Coast Development Authority v Endebess Development Co. Ltd
The bottom line
#Kenya's Court of Appeal refused to pause a Kshs 62 million judgment because the applicant ignored a court order to secure the money with a bank guarantee.
What this practically means
#Executive summary
#Key legal issues
#Arguable appeal
The Applicant established an arguable appeal because it raised multiple grounds, including on the procuring and contracting processes, capable of full argument.
The court examined the memorandum of appeal and noted multiple grounds faulting the trial court on the defence, limitation, procurement processes and contract principles. The court reiterated that only one arguable ground is needed and that an arguable appeal need not succeed; the merits of the Respondent's counter-arguments were left for the hearing of the appeal.
Nugatory aspect / conduct of the applicant
The Applicant failed to demonstrate that the appeal would be rendered nugatory; its failure to comply with the trial court's bank guarantee order weighed against equitable exercise of discretion.
The court found the Applicant had the opportunity to secure the decretal sum under the trial court's ruling of 27th January 2021 but chose not to comply. It had not pleaded that the trial court's orders were varied or set aside. Given this conduct, exercising discretion in its favour would be inequitable, so the nugatory limb failed.
Cumulative limbs under Rule 5(2)(b)
Both limbs of the Rule 5(2)(b) test must be satisfied; satisfaction of only the arguability limb does not warrant a stay.
The court stated the settled two-limb test: arguability and nugatory. Because the Applicant demonstrated only arguability and failed on nugatory, the application had to fail. This synthesises the principles restated in Stanley Kangethe Kinyanjui vs Tony Ketter & 5 others.
Nature of Rule 5(2)(b) jurisdiction
Rule 5(2)(b) jurisdiction is original and discretionary and does not constitute an appeal from the trial judge's discretion.
The court acknowledged, citing Ruben & 9 Others vs Nderitu & Another, that its Rule 5(2)(b) jurisdiction is exercised originally and discretionarily, and is not an appeal against the trial judge's discretion. Nonetheless, equitable considerations arising from the Applicant's conduct were relevant to the exercise of that discretion.
Legal principles established
#- An applicant under Rule 5(2)(b) must demonstrate BOTH an arguable appeal and that the appeal would be rendered nugatory; establishing only one limb is insufficient.
- For arguability, the applicant need only demonstrate a single arguable ground, and an arguable appeal is not necessarily one that will succeed.
- A party who fails to comply with a trial court's security-for-decretal-sum orders, and who does not show those orders were varied or set aside, may be denied stay on grounds of equitable conduct.
Court orders
#- 1.The Notice of Motion dated 12th July 2021 seeking stay of execution is dismissed
- 2.Costs of the application awarded to the Respondent
- On appeal from
- High Court of Kenya
- Mombasa High Court Case No. 11 of 2017
- Jurisdiction invoked
- Rule 5(2)(b) of the Court of Appeal Rules
Key timeline
#Practical implications
#Frequently asked questions
#Cite this brief
#Cite this brief
Caselaw, "Coast Development Authority v Endebess Development Co. Ltd", Case Analysis (2021). Civil Application No. E003 of 2020 (arising from Mombasa High Court Case No. 11 of 2017). Source: https://new.kenyalaw.org/akn/ke/judgment/keca/2021/315/eng@2021-12-17
Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.