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Court of AppealDismissedCivil Application No. NAI. 332 of 2018 (UR 269 of 2018)

Equip Agencies Limited & 5 Others v Phoenix Properties Limited

Court of Appeal
25 January 2019
1,758 words in judgment
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The bottom line

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Kenya's Court of Appeal refused to halt a Ksh. 23.7 million judgment against tenants who had not paid rent for over ten years.

What this practically means

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Executive summary

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The Court of Appeal (Warsame, Musinga & Otieno-Odek, JJA) ruled on a Notice of Motion dated 15th November 2018 by six applicants seeking stay of execution of the judgment and decree of the Environment and Land Court at Milimani (K. Bor J.) dated 30th August 2018 in ELC Suit No. 287 of 2005, which ordered them to yield vacant possession of Nairobi LR No. 209/9722, pay Ksh. 23,699,000/= plus interest, and mesne profits of Ksh. 900,000/= per month from 1st November 2004. The applicants, tenants under a six-year lease expiring in October 2004, argued the intended appeal was arguable because the trial judge proceeded with the full hearing despite a pending Chamber Summons seeking leave to amend the defence and introduce a counterclaim, and that eviction and the colossal judgment sum would render the appeal nugatory. The respondent countered that no counterclaim was pending, the Chamber Summons was compromised by the full hearing, and the applicants had not paid rent since 2002. Applying the twin Rule 5(2)(b) principles, the court held the counterclaim point was not arguable - no counterclaim was on record, a counterclaim being an independent cause of action subject to limitation - and no law prevents a trial court from concluding a hearing while an application pends. On the nugatory limb, the applicants' concession of over ten years' non-payment of rent meant the respondent should not be denied the fruits of its judgment. The application was dismissed with costs on 25th January 2019.

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, if stay is not granted, the success of the intended appeal would be rendered nugatory

Key legal issues

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01

Whether the intended appeal was arguable

Holding

The court found the intended counterclaim point not arguable since no counterclaim was on record before either court

Reasoning

The applicants argued the trial judge ignored a pending Chamber Summons for leave to amend the defence and introduce a counterclaim. The court held no orders were sought against the trial judge, no law stops a trial court from concluding a hearing while an application pends, and no counterclaim existed on record; a counterclaim is an independent cause of action subject to limitation, so the point was not arguable.

p. 2
02

Whether the intended appeal would be rendered nugatory absent stay

Holding

The nugatory limb failed; the applicants' concession of non-payment of rent for over 10 years meant they should not deny the respondent the fruits of its judgment

Reasoning

The applicants claimed eviction and a colossal judgment sum would drive them out of business. Having conceded they had not paid rent since at least 2005 (the respondent said since 2002), the court was not satisfied the appeal would be rendered nugatory, holding that a party in continuous rent arrears should not be denied the fruits of its judgment.

p. 3

Legal principles established

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  • An applicant under Rule 5(2)(b) must satisfy both twin principles: an arguable intended appeal and that the appeal's success would be rendered nugatory absent stay
  • A counterclaim is an independent cause of action, effectively a separate suit, subject to the law on limitation of actions

Court orders

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  1. 1.The Notice of Motion dated 15th November 2018 is dismissed with costs

The bench

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

Mohamed Abdulahi Warsame
M. WarsameJA
Currently serving
majority
majority
majority
On appeal from
Environment and Land Court at Milimani
ELC Suit No. 287 of 2005
Jurisdiction invoked
Rule 5(2)(b) of the Court of Appeal Rules (application for stay of execution pending intended appeal)

Relief refused

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Stay of execution of the judgment and decree of the Environment and Land Court pending the intended appeal

The intended appeal was not shown to be arguable on the counterclaim point and the nugatory limb failed, the applicants having conceded non-payment of rent for over 10 years

p. 3

Costs

The application is dismissed with costs to the respondent.

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.

For the foregoing reasons, we come to the conclusion that the Notice of Motion dated 15 th November 2018 has no merit and is hereby dismissed with costs.
p. 3Final orders - dismissal of the stay application
These two limbs must both be demonstrated and it would not be enough that only one is demonstrated
p. 2Twin principles for stay under Rule 5(2)(b)
a counterclaim is an independent cause of action and subject to the law on limitation of actions
p. 2Nature of a counterclaim
We are not aware as we have not been informed of any law or procedure that stops a trial court from proceeding with the hearing and conclusion of the dispute, whilst a pending application exists on the file.
p. 2Trial court may conclude hearing despite pending application

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, "Equip Agencies Limited & 5 Others v Phoenix Properties Limited", Case Analysis (2019). Civil Application No. NAI. 332 of 2018 (UR 269 of 2018). Source: https://new.kenyalaw.org/akn/ke/judgment/keca/2019/1030/eng@2019-01-25

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