Adungosi v Kenya Women Microfinance Bank Ltd (Civil Appeal E045 of 2024) [2026] KEHC 10222 (KLR) (7 July 2026) (Ruling)

 **REPUBLIC OF KENYA** **IN THE HIGH COURT OF KENYA AT BUSIA** **HIGH COURT CIVIL APPEAL NO. E045 OF 2024** **SANTULINUS OPAKASI** **ADUNGOSI......................................APPLICANT/INTENDED APPELLANT** **VERSUS** **KENYA WOMEN** **MICROFINANCE BANK LTD………………….………........RESPONDENT** **RULING** 1. Before me is a notice of motion Application dated 15th May 2026 filed pursuant to Order 42 Rule 6 of the Civil Procedure Rules, Sections 1A, 1B and 3A of the Civil Procedure Act, urging for the following relief(s); 2. **SPENT** 3. **Pending the hearing and determination of this application, there be a temporary stay of execution of the Judgment, Decree and/or consequential orders delivered on 13th April 2026 in Civil Appeal No. E045 of 2024.** 4. **Pending the hearing and determination of the intended appeal before the Court of Appeal, there be a stay of execution of the Judgment, Decree and/or consequential orders delivered on 13th April 2026 in Civil Appeal No. E045 of 2024.** 5. **Costs of this application be in the appeal.** 6. The Application is premised on the following grounds: 7. ***The Applicant has already lodged a Notice of Appeal dated 21st April 2026 signifying his intention to appeal against the whole judgment.*** 8. ***The intended appeal is arguable and raises serious points of law and fact with high chances of success.*** 9. ***THAT the Respondent is in a position to proceed with execution of the decree,*** 10. ***THAT the Applicant has never contracted nor benefited from the alleged loan forming the basis of his suit in the lower court, and therefore reiterates the same in its entirety including initiating adverse credit reference reporting against the Applicant.*** 11. ***THAT there exists a real and imminent risk that the Applicant may be wrongfully listed with the Credit Reference Bureau (CRB) on account of a loan unknown to him, thereby occasioning grave injustice*** 12. ***Unless stay is granted, the Respondent may proceed with execution, thereby rendering the intended appeal nugatory.*** 13. ***The Applicant stands to suffer substantial loss if execution proceeds before the appeal is heard and determined.*** 14. ***This application has been made without unreasonable delay.*** 15. ***It is in the interests of justice, fairness and equity that the orders sought be granted.*** 16. The Application was opposed and proceeded by way of filed written submissions **Applicants Case** 1. The Applicant depones urging the court to exercise its discretion for the following reason; 2. **THAT on 13th April 2026, this Honourable Court delivered judgment in Civil Appeal No. E045 of 2024 against me.** 3. **THAT being dissatisfied with the whole of the said judgment, I instructed my advocates on record to lodge a Notice of Appeal.** 4. **THAT the exhibited Notice of Appeal dated 21st April 2026 has since been duly filed, signifying his intention to appeal to the Court of Appeal.** 5. **THAT he is advised by his advocates on record, which advice he verily believe to be true, that his intended appeal is arguable and raises serious questions of law and fact.** 6. **THAT unless this Honourable Court grants an order of stay of execution, the Respondent may proceed with execution of the decree and/or consequential orders.** 7. **THAT if execution proceeds, he stand to suffer substantial loss and the intended appeal may be rendered nugatory.** 8. **THAT the application has been made promptly and without unreasonable delay.** 9. In his written submissions date 16th June 2026, the Applicant contends that, he has satisfied the parameters for grant of the orders sought, that the principles governing stay of execution are now settled. **In Butt v Rent Restriction Tribunal [1982] KLR 417**, the Court of Appeal held that the discretion to grant stay should be exercised in a manner that does not render an appeal nugatory. 10. Likewise, in RWW v EKW [2019] eKLR, the Court held that the purpose of stay of execution is to preserve the subject matter of litigation so that the rights of an appellant are safeguarded pending the hearing and determination of the appeal. 11. The Court is therefore called upon to balance the competing rights of the parties while ensuring that the Applicant's undoubted right of appeal is not defeated before the appellate court has had an opportunity to pronounce itself on the dispute. 12. That the Applicant has established sufficient cause for the grant of stay as his intended appeal is arguable and raises serious questions of law and fact and has already lodged a Notice of Appeal and prepared a Memorandum of Appeal setting out substantial grounds challenging the entirety of the Judgment delivered on 13th April 2026. 13. That, it is settled law that an applicant seeking stay is not required to demonstrate that the intended appeal will succeed. It is sufficient to show that the appeal raises at least one bona fide issue deserving consideration by the Court of Appeal. 