[2022] KEHC 16291 (KLR)

Baylem Limited v Moi Teaching and Referral Hospital (Commercial Miscellaneous Application E071 of 2022) [2022] KEHC 16291 (KLR) (Commercial and Tax) (14 November 2022) (Ruling)

Neutral citation: [2022] KEHC 16291 (KLR)

Republic of Kenya

In the High Court at Nairobi (Milimani Commercial Courts Commercial and Tax Division)

Commercial and Tax

Commercial Miscellaneous Application E071 of 2022

DO Chepkwony, J

November 14, 2022

Between

Baylem Limited

Applicant

and

Moi Teaching And Referral Hospital

Respondent

Ruling

1. Baylem Limited (the Applicant) vide a Notice of Motion application dated 21st January, 2022, expressed in terms of sections 1A, 1B, 3A all of the Civil Procedure Act, Order 42 Rule 6 and Order 50 Rule 6, both of the Civil Procedure Rules, 2010 seeks the following orders:a.Spent;b.Spent;c.That the honourable courtBe pleased to stay execution pending hearing and determination of the intended appeal;d.Thatthe honourable court be pleased to grant the defendant leave to Appeal out of time against the Hon. Kagoni E.M delivered on March 1, 2021in Nairobi CMCC No.635 of 2019;e.That upon grant of leave to appeal out of time, the Memorandum of Appeal lodged herein be deemed as duly filed;f.That The costs of the application be provided for.

2. The application is anchored on the grounds on its face and further supported by the annexed affidavit of J. F. Ogumbo sworn on January 21, 2021, in which the cited grounds are that; -a.By dint of a Plaint dated July 2, 2014, the plaintiff moved the court seeking reliefs inter alia price variation Kshs.9,414,723. 47 owing to alleged fluctuation in foreign exchange rates during the contractual period in a contract entered into between the Plaintiff and the Defendant for supply, delivery, installation and commissioning of mortuary equipment.b.Thedefendant denied the plaintiff’s claim by filing a statement of Defence dated September 29, 2014and parties subsequently filed their written submissions.c.Having considered the pleadings, evidence, written submissions, Hon. Kagoni E.M delivered his judgment on theMarch 1, 2021which judgment was entered against the Plaintiff with costs awarded to the defendant.d.Being aggrieved by the impugned judgment, the Plaintiff is desirous of lodging an Appeal against the impugned judgement.e.In spite of the plaintiff’s desire to lodge an appeal, the delay in furthering its intention has been occasioned by the court’s failure to issue the Plaintiff with typed copies of the Judgment and certified proceedings in time despite numerous requests for the same.f.Vide the defendant's letter dated May 20, 2021, thedefendant has served the plaintiff with a bill of costs, threatening to file the same if the plaintiff fails to offset the same within 7 days therefrom.g.Such extreme and highly prejudicial consequences before the lodgment, hearing and determination of the intended appeal would subvert the ends of justice and render the Appeal nugatory.h.The plaintiff undertakes to lodge the intended Appeal and record whereof expeditiously within such time as this honourable court may order upon requisite leave being granted.i.The plaintiff’s intended appeal raises serious questions of both law and fact which the honourable lower court fell into error and is arguable with a good chance of success and will be rendered nugatory unless the honourable court grants theplaintiff orders for stay of execution pending hearing and determination of this application as well as the intended appeal.j.The application is made in good faith and the defendant shall suffer no prejudice that cannot be compensated by way of costs if this application is allowed.k.The delay was inadvertent and not deliberate and this application is brought timeously without unreasonable and undue delay.l.The plaintiff is ready and willing to comply with such reasonable conditions set by this honourable court for the grant of the orders sought herein.m.It is in the interest of justice that stay of execution be granted pending appeal and period granted of filing the intended appeal be extended.

