Consolbase Limited v Omar Sharrif T/A Kemco Auto & 1 other
The bottom line
#Kenya's Court of Appeal paused execution of a large money judgment only on strict terms: part payment now, the rest locked in a joint account.
What this practically means
#Executive summary
#Key legal issues
#Twin requirements for stay under Rule 5(2)(b)
The court adopted the twin test: the intended appeal must be arguable and it must be rendered nugatory if stay is not granted.
The court restated the requirements as set out in Stanley Kangethe Kinyanjui v Tony Ketter & 5 Others. On arguability, the nine draft grounds, including the lawfulness of the goods, proof of loss, the counterclaim and punitive interest, were found arguable though not guaranteed to succeed. On nugatory aspect, the court balanced crippling the applicant's business against securing the decree holder's funds.
Whether the appeal would be rendered nugatory without stay
The court found the decretal amount (in excess of USD 180,000) large and the applicant's fear that its business would be crippled credible, and adopted the Kenya Hotel Properties approach of balancing both parties' interests.
Following Kenya Hotel Properties Ltd v Willesden Investments Ltd, the court held that the applicant needed to do more than allege hardship. Finding the amount large and the applicant's apprehension of crippling its operations not ignorable, the court crafted a middle path: partial payment to the decree holder with the balance secured in a joint interest-earning account, protecting both parties.
Burden of demonstrating ability to refund the decretal sum
The applicant argued, relying on National Industrial Credit Bank Ltd v Aquinas Francis Wasike, that the evidentiary burden shifts to the respondent to show ability to refund; the court did not make a definitive finding but accommodated the concern through the security mechanism.
The applicant contended the 1st respondent admitted needing money and showed no resources for refund. The respondent asserted he could refund. Rather than resolve this factually, the court secured the balance of the decretal sum in a joint interest-earning account, ensuring funds remain accessible whichever way the appeal succeeds.
Legal principles established
#- An arguable appeal under Rule 5(2)(b) need not be one that must succeed; it is one that is not frivolous and a single bona fide arguable ground suffices
- Substantial loss must be demonstrated, not merely alleged; in a money decree the applicant must do more than allege hardship and should place its financial position on the table
- Withholding enjoyment of a money decree is exceptional relief available where the decretal amount is acceptably large and its recovery would be impossible or involve great expense
Court orders
#- 1.The applicant to pay to the 1st respondent USD 40,000.00 within thirty (30) days of the date of delivery of the ruling
- 2.The balance of USD 140,000.00 to be deposited in a joint interest earning account in the joint names of advocates for the respective parties within thirty (30) days of the date of delivery of the ruling
- 3.In default of items 1 and 2, the stay of execution order granted to stand lapsed
- 4.Costs of the application to abide the outcome of the intended appeal
- On appeal from
- High Court of Kenya at Mombasa
- Mombasa HCCA No. 226 of 2003
- Jurisdiction invoked
- Sections 3A and 3B of the Appellate Jurisdiction Act, Cap 9, and Rules 1(2) and 5(2)(b) of the Court of Appeal Rules, 2010
Key timeline
#Practical implications
#Frequently asked questions
#Cite this brief
#Cite this brief
Caselaw, "Consolbase Limited v Omar Sharrif T/A Kemco Auto & 1 other", Case Analysis (2021). Civil Application No. E018 of 2020. Source: https://new.kenyalaw.org/akn/ke/judgment/keca/2021/669/eng@2021-04-23
Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.