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Court of AppealDismissedCivil Application E032 of 2022· [2022] KECA 792 (KLR)

Anne Wangeci Schofield t/a Schofield & Associates v Ehsani & another

Court of Appeal
24 June 2022
DMD. K. MusingaWKW. KaranjaASAsike-Makhandia
1,846 words in judgment
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The bottom line

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Kenya's Court of Appeal dismissed a lawyer's bid to freeze a property development pending appeal because she showed the appeal was arguable but not that it would be pointless without the orders.

What this practically means

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Executive summary

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This is a ruling of the Court of Appeal at Nairobi on a notice of motion dated February 7, 2022 brought by Anne Wangeci Schofield under Article 159 of the Constitution and Rule 5(2)(b) of the Court of Appeal Rules, 2010, seeking injunctions pending the hearing of an intended appeal against a ruling of the High Court (Okwany, J.) dated December 16, 2021 in ELRC No. 352 of 2016. The applicant, a legal practitioner claiming damages for breach of a retainer contract with the 2nd respondent over a joint venture on LR No 12825/39-42, sought injunctions restraining sale, charging or transfer of unsold town houses, restraint on shareholders sharing profits, restraint on winding up and transfer of the reversionary interest, and preservatory orders over specific units. The respondents filed no replying affidavit or submissions. The court restated the settled twin principles under Rule 5(2)(b): the appeal must be arguable and, if successful, would be rendered nugatory absent the orders, both limbs having to be satisfied. It found the appeal arguable, notably on whether the 1st respondent required a board resolution to defend the suit for the 2nd respondent, a limited liability company. However, it held the nugatory limb was not demonstrated: the applicant's fees remained recoverable from known respondents, no inability to pay was averred, and she held vital documents including the title. Both limbs being required, the application was dismissed with no order as to costs. The decision binds the High Court and does not disturb the ruling below; it is an interlocutory determination on the intended appeal only.

Key legal issues

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01

Whether the intended appeal is arguable

Holding

The appeal is arguable, including on whether the 1st respondent should have filed a board resolution authorising him to defend the suit for the 2nd respondent

Reasoning

The court found at least a single bona fide arguable ground: whether the trial court erred in failing to consider that the 2nd respondent was a limited liability company and that the 1st respondent needed a board resolution to act for it. The court refrained from making definitive findings to avoid embarrassing the bench hearing the main appeal.

p. 3
02

Whether the intended appeal would be rendered nugatory if the orders are not granted

Holding

The nugatory aspect was not demonstrated; the applicant's legal fees remain recoverable from known respondents even if the development is completed and sold

Reasoning

The court held that the people who instructed the applicant are known to her, no averments were made that the respondents cannot pay the fees, and the applicant still holds vital documents including the title worth more than her fees. Stopping the developer's business would cause it greater loss than the recoverable legal fees.

p. 4

Legal principles established

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  • An applicant under Rule 5(2)(b) must satisfy both the arguability and nugatory limbs; demonstrating only one limb will not suffice
  • An arguable appeal need not necessarily succeed; it is one that is not frivolous and ought to be argued fully
  • Whether an appeal will be rendered nugatory depends on whether what is sought to be stayed is reversible, or whether damages will reasonably compensate the aggrieved party

Court orders

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  1. 1.The application is dismissed with no order as to costs

Authorities

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Legislation

  • Constitution of KenyaArticle 159
  • Court of Appeal Rules, 2010Rule 5(2)(b)

Cases cited (3)

  • Trust Bank Limited and another v Investech Bank Limited and 3 others
    [2000] eKLR

    Delineating the jurisdiction under Rule 5(2)(b): appeal must be arguable and, if successful, not rendered nugatory

  • Stanley Kangethe Kinyanjui v Tony Ketter & 5 others
    [2013] eKLR

    Both limbs must be demonstrated; definition of an arguable appeal

  • Reliance Bank (in liquidation) v Norlake Investments Ltd
    [2002] 1 EA 227

    Test for whether an appeal will be rendered nugatory - reversibility or adequacy of damages

On appeal from
High Court of Kenya at Nairobi
ELRC No. 352 of 2016
Jurisdiction invoked
Article 159 of the Constitution and Rule 5(2)(b) of the Court of Appeal Rules, 2010

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, "Anne Wangeci Schofield t/a Schofield & Associates v Ehsani & another", Case Analysis (2022). Civil Application E032 of 2022. Source: https://new.kenyalaw.org/akn/ke/judgment/keca/2022/792/eng@2022-06-24

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