Respondent’s Response 3. In opposition to the application, Moi Teaching and Referral Hospital (the respondent), filed a replying affidavit sworn on April 12, 2022 by Julius Onyango Oraro, the Deputy Supply Chain Manager of the Respondent. It is averred therein that:-a.the respondent avers that the present application is made with the sole intent of delaying the payment of costs awarded to the Respondent with execution for recovery of the same being imminent.b.the applicant has not claimed that it will suffer substantial loss unless the order for stay is made. this court ought to appreciate the fact that the applicant was already paid the contract sum of Kshs.23,416,914. 47 and it moved the trial court for an extra payment of Kshs.9,414,723. 47 and which was never agreed upon. Expectedly, the suit was dismissed with costs which have since been assessed at Kshs.343, 888/= which sum is but a tiny fraction of the contract sum paid to theapplicant.c.it cannot therefore be gainsaid that there is no risk of substantial loss being suffered by the Applicant if the order for stay of execution is not granted.d.the present application is also made after undue and inordinate delay since Judgment was delivered on March 1, 2021while the present application was filed on January 28, 2022, which is 11 months after, with no sufficient explanation for the delay.e.the applicant has also not offered security for the costs assessed at Kshs.343, 888/= as a condition for stay and the intended appeal as captured in the draft Memorandum of Appeal is nebulous, vague and comprises of mere posturing and is not therefore arguable.f.no good cause has also been led to support the application for extension of time within which to file the appeal and further the applicant's contention that the file could not be traced is not supported by a scintilla of evidence.g.the respondent disposes that it is only after being served with the Certificate of Costs, which paved way for the execution that applicant was bestirred to action and they rushed to court for stay through the present application hence our contention that the application is aimed at stalling recovery of costs.h.Lastly, it can therefore be surmised from the forgoing that the present application is wholly bereft of merit and it is our prayer that this honourable court dismisses the application with costs to the respondent.

4. The parties were directed to canvass the application by way of written submissions. The Applicant filed submissions are dated June 7, 2022, while the Respondent filed submissions dated June 8, 2022. I have read through them in consideration of the said application

Analysis and Determination 5. I have considered the Notice of Motion application beforecourt, the response thereto and the submissions by both Counsel for the parties alongside the cited authorities. The issues arising for determinationby this honourable court have been discerned as being:-a.whether the application for leave to file appeal out of time is merited; and,b.whether or not theapplicant is entitled to stay of execution pending the hearing and determination of the intended appeal.

6. Before I embark on determining this matter, it is important to begin by mentioning that the trial court record including the Judgment were never availed in this proceedings. However, I will proceed to make a determination based on the material that has been placed before me.

7. The brief background of the application is that the trial court delivered a Judgment on March 1, 2021, which was entered against the plaintiff. On being aggrieved by the said Judgment, theplaintiff preferred this application dated January 21, 2022seeking for stay of execution and leave to file an appeal out of time.

8. It is important to outline the provisions of the law which guide courts in determining applications of this nature where parties seek for stay of execution and leave to file appeal out of time. It is also important to keep in mind that grant of leave to extend time for filing an appeal is a discretionary remedy exercisable by courts to a deserving party upon proof that indeed the same is necessary.

9. The legal basis for appeals from asubordinate court to the High court is provided for undersection 75G of the Civil Procedure Act, which states as follows;“Every appeal from a subordinate court to the High Court shall be filed within a period of thirty days from the date of the decree or order appealed against, excluding from such period any time which the lower court may certify as having been requisite for the preparation and delivery to the appellant of a copy of the decree or order.Provided 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.”

10. Therefore, a party must satisfy the above provisions of the law for the court to exercise its discretion on whether or not to grant leave as sought. In the case of Karny Zaharya &another v Shalom LeviCA No 80 of 2018, Koome JA (as she then was) stated that:“In considering whether to grant leave to a litigant to file his or her appeal out of time, thecourt will have regard to factors such as: the reasons for the delay, if any, that each party stands to suffer depending on how the court exercises its discretion; the conduct of the parties, the need to balance the interests of a party who has a decision in his or her favour against the interest of a party who has a constituency underpinned right of appeal, the need to protect a partly opportunity to fully agitate it’s dispute, against the need to ensure timely resolution of disputes, the public interest issues implicated in the appeal or intended appeal and whether prima facie, the intended appeal has chances of success or is a mere frivolity.”

11. On this point, the question that begs for an answer is whether the applicant has met out the threshold as set out above. In the instant application before Court, the applicant’s application is dated January 21, 2022 and the Judgment being challenged was delivered onMarch 1, 2021. Section 75G of the Civil Procedure Act requires an appeal from a subordinate court to be filed within 30 days yet the current application seems to have been brought almost 10 months later.

12. The applicant has attributed the delay in filing the application to the courtfor failing to provide them with the certified copies of proceedings on time and also to the Covid-19 pandemic which led to the scaling down of thecourt’s operations, hence restricted access to court. The applicant has annexed a letter dated June 4, 2021addressed to the Executive Officer of the court requesting for typed copies of proceedings and Judgment. In my view, the said letter was prompted by a letter from the Respondent dated May 21, 2021asking them to settle the claim, failure to which they would proceed to file the Bill of costs as annexed on the letter.