14. That, in the present case, the intended appeal raises numerous substantial issues of law and fact including: * 1. Whether the learned Judge erred in law by entertaining and determining an appeal that was allegedly filed out of time without first satisfying himself that there existed a valid extension of time under Section 79G of the Civil Procedure Act. 2. Whether the learned Judge erred by failing to determine the Applicant's application dated 11th April 2025 challenging the legality and propriety of the leave allegedly granted to file the appeal out of time. 3. Whether the learned Judge properly discharged the duty of a first appellate court by independently re-evaluating and analysing the evidence on record before reaching the conclusions complained of. 4. Whether the learned Judge erred in holding the Applicant personally liable for the alleged loan facility notwithstanding evidence that the transactions complained of involved a corporate entity separate and distinct from the Applicant. 5. Whether the learned Judge properly evaluated evidence relating to the alleged unauthorized use of the Applicant's credentials an 15. Whether the learned Judge was justified in interfering with the findings of the trial court relating to the unlawful Credit Reference Bureau listing of the Applicant and the award of damages in the absence of any demonstrated error of law or fact. 16. That the foregoing grounds are neither frivolous nor idle. They raise fundamental questions touching on jurisdiction, procedural fairness, appellate practice, evaluation of evidence, separate corporate personality and the legality of Credit Reference Bureau reporting. 17. Particularly significant is the jurisdictional issue concerning the competence of the appeal before the High Court. Jurisdiction is everything and where it is absent a court must down its tools. If the Court of Appeal ultimately finds that the High Court appeal was incompetent, the entire proceedings and judgment would be liable to be set aside. 18. The Applicant's challenge further raises serious concerns regarding the attribution of liability for a loan facility allegedly procured through a company and the circumstances under which the Respondent allegedly utilized the Applicant's credentials and personal information. 19. These issues deserve the consideration of the Court of Appeal and cannot be described as frivolous. That in the case of **Reliance Bank Ltd v Norlake Investments Ltd [2002] 1 EA 227**, the Court held that an arguable appeal is not one that must necessarily succeed but one that raises at least a single bona fide point worthy of judicial consideration. 20. Similarly, in **Stanley Kang'ethe Kinyanjui v Tony Ketter & 5 Others [2013] eKLR**, the Court of Appeal held that an arguable appeal is one that is not frivolous and raises at least one bona fide issue deserving determination by the Court. 21. The Applicant has therefore demonstrated that the intended appeal is plainly arguable and deserving of preservation through an order of stay. 22. Substantial loss remains the cornerstone of every application for stay of execution and its the Applicant's apprehension is genuine and well-founded. The Respondent is a financial institution with the capacity to immediately embark on enforcement measures arising from the impugned Judgment. 23. Unless stay is granted, the Applicant faces the imminent risk of adverse Credit Reference Bureau listing, debt recovery proceedings and other enforcement actions founded upon a liability which he continues to dispute. 24. Such adverse listing would have serious consequences on the Applicant's financial reputation, creditworthiness and ability to access financial facilities. 25. The prejudice likely to be suffered extends beyond a mere monetary claim and affects the Applicant's standing in the financial sector and society generally. Once adverse credit information is disseminated and acted upon by lenders and financial institutions, the damage may not be easily reversible even if the intended appeal ultimately succeeds. 26. Reference is made to the case of **Kenya Shell Ltd v Benjamin Karuga Kibiru & Another [1986] KLR 410**, the Court emphasized that substantial loss is the most important consideration in determining whether to grant stay. 27. The Applicant has demonstrated that he stands to suffer substantial and irreparable prejudice if execution is permitted to proceed. 28. The purpose of stay is to preserve the substratum of the appeal and if execution proceeds before the Court of Appeal hears and determines the intended appeal, the Applicant may be subjected to adverse credit reporting and other enforcement mechanisms whose consequences may persist long after the appeal is determined. 29. The Applicant's constitutional and statutory right of appeal would thereby be rendered illusory. The Court of Appeal in **Butt v Rent Restriction Tribunal (supra)** emphasized that stay ought to be granted where refusal would render an appeal nugatory. It is therefore imperative that the status quo be preserved pending determination of the intended appeal. 