https://new.kenyalaw.org/akn/ke/judgment/kehc/2026/12743

Avenue Hospital Ltd & another v Watatua (Civil Appeal E946 of 2025) [2026] KEHC 12743 (KLR) (Civ) (30 July 2026) (Ruling) Neutral citation: [2026] KEHC 12743 (KLR) Republic of Kenya In the High Court at Nairobi (Milimani Law Courts) Civil Civil Appeal E946 of 2025 WA Okwany, J July 30, 2026 Between Avenue Hospital Limited 1st Appellant Dr. Nyawira 2nd Appellant and Arthur Watatua Respondent Ruling Background 1.This appeal arises from the judgment delivered by the trial court wherein the Respondent was awarded Kshs. 6,520,590/= together with costs against the Appellants. Pending appeal, this Court granted stay of execution on 29th January 2026 on condition that the Appellants deposit Kshs. 3,000,000/= in a joint interest-earning account within thirty days, failing which the stay would automatically lapse. The Court further lifted the proclamation and warrants of attachment and directed that the appeal be heard on priority basis. 2.The Appellants however failed to comply within the stipulated period. They filed an application dated 4th March 2026 seeking an extension of the time within which to comply with the stay conditions issued on 29th January 2026 and on 6th March 2026, they obtained ex parte orders extending time for compliance. 3.Aggrieved by the orders extending the period for compliance, the Respondent filed the present application for review. The Respondent's Case 4.The Respondent submits that the ex parte orders were obtained through material non-disclosure and misrepresentation. He contends that the Court overlooked its earlier ruling of 29th January 2026 which required strict compliance within thirty days and that the conditional stay had lapsed automatically upon default. According to the Respondent, there was therefore no subsisting stay capable of extension. 5.The Respondent further argues that the Appellants introduced a third party, Old Mutual General Insurance Company Ltd, into the deposit arrangements without disclosure to the Court, notwithstanding the fact that the Court had directed the deposit to be made in a joint interest-earning account operated by the parties' advocates. He maintains that his advocates had withdrawn their mandate over the proposed escrow account after expiry of the thirty-day period and informed both the Appellants and the bank accordingly. 6.Counsel further submits that the Appellants neither sought extension of time before expiry of the thirty days nor explained their default. The Respondent contends that the ex parte orders prejudiced him as an elderly decree-holder undergoing dialysis who depends entirely on well-wishers, thereby depriving him of the fruits of his judgment. 7.He urges the Court to exercise its review jurisdiction under Section 80 of the Civil Procedure Act and Order 45 of the Civil Procedure Rules. Reliance was placed on Macharia & Another vs. Kenya Commercial Bank Ltd & 2 Others (Application No. 2 of 2011) and Florence Wairimu Mbugua & Another vs. VS Timber Manufacturers & Dealers Ltd, SC Petition No. E019 of 2023, where the Supreme Court outlined circumstances under which review may issue. The Appellants' Case 8.The Appellants oppose the application through the Replying Affidavit sworn by Christopher Chengecha. They submit that the application is misconceived, frivolous and an abuse of the Court process. They state that the Court properly exercised its discretion in extending time and that they have since complied with the orders by depositing the ordered amount. They therefore urge that there is no basis for interfering with the Court's discretion. 9.The Appellants submitted that they have already complied with the stay conditions by depositing the sum of Kshs. 3 Million in an escrow account in preparation for a deposit in a joint interest earning account after parties’ agreement on the issue of interest. 10.The Appellants faulted the Respondent for frustrating their efforts to open a joint interest earning account. 11.The Appellants maintain that the Respondent has failed to demonstrate discovery of new evidence, an error apparent on the face of the record or any sufficient reason to warrant review under Order 45 of the Civil Procedure Rules. Issues for Determination 12.Having considered the application, affidavits and submissions, I find that the main issues falling for determination are whether the application meets the threshold for review under Section 80 of the Civil Procedure Act and Order 45 Rule 1 of the Civil Procedure Rules and whether the ex parte orders issued on 6th March 2026 should be recalled or set aside. Analysis and Determination 13.The jurisdiction of this Court to review its orders is donated by Section 80 of the Civil Procedure Act and Order 45 Rule 1 of the Civil Procedure Rules. Review lies where there is discovery of new and important evidence, an error apparent on the face of the record, or for any other sufficient reason. 14.In Macharia & Another vs. Kenya Commercial Bank Ltd & 2 Others (supra) the Supreme Court affirmed that review enables a court to correct an irregularity or an error apparent on the face of the record, while in Florence Wairimu Mbugua & Another vs. VS Timber Manufacturers & Dealers Ltd, (supra) the Court emphasized that review may issue where an order is obtained through fraud, misrepresentation or concealment of material facts. 