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Court of AppealDismissedCivil Application E018 of 2020

Balume Laurent Mbotaz v NIC Bank Kenya Ltd

Court of Appeal
23 September 2022
KMK M'InotiFSF SichaleSKS ole Kantai
1,297 words in judgment
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The bottom line

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Kenya's Court of Appeal refused to pause a bank's court win because the bank can pay damages later if the appeal succeeds.

What this practically means

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Executive summary

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The applicant sought stay of execution of the judgment and decree of the High Court at Nairobi (Kasango, J.) dated 1 July 2020, which had allowed the bank's first appeal, held that repossession of the applicant's financed lorry and trailer was not illegal, found the Hire Purchase Act inapplicable to the hire purchase sum involved, and held that special damages were neither pleaded nor proved. The applicant filed a notice of appeal and moved the Court of Appeal under Rule 5(2)(b) for stay pending that appeal. The court applied the settled two-limb test: the intended appeal must be arguable, and it must be rendered nugatory if stay is refused. Applying Stanley Kangethe Kinyanjui v Tony Ketter, the court found the appeal arguable, noting that a single bona fide ground suffices and arguability does not require ultimate success. However, on the nugatory limb, the court noted the uncontested averment that the respondent is a reputable financial institution with nationwide presence, capable of compensating the applicant for the value of the motor vehicles, which were fast-depreciating assets attracting storage charges. Damages would therefore adequately compensate the applicant if the appeal succeeded. Failing the second limb, the application was dismissed with costs to the respondent. The ruling does not disturb the High Court's decision; it is a single judgment of a three-judge bench with no separate opinions.

Questions the Court framed

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The issues the Court set itself to decide, in its own words.

  1. 1.Whether the intended appeal is arguable
  2. 2.Whether the appeal will be rendered nugatory if stay of execution is not granted

Key legal issues

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01

Arguability of the intended appeal

Holding

The intended appeal was arguable; one bona fide ground suffices

Reasoning

The court looked generally at the grounds of appeal, including alleged consideration of extraneous matters by the High Court and failure to apply section 20(1) of the Consumer Protection Act, and was satisfied the appeal was arguable without deciding the merits.

p. 2
02

Whether the appeal would be rendered nugatory

Holding

It would not; the respondent is a reputable financial institution able to compensate the applicant, and the motor vehicles are fast-depreciating assets

Reasoning

The applicant's own deposition that the respondent is a reputable financial institution capable of paying the value of the motor vehicles was uncontested. Damages would therefore adequately compensate the applicant if the appeal succeeded, so the second limb failed.

p. 3

Legal principles established

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  • An applicant for stay under Rule 5(2)(b) must satisfy both limbs: an arguable appeal and that the appeal will be rendered nugatory absent stay
  • An arguable appeal need not ultimately succeed, and a single bona fide ground suffices
  • The nugatory test asks whether what is sought to be stayed is reversible or compensable in damages

Court orders

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  1. 1.Application for stay of execution dismissed with costs to the respondent

The bench

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One judgment of the whole court — no separate or dissenting opinions.

KM
majority
FS
majority
SK
majority
On appeal from
High Court of Kenya at Nairobi
HC CA No. E012 of 2019
Jurisdiction invoked
Rule 5(2)(b) of the Court of Appeal Rules

Relief refused

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Stay of execution of the High Court judgment and decree pending appeal

Applicant failed to satisfy the second Rule 5(2)(b) consideration - the appeal would not be rendered nugatory as the respondent is a reputable bank capable of compensating the applicant

p. 3

Costs

Application dismissed with costs to the respondent

Quotable passages

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Verbatim from the judgment, each located to the page it appears on in the official PDF — so these can be cited and checked directly.

Having failed to satisfy the second consideration under rule 5(2) (b) of the Court of Appeal Rules, we nd that this application has no merit. The same is hereby dismissed with costs to the respondent. It is so ordered.
p. 3Final orders - dismissal of stay application
Even one bona de ground deserving further consideration by the Court will suce.
p. 2Arguable appeal standard
The purpose of this consideration is to ensure that if the appeal succeeds, the applicant is not left only with a pyrrhic victory.
p. 3Purpose of the nugatory-appeal test

Issues in the judgment

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minor

Paragraph 10 misattributes the deposition about the respondent being a reputable financial institution to the applicant

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, "Balume Laurent Mbotaz v NIC Bank Kenya Ltd", Case Analysis (2022). Civil Application E018 of 2020. Source: https://new.kenyalaw.org/akn/ke/judgment/keca/2022/1013/eng@2022-09-23

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