PRAHLAD BHOGAITA & 3others v MINISTER FOR FINANCE & another [2007] KECA 1 (KLR)
The bottom line
#Kenya's Court of Appeal refused to block a VAT notice, ruling that stay applications fail when applicants cannot show the appeal's success would be meaningless without one.
What this practically means
#Executive summary
#Questions the Court framed
#The issues the Court set itself to decide, in its own words.
- 1.Whether the applicants' appeal or intended appeal is arguable, that is, not frivolous.
- 2.Whether, unless a stay or injunction is granted, the success of the intended appeal will be rendered nugatory.
- 3.Whether a stay can properly be granted to an association whose membership is unclear, for the benefit of members unknown to the Court.
Key legal issues
#The twin principles governing stay applications under rule 5(2)(b) of the Court of Appeal Rules.
An applicant must satisfy two cumulative conditions: that the appeal or intended appeal is arguable (not frivolous), and that its success will be rendered nugatory unless a stay or injunction is granted. Failure on either limb disentitles the applicant to the orders sought.
The Court restated the twin principles as well-settled law requiring no authority, and described the cumulative requirement as trite. It assumed, without deciding, that the intended appeal was arguable and disposed of the motion on the second limb, holding that failure to satisfy the nugatory aspect leaves no basis for granting the orders sought.
Whether the nugatory aspect was made out on the facts.
No. The success of the intended appeal would not be rendered nugatory absent a stay: the substantive judicial review remained pending, the applicants had not pursued it, about ten months had elapsed since the discharge of the stay, and the named applicants personally still enjoyed its protection.
The Court measured the nugatory aspect against the passage of time and the applicants' own inertia. The stay had been discharged some ten months earlier; the judicial review application was still pending but unexplainedly unprosecuted; counsel could not tell the Court what prevailed on the ground; and the named applicants were not personally aggrieved because the stay still protected them. The second test therefore failed.
Whether a stay could be granted for the benefit of an association whose membership is unclear, and the applicants' representative capacity.
The Court agreed with KRA that the membership of the United Business Association was unclear in the absence of a registration certificate or list of members, and could not rule on the nugatory aspect for unknown affected members; the objection to representative capacity was not available because the matter was an application, not an appeal.
Kenya Revenue Authority complained that the Association's membership was unclear, and the Court agreed, asking how orders could issue in favour of a party whose existence was unclear and noting no evidence that the affected members knew of the litigation. Because the affected members were unknown, the nugatory inquiry could not be undertaken on their behalf. The capacity objection was unavailable since the matter was not an appeal.
Whether the High Court judge exercised her discretion judicially in declining adjournments.
Although adjournment is a matter for the discretion of the judge seised of the matter and must be exercised judicially (Shah v Mbogo), the Court declined to determine whether Wendoh J met that standard because the question had been overtaken by events and any determination would be of academic benefit only.
Citing Shah v Mbogo, the Court affirmed that the grant of an adjournment is discretionary and must be exercised judicially. The applicants argued the judge failed that standard in refusing two adjournments. The Court nonetheless declined to decide: the judicial review remained pending, events had overtaken the complaint, and a determination either way would confer only academic benefit. The proposition is stated as settled law but was not applied to resolve the motion, making this part obiter.
Legal principles established
#- To succeed on an application under rule 5(2)(b) of the Court of Appeal Rules, the applicant must first show that the appeal or intended appeal is arguable, that is, not frivolous.
- The applicant must additionally show that, unless a stay or injunction is granted, the success of the appeal or intended appeal will be rendered nugatory; both limbs are cumulative and failure on either is fatal.
- Whether to grant an adjournment is a discretion vested in the judge or magistrate seised of the matter, and it must be exercised judicially.
Court orders
#- 1.In the result, the application dated 29th September 2006 and lodged in Court on 2nd October, 2006 is hereby dismissed with costs.
The bench
#One judgment of the whole court — no separate or dissenting opinions.
- On appeal from
- High Court of Kenya at Nairobi
- H.C. Misc. App. No. 373 of 2006
- Jurisdiction invoked
- Rule 5(2)(b) of the Court of Appeal Rules (application for stay pending appeal)
Relief refused
#Stay of the ruling and order of the High Court (Wendoh J) of 27 July 2006 vacating the ex parte stay of Legal Notice No. 54 of 2006, save as regards the four named ex parte applicants.
The intended appeal was assumed arguable, but the applicants failed the nugatory-aspect test: the judicial review remained pending and unprosecuted, the position on the ground was unknown, the Association's membership was unclear, and the named applicants personally still enjoyed the stay.
Costs
The application dated 29th September 2006 and lodged in Court on 2nd October, 2006 is hereby dismissed with costs.
Quotable passages
#Verbatim from the judgment, each located to the page it appears on in the official PDF — so these can be cited and checked directly.
for an applicant to succeed in an application under rule 5 (2) (b) he must first show his appeal or intended appeal, as the case may be, is arguable or as others would say, it is not frivolous.
Secondly, that if that appeal or intended appeal will be rendered nugatory, if it were to eventually succeed, unless he, the applicant is granted either a stay or injunction, as the case may be.
It is trite law that the applicant must not only show the existence of an arguable appeal but also that the success of that appeal will be rendered nugatory unless the stay or injunction prayed for is granted.
Whether or not to grant an adjournment of a matter pending before a court is in the discretion of the Judge or Magistrate seised of it. It is a discretion which must be exercised judicially.
On the assumption that the applicant's intended appeal is arguable, we do not think on the facts and circumstance of this matter that the success of that appeal will be rendered nugatory.
To the extent that the affected members are unknown, we are unable to rule on the question whether unless we grant a stay the success of their intended appeal will be rendered nugatory.
The named applicants are personally not complaining as the stay order in their favour is still in place.
That the application is brought in a representative capacity has been challenged, but the issue is not available for consideration this not being an appeal.
In the result, the application dated 29th September 2006 and lodged in Court on 2nd October, 2006 is hereby dismissed with costs.
Issues in the judgment
#The judgment states the stay order was discharged on 26 July 2006, yet the impugned ruling and order is dated 27 July 2006 and the narrative places the discharge at 2 p.m. on 27 July 2006; with the ruling dated 29 June 2007, the interval is closer to eleven months than the 'about ten months' stated.
Key timeline
#Practical implications
#Frequently asked questions
#Cite this brief
#Cite this brief
Caselaw, "PRAHLAD BHOGAITA & 3others v MINISTER FOR FINANCE & another [2007] KECA 1 (KLR)", Case Analysis (2007). Civil Application No. 253 of 2006. Source: https://new.kenyalaw.org/akn/ke/judgment/keca/2007/1/eng@2007-06-29
Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.