[2016] KEHC 5378 (KLR)

REPUBLIC OF KENYA

IN THE HIGH COURT OF KENYA

AT NAIROBI

CIVIL APPEAL NO. 354 OF 2015

APA INSURANCE LIMITED ……………………………….APPELLANT

VERSUS

MICHAEL KINYANJUI MUTURI ………………………….RESPONDENT

RULING

This ruling determines the appellant/applicant’s application dated 27th July 2015 and a preliminary objection filed by the respondent’s counsel dated 18th August 2015 and filed on 31 August 2015. The application by the applicant seeks for two main prayers namely:-

Leave be granted to appeal out of time against the whole judgment and decree in Milimani CMCC 4145 of 2014 by Honourable Mr D. Ole Keiwa Principal Magistrate delivered 0n 27th March 2015; and that the Memorandum of Appeal dated 22nd July 2015 and filed on 27th July 2015 be and is hereby deemed as filed and served upon the respondent within the prescribed time.

There be stay of execution of decree/judgment entered against the applicant on 27th March 2015 in Milimani CM CC 4145/2014 Milimani CMCC 4144/2014 pending the hearing and determination of this appeal.

The grounds upon which the application is predicated are that the failure to file the appeal in time was due to an inadvertent mistake as the matter was being moved from one advocate who previously represented the applicant (Ms Michael, Daud & Associates) to the present firm of Ochieng K & Associates) to be handled by Mr Ochieng K. who had left the previous firm of advocates; That the delay in filing the appeal in time was purely due to administrative procedures of transferring of the matter and tens of others which made the matter to be overlooked which mistake is excusable; That the application is made in good faith; That the applicant was dissatisfied with the decree passed by the lower court and has preferred an appeal and that unless the stay of execution sought is granted the appeal shall be rendered nugatory if successful; That the appeal has overwhelming chances of success, is arguable and not without merit; and that should the decretal sum be paid out, it shall be out of the applicant’s reach should the appeal succeed and that there is sufficient cause for seeking the orders herein.

The application is supported by an affidavit sworn by Mr Kennedy Ochieng on 27th July 2015 whose depositions as detailed as they are basically explains out the grounds upon which the application is predicated and setting out the history of the dispute as determined by the subordinate court, annexing pleadings. The depositions explain the reasons for the delay and that the applicant is willing to abide by any conditions that this court may impose, in the interest of justice, upon allowing the application.

The application by the applicant is seriously opposed by the respondent who filed grounds of opposition and notice of preliminary objection both dated 18th August 2015 and filed in court on 21st August 2015. In the grounds of opposition, the respondent contends that both applications are incompetent for being predicated upon the equally incompetent Nairobi HCCA 354/215 filed on 27th July 2015 against a decision rendered on 27th March 2015 and which was hopelessly outside the 30 days allowed under Section 79G of the Civil Procedure Act and particularly since no leave to file it was obtained prior to the filings thereof. That the appeal is therefore incompetent and is for striking out in limine; there is no cause shown for orders staying execution; there has been undue and unexplained delay; proceedings were stated to have been ready for collection by letter from court to the applicants advocates dated 19th June 2015 but no action was taken for over 30 days which is long delay; and that the draft decree was sent to the applicant on 14th April 2015 but nothing was done from then on until after the proclamation in August 2015.

In the Notice of Preliminary objection, the respondent maintains that this appeal and application are incurably defective and incompetent and should be struck out with costs because-

The appeal was filed out of time without leave of court;

The application filed must collapse like a house of cards once the appeal is struck out and must of necessity be struck out with costs.

The parties’ advocates agreed to canvass the applications and preliminary objection together by way of written submissions.

In their written submissions dated 10th October 2015 and filed on 12th October 2015, the appellant contended that it was procedurally correct to have filed the appeal before seeking leave to have the appeal deemed to have been filed within time. The appellant relied on the proviso to Section 79G of the Civil Procedure Act and argued that the court has interpreted the power to extend time for filing appeal under the said Section to include the power to admit an appeal already filed out of time. Counsel cited Michael Kinyanjui Mbuthia V John Kamau Nganga HCCA 322 of 2008 where he court dismissed an objection to the appeal filed out of time before seeking leave to validate the same. The appellant also relied onRichard Ngetich & Another V Francis Vozena Kidiga HCCA 75/2012 where the respondent had argued that there was no appeal since it was filed out of time before leave was sought and the court rejected that argument. More reliance was placed on Asma Ali Mohamed V Fatime Mwinyi JumaCA 75/2014 where the court deciding on an application under similar circumstances as the one in the present matter observed that:

” when a party wishes to obtain leave to file an appeal out of time such a party must file the appeal and as provided in the proviso of Section 79G, then must seek leave to admit that appeal out of time. Appellant here has done that.”

