[2022] KEHC 16185 (KLR)

Cebit Cargo Limited & another v Bartemwet & 3 others (Miscellaneous Civil Application E029 of 2022) [2022] KEHC 16185 (KLR) (8 December 2022) (Ruling)

Neutral citation: [2022] KEHC 16185 (KLR)

Republic of Kenya

In the High Court at Bomet

Miscellaneous Civil Application E029 of 2022

RL Korir, J

December 8, 2022

Between

Cebit Cargo Limited

1st Applicant

Pack Ingredients E.A Ltd

2nd Applicant

and

Christina Chepkoech Bartemwet

1st Respondent

Benson Kiptonoh Ngeno

2nd Respondent

Richard Kiptich Korir

3rd Respondent

Annah Chelangat Korir

4th Respondent

Ruling

1. The Applicants filed a Notice of Motion Application under Certificate dated July 15, 2022 which sought the following Orders:I.Spent.II.That there be a stay of execution of the orders dated June 20, 2022. III.That for purposes of facilitating a fair hearing, the Consent Judgment and Decree entered herein be stayed pending interparties hearing and final determination of the Appeal filed herein since the validity thereof is the subject of this appeal.IV.That costs of this application be in the cause.

2. The Application was brought under the provisions of Order 42 Rule 6 of the Civil Procedure Rules and Section 3A of the Civil Procedure Act. The Application was based on the grounds on the face of the Application and further by the Supporting Affidavit sworn by Philemon Ouma Aduda.

The Applicants’ Case. 3. The Applicants stated that the Respondents filed a suit under the Fatal Accidents Act seeking compensation from them. That there were parallel Inquest proceedings where all the parties testified and a decision was made on liability. The Applicants further stated that the Inquest proceedings found that the deceased was to blame for the accident.

4. It was the Applicants case that the counsel for the Insurance Company entered into a Consent conceding liability without having the information from the Inquest Proceedings. It was their further case that the Consent was erroneous as the facts of the accident were heard by a court of competent jurisdiction and that the trial court failed to give weight to the decision of the equally competent court.

5. The Applicants stated that they were now exposed to the risk of execution and that the Respondents would be unjustly enriched for an accident which the deceased was adjudged to be negligent.

6. It was the Applicants’ case that execution of the Judgment and Decree would render the Appeal nugatory. That the Appeal stood a high chance of success and that they would suffer irreparable loss and damage unless the execution was stayed.

7. The Applicants stated that if the Appeal succeeded, the Respondents would not be in a position to refund the Appellants.

The Applicants’ Written Submissions. 8. The Applicants submitted that they sought to set aside the Consent because they were exonerated from any blame in the accident. That they did not participate in the proceedings that led to the Consent and if the Advocate from the Insurance Company had come by that information, he would not have recorded the Consent.

9. The Applicants invited this court to make a determination whether it was proper and in the interest of justice to ignore the information from the Inquest proceedings.

10. The Applicants submitted that they were mid-range companies that would struggle and collapse if the Learned Magistrate’s Orders were not stayed and that they stood to suffer irreparable loss. It was their further submission that they would likely close shop if this court maintained the status quo.

11. It was the Applicants submission that they were challenging the validity of the Consent. That the issue of security did not arise as it was not an appeal that sought to overturn a Decree as envisaged under Order 22 of the Civil Procedure Rules.

The Respondents’ Case. 12. The Respondents opposed the Application through a Replying Affidavit dated July 25, 2022 where they stated that the Applicants filed a defective Appeal as they had filed one Memorandum of Appeal in respect of two suits which were never consolidated before the trail court. That the Appeal did not have a high chance of success as the Applicants failed to present before the trial court and this court any evidence of fraud or misrepresentation to warrant the setting aside of the Consent Judgment.

13. It was the Respondents’ case that the proceedings and Ruling in Inquest Number 10 of 2016 did not affect the Judgment delivered by the trial court as it was never raised in the trial court proceedings and that the said Ruling was not binding upon the trial court.

14. The Respondents stated that there no evidence to show that the Applicants had initiated disciplinary steps against the advocate who entered the Consent on their behalf.

15. It was the Respondents case that the Applicants have not demonstrated any willingness to give security for the Decretal sum which has remained unpaid for over 4 years. That a stay pending appeal could only be granted upon the Applicants furnishing security for the Decretal sum.

16. The Respondents stated that the Applicants were hell-bent on frustrating them from enjoying the fruits of their Judgment even after being given a payment plan by the trial court. That this Application and many others by the Applicants were an abuse of the court process and was meant to delay them from getting justice.

