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Court of AppealDismissedCivil Application No. NAI 97 of 1986

Kenya Shell Limited v Benjamin Karuga Kibiru & anorther [1986] KECA 94 (KLR)

Court of Appeal
2 July 1986
AHA. R. W. HancoxHPH. G. PlattJGJ. M. Gachuhi
3,021 words in judgment
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The bottom line

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Kenya's Court of Appeal refused to stop execution of a money judgment because the company applying for a stay proved no real risk of losing the money.

What this practically means

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Executive summary

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This was an application under rule 5(2)(b) of the Court of Appeal Rules by Kenya Shell Limited for a stay of execution of a judgment of Shields J in High Court Civil Case No. 540 of 1980, which awarded the two respondents damages of Shs 201,380.00 and Shs 5,000.00 for negligence arising from a gas cylinder explosion at their home in June 1977. The applicant contended that if the decree were executed and paid over, it would have the utmost difficulty recovering the money from the respondents if the intended appeal succeeded, rendering the appeal nugatory. The court unanimously held that the nugatory-appeal test was the governing principle under rule 5(2)(b), balanced against the principle that a successful litigant should not be deprived of the fruits of judgment without just cause. It found the first respondent to be a man of substance - a Sales Manager and senior executive with Agip with good pensionable prospects - and no evidence that the respondents would fail to repay the decretal sum. Platt Ag JA added that substantial loss is the cornerstone of the jurisdiction to grant a stay and cannot be inferred here, and Gachuhi Ag JA agreed that the applicant had not furnished sufficient material for the discretion to be exercised in its favour. Although the court deprecated intemperate comments made by the High Court judge in refusing the earlier stay application, it held that this did not justify a stay. The application was dismissed with costs.

Questions the Court framed

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

  1. 1.Whether execution of the High Court decree would render the intended appeal nugatory such that a stay of execution should be granted under rule 5(2)(b) of the Court of Appeal Rules
  2. 2.Whether the applicant demonstrated substantial loss or inability to recover the decretal sum if the appeal succeeds

Key legal issues

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01

Test for stay of execution pending appeal under rule 5(2)(b) of the Court of Appeal Rules

Holding

The applicant must show that execution would render the appeal nugatory; this requires evidence of substantial loss, such as inability of the decree-holder to repay the decretal sum if the appeal succeeds. None was shown.

Reasoning

The court accepted the Cotton LJ principle from Wilson v Church (No 2), approved in Erinford Properties, that an appeal, if successful, should not be rendered nugatory. It balanced this against the right of a successful litigant to the fruits of judgment. The first respondent was a senior executive with Agip with pensionable prospects, and there was no evidence he would cease to be a man of means, so repayment was not in doubt and no stay was justified.

p. 4
02

Distinct requirements of rule 5 of the Court of Appeal Rules versus order XLI rule 4(1) of the Civil Procedure Rules

Holding

Rule 5 requires only that a notice of appeal has been filed; unlike order XLI rule 4(1), it does not require security for due performance of the decree, though the court may in practice require it as the price of a stay.

Reasoning

Hancox JA noted the application was brought only under rule 5, not order XLI rule 4(1), and that rule 5 imposes no security pre-condition - only the filing of a notice of appeal in time. Nevertheless, the court observed that it had been usual to require security, and counsel offered it, including a joint deposit. Platt Ag JA, however, treated substantial loss as the cornerstone of both jurisdictions.

p. 1
03

Proof of special damage

Holding

A plaintiff must not only plead but prove special damage, as recently held by the court in Idi Ayub Omar Shabani v City Council of Nairobi, approving Lord Goddard LCJ in Bohham-Carter v Hyde Park Hotel Ltd.

