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Court of AppealPartially AllowedCivil Application E49 of 2021· [2022] KECA 394 (KLR)

Co-operation (Group) Co. Ltd v Gilbert Charo Mshanga

Court of Appeal
4 March 2022
1,402 words in judgment
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The bottom line

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Kenya's Court of Appeal halted execution of a Kshs.10 million land judgment because the winning party couldn't prove he could refund the money if the appeal succeeds.

What this practically means

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Executive summary

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This is a ruling of the Court of Appeal at Mombasa (Kairu, Nyamweya and Lesiit, JJA) on the applicant's notice of motion dated 1st July 2021 under Rule 5(2)(b) of the Court of Appeal Rules seeking stay of execution of an ex parte judgment of the Environment and Land Court at Malindi (Olola, J.) of 31st January 2019, which found the applicant had trespassed on about two acres of the respondent's land, ordered ejectment, and awarded general damages of Kshs.2,000,000 and mesne profits of Kshs.4,800,000. The ELC had declined on 22nd January 2021 to set aside the ex parte judgment, and the applicant obtained leave from a single Judge to file its notice of appeal out of time. Applying the settled twin test, the Court found the intended appeal arguable on the assessment of damages and the refusal to set aside the judgment. On nugatory value, it accepted that execution was under way, with vehicles proclaimed and some allegedly auctioned, and held the respondent had not adequately demonstrated ability to refund the decretal sum of over Kshs.10 million, the evidential burden having shifted to him. Both limbs satisfied, the Court allowed the application and stayed execution of the ELC judgment pending the intended appeal. Costs of the application were ordered to abide the outcome of the appeal. The Court also noted, without determining, the respondent's pending application to rescind the single Judge's extension-of-time orders for alleged non-service.

Key legal issues

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01

Arguability of the intended appeal

Holding

The intended appeal was arguable on the questions of how the awarded amounts were arrived at and whether the Judge properly exercised discretion in declining to set aside the judgment

Reasoning

The Court applied the settled test that an arguable appeal need not succeed. It identified live questions on the assessment of general damages and mesne profits, and on the exercise of discretion in refusing to set aside the ex parte judgment, concluding the appeal was not frivolous and met the first limb.

p. 2
02

Nugatory value of the appeal

Holding

Execution was under way, vehicles had been proclaimed and partly auctioned, and the respondent did not demonstrate ability to refund the decretal amount; the appeal would be rendered nugatory absent stay

Reasoning

The Court held nugatory-ness is case-specific. Execution had commenced and vehicles were under threat of sale. The respondent's bare assertion of owning property valued at Kshs.24 million, without demonstrating how that valuation was arrived at, did not rebut the applicant's reasonable fear of inability to refund, so the burden-bearing test in Wasike applied in the applicant's favour.

p. 3

Legal principles established

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  • An arguable appeal need not necessarily succeed; it suffices that it is not frivolous
  • Where an applicant reasonably fears a respondent cannot refund the decretal sum, the evidential burden shifts to the respondent to show his resources

Court orders

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  1. 1.Stay of execution of the judgment of the ELC delivered on 31st January 2019 pending the hearing and determination of the applicant's intended appeal
  2. 2.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)

Cases cited (4)

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

    Twin test for stay under Rule 5(2)(b): arguable appeal and nugatory value

  • Joseph Gitahi Gachau & another vs. Pioneer Holdings (A) Limited & 2 others
    [2009] eKLR

    An arguable appeal is not one that must necessarily succeed

  • Reliance Bank Ltd vs. Norlake Investments Ltd
    [2002] 1 E. A. 227

    Nugatory value must be considered within the circumstances of each particular case

  • National Industrial Credit Bank Ltd vs. Aquinas Francis Wasike & another
    [2006] eKLR

    Evidential burden shifts to respondent to show resources once reasonable fear of non-refund is expressed

On appeal from
Environment and Land Court at Malindi
ELC Case No. 245 of 2017
Jurisdiction invoked
Rule 5(2)(b) of the Court of Appeal Rules

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, "Co-operation (Group) Co. Ltd v Gilbert Charo Mshanga", Case Analysis (2022). Civil Application E49 of 2021. Source: https://new.kenyalaw.org/akn/ke/judgment/keca/2022/394/eng@2022-03-04

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