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Court of AppealDismissedCivil Application No. 59 of 2006

KABUNDU HOLDINGS LIMITED v ALI K. MOHAMED T/A SKY CLUB RESTAURANT [2007] KECA 95 (KLR)

Court of Appeal of Kenya
9 February 2007
2,542 words in judgment
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The bottom line

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Kenya's Court of Appeal refused to pause a High Court ruling against Kabundu Holdings, because the company could easily reverse the damage if it later won its appeal.

What this practically means

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Executive summary

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Kabundu Holdings Limited, acting through Patrick Kabundu, applied by notice of motion dated 27th February 2006 under rule 5(2)(b) of the Court of Appeal Rules for a stay of execution of a High Court ruling (Maraga, J, dated 6th September 2005 in H.C.C. Appeal No. 82 of 2004, Mombasa). That ruling had held that Mr Kabundu lacked locus standi to represent Kabundu Holdings, barred him from acting for the company, and struck out two of the company's applications. The judge had reached that result despite accepting that the question was res judicata, having earlier overruled a preliminary objection on the same issue, on the basis of a special circumstance arising from Mr Kabundu's alleged lack of shareholding qualification. Before the Court of Appeal, the applicant argued the judge erred in revisiting the res judicata issue and in entertaining a challenge to the company's representation as delving into its internal affairs. The Court restated the twin rule 5(2)(b) principles: the intended appeal must be arguable, and refusal of stay must render its success nugatory. It found the jurisdiction/res judicata point arguable, expressly without predicting its outcome, but held the nugatory test failed: Mr Kabundu could be reinstated on success, the struck-out applications could be refiled by another advocate, and unpaid rent remained recoverable from an identifiable tenant. The Court declined to consider a defective replying affidavit. The application was dismissed with each party bearing its own costs.

Questions the Court framed

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

  1. 1.Whether the intended appeal is arguable and not frivolous
  2. 2.Whether, if the intended appeal succeeds, its results would be rendered nugatory by refusal of the stay

Key legal issues

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01

Whether the intended appeal challenging the judge's departure from res judicata was arguable

Holding

Yes - whether the judge had jurisdiction to revisit his own earlier ruling through a fresh application that was not for review is an arguable point.

Reasoning

The superior court had first overruled a preliminary objection on Mr Kabundu's capacity, then in a later application overturned that position, itself acknowledging res judicata but invoking a special circumstance. Whether a judge may revisit his own ruling in proceedings not brought by way of review raises a live question fit for full ventilation.

p. 4
02

Whether refusal of stay would render the intended appeal nugatory

Holding

No - the barrister-barring order is reversible and the struck-out applications can be refiled; unpaid rent remains recoverable from an identifiable tenant.

Reasoning

If the appeal succeeds, Mr Kabundu can be reinstated as attorney; the struck-out applications were not dismissed and could be reinstated or fresh applications filed by another advocate within days. The alleged lost rent is recoverable from the tenant whose place of business is known, so success would not be rendered hollow.

p. 4
03

Whether the respondent's replying affidavit should be considered

Holding

The Court declined to consider the replying affidavit because it replied to a non-existent application and was sworn before the motion it purported to answer was filed.

Reasoning

The affidavit was headed in reply to a motion dated 3rd March 2006 which does not exist in the record, and it was sworn on 17th January 2006, a month before the application dated 27th February 2006 was filed, making it a different affidavit altogether.

p. 3

Legal principles established

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  • An applicant under rule 5(2)(b) must satisfy the twin tests of an arguable appeal and nugatory results if stay is refused.
  • In a rule 5(2)(b) application the court does not determine the validity of the notice of appeal.
  • Arguability is not a probability of success; it only means the point stands a chance of being decided either way after full argument.

Court orders

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  1. 1.The application for stay of execution pending the intended appeal is dismissed
  2. 2.Each party to bear their own costs of the application

The bench

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

majority
majority
On appeal from
High Court of Kenya at Mombasa
H.C.C. Appeal No. 82 of 2004
Jurisdiction invoked
Rule 5(2)(b) of the Court of Appeal Rules

Relief refused

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Stay of execution of the High Court orders of 6th September 2005 pending the intended appeal

Although the intended appeal was arguable, the applicant failed to demonstrate that its success would be rendered nugatory if stay was refused; the company could reinstate the struck-out applications or regularise representation within days, and unpaid rent remains recoverable

p. 4

Costs

Each party to bear their own costs - the respondent will bear his own costs and the applicant will also bear its own costs of the application.

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.

That being our view of the matter, we decline to allow the appeal. It is dismissed. For what we have stated above, we will not order costs in favour of the respondent in this application. He will bear his own costs. The applicant will also bear its own costs. Order accordingly.
p. 4Final orders - dismissal and costs
an applicant seeking an order of stay of execution under rule 5(2) (b) has to demonstrate first that the appeal or intended appeal is arguable, that is to say, that the appeal or intended appeal is not frivolous and secondly, that if the intended appeal eventually succeeds, the results of the same appeal will be rendered nugatory by the court's refusal to grant the application for stay
p. 1Rule 5(2)(b) twin principles
the question as to whether the learned Judge had the jurisdiction to revisit his ruling through another and fresh application which was not an application for review and in doing so overturn his own ruling is clearly an arguable point
p. 4Arguability of res judicata/jurisdiction issue
All we are saying is that they are arguable points and stand a chance of being decided either way after they are fully ventilated at a full argument in court.
p. 4Meaning of arguability

Issues in the judgment

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minor

The judgment refers to filing of the notice of motion inconsistently - the motion is dated 27th February 2006, but the Court elsewhere refers to 'the applicant's notice of motion dated 27th February 2006' being filed on '2nd March 2006' when discussing the replying affidavit, and the rejected affidavit's heading cites a motion 'DATED 3RD MARCH 2006', dates that do not reconcile with the motion under consideration.

minor

The application is described in the cause title as signed by 'the alleged company attorney and director Mr. Patrick Kabundu' and the notice of appeal is acknowledged as late, yet the Court declined to decide the notice's validity at this stage - the judgment leaves the appeal's competence expressly open.

minor

The Court states 'we decline to allow the appeal. It is dismissed' although what was before it was an application, not an appeal - the language conflates the application with the intended appeal.

Key timeline

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Practical implications

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Frequently asked questions

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Cite this brief

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Cite this brief

Caselaw, "KABUNDU HOLDINGS LIMITED v ALI K. MOHAMED T/A SKY CLUB RESTAURANT [2007] KECA 95 (KLR)", Case Analysis (2007). Civil Application No. 59 of 2006. Source: https://new.kenyalaw.org/akn/ke/judgment/keca/2007/95/eng@2007-02-09

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