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Court of AppealAllowedCivil Appeal (Application) No. 176 of 2019

Kisii University v Ramji Meghji Gudka Limited [2019] KECA 150 (KLR)

Court of Appeal
20 November 2019
1,188 words in judgment
View original judgmentRead on Kenya Law Watch case
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The bottom line

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Kenya's Court of Appeal paused a Kshs.13 million rent judgment against Kisii University after it deposited Kshs.4.5 million into court pending appeal.

What this practically means

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Executive summary

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This is a single-judge-panel ruling (coram of Asike-Makhandia, Kiage and Odek, JJ.A.) of the Court of Appeal at Kisumu on a notice of motion dated 19th August 2019 brought under Rule 5(2)(b) of the Court's Rules. Kisii University, the applicant, sought stay of execution of a judgment and decree of the High Court at Kisii (Majanja, J.) dated 2nd July 2019, in Kisii HCC No. 13 of 2013, by which it was ordered to pay Ramji Meghji Gudka Limited Kshs.9,131,493 plus interest at 12% from the date of filing suit and costs, in a dispute over unpaid rent on demised premises. Its earlier stay application in the High Court had been dismissed on 19th July 2019. The applicant argued the appeal was arguable (including a complaint that the Judge awarded rent for unoccupied premises proved unfit for occupation) and that payment of sums approaching Kshs.13 Million would cripple it as a public institution dependent on Government revenue, citing Article 48 on access to justice. The respondent, while ultimately amenable to stay conditional on a substantial deposit, contended the appeal was frivolous and that it was financially capable of refunding the decretal sum. Applying the notorious twin principles, the Court found one arguable point sufficient, held that refundability of a money decree cannot determine the nugatory question, and granted stay on terms: Kshs.4.5 Million to be deposited into Court within 45 days, failing which the stay lapses automatically. Costs of the motion were placed in the appeal, which was expedited. This ruling binds subordinate courts and the High Court on the twin principles governing Rule 5(2)(b) applications.

Questions the Court framed

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

  1. 1.Whether the applicant has an arguable appeal
  2. 2.Whether, if stay is not granted, the appeal would be rendered nugatory

Key legal issues

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01

Whether the applicant's appeal was arguable

Holding

The Court found the appeal arguable, sufficient that one bona fide point be raised, whether or not it ultimately succeeds.

Reasoning

The Court examined the memorandum of appeal containing fourteen grounds and found at least one point worthy of exploration: that the learned Judge granted judgment for rent inclusive of parts of the demised premises that were not occupied due to being unfit for occupation. One such arguable point was enough to satisfy the first limb, without needing to determine whether it would succeed.

p. 2
02

Whether the appeal would be rendered nugatory if stay were denied

Holding

The Court held that the potential prejudice to a public educational institution from paying a substantial decretal sum could render the appeal nugatory, and that the respondent's ability to refund does not answer that prejudice.

Reasoning

While the Court doubted that an institution of the applicant's stature would be crippled by paying over Kshs.10 Million, it noted the applicant is a public educational institution and financial adversity would likely affect learning. The Court rejected the proposition that refundability of a money decree determines the nugatory question, holding that money-dynamics cannot be the determinant of interlocutory intervention.

p. 2
03

Whether the Court may impose terms when granting stay

Holding

Stay was granted on condition that the applicant deposit Kshs.4.5 Million into Court within 45 days, failing which the stay lapses automatically.

Reasoning

The Court affirmed its discretion to attach conditions to the grant of a stay so as to balance the interests of both parties. It exercised that discretion by requiring a substantial deposit of Kshs.4.5 Million into Court within forty-five days, with the stay lapsing automatically on default, and directed that the appeal be heard on a priority basis.

p. 2

Legal principles established

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  • A stay of execution under Rule 5(2)(b) requires the applicant to satisfy the Court both that the appeal is arguable and that it would be rendered nugatory if stay is denied.
  • The fact that the respondent is well able to refund a decretal sum is not, by itself, a bar to the grant of stay.
  • The Court may grant a stay of execution subject to terms, such as a deposit into Court.

Court orders

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  1. 1.Stay of execution of the High Court judgment and decree granted pending the hearing and determination of the appeal
  2. 2.Applicant to pay Kshs.4.5 Million into Court within forty-five (45) days, failing which the stay shall automatically lapse
  3. 3.Costs of the motion to be in the appeal
  4. 4.Appeal ordered to be expedited for hearing on priority basis

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 Kisii
Kisii HCC No. 13 of 2013
Jurisdiction invoked
Rule 5(2)(b) of the Court of Appeal Rules

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 principles that govern the matter are notorious: the applicant must satisfy the Court both that he has an arguable appeal, which means one that raises a bona fide point worthy of consideration, though it not necessarily succeed; and that if the stay is not granted the appeal would be rendered nugatory, which is another way of saying useless or of no effect, due to harm having been suffered in the intervening period.
p. 2Twin principles governing Rule 5(2)(b) applications for stay
Were that the case, money-dynamics could easily become the determinants of the Court’s interlocutory intervention, which is unacceptable.
p. 2Ability to refund decretal sum not decisive on nugatory limb
The applicant shall pay the sum of Kshs.4.5 Million into Court within forty-five (45) days of the date hereof, failing which the stay shall automatically lapse.
p. 2Final orders - conditional stay of execution
The costs of the motion shall be in the appeal which we order to be expedited for hearing on priority basis.
p. 2Final orders - costs and expedited hearing

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, "Kisii University v Ramji Meghji Gudka Limited [2019] KECA 150 (KLR)", Case Analysis (2019). Civil Appeal (Application) No. 176 of 2019. Source: https://new.kenyalaw.org/akn/ke/judgment/keca/2019/150/eng@2019-11-20

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