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Court of AppealDismissedCivil Application No. 9 of 2017 (UR8 of 2017)

ICEA Lion General Ins. Co. Ltd v Board of Governors, Rioma Mixed Secondary School & 24 others [2019] KECA 964 (KLR)

Court of Appeal
21 February 2019
1,651 words in judgment
View original judgmentRead on Kenya Law Watch case
AI-assisted case brief
·~7 min to read original · ~4 min brief

The bottom line

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The Court of Appeal refused to pause accident-related court cases against an insurer, because showing an arguable appeal alone is not enough — you must also prove waiting will cause irreversible harm.

What this practically means

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Executive summary

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This is a ruling of the Court of Appeal at Kisumu (Githinji, Warsame and M'Inoti, JJ.A) on an application under Rule 5(2)(b) of the Court of Appeal Rules by ICEA LION General Insurance Company seeking stay of proceedings in numerous magistrate courts' cases arising from a 10th July 2013 accident involving motor vehicle KBT 580N, pending an intended appeal against the judgment of Okwany J in HCCC No. 24 of 2013, which dismissed the insurer's suit seeking a declaration of non-liability under the policy and directed it to perform its contractual obligations to genuine third party claimants. The applicant argued the appeal was arguable and that execution of judgments against the insured would leave it without recourse if the appeal succeeded. The court applied the settled two-limb test: the intended appeal must be arguable, and the appeal must not be rendered nugatory if stay is refused. It found the first limb satisfied, holding that a single arguable point suffices - namely whether carrying excess passengers amounted to a fundamental breach of the policy. However, the second limb failed: some of the lower court cases had already been concluded, a fact the applicant did not rebut, partly due to the applicant's indolence, and the applicant produced no evidence of the respondents' inability to refund a money decree. The application was dismissed with costs to abide the outcome of the intended appeal.

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 is arguable and not frivolous
  2. 2.Whether the appeal, if successful, would be rendered nugatory if stay of proceedings is not granted

Key legal issues

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01

Whether the intended appeal was arguable

Holding

The court found at least one arguable point: whether overloading the vehicle amounted to a fundamental breach of the policy

Reasoning

Applying Kenya Tea Growers Association and Goldenberg, the court held that an applicant under Rule 5(2)(b) need not show the appeal will succeed; it is enough to identify a single issue the Court should pronounce on. The applicant identified the question of fundamental breach of the insurance policy by carrying excess passengers, satisfying the first limb of the test.

p. 2
02

Whether the appeal would be rendered nugatory if stay was refused

Holding

The applicant failed to demonstrate nugatory-ness; a money decree requires proof of irrecoverability or ruin, which was not shown, and some cases had already concluded owing to the applicant's delay

Reasoning

The respondents showed some of the 49 cases were concluded and the applicant did not rebut that fact. The indolence of the applicant in filing the application nearly a year after the Notice of Appeal contributed to the situation. Applying Meteine Ole Kilelu, an applicant facing a money decree must show the decretal sum is unrecoverable even if the appeal succeeds, or that execution would ruin its business; the applicant did neither.

p. 2

Legal principles established

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  • An applicant for relief under Rule 5(2)(b) must satisfy both limbs - an arguable appeal and that the appeal would not be rendered nugatory - before relief can be granted.
  • A single arguable point suffices to satisfy the first limb of the Rule 5(2)(b) test; the applicant need not show the appeal will succeed.
  • Where the decree is a money decree, the applicant must show it would be unrecoverable or that execution would ruin the applicant, in order to demonstrate nugatory-ness.

Court orders

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  1. 1.The application dated 26th January 2017 (referred to in the operative paragraph as dated 5th June 2017) is dismissed
  2. 2.Costs of the application to abide the outcome of the intended appeal

The bench

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One judgment of the whole court — no separate or dissenting opinions.

majority
Mohamed Abdulahi Warsame
M. WarsameJA
Currently serving
majority
majority
On appeal from
High Court
HCCC No. 24 of 2013
Jurisdiction invoked
Rule 5(2)(b) of the Court of Appeal Rules

Relief refused

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Stay of proceedings and/or further proceedings in cases at Ogembo Principal Magistrates' Court and any other suits arising from the accident

Applicant failed to satisfy the second limb of the Rule 5(2)(b) test - that the appeal would be rendered nugatory without a stay - and some cases had already been concluded due to the applicant's indolence

p. 2

Costs

Costs of this application to abide the outcome of the intended appeal.

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.

Lastly, both limbs must be demonstrated to exist before one can obtain relief under Rule 5(2) (b).
p. 2Rule 5(2)(b) cumulative test
He (the applicants) need not show that such an appeal is likely to succeed. It is enough for him to show that there is at least one issue upon which the Court should pronounce its decision.
p. 2Arguability standard
We therefore do not find merit in the application dated the 5 th June, 2017 and we accordingly dismiss it. Costs of this application to abide the outcome of the intended appeal.
p. 3Final orders - dismissal and costs

Issues in the judgment

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minor

Date discrepancy: the notice of motion is described as dated 26th January 2017, but the operative paragraph dismisses 'the application dated the 5th June, 2017', an internal inconsistency in the judgment

minor

Bench name inconsistency: the coram reads 'M'INOTI, JJ.A' while the signature block prints 'K. M'INTOTI'

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, "ICEA Lion General Ins. Co. Ltd v Board of Governors, Rioma Mixed Secondary School & 24 others [2019] KECA 964 (KLR)", Case Analysis (2019). Civil Application No. 9 of 2017 (UR8 of 2017). Source: https://new.kenyalaw.org/akn/ke/judgment/keca/2019/964/eng@2019-02-21

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