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Court of AppealDismissedCivil Application E012 of 2022

Family Bank Limited v Step-Up Holdings (K) Ltd

Court of Appeal
15 December 2022
1,349 words in judgment
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The bottom line

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Kenya's Court of Appeal refused to pause a long-running case, ruling that a stay of proceedings is a drastic remedy granted only in the clearest of cases.

What this practically means

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Executive summary

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Family Bank Limited applied to the Court of Appeal at Nakuru under Rule 5(2)(b) of the Court of Appeal Rules for a stay of proceedings in Nakuru HCCC No. 306 of 2011 pending the hearing of its intended appeal against a ruling of Chemitei J dated November 18, 2021, which allowed the respondent's application to amend its plaint. The bank contended that the amendment introduced new causes of action and that, unless proceedings were stayed, the appeal would be rendered nugatory and its rights under Section 4 of the Limitation of Actions Act would be trampled upon. The respondent did not appear despite service. Applying the settled twin principles from Stanley Kangethe Kinyanjui v Tony Ketter & others, the court held that the applicant had failed to demonstrate that the appeal would be rendered nugatory: the applicant would have an opportunity to amend its pleadings in response to the amended plaint, and limitation could be raised at any stage of the trial in the High Court. The court further emphasised that stay of proceedings is a drastic judicial action to be granted sparingly and only in the clearest of cases, as it may impede access to justice. Having failed on the nugatory limb, the applicant was not required to be assessed on arguability, since both limbs are prerequisites. The motion was dismissed, with costs of the motion abiding the outcome of the intended appeal. The decision binds subordinate courts and the High Court on the standard for granting stays of proceedings pending 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 would be rendered nugatory if stay of proceedings is not granted
  2. 2.Whether the applicant has an arguable appeal
  3. 3.Whether stay of proceedings should issue in the circumstances

Key legal issues

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01

Whether the nugatory principle was satisfied

Holding

The applicant failed to demonstrate nugatory-ness; it could amend its pleadings in response to the amended plaint and could raise limitation at any stage of the trial.

Reasoning

The court found two reasons why the appeal would not be rendered nugatory: the applicant retains the opportunity to amend its pleadings in response to the respondent's amended plaint, and limitation under the Limitation of Actions Act can be raised at any stage of the trial in the High Court. Both limbs of the Rule 5(2)(b) test must be satisfied, so failure on nugatory-ness was dispositive.

p. 3
02

Whether arguability needed to be determined

Holding

Having failed on the nugatory limb, the court declined to determine arguability, since both limbs are prerequisites.

Reasoning

The court held that because both limbs of the Rule 5(2)(b) test are prerequisites, failure to establish that the appeal would be rendered nugatory made it unnecessary to consider whether the appeal was arguable. This avoids making definitive findings that could embarrass the ultimate hearing of the main appeal.

p. 3

Legal principles established

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  • An applicant under Rule 5(2)(b) must satisfy both twin principles: arguability of the appeal and that the appeal would be rendered nugatory absent stay.
  • Stay of proceedings is a drastic remedy to be granted sparingly and only in the clearest of cases.

Court orders

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  1. 1.The applicant's motion dated February 21, 2022 is dismissed
  2. 2.Costs of the motion shall 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
majority
majority
On appeal from
High Court
Nakuru HCCC No. 306 of 2011
Jurisdiction invoked
Rule 5(2)(b) of the Court of Appeal Rules

Relief refused

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Stay of proceedings in Nakuru HCCC No. 306 of 2011 pending the hearing and determination of the appeal

The applicant failed to demonstrate that the appeal would be rendered nugatory absent stay; limitation can be raised at trial and pleadings can be amended in response

Costs

The costs of this motion shall 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.

The upshot of the foregoing is that the applicant's motion dated February 21, 2022 is without merit and the same is hereby dismissed.
p. 3Disposition - dismissal of the motion
The costs of this motion shall abide the outcome of the intended appeal.
p. 3Costs order
stay of proceedings is a drastic judicial action that should be sparingly and rarely invoked as it may impede the right to access to justice and should only be issued in the clearest of cases
p. 3Stay of proceedings - drastic remedy standard
An applicant must satisfy the Court on both the twin principles.
p. 3Rule 5(2)(b) twin principles

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, "Family Bank Limited v Step-Up Holdings (K) Ltd", Case Analysis (2022). Civil Application E012 of 2022. Source: https://new.kenyalaw.org/akn/ke/judgment/keca/2022/1430/eng@2022-12-15

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