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Court of AppealDismissedCivil Application No. Nai. 185 of 2013 (Ur 131/2013)

John B. Muya & 2 others v Elkana Mukundi Gatimu & another [2015] KECA 384 (KLR)

Court of Appeal
25 September 2015
1,810 words in judgment
View original judgmentRead on Kenya Law Watch case
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·~7 min to read original · ~4 min brief

The bottom line

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Kenya's Court of Appeal ruled you cannot get a stay of purely declaratory court orders — there is nothing to enforce, so nothing to stay.

What this practically means

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Executive summary

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This was a single-judge-motion application before the Court of Appeal at Nairobi (Githinji, Azangalala and Sichale, JJ.A) under Rule 5(2)(b) of the Court of Appeal Rules, seeking a stay of execution of the judgment of Kimondo, J delivered on 29th January 2013 in Nairobi HCCC No. 611 of 2004 pending an intended appeal. The High Court had declared that the extraordinary general meeting and board meeting of Safina Properties Limited held on 25th May 2004 contravened the company's articles and the Companies Act, nullified all resolutions affecting the board, shareholding and bank mandates, cancelled the allotment of 13,000 and 3,290 shares to the defendants, and ordered expungement of the associated returns from the register, further directing the Registrar of Companies to convene a shareholders' meeting to appoint new directors. By consent the motion was amended to limit the stay to the three declaratory orders. The Court held that because the impugned orders were purely declaratory, the High Court had ordered no party to do or refrain from doing anything, and there was consequently nothing to stay; the Court had no power to reverse the orders at that stage as they could only be set aside upon hearing the appeal. Having so found, the Court did not consider whether the appeal was arguable or would be rendered nugatory. The motion was dismissed with costs on 25th September 2015.

Questions the Court framed

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

  1. 1.Whether the Court has power to grant a stay of execution of purely declaratory orders of the High Court pending an intended appeal under Rule 5(2)(b)
  2. 2.Whether there is anything to stay in a judgment that made declaratory orders only

Key legal issues

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01

Whether a stay of execution can issue in respect of declaratory orders under Rule 5(2)(b)

Holding

The Court cannot grant a stay of execution of declaratory orders because there is nothing to stay; stay lies only where there are specific acts towards enforcement of the judgment.

Reasoning

The High Court had declared the 25th May 2004 meetings and resolutions invalid, cancelled the share allotment and ordered expungement of returns, but had not ordered any party to do or refrain from doing anything. Where a judgment merely makes declarations, no act of enforcement exists that a stay could suspend. A stay would have been available had the applicant sought stay of specific enforcement acts such as cancellation of returns or of the share allotment.

p. 4
02

The principles governing applications under Rule 5(2)(b)

Holding

An applicant must demonstrate that the intended appeal is arguable and that the appeal will be rendered nugatory unless a stay or injunction is granted.

Reasoning

The court restated the settled principles from Ishmael Kagunyi Thande v Housing Finance of Kenya Ltd, that the jurisdiction under Rule 5(2)(b) is original but discretionary, guided by the twin principles of an arguable appeal and the nugatory-impact test. However, having found no power to stay declaratory orders, the court did not consider these principles.

p. 3

Legal principles established

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  • For an applicant under Rule 5(2)(b) to succeed, he must show both that the appeal or intended appeal is arguable and that unless a stay or injunction is granted the success of the appeal will be rendered nugatory.
  • A court cannot grant a stay of execution of a judgment that has made purely declaratory orders, since there is nothing to stay or enforce; stay lies only where there are acts towards enforcement of the judgment.
  • Declaratory orders of the High Court can only be set aside upon hearing the appeal; the Court of Appeal has no power to reverse them at the stay stage.

Court orders

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  1. 1.The Notice of Motion dated 19th July 2013 is dismissed with costs

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
NBI HCCC No. 611 of 2004
Jurisdiction invoked
Rule 5(2)(b) of the Court of Appeal Rules (Appellate Jurisdiction Act)

Relief refused

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Stay of execution of the declaratory orders of the High Court (nullification of the 25th May 2004 meeting and resolutions, cancellation of share allotment, and expungement of returns from the register) pending the intended appeal

The orders of the High Court were declaratory only; the court has no power to stay or reverse them at this stage as they can only be set aside after hearing the appeal

p. 4

Costs

The motion is dismissed with costs (costs awarded to the respondents)

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.

The upshot of the above is that the motion is dismissed with costs.
p. 4final orders - dismissal of the application
We therefore find that we have no power at this stage to grant an order for stay of execution in the terms sought.
p. 4no power to stay declaratory orders
For an applicant to succeed he must not only show that his appeal or intended appeal is arguable, but also that unless the court grants him an injunction or stay as the case may be, the success of that appeal will be rendered nugatory.
p. 3Rule 5(2)(b) twin principles
It would have been otherwise if the applicant sought stay of execution of specific acts towards enforcement of the judgment such as stay of cancellation of returns and stay of cancelation of allotment of the shares pending appeal.
p. 4proper framing of a stay application against declaratory relief

Issues in the judgment

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minor

The case number is printed with apparent typographical errors: 'Civil Application No. Nai. 185 Of 2013 (Ur 131/20130'

minor

Counsel for the applicant is referred to as 'learned counsel for the appellant' although the applicant had only filed a Notice of Appeal and the intended appeal had not been determined

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, "John B. Muya & 2 others v Elkana Mukundi Gatimu & another [2015] KECA 384 (KLR)", Case Analysis (2015). Civil Application No. Nai. 185 of 2013 (Ur 131/2013). Source: https://new.kenyalaw.org/akn/ke/judgment/keca/2015/384/eng@2015-09-25

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