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Court of AppealDismissedCivil Appli 77 of 2008 (UR 46/09)

Harris Horn Junior & another v Vijay Morjaria [2009] KECA 317 (KLR)

Court of Appeal of Kenya
29 May 2009
1,505 words in judgment
View original judgmentRead on Kenya Law Watch case
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·~6 min to read original · ~4 min brief

The bottom line

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Kenya's Court of Appeal refused to pause a Kshs 22.5 million judgment, holding that money decrees can be repaid, so wealthy parties cannot claim an appeal would be ruined.

What this practically means

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Executive summary

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The applicants, father and son of Greek origin resident in Kenya and directors of Majani Mingi Sisal Estates Limited, sought stay of execution of a decree of Kshs. 22,500,000 entered by Muga Apondi, J on 16th June 2006 in Nakuru HCCC No. 285 of 2004, and a stay of further proceedings in that suit, pending the hearing of their appeal (Nakuru Civil Appeal No. 223 of 2007) against the refusal by Koome, J of their application for review, stay and leave to adduce evidence. The respondent, a Nakuru businessman, had successfully sued for money allegedly lent under a formal agreement secured by title to land in Kwale and by cheques, several of which were dishonoured. The application was brought under rule 5(2)(b) of the Court of Appeal Rules, requiring the applicant to show an arguable appeal and that the appeal would be rendered nugatory without a stay. The Court found the appeal arguable on both law and fact, but held that the nugatory test failed: the decree was essentially for payment of money, the applicants were wealthy landowners, and the respondent was demonstrably a man of means who could repay any sums paid if the appeal succeeded. The Court also noted, obiter, that whether it could stay a dismissal order by the superior court was an arguable point, but declined to decide it since it had not been raised. 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 the intended appeal (Nakuru Civil Appeal No. 223 of 2007) is arguable
  2. 2.Whether the appeal, if successful, would be rendered nugatory unless a stay of execution and stay of proceedings are granted

Key legal issues

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01

Arguability of the intended appeal

Holding

The Court was satisfied that the intended appeal raised arguable grounds on both law and fact, including whether a dismissal order by the superior court could be stayed.

Reasoning

Counsel for the applicants argued that the plaint disclosed no cause of action, that the transaction was illegal and that the suit was a nullity, relying on multiple authorities. The respondent countered that only an exercise of judicial discretion was being challenged without any demonstration that it was wrongly exercised. On considering the memorandum of appeal, the ruling and submissions, the Court found the grounds arguable on both law and fact, though it declined to decide an unraised point on whether a dismissal order could be stayed.

p. 3
02

Whether the appeal would be rendered nugatory absent a stay

Holding

The Court held that the appeal would not be rendered nugatory because the decree was for payment of money and both parties were wealthy, so repayment was possible if the appeal succeeded.

Reasoning

The Court reasoned that the orders in issue were essentially for payment of money. The applicants were described as wealthy landowners with large tracts of land, and the respondent had demonstrated wealth through the large sums he transacted. Since the respondent could repay the decretal sum if the appeal ultimately succeeded, the nugatory-ness test failed and the discretionary application had to be dismissed with costs.

p. 3

Legal principles established

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  • An applicant under rule 5(2)(b) of the Court of Appeal Rules must demonstrate, first, that the appeal or intended appeal is arguable (not frivolous) and, second, that unless the stay is granted the appeal will be rendered nugatory.
  • Where the decree sought to be stayed is for payment of money and the respondent is shown to be a person of means capable of repaying the decretal sum should the appeal succeed, the appeal will not be rendered nugatory and a stay will be refused.

Court orders

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  1. 1.The application for stay of execution of the decree and stay of further proceedings in Nakuru HCCC No. 285 of 2004 is dismissed
  2. 2.Costs of the application awarded to the respondent

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 Nakuru
HCCC No. 285 of 2004
Jurisdiction invoked
Rule 5(2)(b) of the Court of Appeal Rules (discretionary jurisdiction to grant stay of execution and stay of proceedings pending appeal)

Relief refused

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Stay of execution of the decree made on 16th June 2006 pending the hearing and determination of Nakuru Civil Appeal No. 223 of 2007

The appeal would not be rendered nugatory without a stay since the decretal sum is capable of repayment - both parties are persons of means

p. 3

Stay of further proceedings in Nakuru HCCC No. 285 of 2004 pending disposal of the appeal

The application failed as a whole because the nugatory-ness threshold was not met

p. 3

Costs

The application was dismissed with costs to the respondent

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.

It is now well established that for an application under Rule 5(2)(b) of the Court’s Rules to succeed the applicant must satisfy the Court that:- (i) The appeal or intended appeal is an arguable one, that is, that it is not a frivolous appeal; And that (ii) Unless the order of stay of execution is granted, the intended appeal or appeal, if it eventually success, will be rendered nugatory.
p. 2Twin criteria for relief under rule 5(2)(b)
Again, we would point out to both counsel, that it is an arguable point as to whether we could stay a dismissal order by the superior court. However, as the matter was not raised before us we will not deal with it at this stage.
p. 3Obiter: stay of a dismissal order
Accordingly in the exercise of our discretion and for the aforegoing reasons this application fails and is ordered dismissed with costs.
p. 3Disposition - final orders

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, "Harris Horn Junior & another v Vijay Morjaria [2009] KECA 317 (KLR)", Case Analysis (2009). Civil Appli 77 of 2008 (UR 46/09). Source: https://new.kenyalaw.org/akn/ke/judgment/keca/2009/317/eng@2009-05-29

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