13. The delay in bringing the current application before court is almost 10 months from the date the trial court delivered its decision. In the circumstances of this case, looking at the time when the Judgment was delivered and the time when the application was filed, it has been noted that there has been considerable delay. However, of the reason advanced by the applicant for not complying with procedural timelines set out by the law, only one is valid. It will be noted that there is a letter requesting for proceedings that was at the time of ruling, the same are yet to be availed. The excuse of Covid-19 restrictions having caused the delay herein cannot stand for the period the when Judgment was delivered the courts had embraced virtual filing and hearing of matters.

14. It is therefore my humble view that the Applicant has satisfactorily explained the delay by citing one reason which cannot be attributed to it to warrant this court exercise its discretion in its favour in line with section 75G of the Civil Procedure Act and the application on the issue of leave to file appeal out of time succeeds.

15. The next issue for determination is whether or not to grant the Applicant stay of execution. The test for grant of stay of execution is set out in Order 42 Rule 6 of the Civil Procedure Rules, 2010, which states as follows:-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 order set aside.2. No order for stay of execution shall be made under subrule (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.3. Notwithstanding anything contained in subrule (2), the court shall have power, without formal application made, to order upon such terms as it may deem fit a stay of execution pending the hearing of a formal application.4. For the purposes of this rule an appeal to the Court of Appeal shall be deemed to have been filed when under the Rules of that court notice of appeal has been given.5. An application for stay of execution may be made informally immediately following the delivery of judgment or ruling.6. Notwithstanding anything contained in subrule (1) of this rule the High Court shall have power in the exercise of its appellate jurisdiction to grant a temporary injunction on such terms as it thinks just provided the procedure for instituting an appeal from a subordinate court or tribunal has been complied with

16. Clearly, from the provisions an applicant seeking stay of execution must satisfy the following conditions:-a.must establish a sufficient cause;b.must satisfy court that he/she/it is likely to suffer substantial loss if stay is not granted;c.the applicant must furnish security;d.application mu be made without unreasonable delay.These principles have been enunciated by the courts in their various decisions relating to stay of execution proceedings.

17. On the question of stay pending appeal, it is settled law that applications for stay of execution, stay of proceedings or injunction, an applicant must demonstrate and persuade court that his/her/its appeal is arguable and if the application is not granted or were the appeal to succeed, it would be rendered nugatory.

18. In the instant case, it is the applicant’s case that vide a letter dated May 20, 2021, the respondent has served on them a Bill of Costs threatening to file it facts to offset the same within 7 days, which, according to theapplicant would subvert and render the ends of justice and the appeal nugatory. It is the applicant’s contention that its appeal is arguable with high chances of success.

19. On the other hand, the respondent contested the grant of an order for stay of execution pending appeal on the ground that the power to grant the said order presupposes that there must be compliance with the procedure of filing an appeal. In this case, a Memorandum of Appeal as provided for under Order 42 Rule 6(1) and (6) of the Civil Procedure Rules. That the Applicant is yet to file an appeal and hence there is no basis upon which the court can exercise its jurisdiction in a Miscellaneous Cause. Also, the Respondent has pointed out that the impugned order by the trial court was negative and therefore incapable of being stayed.

20. In considering the issue of grant of stay of execution, while the respondent served a Bill of Costs which they intend to file upon the applicant, I find that no imminent danger of execution has been demonstrated to warrant grant of stay of execution at this stage as the Bill of Costs is yet to be heard and determined. I also agree with the submissions by therespondent that the applicant is yet to file an appeal in this matter and therefore there is nothing upon which this court an determine whether the appeal raises arguable and triable issues of law and fact deserving judicial determination. Further, the impugned Judgment subject of the intended appeal was entered against the appellant, which is a negative order, that is incapable of being stayed.

21. Accordingly, the application dated January 21, 2022 succeeds in part and allowed in the following terms:-a.That the prayer for stay of execution pending an intended appeal is declined.b.The applicant be and is hereby granted leave to appeal against the Judgment delivered by Hon. Kagoni E. M. on March 1, 2021in Nairobi CMCC No.635 of 2019, out of time.c.Theapplicant to file and serve a Record of Appeal within 60 days from the date hereof.d.Costs to be in the cause of the appeal.It is so ordered.

DELIVERED VIRTUALLY, DATED AND SIGNED AT NAIROBI THIS 14TH DAY OF NOVEMBER, 2022. D. O. CHEPKWONYJUDGEIn the presence of:No appearance for and by ApplicantMr. Kiplangat counsel for RespondentCourt Assistance - Godfrey