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Court of AppealAllowedCivil Appeal (Application) No. 7 of 2005

Housing Finance Company of Kenya Ltd v Richard Ndere Johnson Paul & 3 others [2006] KECA 175 (KLR)

Court of Appeal of Kenya
14 July 2006
633 words in judgment
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The bottom line

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The Court of Appeal paused a property dispute, confirming that a stay will be granted where an appeal is arguable and letting it proceed would make it pointless.

What this practically means

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Executive summary

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This is a single-judge-of-the-court ruling (Tunoi, Githinji and Deverell, JJA) on a notice of motion by Housing Finance Company of Kenya Ltd under rule 5(2)(b) of the Court of Appeal Rules seeking a stay of proceedings in HCCC No. 2095 of 2000 (Kasango, J) pending the hearing of its appeal, Civil Appeal No. 52 of 2003. The underlying dispute concerns Land Reference No. Nairobi/Block 129/86, sold by the applicant as chargee in exercise of its statutory power of sale after the 1st respondent allegedly defaulted on a loan; the 1st respondent alleged fraud, sought to nullify the sale, and had obtained ex-parte judgment in default of appearance, which Mwera, J declined to set aside, and Kasango, J on 16th June 2004 dismissed an application to stay the suit proceedings pending appeal. The Court of Appeal restated the twin rule 5(2)(b) principles: whether the appeal or intended appeal is arguable, and whether it would be rendered nugatory if the stay is refused. Holding that it was not seized of the appeal and could not express definitive views, the Court nonetheless found the appeal not frivolous and, in order to preserve the subject property, allowed the application. The proceedings in HCCC No. 2095 of 2000 were stayed pending the hearing and final determination of the appeal, with costs in the appeal. The ruling binds subordinate courts and the High Court on the rule 5(2)(b) test.

Questions the Court framed

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

  1. 1.Whether the applicant's appeal (Civil Appeal No. 52 of 2003) is arguable
  2. 2.Whether the appeal would be rendered nugatory if a stay of proceedings is not granted

Key legal issues

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01

Test for stay of proceedings pending appeal under rule 5(2)(b)

Holding

The two governing principles are: (1) whether the appeal or intended appeal is arguable, i.e. not frivolous; and (2) whether the appeal will be rendered nugatory if the stay or injunction is not granted.

Reasoning

The Court restated the settled rule 5(2)(b) test, emphasising that the discretion must be exercised on evidence and sound legal principles. On the material before it, and without being seized of the appeal, the Court declined to express definitive views on merits beyond finding the appeal not frivolous, and found preservation of the subject property necessary.

p. 2
02

Whether the appeal was arguable and preservation warranted

Holding

The Court found the appeal not frivolous and ordered preservation of the suit property and stay of proceedings pending appeal.

Reasoning

The Court held it could not, not being seized of the appeal, express firm conclusions on its merits, but it did not think the appeal was frivolous - satisfying the arguability threshold. Because the land at the heart of the chargee's statutory power of sale dispute had been sold and transferred, it followed that the property should be preserved pending appeal.

p. 2

Legal principles established

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  • The power under rule 5(2)(b) is discretionary and is governed by the twin principles of an arguable appeal and the appeal being rendered nugatory

Court orders

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  1. 1.The proceedings in HCCC No. 2095 of 2000 (Milimani) are stayed pending the hearing and final determination of Civil Appeal No. 52 of 2003
  2. 2.Costs shall be in the appeal

The bench

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

majority
majority
majority
On appeal from
High Court of Kenya at Nairobi (Milimani)
H.C.C.C. No. 2095 of 2000
Jurisdiction invoked
Rule 5(2)(b) of the Court of Appeal Rules (application for stay of proceedings/injunction pending appeal)

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.

Two principles guide the Court in considering whether or not the orders prayed for should be granted. The first one of those principles is whether the applicant has shown that his appeal or intended appeal is arguable. Secondly, whether the applicant has shown that if he is not granted a stay or injunction as the case may be, his appeal or intended appeal will be rendered nugatory.
p. 2Rule 5(2)(b) twin principles
In the result, the application is allowed and the orders and decision given by Mary Kasango, J, on 16th June, 2006 in HCCC 2095 of 2000 (Milimani) are stayed pending the hearing and final determination of the said appeal. Costs shall be in the appeal.
p. 2Final orders - stay granted

Issues in the judgment

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minor

The judgment states the decision below was given on 16th June 2004 in the header but 16th June 2006 in the final order

minor

The 1st respondent's name is printed as 'NDERE' in the title and 'NDORE' in the body

Key timeline

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Practical implications

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Frequently asked questions

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Later judgments citing this (1)

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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, "Housing Finance Company of Kenya Ltd v Richard Ndere Johnson Paul & 3 others [2006] KECA 175 (KLR)", Case Analysis (2006). Civil Appeal (Application) No. 7 of 2005. Source: https://new.kenyalaw.org/akn/ke/judgment/keca/2006/175/eng@2006-07-14

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