The Learned Judge in the above decision adopted an earlier reasoning by justice M.J. Anyara Emukule in the case of Gerald M’limbine V Joseph Kangangi [2009] e KLR.

The appellant urged the court to uphold the above cited decisions and dismiss the preliminary objection and find that it was procedurally in order to file an appeal then seek for leave to have the appeal deemed as properly filed.

On whether the applicant has satisfied conditions for leave to file an appeal out of time, the appellant submitted that it had shown good and sufficient cause to warrant grant of the extension of time. That the application had been filed without inordinate delay and that the delay in any case had been satisfactorily explained. They relied on Mwangi V Kenya Airways Ltd where the Court of Appeal listed 4 matters which the court ought to take into account in deciding whether or not to grant extension of time to appeal namely:

The length of delay

The reason for the delay.

Possibly, the chances of appeal succeeding if the application is granted and

The degree of prejudice to the respondent if the application is granted.

On delay, it was submitted by the appellant’s counsel that judgment was delivered on 27th March 2015 and typed proceedings were applied for on 8th April 2015. The proceedings are said to have been ready on 19th June 2015 and that the communication for collection of the typed proceedings was send to the appellant’s former advocates who did not react and that the present advocates only learnt of the same on 22nd July 2015 upon which they timeously filed an application for leave on 27th July 2015, by which time the statutory appeal period of 30 days had lapsed hence the delay was not inordinate. Reliance was placed on Hellen Wanza Maeker, Bernard Njoroge Gathua & Another HCC Miscellaneous Application 286/2009 where the court held that delay is excusable where it is contributed to by delay by the court registry to provide typed proceedings, and that in that case the application for leave was made 2 months after the proceedings were available for collection.

It was further submitted that the applicant had demonstrated that the delay was occasioned by the confusion caused by the change of advocates in the matter due to administrative lapses between the two firms’ offices during the intervening transition period, which deposition the applicant contends, have not been rebutted by the respondent and that therefore they should be deemed admitted, relying on Mohamed & Another V Haidena[1972] EA 166 where it was held that the facts that are not denied in the affidavit ought to be deemed to have been admitted. The appellant’s counsel maintained that a delay caused by administrative lapses in the process of change of advocates has been accepted by the court in Richand Velji Shah & 3 Others V Victor Maina Ngunjiri ELC 359/2009 where a party sought to strike out suit for want of prosecution and the court accepted the respondent’s explanation for the delay on account of administrative lapses in changing of advocates.

On whether the appeal has chances of success, it was submitted by the applicant’s counsel that the appeal raises serious critical issues that cast serious questions of infallibility of the decision of the trial magistrate which made fundamental errors which occasioned injustice that ought to be corrected among them, that the trial court made errors in finding that the issues raised by the applicant in its statement of defence should have been raised in CMCC 4573 of 2010 yet the applicant was never a party to the said suit; the trial court disregarded clear triable issues in the applicant’s statement of defence and draft statement of defence when he struck out the appellant’s defence; and that he did not consider the merits or demerits of the application to amend the defence. Reliance was placed on the case of Co-operative Merchant Bank Ltd V George Fredrick Wekesa CA 54/1999. Finally that the trial court failed to address himself to the principle that under Section 10 of the Insurance (Motor Vehicles Third Party Risks ) Act Cap 405, the applicant was only bound to satisfy judgment against an insured and not judgment against third party who did not have an insurable interest in the motor vehicle in question. Reliance was placed on Geminia Insurance Company Ltd V Dwara Kanath Bhatt HCC 76/2010 where it was held that the appellant was not liable because the accident motor vehicle had been transferred and therefore the applicant was not liable to satisfy a decree arising there from and that the suit should have proceeded to full hearing on merit and not to strike out the defence contrary to the principles laid down in D.T. Dobie & Company (K) Ltd V Muchina CA 37/78.

