[2023] KEHC 24462 (KLR)

AIC Litein Cottage Hospital v Cheruiyot & 2 others (Civil Appeal E001 of 2023) [2023] KEHC 24462 (KLR) (16 October 2023) (Ruling)

Neutral citation: [2023] KEHC 24462 (KLR)

Republic of Kenya

In the High Court at Bomet

Civil Appeal E001 of 2023

RL Korir, J

October 16, 2023

Between

AIC Litein Cottage Hospital

Applicant

and

Priscilla Cheruiyot

1st Respondent

Charles K. Rotich

2nd Respondent

Japhet Terer

3rd Respondent

Ruling

1. The Applicant filed a Notice of Motion Application dated 17th January 2023 which sought the following Orders:-i.Spent.ii.Spent.iii.That pending the hearing and determination of the Appeal, this Honourable Court be and is hereby pleased to issue an order of stay of execution of the Judgment dated 21/12/2022iv.That costs of this application be provided for.

2. The Application was brought under the provisions of Order 42 Rule 6 of the Civil Procedure Rules and it was based on the grounds on the face of the Application and further by the Supporting Affidavit sworn by Richard Koech on 17th January 2023.

The Applicant’s Case. 3. The Applicant stated that the subordinate court delivered a Judgment dated 21st December 2022 on 29th December 2022 where the court ordered the Applicant to pay the 1st Respondent general damages of Kshs 900,000/= and special damages of Kshs 176,540/=.

4. It was the Applicant’s case that it had appealed against the entire decision by the trial Magistrate and if execution was allowed to proceed then it would suffer irreparable damage and the appeal would be rendered nugatory. It stated that the Application had been brought without undue delay.

5. The Applicant stated that it had an arguable appeal with a high probability of success and that the balance of convenience weighed in its favour.

6. It was the Applicant’s case that it was willing to deposit security or abide with any conditions that this court would impose.

7. The Applicant stated that the 1st Respondent had shown her intention and signs of being ready to execute the decree.

The Response 8. The 1st Respondent filed Grounds of Opposition dated 13th February 2023. She stated that the Application did not meet the threshold for granting of the order of stay of execution.

9. It was the 1st Respondent’s claim that the Application was not made in good faith and was meant to delay the execution of the Judgment especially because the 1st Respondent was in need of funds for further medical treatment.

10. The Respondent stated that the Applicant had not sufficiently demonstrated how it would suffer irreparable loss should the stay be denied. The Respondent further stated that the Application was defective as it purported to submit on the merits of the Appeal.

11. On 15th March 2023, I directed that the Appeal be canvassed by way of written submissions.

Applicant’s written submissions. 12. The Applicant submitted that it brought the Application without undue delay. That the trial court delivered its Judgment on 29th December 2022 and it filed the present Application on 19th January 2023 which was 21 days after the delivery of the Judgment.

13. It was the Applicant’s submission that the 1st Respondent had not demonstrated that she would be able to refund the decretal sum which was in excess of one million Kenyan shillings should the Appeal succeed. That this means that the Applicant risked losing a substantial amount of money.

14. The Applicant submitted that the Appeal had a high chance of success as demonstrated in the Memorandum of Appeal and it would be rendered nugatory should the Application be denied. It relied on RWW vs EKW (2019) eKLR.

15. It was the Applicant’s submission that it was willing to provide security for the due performance of the Decree. It relied on Focin Motorcycle Co. Limited vs Ann Wambui Wangui & another (2018) eKLR. It was the Applicant’s further submission that the court caps the security at half the decretal sum. That it was a mission hospital whose work was to help the poor in society and was not a profit-making business.

1st Respondent’s written submissions 16. The 1st Respondent submitted that the Applicant had not demonstrated how it was likely to suffer substantial loss if the prayer for stay was declined. She further submitted that the Applicant’s Appeal had no chance of success and was meant to deprive her of the fruits of the Judgment.

17. It was the 1st Respondent’s submission that the Application was fraudulent, frivolous and vexatious. That the burden of proof lay with the Applicant and it could not purport to shift that burden since he who alleges must prove.

18. The 1st Respondent submitted that the Applicant merely stated that he would provide security but it had not demonstrated how or what type of security it had in its possession e.g. land or bank accounts. She relied on Stanley Wainaina & another vs Ridon Ayangu Mutual NIB HCCA 427/105 and National Industrial Credit Bank Limited vs Aquinas Francis Wasike and Another (2006) eKLR.

19. The 1st Respondent submitted that since the Applicant had failed to demonstrate how it would suffer irreparable loss, the execution of the Judgment would be fair.

