Khalsa Schools & another v Catherine Mutave Philip [2021] KEELRC 1890 (KLR)
The bottom line
#The Employment Court allowed a school to swap a cash deposit for a bank guarantee to pause a judgment debt, provided the guarantee stays valid until the appeal ends.
What this practically means
#Executive summary
#Key legal issues
#Power of the appellate court to revisit stay conditions set by the lower court
The High Court/ELRC on appeal has power under Order 42 Rule 6 to consider and vary stay orders made by the court appealed from.
Order 42 Rule 6 permits the court to which the appeal is preferred to consider an application for stay whether it has been granted or rejected below and to make just orders. The lower court had already found the threshold under Order 42 Rule 6 met (substantial loss, no undue delay, appeal rendered nugatory), so the only question was whether the conditions imposed could be varied by accepting a bank guarantee in place of the cash deposit.
Sufficiency of a bank guarantee as security for the decretal sum
A bank guarantee is acceptable security, but it must remain operational and valid until the appeal is finally determined and must account for the decretal sum.
The court took judicial notice of COVID-19 hardships, including closure of schools in 2020, causing cash-flow problems, and held that the law requires acceptable security rather than a cash deposit. The guarantee offered (valid only to 30th October 2021 and not covering accruing interest) was accepted subject to the condition that it remain valid until final determination of the appeal.
Legal principles established
#- The court to which an appeal is preferred may consider an application for stay of execution whether or not it was granted or refused by the lower court, and may make such orders as appear just.
- The law requires acceptable security, not necessarily a cash deposit; a bank security is good security but must remain valid until determination of the appeal.
Court orders
#- 1.The application dated 8th October 2020 is allowed on terms that the bank security offered by the Applicant be operational and valid until the hearing and final determination of the appeal
- 2.The Applicant shall pay the costs of this application to the Respondent in any event
- On appeal from
- Subordinate Court (before Hon. K. I. Orenge, SRM)
- not stated
- Jurisdiction invoked
- Order 42 Rule 6 of the Civil Procedure Rules (appellate jurisdiction over stay of execution from the subordinate court)
Key timeline
#Practical implications
#Frequently asked questions
#Cite this brief
#Cite this brief
Caselaw, "Khalsa Schools & another v Catherine Mutave Philip [2021] KEELRC 1890 (KLR)", Case Analysis (2021). Appeal No 23 of 2020. Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2021/1890/eng@2021-04-09
Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.