On whether the respondent stands to suffer any prejudice, the applicant submitted that the respondent would not be prejudiced in any way if leave to appeal out of time is granted. They relied on this court’s decision in Factory Guards Ltd V Abel Vundi Kitungi; Richard Ngetich & Another V Francis Vozena Kidiga (supra) and Waljees ( Uganda ) Ltd V Ranji Punjabhai Bugerere Tea Estates Ltd [1971] EA 188 wherein the court held that no prejudice would be so great that would not be adequately compensated for an award of costs if leave to appeal out of time was granted.

On the second prayer for stay of execution of decree pending appeal, the applicant submits that it had met all the three conditions for granting of stay order pending appeal under Order 42 (6) (2) of the Civil Procedure Rules in that the respondent has already commenced execution process by issuing a proclamation and hence execution is imminent and that unless stay is ordered the execution will issue yet there is no guarantee that should the appeal succeed, the respondents would be able to refund the decretal sum if paid out to them.

It was submitted that the applicant stands to suffer substantial loss that would be in compensable if execution proceeds and in the likely event that the appeal eventually succeeds. That the appellant is a reputable insurance company and therefore the attachment and sale would be devastating on the applicant’s image and business reputation. Such loss cannot be estimated or quantified, since the importance of reputation to an insurance company has been underscored by the court in UAP Insurance Company Ltd V Toiyoi Investment Company Ltd HCC 24/2013. Reliance was also placed on Tropical Commodities Suppliers Ltd & Others V International Credit Bank Ltd ( in liquidation) [2004] 2 EA 331 where the court held that substantial loss is a quantitative concept. It refers to any loss, great or small, that is of real worth or value as distinguished or a loss without value or a loss that is merely nominal. Further reliance was placed on James Wangalwa & Another V Agnes Naliaka Cheseto Bam HC Miscellaneous Application 42/2011.

It was further submitted that as a sign of good faith the applicant had deposited the entire decretal sum in an interest earning bank account in the joint names of the respective advocates for the parties hence all the conditions necessary for stay to issue under Order 42 Rule 6(2) of the Civil Procedure Rules had been fulfilled. The applicant urged the court to be guided by this court’s ruling in Edward Kamau & Another V Hannah Mukui Gichuki & Another HC Miscellaneous Application 78/2015 where I held that the right of appeal is a constitutional right which is the cornerstone of the rule of law and that to deny a party that right would be tantamount to denying them access to justice and the right to a fair hearing as guaranteed under the Constitution. The applicant’s counsel therefore urged the court to dismiss the preliminary objection filed by the respondent and allow the application for leave to file the appeal/have it deemed as duly filed and order for a stay of execution of decree in the lower court pending hearing and disposal of the appeal.

In opposition to the twin application by the applicant, the respondent filed grounds of opposition and preliminary objection and the submissions dated 21 September 2015 filed on 1st October 2015 which are hinged on the preliminary objection and the grounds of opposition aforesaid. Starting with the preliminary objection, Mr Kaburu counsel for the respondent submitted that the applicant’s application and appeal as filed are in violation of the provisions of Section 79G of the Civil Procedure Act which expressly stipulate that an appeal from the subordinate court to the High Court should be filed within 30 days of the decision appealed from and that there is no such certificate from the lower court as contemplated by the section that an appeal may be admitted out of time if the appellant satisfies the court that he had good and sufficient cause for not filing the appeal in time. That consequent to the appeal being filed out of time is that it is incompetent and should be struck out with costs since the court has no jurisdiction. Further, that Section 79G of the Civil procedure Act is a substantive provision of the Act of Parliament as opposed to the Rules Committee which are subject to the oxygen principles or overriding objectives and that for that matter the Section cannot be said to be (sic) prescribed procedural technicalities. Mr Kaburu relied on Patrick Kiruja Kithinji V Victoria Mugira Marete CA 48/2014 [2015] e KLR citing with approval Supreme Court decision in Honourable Lemanken Aramat V Harun Mutembei Lempaka & 2 Others where the Supreme Court of Kenya held that time prescribed for lodging of appeals is substantive and goes to jurisdiction and cannot be cured by Article 159(2) (d) of Constitution as it is not a technicality. The same position, it was submitted, was taken by the Court of Appeal in Ramji Devji Vekaria V Joseph Oyula Eldoret CA No. 154 of 2010. The respondent’s counsel urged the court to strike out the appeal and the applications.

