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Court of AppealDismissedNairobi COA Civil Application No. E225 of 2021

Bell Estate Agency Limited & another v Sifa Towers Management Limited (Civil Application E124 of 2021) [2022] KECA 95 (KLR)

Court of Appeal of Kenya
4 February 2022
1,471 words in judgment
View original judgmentRead on Kenya Law Watch case
AI-assisted case brief
·~6 min to read original · ~4 min brief

The bottom line

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The Court of Appeal refused to pause a Kshs 8.7 million service charge judgment, confirming that money paid can be recovered later if the appeal succeeds.

What this practically means

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Executive summary

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This is a single-judgment decision of the Court of Appeal at Nairobi (Nambuye, Karanja and Mohammed, JJ.A) delivered on 4th February 2022 in an application under Rule 5(2)(b) of the Court of Appeal Rules by Bell Estate Agency Limited and Sifa Insurance Brokers Limited seeking a stay of execution of a judgment of the High Court (Tuiyott, J.) in HCCC No. 439 of 2017 dated 29th April 2020, which awarded Sifa Towers Management Limited Kshs 8,757,815.00 in service charge. The High Court had granted a conditional stay requiring payment of one third of the decretal sum and security for the remainder, conditions the applicants did not comply with. The Court of Appeal restated the settled twin principles from Trust Bank Limited v Investech Bank Limited: an applicant must show both that the appeal is arguable and that it will be rendered nugatory absent stay. The court found the intended appeal arguable, notably on whether the trial judge erred in relying on unsigned minutes/resolutions, but held the nugatory limb failed: the applicants admitted a duty to pay service charge, and any decretal amount paid could be recovered from the respondent or prorated if the appeal succeeded. Failing one limb, the notice of motion dated 23rd April 2021 was dismissed with costs to the respondent. This ruling binds subordinate courts and the High Court on the requirement that both Rule 5(2)(b) limbs be satisfied.

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 under Rule 5(2)(b)
  2. 2.Whether the appeal would be rendered nugatory absent a stay of execution

Key legal issues

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01

Test for stay of execution under Rule 5(2)(b)

Holding

The applicant must demonstrate both that the appeal is arguable and that it will be rendered nugatory absent stay; the jurisdiction is discretionary and guided by the interests of justice.

Reasoning

The court restated the twin principles from Trust Bank Limited v Investech Bank Limited: Rule 5(2)(b) jurisdiction is original and discretionary, requiring a showing that the appeal is not frivolous and that a stay is necessary to avoid the appeal being rendered nugatory. The principles are applied flexibly against the facts of each case. The applicants satisfied only the arguability limb, so the application failed.

p. 2
02

Arguability of the intended appeal

Holding

The intended appeal was arguable, particularly on the trial judge's reliance on unsigned minutes/resolutions.

Reasoning

The court identified as a bona fide arguable ground whether the learned Judge erred by relying on unsigned minutes/resolutions despite disclosure on cross-examination that they were unsigned. It emphasised that an arguable point need not succeed but merely deserve consideration, and declined to make definitive findings to avoid embarrassing the bench hearing the main appeal.

p. 3
03

Nugatory aspect

Holding

The appeal would not be rendered nugatory absent stay because any decretal amount paid could be recovered from the respondent.

Reasoning

The applicants admitted a duty to pay service charge and had previously paid it. The court reasoned that if the decretal amount was paid and the appeal later established it ought not to have been paid, the amount could be recovered from the respondent or prorated for the applicants' benefit. The reversible, recoverable nature of the payment meant the nugatory test failed.

p. 3

Legal principles established

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  • An applicant under Rule 5(2)(b) must satisfy both the arguability and nugatory limbs; satisfying only one is insufficient.
  • An arguable appeal need not necessarily succeed; it suffices that it is not frivolous and deserves full argument, and the court must not make definitive findings at the interlocutory stage.
  • An appeal is not rendered nugatory where what is sought to be stayed is reversible or the aggrieved party can be reasonably compensated by damages or recovery.

Court orders

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  1. 1.The notice of motion dated 23rd April, 2021 is dismissed
  2. 2.Costs of the application awarded to the respondent

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 Nairobi
HCCC No. 439 of 2017
Jurisdiction invoked
Rule 5(2)(b) of the Court of Appeal Rules

Relief refused

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Stay of execution of the High Court judgment pending hearing and determination of Nairobi COA CA No. E225 of 2021

Applicants failed to satisfy the nugatory limb; the decretal amount, if paid and later found payable in error, is recoverable

p. 3

Stay of execution pending hearing and determination of Nairobi COA CA No. E200 of 2021

Same failure to satisfy both limbs of Rule 5(2)(b)

p. 3

Costs

Costs of the application granted to the respondent (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.

The jurisdiction of the Court under Rule 5(2)(b) is original and discretionary and it is trite law that to succeed an applicant has to show firstly that his appeal or intended appeal is arguable, to put another way, it is not frivolous and secondly that unless he is granted a stay the appeal or intended appeal, if successful will be rendered nugatory.
p. 2Twin principles for Rule 5(2)(b) applications
An arguable appeal is not one which must necessarily succeed, but one which ought to be argued fully before the court; one which is not frivolous.
p. 3Definition of an arguable appeal
The term “nugatory” has to be given its full meaning. It does not only mean worthless, futile or invalid. It also means trifiing.
p. 3Meaning of nugatory
As the applicants are required to satisfy both limbs of arguability and the nugatory aspect in regard to the requirements, the notice of motion dated 23rd April, 2021 is hereby dismissed with costs to the respondent.
p. 3Final orders - dismissal for failure to satisfy both limbs

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, "Bell Estate Agency Limited & another v Sifa Towers Management Limited (Civil Application E124 of 2021) [2022] KECA 95 (KLR)", Case Analysis (2022). Nairobi COA Civil Application No. E225 of 2021. Source: https://new.kenyalaw.org/akn/ke/judgment/keca/2022/95/eng@2022-02-04

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