Skip to content
AI-generated case briefs sourced from Kenya Law · Not legal advice
AI-generated case brief
Case Brief · caselaw.co.ke
Court of AppealDismissedCivil Application No. 89 of 2020

Kagaa Farmers Co-operative Society v Daniel Githiora Garuha & another [2021] KECA 645 (KLR)

Court of Appeal
23 April 2021
728 words in judgment
View original judgmentRead on Kenya Law Watch case
AI-assisted case brief
·~3 min to read original · ~4 min brief

The bottom line

#

A liquidated Kenyan co-operative lost its bid to stop its own liquidation because it targeted the wrong order and no longer legally existed.

What this practically means

#

Executive summary

#
Kagaa Farmers Co-operative Society applied to the Court of Appeal under Rule 5(2)(b) of the Court of Appeal Rules for orders of stay of liquidation pending an intended appeal against the High Court judgment of C. Kariuki, J. delivered on 20th December 2019 in H.C.C.C. No. 327 of 2017, which had dismissed the society's appeal from the Co-operative Tribunal. The background was that, pursuant to Tribunal directions of 14th March 2014 in Tribunal Suit No. 234 of 2011, the Commissioner for Co-operatives Development, by Gazette Notice No. 6199 of 5th September 2014, appointed a liquidator and cancelled the society's registration. The society sought to join the Tribunal proceedings and to set aside the liquidation nearly two years later; the Tribunal and, on appeal, the High Court rejected the application, the Judge holding that by section 63 of the Co-operative Societies Act the society had ceased to exist as a body corporate and could neither sue nor be sued. Before the Court of Appeal, the society argued that its intended appeal was arguable and that, liquidation being irreversible, an order of stay was needed to preserve its status. The respondents urged that the society was being used by busybodies to derail a liquidation whose usefulness was spent. The Court held that the orders the applicant sought to stay were the Tribunal's orders of 14th March 2014, not the High Court order under appeal; and that the High Court's dismissal of the application created no order capable of execution. The application was dismissed with costs to the 1st respondent.

Questions the Court framed

#

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

  1. 1.Whether the intended appeal is arguable
  2. 2.Whether, if the appeal succeeds, it will be rendered nugatory in the absence of an order of stay of execution/liquidation
  3. 3.Whether the Court can stay the orders sought, being orders of the Co-operative Tribunal of 14th March 2014 rather than the High Court order of 20th December 2019

Key legal issues

#
01

Whether the application for stay met the twin principles of Rule 5(2)(b) of the Court of Appeal Rules

Holding

The application failed because the orders sought to be stayed were tribunal orders of 14th March 2014 rather than the High Court order under appeal, and the High Court had made no executable order.

Reasoning

The applicant sought to stay the tribunal's 2014 orders appointing a liquidator, but the notice of appeal and the intended appeal related only to the High Court judgment of 20th December 2019 dismissing the applicant's appeal. The Court can stay only orders forming the subject of the appeal before it. Further, the High Court's dismissal of the applicant's application created no order capable of execution, so there was nothing to stay. The application was therefore bereft of merit.

p. 2
02

Whether the applicant, having been liquidated and its registration cancelled, could sustain the application

Holding

By section 63 of the Co-operative Societies Act, the applicant ceased to exist as a body corporate upon cancellation of registration and appointment of the liquidator, and could neither defend nor institute suits in its own name.

Reasoning

The liquidator was appointed by Gazette Notice No. 6199 of 5th September 2014 pursuant to Tribunal directions of 14th March 2014, and the registration of the applicant was cancelled with immediate effect. By the time the applicant moved the Tribunal in January 2016, nearly two years later, the liquidation orders had taken their full course, leaving the society without corporate capacity to sue or be sued.

p. 1

Legal principles established

#
  • The Court of Appeal under Rule 5(2)(b) can only stay orders that are the subject of the appeal before it; it cannot stay orders of a tribunal that are not under challenge in the appeal, and a dismissal without substantive orders yields nothing capable of being stayed.
  • Upon cancellation of registration and appointment of a liquidator under section 63 of the Co-operative Societies Act, a co-operative society ceases to exist as a body corporate and can neither defend nor institute suits in its own name.

Court orders

#
  1. 1.The application for stay of liquidation is dismissed with costs to the 1st respondent

The bench

#

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

William Ouko
W. OukoJA
Currently serving
majority
majority
majority
On appeal from
High Court of Kenya at Nairobi
H.C.C.C. No. 327 of 2017
Jurisdiction invoked
Rule 5(2)(b) of the Court of Appeal Rules

Relief refused

#

Stay of liquidation in execution of the High Court judgment of 20th December 2019

The order sought to be stayed was that of the Co-operative Tribunal of 14th March 2014, not the High Court; and the High Court, having dismissed the applicant's application, made no order capable of execution

p. 2

Costs

The application is dismissed with costs to the 1st respondent.

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.

That can only be the order of the tribunal and not of the High Court. This Court, in the circumstances of this dispute, can only stay the orders of 20th December, 2019, because the notice of appeal as well as the appeal only relates to it.
p. 2Scope of stay under Rule 5(2)(b) - only orders forming the subject of the appeal
Secondly, by dismissing the applicant’s application, the learned Judge did not make any order capable of being executed.
p. 2No stay lies of a mere dismissal that makes no executable order
In the end, this application is bereft of merit. It is accordingly dismissed with costs to the 1 st respondent.
p. 2Final orders - dismissal with costs

Issues in the judgment

#
minor

The judgment refers inconsistently to the Rule 5(2)(b) threshold, at one point rendering it as 'Rule 2(5)(b)', an apparent typographical error in the judgment.

minor

The applicant is described as wishing to challenge the High Court decision in an appeal instituted as 'No. 89 of 2018', while this application is Civil Application No. 89 of 2020 - an internal inconsistency in numbering.

Key timeline

#

Practical implications

#

Frequently asked questions

#

Cite this brief

#

Cite this brief

Caselaw, "Kagaa Farmers Co-operative Society v Daniel Githiora Garuha & another [2021] KECA 645 (KLR)", Case Analysis (2021). Civil Application No. 89 of 2020. Source: https://new.kenyalaw.org/akn/ke/judgment/keca/2021/645/eng@2021-04-23

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