Willesden Investments Limited v Kenya Hotel Properties Limited [2019] KECA 62 (KLR)
The bottom line
#Kenya's Court of Appeal refused to release a bank guarantee because unresolved related cases could affect it, even though the applicant had won its appeal.
What this practically means
#Executive summary
#Questions the Court framed
#The issues the Court set itself to decide, in its own words.
- 1.Whether Willesden's application for release of Bank Guarantee No. DBK2007/030 should be granted following the dismissal of Civil Appeal No. 184 of 2013
- 2.Whether the Court should exercise its inherent jurisdiction to stay the release of the bank guarantee pending the determination of the review application in CA No. 149 of 2007 and Civil Appeal No. 404 of 2018
- 3.Whether the doctrine of lis pendens and the alleged questionable title to the suit property justify restraining execution of the decree
Key legal issues
#Whether a judgment creditor is entitled as of right to release of a bank guarantee held as security after dismissal of the appeal against its judgment
Release was refused because uncontroverted evidence showed pending related proceedings (review in CA No. 149 of 2007 and CA No. 404 of 2018) likely to affect the guarantee, and Willesden's inability to refund the guarantor was not rebutted.
Although Willesden succeeded in the appeal (CA No. 184 of 2013 was dismissed and the stay discharged), the guarantor and Kenya Hotel filed uncontroverted affidavits warning that pending proceedings could impact the guarantee and that Willesden had no known assets for refund. The Court, exercising inherent jurisdiction and guided by the overriding objective and Article 159(2)(d), held the interests of justice required denial of release pending the outcome of those proceedings.
The scope of the Court's inherent jurisdiction under Rule 1(2) of the Court of Appeal Rules
The inherent jurisdiction is a residual source of powers the court may draw upon whenever it is just or equitable to do so, exercised cautiously and sparingly, to prevent injustice and abuse of process.
Relying on Equity Bank v West Link Mbo and Kenya Power & Lighting v Benzene Holdings, the Court described inherent jurisdiction as part of procedural law, exercisable by summary process, enabling the court to control its process, prevent abuse and do justice between the parties. It is distinct from ordinary judicial discretion and may be exercised even where rules of court apply.
The relationship between Article 159(2)(d) and procedural rules
Article 159(2)(d) requires courts to render substantial justice rather than uphold technicalities, but it is not a licence to disregard express statutory procedures.
The Court canvassed authorities including Jaldesa Tuke Dabelo v IEBC, Raila Odinga v IEBC, Lemaken Arata v Lempaka and Patricia Cherotich Sawe v IEBC, concluding that Article 159(2)(d) emboldens the court to achieve substantive justice and overcome technicalities, yet not all procedural deficiencies can be remedied by it, and clear statutory procedures must still be followed.
Legal principles established
#- The Court's inherent jurisdiction under Rule 1(2) of the Court of Appeal Rules may be invoked to stay release of a bank guarantee pending related proceedings where the ends of justice dictate so, but it is exercised cautiously and sparingly.
- Uncontroverted affidavit evidence on matters bearing on the release of security, such as the inability of a judgment creditor to refund and questionable title, may justify declining release of a bank guarantee.
- The exercise of judicial discretion in appellate applications must be based on sound reason rather than whim, caprice or sympathy.
Court orders
#- 1.Willesden's application dated 7th March 2018 dismissed
- 2.Release of the original security Bond/Bank Guarantee No. DBK2007/030 stayed pending hearing and determination of the application for review in CA No. 149 of 2007 and the hearing and determination of CA No. 404 of 2018
- 3.Each party to bear own costs
The bench
#One judgment of the whole court — no separate or dissenting opinions.
Wrote the judgment
Wrote the judgment
Wrote the judgment
- On appeal from
- High Court of Kenya
- HCCC No. 367 of 2000 (as affirmed in Civil Appeal No. 184 of 2013)
- Jurisdiction invoked
- Rules 4 and 47 and Rule 1(2) of the Court of Appeal Rules 2010; Sections 3A and 3B of the Appellate Jurisdiction Act; Article 159(2)(d) of the Constitution
- Consolidated with
- Civil Application No. 332 of 2006
Relief refused
#Release of the original security Bond/Bank Guarantee No. DBK2007/030 to Willesden
Willesden did not controvert the uncontroverted assertions of Kenya Hotel and the guarantor that the pending review application and CA No. 404 of 2018 would impact on the guarantee and that Willesden has no known assets to refund the guarantor
Costs
Due to the nature of the applications under consideration, each party to bear own 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.
Application dated 7th March, 2018 is dismissed.
An order be and is hereby granted that the release of the original security Bond/Bank guarantee No DBK2007/030 be and is hereby stayed pending hearing and determination of application for review in CA No. 149 of 2007 and the hearing and determination of CA No. 404 of 2018.
Due to the nature of the applications under consideration, each party to bear own costs.
inherent jurisdiction is invoked not only cautiously but also sparingly and only when ends of justice to both parties dictate so.
such a discretion has to be exercised judicially, meaning that it has to be based on sound reason rather than whim, caprice or sympathy.
Issues in the judgment
#The judgment refers inconsistently to the appeal dismissed on 16th February 2018 as Civil Appeal No. 184 of 2013 in one passage but as 'CA No. 184 of 2012' in another
The judgment refers to the bank guarantee with inconsistent numbers - 'DBK/200/030' in the title, 'DBK2007/030' in the body
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.
Cite this brief
#Cite this brief
Caselaw, "Willesden Investments Limited v Kenya Hotel Properties Limited [2019] KECA 62 (KLR)", Case Analysis (2019). Civil Application No. 322 of 2006 (consolidated with Civil Application No. 332 of 2006). Source: https://new.kenyalaw.org/akn/ke/judgment/keca/2019/62/eng@2019-12-20
Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.