15.The record shows that the orders of 29th January 2026 expressly provided that failure to deposit Kshs. 3,000,000/= within thirty days would result in the stay lapsing automatically. There is no dispute that the deposit was not made within the stipulated period which expired on 1st March 2026. Equally, there is no evidence to show that the Appellants sought extension of time before expiry of the conditional stay. Indeed, the application for extension of time was filed on 4th March 2026 after the stay condition had already lapsed. 16.I further note the Respondent's contention that the Appellants departed from the Court's directions by pursuing an escrow arrangement involving a third party instead of opening the joint interest-earning account ordered by the Court. The material placed before Court indicates that the Respondent's advocates withdrew their mandate concerning the proposed escrow account after the lapse of the thirty-day period. I find that these were material facts which ought to have been fully disclosed when the Appellants sought the ex parte orders. 17.The Court is also mindful of the fact that ex parte orders are granted on the basis of utmost good faith and full disclosure. Where material facts are omitted, the Court is entitled to revisit such orders in order to safeguard the integrity of its process. 18.I am therefore satisfied that sufficient reason has been demonstrated to warrant review. The circumstances disclose material non-disclosure and procedural irregularity sufficient to justify recalling the ex parte orders issued on 6th March 2026. 19.Having found that the Appellants did not comply with the conditional stay orders within the period stipulated by the Court and that the ex parte orders extending time were obtained after the stay had already lapsed, it would ordinarily follow that the orders issued on 6th March 2026 ought to be reviewed and set aside. However, the Court must also take into account subsequent events and the overriding objective under Sections 1A and 1B of the Civil Procedure Act, which enjoins the Court to facilitate the just, expeditious, proportionate and affordable resolution of civil disputes. 20.It is not disputed that subsequent to the issuance of the impugned ex parte orders, the Appellants deposited the sum of Kshs. 3,000,000/= as security for the due performance of the decree. Although the Respondent contends that the deposit was made contrary to the Court's directions, the fact still remains that the decretal amount has substantially been secured. The Court cannot ignore this subsequent compliance, which demonstrates the Appellants' intention to abide by the conditional stay, albeit belatedly. 21.In the said vein, this court cannot overlook the fact that the Respondent is a successful litigant who obtained judgment in his favour and has been kept out of the fruits of that judgment. The Respondent has also deponed, without rebuttal, that he is an elderly person undergoing dialysis and urgently requires the decretal sum to meet his medical and daily living expenses. The Court is therefore under a duty to balance the competing rights of the parties so that neither the appeal nor the decree is rendered nugatory. 22.In Butt vs. Rent Restriction Tribunal [1982] KLR 417 the Court of Appeal held that the discretion to grant or maintain an order of stay should be exercised in a manner that does not prevent an appeal while at the same time ensuring that a successful litigant is not unnecessarily deprived of the fruits of his judgment. Similarly, in RWW vs. EKW [2019] eKLR, the Court observed that the purpose of stay pending appeal is to preserve the subject matter while balancing the rights of both parties. 23.In the peculiar circumstances of this case, I am satisfied that the interests of justice will be better served by varying the manner in which the decretal sum is secured rather than vacating the stay altogether. Such an approach preserves the substratum of the appeal and the Appellants’ undoubted right of appeal while at the same time enabling the Respondent to enjoy part of the fruits of his judgment without undue delay. Disposition 24.Consequently, I make the following final orders:a.The Respondent's application for review succeeds to the extent that the ex parte orders issued on 6th March 2026 are hereby reviewed.b.In exercise of this Court's inherent jurisdiction and in furtherance of the overriding objective under Sections 1A, 1B and 3A of the Civil Procedure Act, the conditional stay of execution shall remain in force on the following terms:i.The Appellants shall pay to the Respondent one half (½) of the decretal sum within thirty (30) days from the date of this ruling.ii.The balance of one half (½) of the decretal sum shall, within the same period, be deposited in an interest-earning joint account in the names of the parties' advocates in a reputable commercial bank agreed upon by the parties.iii.In default of compliance with either of the above conditions within the stipulated period, the order of stay shall automatically lapse without any further order of the Court.c.The costs of this application shall abide the outcome of the appeal.It is so ordered. DATED, SIGNED AND DELIVERED VIRTUALLY THIS 30TH DAY OF JULY 2026HON W A OKWANYJUDGE