On leave to appeal, the respondent’s counsel submitted that the time set out by Section 79G of the Civil Procedure Act for filing of the appeal to the High Court cannot be enlarged under Order 50 Rule 6 of the Civil Procedure Rules hence retrospective enlargement of time limited as prescribed by the statute cannot be made under the Rules that allow such enlargement as the Act does not say so and secondly one cannot put the cart before the horse. The respondent maintained that even if the procedure adopted in filing the appeal and application were appropriate the application should still be rejected as no sufficient cause has been shown since the applicant’s advocate’s affidavit at paragraph 17 concedes that the client gave instructions to appeal against the subject judgments well within the statutory period within which to file an appeal from the subordinate court. However, it is contended that the date when instructions were given is not provided and neither is the date when the alleged transition took place with Mr K. Ochieng leaving the previous firm and acting for the applicant.

Further, that despite asking for certified proceedings on 7th April 2015, no appeal was filed in time as instructed by the client. Reliance was placed on Madison Insurance Company Limited V Peter Mutunga Musila & Another Nakuru HCCA 50/2005. The respondent’s counsel maintained that 4 months delay was inordinate and unexplained and that in Joseph Kangethe Kabogo & Benson Mburu Kangethe V Michael Kinyua Ngari [2012] e KLR the court declined a similar application which was filed 90 days late and held that Article 159(2) (d) of the Constitution was not a panacea of incompetence, illegalities and abuse of the court process. He urged the court to decline leave to have the filed appeal admitted out of time.

On the prayer for stay of execution of decree in the lower court pending the hearing and determination of the appeal, the respondent submitted that no reasons were given as to how the appeal if successful shall be rendered nugatory. Further, that no substantial loss would be occasioned and none had been demonstrated should the execution be allowed to proceed and that there were no reasons given to support allegations that the judgment sum if executed will be beyond the applicant’s reach.

That the judgment was for money decreed in favour of the respondents for the injuries sustained by them and there was no allegation that the respondents were men of straw or that once paid they had no means to recoup the appellant. Further, that a money decree cannot be nugatory if the money can be repaid and that there is no allegation that that it will be lost irretrievably. counsel relied on Kenya Orient Insurance Company Limited V Paul Mathenge Gichuki & Another [2014] e KLR on what an applicant ought to prove and the rebuttal required of a respondent.

The respondent’s counsel concluded that no case had been made out for stay of execution and that kshs 194,407 was a paltry sum which it cannot be proved that if paid out then the respondent cannot recompense should the appeal be successful. Finally, that a successful litigant should never be denied immediate enjoyment of the fruits of his judgment unless there is just cause for stay of execution.

Determination

I have carefully considered the application by the applicant, the supporting affidavit, annextures, the grounds of opposition, preliminary objection and the elaborate written submissions filed by both parties advocates. There are four main issues for determination in this matter namely

Whether it was procedural for the appellant to file an appeal and seek validation thereafter and therefore whether the appeal and application are competent before this court.

Whether the applicant deserves to be granted leave to have his appeal filed out of time deemed to be properly filed within the statutory period.

Whether the applicant has satisfied the court on conditions for grant of stay of execution of decree pending appeal.

What orders should this court make.

On the first issue, which forms the basis of the preliminary objection raised by the respondents that this application and ‘appeal’ are incompetent, it is worth noting that as a preliminary point of law, if well taken can determine the whole matter in limine hence it must be considered first. The preliminary objection raised center around the interpretation of Section 79G of the Civil Procedure Act Cap 21 Laws of Kenya which prescribes the period for filing of appeals from decrees or orders of the lower court to the High Court to 30 days from date of the decision or order. However, the proviso to the said Section 79G permits the admission of an appeal out of the statutory period of 30 days where there is sufficient or good cause shown as to why there was delay in such filing.