20. It was the 1st Respondent’s submission that she urgently needed the funds to continue with her medication

21. I have read through and carefully considered the Notice of Motion Application dated 17th January 2023, the Grounds of Opposition dated 13th February 2023, the Applicant’s written submissions dated 15th February 2023 and the 1st Respondent’s written submissions dated 2nd May 2023 and the only issue for my determination was whether the Applicant had satisfied the requirements for the grant of the Order of Stay of Execution.

22. The principles that relate to Stay of Execution Orders are well settled. Order 42 Rule 6 of the Civil Procedure Rules stipulates:-1. No appeal or second appeal shall operate as a stay of execution or proceedings under a decree or order appealed from except in so far as the court appealed from may order but the court appealed from may for sufficient cause order stay of execution of such decree or order and whether the application for such stay shall have been granted or refused by the court appealed from the court to which such appeal is preferred shall be at liberty on application being made to consider such application and to make such order thereon as may to it seem just and any person aggrieved by an order of stay made by the court from whose decision the Appeal is preferred may apply to the appellate court to have such orders set aside.2. No order for stay of execution shall be made under sub rule 1 unless:-a)The Court is satisfied that substantial loss may result to the applicant unless the order is made and that the application has been made without unreasonable delay; andb)Such security as the Court orders for the due performance of such decree or order as may ultimately be binding on him has been given by the Applicant”.

23. Thus, under Order 42 Rule 6(2) of the Civil Procedure Rules, the Applicant should satisfy the court that: -i.Substantial loss may result to it unless the order is granted.ii.That the Application has been made without unreasonable delay.iii.The Applicant gives such security as the court orders for the due performance of such Decree or order as may ultimately be binding to them.

24. Regarding the issue of substantial loss, the Court of Appeal in the case of Kenya Shell Limited vs Benjamin Karuga Kibiru & another (1986) eKLR, held that: -“Substantial loss in its various forms, is the cornerstone of both jurisdictions for granting stay. That is what has to be prevented. Therefore without this evidence it is difficult to see why the respondents should be kept out of their money.”

25. I am further persuaded by the reasoning of Gikonyo J. in James Wangalwa & Another vs Agnes Naliaka Cheseto (2012) eKLR, where he stated thus:-“No doubt, in law, the fact that the process of execution has been put in motion, or is likely to be put in motion, by itself, does not amount to substantial loss. Even when execution has been levied and completed, that is to say, the attached properties have been sold, as is the case here, does not in itself amount to substantial loss under Order 42 Rule 6 of the CPR. This is so because execution is a lawful process. The applicant must establish other factors which show that the execution will create a state of affairs that will irreparably affect or negate the very essential core of the applicant as the successful party in the appeal ... the issue of substantial loss is the cornerstone of both jurisdictions. Substantial loss is what has to be prevented by preserving the status quo because such loss would render the appeal nugatory.”

26. The Applicant stated that it would suffer substantial loss unless the execution of the Decree was stayed and that the 1st Respondent would not be able to refund it the decretal sum in the event that the Appeal succeeded. In the case of ABN AMRO Bank vs Lemond Foods Limited Civil Application No.15 of 2002 the Court Appeal held that:-“The burden is on the applicant to show that the appeal shall be rendered nugatory say by swearing upon reasonable grounds that the respondent will not be in a position to refund the decretal sum if it were paid over to him and the pending appeal was to succeed. . . .”

27. The Applicant did not adduce any evidence or set out factual circumstances to demonstrate that it would suffer substantial loss if the execution was not stayed. In the case of Kenya Shell Limited (supra) it was held: -“………….There was no evidence of substantial loss to the Applicant, either in the matter of paying the damages awarded which would cause difficulty to the Applicant itself, or because it would lose its money, if payment was made, since the Respondents would be unable to repay the decretal sum plus costs in two courts…..It is usually a good rule to see if Order XLI Rule 4 of the Civil Procedure Rules can be substantiated. If there is no evidence of substantial loss to the Applicant, it would be a rare case when an appeal would be rendered nugatory by some other event. . . .”

28. Based on the evidence before me, it is my finding that the Applicant had not proved the substantial loss that it would suffer.

29. What constitutes unreasonable delay was discussed by Nyamweya J. (as she then was) in Republic vs Attorney General & Another, Baps International Limited (Interested Party) Ex parte (2020) eKLR, thus:-“The concept of what is reasonable time is flexible, and will depend on the circumstance of a case, as held in Law Society of Kenya v Attorney General &2 others [2016] eKLR. Relevant circumstance include the nature of the matter to which the inaction relates, any mitigating circumstances on the part of the decision make, and adverse consequences of delay, and the need to ensure fairness………….”

