Kagaa Farmers Co-operative Society v Daniel Githiora Garuha & another [2021] KECA 645 (KLR)
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
#Questions the Court framed
#The issues the Court set itself to decide, in its own words.
- 1.Whether the intended appeal is arguable
- 2.Whether, if the appeal succeeds, it will be rendered nugatory in the absence of an order of stay of execution/liquidation
- 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
#Whether the application for stay met the twin principles of Rule 5(2)(b) of the Court of Appeal Rules
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.
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.
Whether the applicant, having been liquidated and its registration cancelled, could sustain the application
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.
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.
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.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.
- 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
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.
Secondly, by dismissing the applicant’s application, the learned Judge did not make any order capable of being executed.
In the end, this application is bereft of merit. It is accordingly dismissed with costs to the 1 st respondent.
Issues in the judgment
#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.
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.