According to the respondent’s counsel, there is no short cut and that either the appeal is filed within 30 days from the date of the decision or order or one files an application for leave to file an appeal out of the statutory period. Further, that filing an appeal out of time and thereafter seeking to have it admitted out of time is incompetent hence the appeal and application should be struck out.

On the other hand, the applicant maintains that Section 79G of the Civil Procedure Act, the proviso thereof and as interpreted by courts is clear that one can file an appeal out of time and seek for its admission outside the statutory period by way of enlargement of the stipulated statutory period.

Whereas I am in agreement with Mr Kaburu’s submissions that Order 50 Rule 6 of the Civil Procedure Rules on enlargement of time cannot be applied to cases where the time in question is fixed by statute and not by the court or rules, I am not in agreement with him that the application and therefore the appeal herein are incompetent simply because the appeal was filed out of time and leave sought subsequent thereto to have the appeal admitted as duly filed out of time. This court as correctly submitted by Mr Ochieng, has had on many occasions to decide on the same issue and has plainly, overtly and authoritatively pronounced itself that an appeal which is filed out of time can be validated by an application for leave to validate the appeal and that is what the proviso to Section 79G of the Civil Procedure Act stipulates. The decisions by Honourable H.M. Okwengu J ( as she then was) in HCC 322/2008 Michael Kinyanjui Mbuthia V John Kamau Nganga;Honourable R.V.P. Wendoh J in Richard Ngetich & another V Francis Vozena Kidiga HCCA 75/2012 ; and Honourable Mary Kasango J in Asma Ali Mohamed V Fatime Mwinyi Juma HCCA 75/2014 (Mombasa) among others all positive attestations to that pronouncement and so far there is no contrary decision from the Court of Appeal on that line of interpretation of Section 79G of the Civil Procedure Act Proviso.

It would indeed be a long and tedious and winded process which is time consuming and costly to the parties contrary to the overriding objectives of the law as espoused in Sections 1A and 1B of the Civil Procedure Act if the court were to find otherwise. It would likewise in my view be a focus on procedural technicalities at the altar of substantive justice. It is for that reason that the court in the cited cases made it clear that “ when a party wished to obtain leave to file an appeal out of time such a party must file the appeal and as provided in the proviso of Section 79G, then must seek leave to admit that appeal out of time……” (see Asma Ali Mohamed V Fatime Mwinyi Juma (supra).

Honourable Anyara Emukule J in Gerald M’limbine v Joseph Kangangi (supra) too interpreted the proviso to Section 79G of the Civil Procedure Act thus; and I concur with that holding:

“ My understanding of the proviso to Section 79G is that an applicant seeking an appeal to be admitted out of time must in effect file such an appeal and at the same time seek the court’s leave to have such an appeal admitted out of the statutory period of time. The provision does not mean that an intending appellant first seeks the court’s permission to admit a nonexistent appeal out of the statutory period. To do so would actually be an abuse of the court’s process which under Section 79B says……”

The court in Michael Kinyanjui Mbuthia V John Kamau Nganga (supra) was also emphatic that an appeal filed out of time could be deemed to be duly filed if leave of court is sought to that effect.

From all the foregoing, I am satisfied that the appeal and application for leave as filed are competent before this court and accordingly, I dismiss the respondent’s preliminary objection adding that in any event, the application was not brought under Order 50 Rule 6 of the Civil Procedure Rules which counsel for the respondent belabored to challenge. An even if that were to be the case, then this court would not be caged into deciding the application on the basis of procedural technicalities of the matter having been brought under the wrong provisions of law, which in any event would not render the application a nullity.

On the issue of whether the appellant has satisfied the court for the grant of such leave to have the filed the appeal deemed to be duly filed out of time, it is clear that Section 79G of the Civil Procedure Act permits such filing of an application for leave out of time if the appellant satisfies the court that he had good and sufficient cause for not filing the appeal in time. The case of Mwangi V Kenya Airways Ltd (supra) laid down three conditions to be fulfilled with regard to delay which are:

The length of the delay.

The degree of prejudice to the respondent if the application is granted. The fourth condition is relevant but not prerequisite(d) possibly, the chances of the appeal succeeding if the application is granted.

