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Court of AppealAllowedNairobi Civil Application (Rule 5(2)(b)) arising from intended appeal against Nairobi High Court Civil Suit No 389 of 2011

Tetra Pak Limited v Njuguna & another (Civil Application E223 of 2024) [2024] KECA 1604 (KLR)

Court of Appeal
8 November 2024
2,327 words in judgment
View original judgmentRead on Kenya Law Watch case
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The bottom line

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Kenya's Court of Appeal paused a Kshs 102 million judgment, confirming that respondents claiming financial ability must prove it with evidence, not just words.

What this practically means

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Executive summary

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This was a rule 5(2)(b) application in the Court of Appeal seeking stay of execution of a High Court judgment dated 30th April 2024 in Nairobi High Court Civil Suit No 389 of 2011, which had declared unlawful the sale of LR No 1/149, Dennis Pritt Road, Nairobi, and ordered the applicant to pay Joseph Njogu Njuguna and Jane Nyambuara Njogu Kshs 32,000,000 plus interest at 12% per annum. The dispute concerned a property charged to secure a guarantee for a loan by Aberdare Creameries Limited, allegedly without authority under the power of attorney donated by Jane to her husband Joseph, and allegedly sold at an undervalue. The applicant contended its intended appeal, raising 18 grounds, was arguable and would be rendered nugatory if forced to pay a decretal sum now around Kshs 102,280,000 which the respondents could not refund. The respondents argued the notice of appeal was incompetent, filed by a non-existent firm of advocates, and that they had ample assets. The Court first held that a notice of appeal compliant with rule 77 is the jurisdictional prerequisite to a rule 5(2)(b) application, and any challenge to its competence lies under rule 86. It found the intended appeal arguable and, applying the principle that allegations of a respondent's impecunity shift the onus to the respondents to adduce rebuttal evidence, held that neither respondent had proved ability to refund the decretal sum. Both limbs of the twin test were satisfied; the Court granted a stay of execution pending the intended appeal, with costs of the application to abide its outcome. The decision below was not disturbed on the merits; the intended appeal remains to be heard.

Questions the Court framed

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

  1. 1.Whether the notice of appeal dated 6th May 2024 was competent, given the challenge to the firm of advocates that filed it
  2. 2.Whether the intended appeal is arguable
  3. 3.Whether the intended appeal, if successful, would be rendered nugatory unless stay of execution is granted

Key legal issues

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01

Competence of the notice of appeal as a precondition to a rule 5(2)(b) application

Holding

The applicant having filed a notice of appeal in accordance with rule 77(2), the respondents' complaint about its competence or about the advocates' firm was not for determination in this application; the remedy lies under rule 86.

Reasoning

The Court held that invoking rule 5(2)(b) requires a notice of appeal filed per rule 77, which the applicant had done. Challenges to the notice's competence fall under rule 86, and the respondents had a separate pending application to strike out the notice. The Court therefore proceeded to the merits of the stay application without disturbing the notice.

p. 4
02

Arguability of the intended appeal

Holding

The intended appeal was arguable; one arguable ground suffices and the Court need not elaborate lest it embarrass the bench hearing the appeal.

Reasoning

Applying Stanley Kangethe Kinyanjui v Tony Ketter, the Court found the grounds in the draft memorandum of appeal - including special damages, the consent order, framing of issues, and the scope of the power of attorney - were not idle. It deliberately said little on arguability to avoid prejudging the appeal, finding the first limb satisfied.

p. 4
03

Nugatory aspect and burden of rebutting alleged impecunity

Holding

The respondents failed to disprove the allegation that they could not refund the substantial decretal sum (about Kshs 102,280,000), so the appeal would be rendered nugatory without a stay.

Reasoning

The Court restated the nugatory test: whether what is sought to be stayed is reversible, or if not, whether damages would reasonably compensate. Relying on International Laboratory for Research on Animal Diseases v Kinyua, it held the onus shifted to the respondents to rebut impecunity with evidence. The 1st respondent only asserted he was not a pauper; the 2nd respondent gave no title documents or valuations for her claimed assets. Both limbs were thus satisfied and stay was granted.

p. 4

Legal principles established

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  • A notice of appeal filed in accordance with rule 77 is a jurisdictional prerequisite to invoking the Court's jurisdiction under rule 5(2)(b), and any challenge to its competence must be brought under rule 86.
  • Where an applicant alleges that an appeal will be rendered nugatory on account of the respondents' impecunity, the onus shifts to the respondents to rebut that allegation with evidence.

Court orders

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  1. 1.Stay of execution of the judgment and orders of the High Court dated 30th April 2024 pending hearing and determination of the intended appeal
  2. 2.Costs of the application to abide the outcome of the intended appeal

The bench

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

majority
majority
majority
On appeal from
High Court of Kenya
Nairobi High Court Civil Suit No 389 of 2011
Jurisdiction invoked
Articles 159 and 164 of the Constitution; sections 3A and 3B of the Appellate Jurisdiction Act; rule 5(2)(b) of the Court of Appeal Rules

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.

Accordingly, we grant stay of execution of the judgment and orders of the High Court dated 30th April 2024 pending hearing and determination of the intended appeal.
p. 4Final orders - stay granted
It is trite law that in an application of this nature an applicant must satisfy this Court that the appeal or the intended appeal is arguable, and that unless the orders sought are granted, the appeal, if successful, shall be rendered nugatory.
p. 3Twin-test for rule 5(2)(b) stay
A notice of appeal is a primary document to be filed outright whether or not the subject matter under appeal is one that requires leave or not. It is a jurisdictional prerequisite.
p. 4Notice of appeal as jurisdictional prerequisite (quoting Salat)
whether an appeal will be rendered nugatory depends on whether what is sought to be stayed if allowed to happen is reversible; or if it is not reversible, whether damages will reasonably compensate the party aggrieved.
p. 4Nugatory test
The costs of the application shall abide by the outcome of the intended appeal.
p. 4Costs order

Issues in the judgment

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minor

The judgment does not name the applicant's corporate identity; the applicant is referred to only through the supporting affidavit of its Managing Director, Jonathan Kinisu, making the case title uncertain.

minor

The delivery date is printed with apparent typographical errors in the closing words.

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, "Tetra Pak Limited v Njuguna & another (Civil Application E223 of 2024) [2024] KECA 1604 (KLR)", Case Analysis (2024). Nairobi Civil Application (Rule 5(2)(b)) arising from intended appeal against Nairobi High Court Civil Suit No 389 of 2011. Source: https://new.kenyalaw.org/akn/ke/judgment/keca/2024/1604/eng@2024-11-08

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