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Court of AppealDismissedCivil Application No. NAI 97 of 1986· [1986] KECA 94 (KLR)

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.

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
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)

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.