On the length of the delay, the judgment/order of the lower court which is subject of this appeal was made on 27th March 2015 and the application was made on 27th July 2015 which is exactly 4 months or 120 days from the date of the decision. The appeal ought to have been filed by 27th April 2015. The reasons for the delay have been explained by the applicant’s advocate who owned up that indeed it was due to the advocates’ inadvertence coupled which the transition of the file from the former firm of advocates of Michael, Daud & Associates to Ochieng K & Associates which latter advocate, Mr Ochieng previously worked for the former firm. Further, that there were several similar files which were being transitioned to Mr Ochieng and therefore this matter was despite the early instructions to lodge an appeal, inadvertently forgotten and upon learning of the lapse on 22nd July 2015 the current advocates timeously filed the present application on 27th July 2015.

On the other hand, the respondent’s counsel contends that the explanation given by the applicant’s counsel for the delay is not satisfactorily and that there is no sufficient cause given hence the application should be dismissed as was the case in Madison Insurance Company Limited V Peter Mutunga Musila & Another(supra), since the precise time when instructions were given to appeal and or the firm of Ochieng & Associates taking over the matter from the previous advocates on record was not given. Further, that a draft decree was send to the respondent’s counsel for approval.

The power of the court to grant leave to file an appeal out of tine as stipulated in Section 79G of the Civil Procedure Act is discretionary which discretion must nonetheless be exercised judiciously and depending on the circumstances of each case as no two cases are the same; and as leave by itself is not a matter of right. Therefore, the applicant must satisfy the court by placing before it material upon which such discretion may be exercised on their favour ( see Nicholas Kiptoo Arap Salat V IEBC & 7 Others SC Application 16/2014.

In the instant case, the applicant’s counsel has owned up to the default and given the reasons for delay as being attributed to administrative lapses in the respective offices of the former and current advocates. The Court of Appeal in Phillip Keipto Chemwolo & another V Augustine Kibende [1986] KLR 495 stated that :

“ Blunders will continue to be made from time to time and it does not follow that because a mistake has been made that a party should suffer the penalty of having his case determined on its merits.”

In the case of Banco Arabe Espanol V Bank of Uganda [1999] 2 EA 22 it was held that:

“ The administration of justice should normally require that the substance of all disputes should be investigated and decided on their merits and that errors, lapses should not necessarily debar a litigant from the pursuant of his rights and unless lack of adherence to rules renders the appeal process difficult and inoperative. It should seem that the main purpose of litigation, namely, the hearing and determination of disputes should be fostered rather than hindered.”

Though persuasive, the above decision speaks to this court in no uncertain terms that it is good precedent and I have therefore no reason to depart from such noble principles of law established by the courts over a period of time and which have withstood the test of times. I am further fortified by the decision and principles laid down in Factory Guards Limited V Abel Vundi Kitungi that the right of appeal should not be impeded as it is a constitutional right and the cornerstone of the rule of law. Where there is delay which is explained and the court accepts that explanation in order to render substantive justice and to facilitate access to justice for all by ensuring that deserving litigants are not shut out of the judgment seat, such leave should be granted.

In this case, I accept the explanation given for the delay in filing the appeal late as being logical and rational. Furthermore, I see no prejudice that will be occasioned if leave is granted to file the appeal out of time as the prejudice if any following the delay , and which prejudice has not been demonstrated by the respondent, can adequately be compensated by an award of costs.

It is for the above reasons that I hereby grant to the appellant leave to file an appeal out of time and the appeal herein as filed is hereby deemed to be duly filed within the extended period.

On the issue of whether the appellant is deserving of the orders of stay of execution of decree pending the hearing and determination of the appeal herein as admitted out of time, the law applicable is order 42 Rule 6 of the Civil Procedure Rules which provide that:

No appeal or second appeal shall operated 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 should have been granted or refused by the court appealed from, the court to which such appeal is preferred shall be at liberty, on application and to make such order thereon as it may seen 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 order set aside.

No order for stay of execution shall be made under sub rule (1) unless:-

The court is satisfied that substantial loss may result to an applicant unless the order is made and that the application has been made without unreasonable delay; and

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.

