Paramount Universal Bank Limited v Trust Bank Limited & 2 others [2010] KECA 86 (KLR)
The bottom line
#The Court of Appeal dismissed Paramount Universal Bank's stay application, requiring Kshs.15 million deposits into an interest-earning account pending the fraud appeal's outcome.
What this practically means
#Executive summary
#Key legal issues
#Arguability of the intended appeal
The intended appeal is arguable on the standard of proof for fraud and the award of compound interest
The court identified two issues raised in support of the intended appeal - whether the learned Judge applied the correct standard of proof where fraud is pleaded, and whether compound interest should have been ordered - and held both need full ventilation at the hearing. Arguability means only that the points merit a full hearing, not that they will succeed.
Nugatory value of the appeal if stay is refused
The nugatory principle is not satisfied because the deposit is to be paid into court, not to the 1st respondent, so the applicant would be refunded if successful
The applicant argued the 1st respondent was insolvent, so payment would be irrecoverable. The court held payment need not be made to the 1st respondent directly; the superior court ordered it paid into court to remain until the intended appeal is determined, so no loss would occur if the appeal succeeded. The court also weighed the applicant's earlier undertaking to abide by conditions and its unexplained delay.
Exercise of discretion on stay given delay and non-compliance
The superior court's conditional stay order stands, modified so the deposit earns interest
The applicant accepted before the superior court that it would abide by any condition, then failed to comply within 30 days and waited over a year, until taxation, before approaching the Court of Appeal. That unexplained delay and non-compliance are matters for a fair and just decision. The court confirmed the order but varied it to require payment into an interest-earning account, recognising the applicant's commercial interest in its money earning interest.
Legal principles established
#- A single judge's ruling of the High Court does not oust the Court of Appeal's original jurisdiction under Rule 5(2)(b) to entertain a stay application
- An arguable appeal is one that may or may not succeed; arguability alone does not predict the outcome
- Where the decretal sum is to be paid into court pending appeal, the nugatory principle is not engaged because successful appellants can recover the money; and unexplained delay plus non-compliance with prior orders are relevant to the exercise of the discretion
Court orders
#- 1.The notice of motion dated 24th June, 2010 is dismissed
- 2.The order of the superior court made on 5th June, 2009 is confirmed but varied so that the applicant, second and third respondents each deposit Kshs. Fifteen million (15,000,000) into an interest earning bank account in the joint names of the advocates for the first respondent and the applicant, within thirty (30) days of the date of the order, failing which the first respondent shall be at liberty to execute
- 3.Costs of the application to be paid by the applicant to the first respondent
- On appeal from
- High Court of Kenya at Nairobi
- H.C.C.C. No. 1243 of 2001
- Jurisdiction invoked
- Sections 3A and 3B of the Appellate Jurisdiction Act and Rule 5(2)(b) of the Court of Appeal Rules
Key timeline
#Practical implications
#Frequently asked questions
#Later judgments citing this (1)
#Judgments in the corpus that rely on this one. Where the Court said how it treated the authority, that is shown.
- Ransa Company Limited & 2 others v Manca Francesco[2015] KECA 470 (KLR)31 Jul 2015followed
Cite this brief
#Cite this brief
Caselaw, "Paramount Universal Bank Limited v Trust Bank Limited & 2 others [2010] KECA 86 (KLR)", Case Analysis (2010). Civil Application No. 154 of 2010. Source: https://new.kenyalaw.org/akn/ke/judgment/keca/2010/86/eng@2010-10-22
Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.