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Court of AppealAllowedNot stated in the judgment· [2023] KECA 627 (KLR)

Compact Freight Systems Limited v Aswa Developers & Contractors Ltd (Civil Appeal (Application) E003 of 2021) [2023] KECA 627 (KLR)

Court of Appeal
26 May 2023
1,942 words in judgment
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The bottom line

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Kenya's Court of Appeal paused execution of a Mombasa judgment, confirming that losing a stay bid in the High Court doesn't block a fresh attempt on appeal.

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 (Nyamweya, Lesiit and Odunga, JJAA) on a notice of motion dated February 17, 2023 by Aswa Developers and Contractors Limited, the appellant, seeking under rule 5(2)(b) of the Court of Appeal Rules a stay of execution of the judgment of the High Court at Mombasa in Civil Case No 85 of 2009, delivered in December 2018. The application was made after the appeal had been fully argued on February 7, 2023, with judgment expected on June 9, 2023, and after the respondent sent auctioneers to the appellant's premises ten days after the hearing. Both counsel agreed the appeal was arguable, leaving only the nugatory test for determination. The respondent opposed, arguing that the appellant had made five failed similar applications in the High Court, that the application was late, and that part execution had already occurred. The court held that the principles under rule 5(2)(b) - arguability and nugatory effect - differ from those under order 46 rule 6 of the Civil Procedure Rules, so prior failure in the High Court was no bar. It found the delay explained and held that parties should await the appeal outcome before executing. The court granted a stay of execution pending determination of the appeal, with costs to abide the appeal's outcome.

Key legal issues

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01

The two-pronged test for stay under rule 5(2)(b) of the Court of Appeal Rules

Holding

An applicant must satisfy the court that the appeal is arguable and that, unless stay is granted, the appeal will be rendered nugatory. Arguability was not contested here as the appeal had been argued and judgment was pending.

Reasoning

The court restated the settled principles governing its unfettered discretion under rule 5(2)(b), as prescribed in Halai & another v Thornton & Turpin (1963) Ltd and amplified in Stanley Kangethe Kinyanjui v Tony Ketter & 5 others. Since both counsel agreed the appeal was arguable, the court confined its determination to the nugatory test.

p. 3
02

Whether the nugatory test was satisfied

Holding

The nugatory test was satisfied: the respondent had sent auctioneers to the appellant's premises ten days after the appeal was heard, showing an intention to execute while judgment was imminent, which would compromise the appeal if successful.

Reasoning

The court found that the respondent was intent on executing the High Court judgment when the Court of Appeal's determination was imminent. Citing MM Butt v The Rent Restriction Tribunal and RWW v EKW, it held that stay preserves the subject matter so that a successful appeal is not rendered nugatory, and that a short remaining period justified restraint by the parties.

p. 3
03

Whether prior dismissed stay applications before the High Court preclude a rule 5(2)(b) application

Holding

They do not. The principles under rule 5(2)(b) differ from those under order 46 rule 6 of the Civil Procedure Rules, so failure before the High Court is no bar to a similar application before the Court of Appeal.

Reasoning

Distinguishing the High Court test under order 46 rule 6 (substantial loss, undue delay, offer of security) from the rule 5(2)(b) test of arguability and nugatory effect, the court held that the latter does not restrict an applicant who failed before the superior court from making a similar application to it.

p. 3
04

Whether the application was brought after inordinate, unexplained delay

Holding

The delay was explained: the appellant had been prosecuting stay applications in the High Court and could not properly have applied to both courts simultaneously.

Reasoning

The respondent argued the application was late since judgment had been delivered in December 2018 and there had been part execution. The court accepted that the time spent pursuing the various High Court applications accounted for the delay, and that approaching the Court of Appeal while those applications were live would itself have been an abuse of process.

p. 4

Legal principles established

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  • Failure to secure a stay before the High Court does not restrict an applicant from approaching the Court of Appeal under rule 5(2)(b), because the principles governing the two jurisdictions are different.
  • Where an appeal has been argued and judgment is pending, it is reasonable and prudent for parties to await the outcome before taking further steps at execution, whether or not there has been part execution.
  • A litigant who has unsuccessfully prosecuted stay applications before the High Court may properly await their conclusion before moving the Court of Appeal, and such sequencing does not constitute abuse of process.

Court orders

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  1. 1.Pending the determination of the appeal, a stay of execution of the judgment delivered on December 17, 2018 in Mombasa High Court Civil Case No 85 of 2009, Aswa Developers & Contractors Limited v Compact Freight Systems Limited
  2. 2.Costs to abide the outcome of the appeal
On appeal from
High Court
Mombasa High Court Civil Case No 85 of 2009
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, "Compact Freight Systems Limited v Aswa Developers & Contractors Ltd (Civil Appeal (Application) E003 of 2021) [2023] KECA 627 (KLR)", Case Analysis (2023). Not stated in the judgment. Source: https://new.kenyalaw.org/akn/ke/judgment/keca/2023/627/eng@2023-05-26

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