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 AppealDismissedApplication dated August 29, 2022 (Civil Suit No. 107 of 2014 appeal)

Humming Healthcare Limited v Asterisk Limited (Civil Appeal (Application) E586 of 2022) [2023] KECA 168 (KLR)

Court of Appeal of Kenya
17 February 2023
1,605 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

#

The Court of Appeal refused to stop execution of a Kshs 17.3 million judgment against four directors personally because they filed no draft grounds of appeal.

What this practically means

#

Executive summary

#
This is a single-judgment ruling of a three-judge bench of the Court of Appeal at Nairobi (Musinga, P, Sichale and Gachoka, JJAA) delivered on February 17, 2023, dismissing a notice of motion dated August 29, 2022 seeking stay of execution of a High Court ruling of Mabeya, J in Civil Suit No. 107 of 2014. The High Court had, on July 1, 2021, lifted the corporate veil of the applicant's company and held four directors of the Popat family personally liable for a debt of approximately Kshs 17,295,668 owed to the respondent, and on July 28, 2022 granted extension of time and conditional stay, requiring payment of 50% of the decree and deposit of the balance in a joint interest-bearing account, failing which execution would issue. The Court of Appeal applied the settled two-limb test under rule 5(2)(b): an applicant must show an arguable appeal and that the appeal would be rendered nugatory absent stay. On the first limb, the court found the applicant had attached no draft memorandum of appeal and that its grounds were not discernible. On the second limb, it held this was a monetary decree, compensable in damages, so the appeal could not be rendered nugatory. It also declined to entertain the respondent's objection that the notice of appeal was served late, holding that striking out a notice requires a separate application under rules 79 and 86. The motion was dismissed with costs to the respondent. The decision binds subordinate courts and the High Court on the rule 5(2)(b) test, the draft memorandum requirement, and the proper procedure for challenging late service of a notice of appeal.

Questions the Court framed

#

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

  1. 1.Whether service of the notice of appeal on the respondent was made within the prescribed timelines, and whether that issue can be raised on a stay application
  2. 2.Whether the intended appeal is arguable
  3. 3.Whether the appeal, if successful, would be rendered nugatory if stay is not granted

Key legal issues

#
01

Whether the intended appeal is arguable

Holding

The limb was not established because the motion and supporting affidavit did not disclose the grounds of appeal and no draft memorandum of appeal was attached.

Reasoning

The court perused the motion and supporting affidavit and could not glean the grounds said to render the appeal arguable. It held that an arguable appeal need not be one that will necessarily succeed, but must not be frivolous; absent a draft memorandum of appeal or discernible grounds, the applicant's general assertion of arguability could not stand.

p. 3
02

Whether the appeal would be rendered nugatory if stay is not granted

Holding

The nugatory limb failed: this is a monetary decree and any loss to the applicant if execution proceeds and the appeal later succeeds can be compensated by damages.

Reasoning

Applying Stanley Kangethe Kinyanjui v Tony Ketter, the test is whether what is sought to be stayed is reversible or, if not, whether damages will reasonably compensate the aggrieved party. The decree here was monetary (approximately Kshs 17,295,668 against the directors personally), and the court was not satisfied that execution would render a successful appeal nugatory, since damages could compensate any loss.

p. 3
03

Whether late service of the notice of appeal defeats a stay application

Holding

Nothing turns on the alleged late service; a party seeking striking out of a notice of appeal must bring a separate application under rules 79 and 86 of the Court of Appeal Rules.

Reasoning

The court framed the issue as whether service was within the prescribed timelines, but noted that what was before it was a stay application, not an application to strike out the notice of appeal. A respondent objecting to late service must move the court by a separate application under the appropriate rules; therefore the objection could not be determined on this motion.

p. 3

Legal principles established

#
  • An applicant for stay under rule 5(2)(b) must demonstrate both an arguable appeal and that the appeal, if successful, would be rendered nugatory; both limbs must be satisfied.
  • A complaint about late service of a notice of appeal cannot be determined on a stay application; a party seeking striking out of the notice must bring a separate application under rules 79 and 86 of the Court of Appeal Rules.
  • An applicant asserting an arguable appeal should attach a draft memorandum of appeal; general assertions of arguability without grounds will fail.

Court orders

#
  1. 1.The notice of motion dated August 29, 2022 is dismissed with costs to the respondent

The bench

#

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

majority
majority
majority
On appeal from
High Court of Kenya
Civil Suit No. 107 of 2014 (ruling of Mabeya, J delivered July 28, 2022)
Jurisdiction invoked
Articles 159 of the Constitution of Kenya, 2010; sections 3, 3A and 3B of the Appellate Jurisdiction Act; rules 5(2)(b), 42 and 47 of the Court of Appeal Rules, 2010

Relief refused

#

Stay of execution of the orders arising from the ruling of Mabeya, J delivered July 28, 2022 pending the hearing and determination of the intended appeal

The applicant failed to establish both limbs for stay under rule 5(2)(b): no arguable appeal demonstrated (no draft memorandum of appeal) and no demonstration that the appeal would be rendered nugatory since monetary loss is compensable by damages

p. 3

Costs

The notice of motion dated August 29, 2022 is dismissed with costs to the 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.

The purpose of an application such as this is to preserve the subject matter in dispute so that the rights of an applicant who is exercising his or her undoubted right to appeal are safeguarded and the appeal, if successful, is not rendered nugatory.
p. 2Purpose of a rule 5(2)(b) stay application
However, it does not mean that the appeal must be one which will necessarily succeed, but one which is not frivolous.
p. 3Meaning of an arguable appeal
whether or not an appeal will be rendered nugatory depends on whether what is sought to be stayed, if allowed to happen, is reversible; or if it is not reversible, whether damages will reasonably compensate the party aggrieved.
p. 3Nugatory test
In view of the foregoing, and noting that the applicant has not satisfied the two limbs for grant of orders of stay under rule 5 (2)(b), the notice of motion dated August 29, 2022 fails and is hereby dismissed with costs to the respondent.
p. 3Final orders - dismissal of the stay application

Issues in the judgment

#
minor

Internal date inconsistency: the applicant's application dated August 29, 2022 is described as seeking stay of a ruling delivered July 28, 2022 which 'allowed the applicant's application dated September 17, 2022' - a date after both the impugned ruling and the application itself.

minor

The applicant's application is said to seek stay of the ruling of July 28, 2022, but the applicant is elsewhere described as aggrieved by two rulings including that of July 1, 2021, which it fears will crystallize execution.

Key timeline

#

Practical implications

#

Frequently asked questions

#

Later judgments citing this (1)

#

Judgments in the corpus that rely on this one. Where the Court said how it treated the authority, that is shown.

Cite this brief

#

Cite this brief

Caselaw, "Humming Healthcare Limited v Asterisk Limited (Civil Appeal (Application) E586 of 2022) [2023] KECA 168 (KLR)", Case Analysis (2023). Application dated August 29, 2022 (Civil Suit No. 107 of 2014 appeal). Source: https://new.kenyalaw.org/akn/ke/judgment/keca/2023/168/eng@2023-02-17

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