On the first condition of proving that substantial loss may result unless stay order is made. It is incumbent upon the applicant to demonstrate what kind of substantial loss it will suffer unless stay order is made in its favour. The applicant contends that should the money decree subject of the judgment in the lower court be paid out to the respondent, it shall not be within the applicant’s reach and that the appeal will therefore be rendered nugatory. On the other hand, the respondent’s counsel through grounds of opposition and submissions contends that this being a meagre money decree, there was no affidavit evidence to suggest that the respondent was so impecunious that he would not be in a position to recompense the decretal sum should the appeal succeed. Further, that the respondent should not be delayed and or denied his lawfully obtained judgment.

This court is cognizant of the principle of law that legal burden is on he who alleges to prove the allegations to the required standard of balance of probabilities. It is therefore upon the applicant to prove the allegations that if paid out, the respondent shall not be in a position to pay back the decretal sum and that as a result the appeal shall be rendered nugatory and as a consequence the applicant will suffer substantial loss.

The applicant has submitted that it is a reputable insurance company that thrives on its reputation hence any attempt to attach its property will send a negative message to the whole world that it is unable to meet its financial obligations. However, it is my view that the applicant being a reputable insurance company, it can as well pay the decretal sum and wait for the verdict such that there need not be any attachment and sale of its properties to recover the decretal sum. Nonetheless this court is cognizant of the principle that once it is alleged that the respondent is not able to recompense the decretal sum once it is paid out and the appeal is successful thereby rendering the appeal nugatory and a mere academic exercise, the burden of proof shifts to the respondent to prove that he is of means or that he shall be capable of refunding the decretal sum should the appeal succeed. He can do so by filing an affidavit of means. This is what was espoused in the case of National Industrial Credit Bank Ltd V Aquinas Francis Wasike Civil Appeal 238/2005 where the appellate court stated.

“ This court has said before and it would bear repeating that while the legal duty is on an applicant to prove the allegations that an appeal would be rendered nugatory because the respondent would be unable to pay back the decretal sum, it is unreasonable to expect such an applicant to know in detail the resources owned by the respondent or the lack of then. Once an applicant expresses a reasonable fear that a respondent would be unable to pay back, the decretal sum , the evidential burden must then shift to the respondent to show what resources he has since e that is a matter which is peculiarly within his knowledge.”

Therefore, in order to balance out the interests of both the appellant who is exercising its unfettered right of appeal and without denying the respondent his fruits of the lawfully obtained judgment, this court is inclined to exercise its discretion and make orders that balance out those rights. But before that happens, I must decide whether the application was made without unreasonable delay and whether any security for the due performance of decree should be made.

On the issue of whether the application was made without unreasonable delay, I have already, while deciding on whether or not to grant leave admitting the appeal out of time rendered myself that the application was not made late-after 4 months from the date of judgment in the lower court. That delay was satisfactorily explained to the court by the applicant and which delay in my view has not occasioned to the respondent any prejudice that cannot be compensated by an award of costs. Accordingly, I find that despite the delay, which is explained satisfactorily, justice can still be done to the both parties.

On the deposit of security for the due performance of decree, the applicant submitted of its willingness and ability and that in any event the decretal sum is already deposited in a joint interest earning account held by both parties’ advocates following consent order recorded before Honourable A. Mabeya J on 25th August 2015. A sum of kshs 1,250,000 was deposited to cover decree in Milimani CMCC 4145/2014 and CMCC 4144/2014 . That being the case, I am satisfied that the last condition for stay is fulfilled.

As to what orders this court should make, taking into account the rights and interests of both parties, I make the following orders:-

That the appeal herein as filed is hereby admitted out of time and deemed to be duly filed and served within the stipulated statutory period.

That there shall be stay of execution of decree in Milimani CM CC 4144/2014 and CMCC 4145/2014 pending hearing and determination of the appeal herein.

That the decretal sum in the above named two suits shall remain deposited in the joint interest earning accounts as opened and operated by both advocates for the parties until further orders of this court as to its disposal and or pending hearing and determination of the appeal herein.

That the appellant shall within 90 days from to date compile, file and serve upon the respondent a compete record of appeal.

The Deputy Registrar is directed to call for the submission of the lower court record for admission of this appeal to hearing expeditiously.

Costs of this application shall be to the respondent, assessed at kshs 20,000/- to be paid before the appeal is heard and in default execution to issue for recovery of the same.

Orders accordingly.

Dated, signed and delivered in open court at Nairobi this 17th day of March 2016 .

R.E. ABURILI

JUDGE