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ELCPartially AllowedNot stated in the ruling· [2021] KEELC 2890 (KLR)

Cove Investments Limited v Johana Kiprotich Rono & another [2021] KEELC 2890 (KLR)

Environment and Land Court of Kenya
17 June 2021
1,666 words in judgment
View original judgmentRead on Kenya Law Watch case
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The bottom line

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A Kenyan land buyer won a stay of execution against a property transfer, but only by paying KShs 8 million security within 21 days and appealing within one year.

What this practically means

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Executive summary

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This ruling by D. O. Ohungo J of the Environment and Land Court at Nakuru, delivered on 17th June 2021, determines a Notice of Motion dated 31st May 2021 by the 1st respondents seeking stay of execution of the court's judgment of 18th May 2021, which had ordered specific performance of a sale of LR No. Nakuru/Ol'ongai Phase 11/34, directed the petitioner to deposit KShs 782,425 as the balance of the purchase price, extended time for Land Control Board consent, declared the respondents held the land in trust for the petitioner, and directed transfer to the petitioner. Applying Order 42 rule 6 of the Civil Procedure Rules, the court found the application filed within two weeks of judgment involved no unreasonable delay. On substantial loss, the court rejected the petitioner's arguments based on lis pendens and an undertaking to retransfer, holding that the very transfer the applicant sought to stop would itself constitute substantial loss. Fixing security at KShs 8 million, midway between the petitioner's claimed payment of KShs 15,976,000 and the applicants' claim of KShs 6.5 million, the court granted a stay pending appeal conditional on the applicants depositing that sum in a joint interest-bearing account within 21 days, with the stay expiring after one year unless extended by the Court of Appeal. Costs of the application were awarded to the petitioner, borne by the 1st respondents.

Key legal issues

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01

Unreasonable delay

Holding

An application filed two weeks after judgment was delivered was made without unreasonable delay

Reasoning

Order 42 rule 6(2)(a) requires the application to be made without unreasonable delay. The judgment was delivered on 18th May 2021 and the motion was filed on 31st May 2021, a two-week interval the court found unobjectionable.

p. 2
02

Substantial loss

Holding

Transferring the suit property to the petitioner during the pendency of the appeal would constitute substantial loss to the applicants

Reasoning

Enforcement of the judgment would transfer ownership of the land from the respondents to the petitioner. The petitioner's reliance on lis pendens and an undertaking to retransfer was inadequate because stopping the transfer itself is the object of the appeal, so transfer pending appeal amounts to substantial loss.

p. 2
03

Security for due performance

Holding

Security set at KShs 8 million, midway between the parties' competing accounts of what the petitioner paid

Reasoning

The court found the petitioner had paid KShs 15,976,000 (over 95% of the price) while the applicants claimed only KShs 6.5 million was paid; the court fixed security at KShs 8 million as a mid-figure, depositable in a joint interest-bearing account within 21 days, failing which the stay lapses.

p. 2

Legal principles established

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  • Substantial loss is the cornerstone of the jurisdiction to grant stay of execution pending appeal
  • Where the very transfer of property is what the applicant seeks to stop, the promise of retransfer if the appeal succeeds is not an adequate answer to substantial loss

Court orders

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  1. 1.Stay of execution of the judgment delivered on 18th May 2021 granted pending hearing and determination of the 1st respondents' appeal to the Court of Appeal
  2. 2.Stay conditional on the 1st respondents depositing KShs 8,000,000 in an interest-bearing account in the joint names of counsel for both parties in a reputable bank within 21 days; in default the stay lapses and the application stands dismissed with costs to the petitioner
  3. 3.The stay orders to remain in force for only one year from the date of the ruling, unless otherwise extended by the Court of Appeal
  4. 4.The 1st respondents to bear costs of the application

Authorities

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Legislation

  • Civil Procedure Rules, 2010Order 42 rule 6(1) and (2)

Cases cited (2)

  • Kenya Shell Limited v Benjamin Karuga Kibiru & another
    [1986] eKLR
  • Nation Newspapers Limited v Peter Baraza Rabando
    [2007] eKLR
Jurisdiction invoked
Order 42 rule 6 of the Civil Procedure Rules, 2010 - jurisdiction of the trial court to stay its own decree pending appeal

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, "Cove Investments Limited v Johana Kiprotich Rono & another [2021] KEELC 2890 (KLR)", Case Analysis (2021). Not stated in the ruling. Source: https://new.kenyalaw.org/akn/ke/judgment/keelc/2021/2890/eng@2021-06-17

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