2018, leading to notices to show cause and warrants of arrest against the applicant's officers; pending negotiations and an appeal, the respondents separately sought to attach the applicant's bank accounts, and on 22nd July 2021 the High Court issued an order nisi against the applicant's Co-operative Bank account while discharging National Bank of Kenya. The applicant contended the decree was capped at Kshs.12,000,000 whereas Kshs.17,262,904.11 was being claimed. The Court of Appeal found the appeal arguable on both the quantum question and the contention that execution may not lie against a county government, and held the appeal would be rendered nugatory since there was no guarantee of refund if the garnished funds were paid out. The Court allowed the application, stayed the order nisi against the garnishee, cautioned against parallel execution proceedings, and ordered that the costs of the application abide the outcome of the appeal.

Key legal issues

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01

Arguability of the appeal

Holding

The contention whether the respondents are entitled to the amount claimed or only the amount in the decree is an arguable point, as is the contention that no execution may be levied against a County Government on the basis that it is equivalent to the National Government.

Reasoning

The Court identified two live disputes: whether the decree is limited to Kshs.12,000,000 as found by the High Court, or extends to the Kshs.17,262,904.11 claimed by the respondents; and whether execution may issue against a County Government. Both were held to raise arguable points warranting further consideration on appeal.

p. 2
02

Nugatory effect of the appeal

Holding

If not restrained, the amount will be paid and there is no guarantee that the respondents have the capacity to refund it if the appeal succeeds; the appeal would therefore be rendered nugatory.

Reasoning

The second limb of the Rule 5(2)(b) test was satisfied because garnishment would irreversibly deplete the applicant's accounts. The Court reasoned that restitution by the respondents could not be guaranteed, applying the principle in Stanley Kangethe Kinyajui v Tony Ketter & Others on the nugatory-value test.

p. 2
03

Parallel execution proceedings

Holding

The Court stayed the garnishee order nisi while cautioning parties against initiating parallel execution proceedings where live execution proceedings are already running against the same applicant.

Reasoning

The record showed that execution by way of mandamus, notices to show cause and warrants of arrest was already ongoing against the applicant's officers when the respondents separately sought to attach bank accounts. The Court disapproved of such parallel proceedings and stayed the garnishee order nisi pending appeal.

p. 2

Legal principles established

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  • Parties should not initiate parallel execution proceedings where there are running and live execution proceedings against the same applicant.
  • An applicant for a stay of execution under Rule 5(2)(b) must present an arguable appeal and establish that the appeal will be rendered nugatory if the stay is not granted, considering the positions of both sides.

Court orders

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  1. 1.A stay of execution of the order nisi of the High Court given on 22nd July, 2021 directed to the garnishee (the Co-operative Bank of Kenya Limited)
  2. 2.An observation that parties should not initiate parallel execution proceedings where there are running and live execution proceedings against the same applicant
  3. 3.Costs of the application to abide the outcome of the appeal

Authorities

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Legislation

  • Court of Appeal RulesRule 5(2)(b)
  • Civil Procedure ActSection 3A
  • Civil Procedure ActSection 3B

Cases cited (3)

  • Kennedy Wainaina Nganga vs. County Government of Nairobi and Another
    (2019) eKLR
  • Kilimanjaro Safari Club Limited vs. Governor of Kajiado County
    (2014) eKLR
  • Stanley Kangethe Kinyajui vs. Tony Ketter & Others
    (2013) eKLR
On appeal from
High Court of Kenya
Not stated in the judgment
Jurisdiction invoked
Rule 5(2)(b) of the Court of Appeal Rules and Sections 3A and 3B of the Civil Procedure Act

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, "City Council of Nairobi v Asistiba & another; Co-operative Bank of Kenya (Garnishee) (Civil Application E268 of 2021) [2021] KECA 116 (KLR)", Case Analysis (2021). Not stated in the judgment. Source: https://new.kenyalaw.org/akn/ke/judgment/keca/2021/116/eng@2021-10-22

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