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Court of AppealDismissedCivil Application (Rule 5(2)(b)) arising from ELC Misc. Reference Application No. E003 of 2023

Agricultural Development Corporation & another v JJ Chesaro & Company Advocates (Civil Appeal (Application) E032 of 2024) [2025] KECA 802 (KLR)

Court of Appeal of Kenya
9 May 2025
807 words in judgment
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The bottom line

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Kenya's Court of Appeal dismissed ADC's attempt to delay paying Kshs.13.2 million in legal costs, ruling you cannot stay a dismissal and money decrees are generally payable pending appeal.

What this practically means

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Executive summary

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The Court of Appeal at Mombasa (Tuiyott, Laibuta and Ngenye-Macharia, JJA) dismissed ADC's Notice of Motion dated 17th September 2024 seeking stay of execution of a decision of E.K. Makori, J. of 20th June 2024, which had dismissed ADC's reference in ELC Misc. Reference Application No. E003 of 2023 and left ADC owing the firm of J. J. Chesaro & Company Advocates Kshs.13,226,441.60 in taxed costs. The application was brought under Rule 5(2)(b) of the Court of Appeal Rules, 2022, ADC asserting that its appeal was arguable and that payment would render the appeal nugatory as the sum would be irrecoverable. The court identified two independent grounds for refusal. First, the order sought to be stayed was negative in nature - a dismissal - and there is nothing to be stayed once an order is negative; the court noted that Rule 5(2)(b) offered another avenue which ADC chose not to pursue. Second, on the twin conditions, the court applied Kenya Hotel Properties Limited v Willesden Investments Limited, holding that a money decree ordinarily does not render an appeal nugatory where the respondent can repay. ADC did not substantiate its apprehension: it did not show the advocates were financially incapable of repaying or had evaded obligations, nor that payment would cause insolvency or severely handicap its operations. The application was dismissed with costs. The decision binds subordinate courts and tribunals on the principles stated.

Questions the Court framed

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

  1. 1.Whether an application for stay of execution lies in respect of a negative order, namely the dismissal of the reference by the ELC
  2. 2.Whether the intended appeal is arguable and whether refusal of stay would render it nugatory under the twin conditions in Rule 5(2)(b)

Key legal issues

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01

Whether stay of execution can issue against a negative order

Holding

It cannot; a negative order such as dismissal of a reference leaves nothing to be stayed, and this alone justifies refusal of the application.

Reasoning

The court observed that the order sought to be stayed was the dismissal of the reference by the ELC. Once an order is negative, there is nothing capable of being stayed, a position the Court of Appeal has restated repeatedly. Although Rule 5(2)(b) offered another avenue (presumably an order staying further proceedings), ADC chose to seek stay of the dismissal and persisted in that course, which was a strong headwind warranting refusal on that account alone.

p. 2
02

Whether refusal of stay would render the intended appeal nugatory given that the decree is a money decree

Holding

No; the applicant did not substantiate its apprehension that the advocates could not repay the decretal sum, nor that payment would cripple its operations.

Reasoning

Applying Kenya Hotel Properties Limited v Willesden Investments Limited, a money decree ordinarily does not render an appeal nugatory if the respondent can repay the decretal amount plus interest. ADC asserted it was unlikely to recover the sum but offered no evidence that the advocates were financially incapable of repayment or had a record of evading obligations, and did not claim the payment would cause insolvency or severely handicap its operations. The nugatory condition therefore failed.

p. 2

Legal principles established

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  • Once an order is negative in nature, there is nothing to be stayed, and an application for stay of a negative order must fail on that account alone.
  • An applicant under Rule 5(2)(b) must satisfy both twin conditions - an arguable appeal and that the appeal would be rendered nugatory absent stay.
  • Where the decree sought to be stayed is a money decree, the appeal is generally not rendered nugatory provided the respondent is not a man of straw and can repay the decretal amount plus interest, subject to riders where undue hardship is shown.

Court orders

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  1. 1.The Notice of Motion dated 17th September 2024 is dismissed with costs

The bench

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

majority
majority
On appeal from
Environment and Land Court
ELC Misc. Reference Application No. E003 of 2023 - Agricultural Development Corporation & Anor v J. J Chesaro & Company Advocates
Jurisdiction invoked
Rule 5(2)(b) of the Court of Appeal Rules, 2022

Relief refused

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Stay of execution of the dismissal of the reference and of the order to pay Kshs.13,226,441.60 pending appeal

A negative order - the dismissal of the reference - cannot be stayed; and the nugatory-prong was not demonstrated as the applicant did not substantiate the respondent's inability to repay a money decree

p. 2

Costs

The application is dismissed with costs to the respondent (the advocates).

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.

once an order is negative in nature, then there is nothing to be stayed
p. 2stay of negative orders
for an application for grant of stay under Rule 5(2) (b) to prevail, then the applicant must show that the intended appeal or appeal is arguable and that not to grant stay will render it nugatory. The twin conditions must both be met.
p. 2twin conditions under Rule 5(2)(b)
In a word, the Notice of Motion dated 17th September 2024 is without merit. We hereby dismiss it with costs.
p. 2final orders - dismissal of the motion

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, "Agricultural Development Corporation & another v JJ Chesaro & Company Advocates (Civil Appeal (Application) E032 of 2024) [2025] KECA 802 (KLR)", Case Analysis (2025). Civil Application (Rule 5(2)(b)) arising from ELC Misc. Reference Application No. E003 of 2023. Source: https://new.kenyalaw.org/akn/ke/judgment/keca/2025/802/eng@2025-05-09

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