30. That the application has been made without unreasonable delay as the Judgment was delivered on 13th April 2026 the Applicant promptly lodged a Notice of Appeal on 21st April 2026 and thereafter moved the Court with dispatch. There has been no inordinate delay whatsoever. 31. The Applicant has demonstrated diligence and seriousness in pursuing his appellate remedies. 32. The Applicant remains ready and willing to comply with any reasonable conditions regarding security that this Honourable Court may impose. However, given that the dispute concerns liability for a debt which the Applicant wholly denies and challenges, the Court is urged to exercise its discretion judiciously and impose only such conditions as are fair and proportionate legally. 33. That the interests of justice favour the grant of stay as the Respondent will suffer no prejudice incapable of compensation through an award of costs if stay is granted. 34. On the other hand, refusal to grant stay would expose the Applicant to substantial and potentially irreversible prejudice before his appeal is heard. 35. The balance of convenience therefore tilts heavily in favour of preserving the status quo pending the hearing and determination of the intended appeal. 36. The overriding objective of the Court under Sections 1A and 1B of the Civil Procedure Act requires the Court to facilitate the just, proportionate and efficient determination of disputes. The interests of justice, fairness and equity demand that the Applicant's right of appeal be protected. That in conclusion the Applicant contends that he has demonstrated that he has lodged a Notice of Appeal and intends to prosecute an appeal before the Court of Appeal. 37. That his intended appeal raises substantial and arguable questions of law and fact and he stands to suffer substantial loss if stay is denied. 38. That the intended appeal risks being rendered nugatory unless stay is granted and his application was filed promptly and without unreasonable delay and that he is willing to abide by such reasonable conditions as this Honourable Court may impose. 39. That the Applicant has therefore satisfied all the requirements for grant of stay under Order 42 Rule 6 of the Civil Procedure Rules. 40. The Applicant respectfully urge this Honourable Court to allow the Notice of Motion dated 15th May 2026 and grant an order of stay of execution ending the hearing and determination of the intended appeal before the Court of Appeal, with costs in the appeal. **The Respondent’s Case** 1. The Respondent opposes the Application submitting that there is nothing to stay, that the Order allowing the Appeal, setting aside the primary judgment and dismissing the primary suit was a negative order. 2. As to whether the judgment and consequential orders of the judgment delivered on 13th April, 2026 can be stayed? The Respondent submit that the prayer of stay of execution is defective as the judgment sought to be stayed is in the nature of a negative order. Particularly, in its judgment of 13th April, 2026, this court merely set aside the judgment and decree of the magistrate delivered on 22nd December, 2023 and substituted the same with an order dismissing the Respondents suit with no orders as to costs. 3. That, the current application arises from the dismissal of the Applicant’s suit, hence the court cannot stay execution of a negative Order. It is established practice and courts have held so that an order dismissing a suit is in the nature of a negative order and is incapable of execution. This was the holding in **Bernard Njoroge Kibaki t/a Njowa Njemu Enterprises v Equity Bank Limited & another [2020] eK**LR where Chepkwony J stated as follows when faced with a similar application: - *“Accordingly, there is nothing to stay in the present case. The trial court in the Judgment dated 30th April, 2020 merely dismissed the suit with costs. Therefore, the only execution which can flow from the said Judgment is with respect to cost since the trial court did not order any of the parties to do anything or to refrain from doing anything or to pay any sum. It therefore, follows that in light of the above discussion, this Court has no mandate to grant a Stay Order in the manner prayed for by the Applicant.....”* 1. The same position was reiterated in the case of **Co-operative Bank of Kenya Limited v Banking Insurance & Finance Union (Kenya) [2015] eKLR** where the Court of Appeal (Kantai J.A) held as follows: *‘An order for stay of execution [pending appeal] is ordinarily an interim order which seeks to delay the performance of positive obligations that are set out in a decree as a result of a judgment. The delay of performance presupposes the existence of a situation to stay – called a “positive order” – either an order that has not been complied with or has partly been complied with.