Reasoning

The court noted in passing, agreeing with Mr Kwach's contention at trial, that special damages must be proved and not merely pleaded or asserted. However, the record was not yet available to assess whether this allegation had substance, so it did not affect the outcome of the stay application.

p. 2

Legal principles established

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  • Execution or enforcement that would render a proposed appeal nugatory is a proper ground for granting a stay
  • A successful litigant should not be deprived of the fruits of judgment without just cause
  • Substantial loss is the cornerstone of the jurisdiction to grant a stay; without evidence of it, a stay will rarely be granted
  • An intended appeal does not operate as an automatic stay
  • A plaintiff must plead and prove special damage

Court orders

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  1. 1.Application for stay of execution dismissed with costs

The bench

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

AH
majority

Wrote the judgment

Hancox JA delivered the lead judgment. He reviewed the principles governing stay of execution under rule 5 of the Court of Appeal Rules, including the nugatory-appeal test and the competing principle that a successful litigant should not be deprived of the fruits of judgment without just cause. He deprecated the High Court judge's comments but found no evidence that the respondents would be unable to repay the decretal sum, and refused the stay.

I accept the proposition that if it is shown that execution or enforcement would render a proposed appeal nugatory, then a stay can properly be given.p. 3
HP
concurring

Wrote the judgment

Platt Ag JA wrote separately, emphasising that substantial loss is the cornerstone of both jurisdictions for granting a stay, that it cannot be inferred on these facts, and that it is not normal in money decrees for an appeal to be rendered nugatory merely because payment is made.

Substantial loss in its various forms, is the corner stone of both jurisdictions for granting a stay.p. 4
JG
concurring

Wrote the judgment

Gachuhi Ag JA agreed with Hancox JA's judgment. He held that the applicant had not shown what loss it would suffer if the decretal sum were paid and had not given the court sufficient material to exercise its discretion in favour of a stay.

The applicant has not given to court sufficient materials to enable it to exercise its discretion in granting the order of stay.p. 5
On appeal from
High Court
High Court Civil Case No. 540 of 1980
Jurisdiction invoked
Rule 5(2)(b) of the Court of Appeal Rules (application for stay of execution pending appeal)

Relief refused

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Stay of execution of the judgment and decree of Shields J pending the intended appeal

No evidence that the respondents would be unable to repay the decretal sum if the appeal succeeded; the appeal would not be rendered nugatory

p. 3

Costs

Application dismissed with costs (costs of the application awarded to the respondents)

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.

I accept the proposition that if it is shown that execution or enforcement would render a proposed appeal nugatory, then a stay can properly be given.
p. 3Nugatory-appeal test for stay
Parallel with that is the equally important proposition that a litigant, if successful, should not be deprived of the fruits of a judgment in his favor without just cause.
p. 3Fruits of judgment
Substantial loss in its various forms, is the corner stone of both jurisdictions for granting a stay.
p. 4Substantial loss as cornerstone
An intended appeal does not automatically operate as a stay.
p. 4No automatic stay
I would therefore dismiss the motion with costs. As the other members of the court agree it is so ordered.
p. 3Final orders
there is in my judgement no justification whatsoever for holding that there is a likelihood that the respondents will not repay the decretal sum if the appeal is successful and that the appeal will thereby be rendered nugatory.
p. 3Application of test to facts
The applicant has not given to court sufficient materials to enable it to exercise its discretion in granting the order of stay.
p. 5Burden on applicant

Issues in the judgment

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minor

The decretal sum is stated inconsistently within the judgment: Hancox JA records damages of Shs 201,380.00 while Gachuhi Ag JA refers to Shs 20,380.00

minor

The first respondent's surname appears as both 'Kibiru' in the cause title and 'Kibuku' in the body of the judgment

minor

The quotation from Bohham-Carter v Hyde Park Hotel Ltd is attributed to page 178 of a report cited as page 117

Key timeline

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Practical implications

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Frequently asked questions

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Later judgments citing this (25)

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Judgments in the corpus that rely on this one. Where the Court said how it treated the authority, that is shown.

Cite this brief

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Cite this brief

Caselaw, "Kenya Shell Limited v Benjamin Karuga Kibiru & anorther [1986] KECA 94 (KLR)", Case Analysis (1986). Civil Application No. NAI 97 of 1986. Source: https://new.kenyalaw.org/akn/ke/judgment/keca/1986/94/eng@1986-07-02

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