30. Judgment in the trial court was delivered on 21st December 2022. The present Application for stay of execution was filed on 19th January 2023. It is my finding that the three weeks difference represents a reasonable timeline within which this Application was filed.

31. Regarding security for the performance of the Decree, Gikonyo J in the persuasive case of Arun C Sharma vs. Ashana Raikundalia t/a Raikundalia & Co. Advocates & 2 Others (2014) eKLR held that: -“The purpose of the security needed under Order 42 is to guarantee the due performance of such decree or order as may ultimately be binding on the applicant. It is not to punish the judgment debtor.Civil process is quite different because in civil process the judgment is like a debt hence the applicants become and are judgment debtors in relation to the respondent. That is why any security given under Order 42 rule 6 of the Civil Procedure Rules acts as security for due performance of such decree or order as may ultimately be binding on the applicants. I presume the security must be one which can serve that purpose.”

32. I am further persuaded by the decision in Gianfranco Manenthi & Another vs Africa merchant Assurance Co. Ltd (2019) eKLR where Nyakundi J. observed:-“The applicant must show and meet the condition of payment of security for due performance of the decree. Under this condition, a party who seeks the right of appeal from a money decree of the lower court for an order of stay must satisfy this condition on security………Thus, the objective of the legal provisions on security was never intended to fetter the right of appeal. It was also put in place to ensure that courts do not assist litigants to delay execution of decrees through filing vexatious and frivolous appeals. In any event, the issue of deposit of security for due performance of decree is not a matter of willingness by the applicant but for the court to determine……..”

33. The Applicant has demonstrated willingness to deposit security as a condition for the award of the stay of execution. It further submitted that such a deposit for security of the performance of the decree be capped at half the decretal sum.

34. It is salient to note that the power of the court in deciding whether or not to grant a stay of execution is discretionary. In the case of Butt v Rent Restriction Tribunal (1982) KLR 417 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.5. 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.”

35. Further, in the case of Samvir Trustee Limited vs Guardian Bank Limited (UR), Warsame J (as he then was), held that:-“The Court in considering whether to grant or refuse an application for stay is empowered to see whether there exist any special circumstances which can sway the discretion of the court in a particular manner. But the yardstick is for the court to balance or weigh the scales of justice by ensuring that an appeal is not rendered nugatory while at the same time ensuring that a successful party is not impeded from the enjoyment of the fruits of his judgement. It is a fundamental factor to bear in mind that, a successful party is prima facie entitled to the fruits of his judgement; hence the consequence of a judgement is that it has defined the rights of a party with definitive conclusion”.

36. I have noted that the Applicant’s main reason for the prayer of stay is that it was apprehensive that the 1st Respondent would be unable to refund it the decretal sum if the Appeal succeeded. I have also noted that the 1st Respondent was the decree holder who should be enjoying the fruits of the Judgment particularly as she needs the money for further medical attention. This Court while balancing these two interests, must satisfy itself that that no party would suffer undue prejudice.

37. This principle was enunciated in the decision of Gikonyo J. in Absalom Dova vs. Tarbo Transporters (2013) eKLR, where he stated: -“The discretionary relief of stay of execution pending appeal is designed on the basis that no one would be worse off by virtue of an order of the court; as such order does not introduce any disadvantage, but administers the justice that the case deserves. This is in recognition that both parties have rights; the Appellant to his appeal which includes the prospects that the appeal will not be rendered nugatory; and the decree holder to the decree which includes full benefits under the decree. The court in balancing the two competing rights focuses on their reconciliation…”

38. In balancing the interests of the parties, I am persuaded not drive the Applicant away from the seat of justice but to facilitate its right of appeal enshrined in the Constitution as held by the Court of Appeal in Judicial Service Commission & Secretary, Judicial Service Commission v Kalpana H. Rawal (2015) eKLR.

39. I am further convinced that the 1st Respondent should not be kept away from the fruits of her judgment during the pendency of the appeal

40. In the end, having considered the pleadings and evidence before me and in the analysis thereof, I grant an order for stay of execution pending the hearing and determination of the appeal on the following conditions: -i.For security for the performance of the Decree, the Applicant shall deposit into court within 30 days Kshs. 300,000 being part of the decretal sum.ii.The Applicant shall pay the 1st Respondent (Plaintiff) Kshs. 300,000 being part of the decretal sum within 30 days.iii.The Applicant shall file the Record of Appeal and set down the Appeal for directions within 45 days.

RULING DELIVERED, DATED AND SIGNED AT BOMET THIS 16TH DAY OF OCTOBER, 2023. ..........................R. LAGAT-KORIRJUDGERuling delivered in the presence of Mr. Langat for the Applicant, Mr. Rono for the Respondent and Siele (Court Assistant