* 1. That, in the case of **Kenya Commercial Bank Limited v Tamarind Meadows Limited & 7 Ors [2016] eKLR**, the Court of Appeal expounded on a stay of execution stating: “16. In Kanwal Sarjit Singh Dhiman v. Keshavji Juvraj Shah [2008] eKLR, the Court of Appeal, while dealing with a similar application for stay of a negative order, held as follows: *“The 2nd prayer in the application is for stay (of execution) of the order of the superior court made on 18th December, 2006. The order of 18th December, 2006 merely dismissed the application for setting aside the judgment with costs. By the order, the superior court did not order any of the parties to do anything or refrain from doing anything or to pay any sum. It was thus, a negative order which is incapable of execution save in respect of costs only (see* ***Western College of Arts & Applied Sciences vs. Oranga & Others [1976] KLR 63 at page 66 paragraph C****).”* 1. That the same reasoning was applied in the case of Raymond M. Omboga v. Austine Pyan Maranga (supra), that a negative order is one that is incapable of execution, and thus, incapable of being stayed. This is what the Court had to say on the matter: ***“The Order dismissing the application is in the nature of a negative order and is incapable of execution save, perhaps, for costs and such order is incapable of stay. Where there is no positive order made in favour of the respondent which is capable of execution, there can be no stay of execution of such an order … The applicant seeks to appeal against the order dismissing his application. This is not an order capable of being stayed because there is nothing that the applicant has lost. The refusal simply means that the applicant stays in the situation he was in before coming to court and therefore the issues of substantial loss that he is likely to suffer and or the appeal being rendered nugatory does not arise…”*** 1. That in light of the above precedents, the Respondent submit that this Court in its judgement, did not order any of the parties to do anything or to refrain from doing something. Even costs were not awarded to either party. Therefore, nothing is arising out of the Order of this Court to enforce or restrain, warranting the stay of execution prayed **Analysis and Determination** 1. I have carefully considered the application before me alongside with the submissions made, authorities cited and the relevant law. The Applicant seeks to stay the orders issued by the trial court on 25th August 2023. 2. The principles guiding the Court in granting stay are well articulated in the locus classicus case of [**Butt v Rent Restriction Tribunal**](https://kenyalaw.org/akn/ke/judgment/keca/1979/22)**(1982) KLR 417** where the Court of Appeal held that *“1.The power of the court to grant or refuse an application for a stay of execution is a discretionary power. The discretion should be exercised in such a way as not to prevent an appeal.2.The general principle in granting or refusing a stay is; if there is no other overwhelming hindrance, a stay must be granted so that an appeal may not be rendered nugatory should that appeal court reverse the judge’s discretion.3.A judge should not refuse a stay if there are good grounds for granting it merely because in his opinion, a better remedy may become available to the applicant at the end of the proceedings.4.The court in exercising its discretion whether to grant (or) refuse an application for stay will consider the special circumstances of the case and unique requirements. The special circumstances in this case were that there was a large amount of rent in dispute and the appellant had an undoubted right of appeal.* *6.The court in exercising its powers under Order XLI rule 4(2) (b) of the Civil Procedure Rules, can order security upon application by either party or on its own motion. Failure to put security for costs as ordered will cause the order for stay of execution to lapse.”* 1. These principles were summarised in **RWW v EKW [2019] eKLR**, where the Court considered the purpose of a stay of execution order pending appeal, in the following words: *“The purpose of an application for stay of execution pending an appeal is to preserve the subject matter in dispute so that the rights of the appellant who is exercising the undoubted right of appeal are safeguarded and the appeal if successful, is not rendered nugatory. However, in doing so, the court should weigh this right against the success of a litigant who should not be deprived of the fruits of his/her judgment. The court is also called upon to ensure that no party suffers prejudice that cannot be compensated by an award of costs. Indeed to grant or refuse an application for stay of execution pending appeal is discretionary. The Court when granting the stay however, must balance the interests of the Appellant with those of the Respondent.”* 1. I have considered the impugned judgment dated 13th April 2026 and find the Order of dismissal made to be a negative order unworthy of execution. There is nothing to execute and this court is unable to determine the Arguability or merit of the intended Appeal. 2. I am thus unable to exercise my discretion to order a stay against execution of judgment. 3. The Application dated 15th May 2026 is without merit and the same is dismissed with costs to the Respondent. It is so ordered **Signed, Dated and Delivered at Busia** **on this 7th Day of July 2026*.*** **\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_** **Mohochi S. M.** **Presiding Judge**