The Respondents’ Submissions. 17. The Respondents submitted that the Appeal was not triable to warrant granting of the orders sought as the Applicants had filed one Memorandum of Appeal in respect of separate matters which made it defective.

18. It was the Respondents submission that this court had discretion in determining the prayer for stay of execution pending Appeal and that such discretion ought to be exercised judiciously. That the rights of the Applicants to appeal and the rights of the Respondents to enjoy the fruits of their Judgment should be protected by the court.

19. The Respondents submitted that at the time of hearing of the Application at the trial court, the amount in both matters stood at Kshs 7,438,401/=. That if this court was to grant the prayer for stay, the amount had to be secured in a joint interest earning account in the joint names of the advocates for the parties. They relied on the cases of Kenya Tanzania Uganda Leasing Co Ltd vs Mukenya Ndunda (2013) eKLR andRocky Driving School Limited vs Cute Kitchen Limited (2015) eKLR to support this submission.

20. The Respondents submitted that the Application should be dismissed as the Applicant companies were on their knees hence the security for the Decretal sum was not guaranteed.

21. I have read through and carefully considered the Notice of Motion Application dated July 15, 2022, the Replying Affidavit dated July 25, 2022, the Applicants’ Written Submissions dated October 3, 2022 and the Respondents’ Written Submissions dated March 17, 2022. The only issue for my determination was whether the Applicants have 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 Applicants should satisfy the court that:-i.Substantial loss may result to them unless the order is granted.ii.That the Application has been made without unreasonable delay.iii.The Applicants have given such security as the court orders for the due performance of such Decree or order as may ultimately be binding to them.

24. With respect to 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. In the persuasive case of James Wangalwa & Another vs Agnes Naliaka Cheseto (2012) eKLR, Gikonyo J held that:'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 Applicants contended that they would suffer substantial loss unless the execution of the Decree is stayed and that the Respondents would not be able to refund them 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.'

The Applicants did not adduce any evidence or set out factual circumstances to demonstrate that they would suffer substantial loss if the execution was not halted. In fact, they admitted that their companies were struggling financially and payment of the Decretal Sum would cripple them leading to a shut down. 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 Applicants have not proved the substantial loss that they would suffer.

29. On the issue of unreasonable delay, In Republic vs Attorney General & Another, Baps International Limited (Interested Party) Ex parte (2020) eKLR, the Court stated:-'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. In this case, Judgment in the trial court was entered on July 24, 2017. The Application that challenged the Consent Judgment in the lower court was dated December 15, 2021. The Ruling that is the subject of the present Appeal was delivered on June 20, 2022. The present Application for Stay of the Orders of June 20, 2022 was filed on July 18, 2022. It is my finding that the one month 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. Similarly in Gianfranco Manenthi & Another vs Africa merchant Assurance Co Ltd (2019) eKLR the court 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. In this regard, the security for due performance of the decree under Order 42 Rule 6(1) of the Civil Procedure Rules, it is trite that the winner of litigation should not be denied the opportunity to execute the decree in order to enjoy the fruits of his judgment in case the appeal falls.Further Order 42 should be seen from the point of view that a debt is already owed and due for payment to the successful litigant in a litigation before a court which has delivered the matter in his favour. This is therefore to provide a situation for the court that if the appellant fails to succeed on appeal there could be no return to status quo on the part of the plaintiff to initiate execution proceedings where the judgment involves a money decree. The court would order for the release of the deposited decretal amount to the respondent in the appeal.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 Applicants submitted that the issue of security did not arise as they were not challenging the Decree but the validity of the Consent. The Respondents on the other hand stated that the Applicants have not made any payments despite being given a payment plan by the trial court.

34. The present Application is for orders of Stay of Execution of a Decree. The Decree was extracted from the Judgment of the trial court delivered on July 24, 2017. It is therefore disingenuous for the Applicants to state that they were only after the validity of the Consent and not the Decree. The Consent that they challenge was the basis of the Judgment delivered by the trial court which gave rise to the Decree.

35. The Applicants have not demonstrated any willingness to deposit security as a per condition for the award of the stay of execution and it is my finding that no security has been put forward by the Applicants

36. 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.'

37. I am guided by the above cited case. I am further persuaded by the case of Samvir Trustee Limited vs Guardian Bank Limited (UR), where 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'.(See also Mohammed Salim t/a Choice Butchery vs Nasserpuria Memon Jamat (2013) eKLR).

38. In this case the Respondents hold a Judgment in their favour delivered way back in 2017. Their right to the fruit of the Judgment must be balanced against the right of the applicant to have their day in court and exhaust their right of appeal. It is my duty while exercising discretion to balance these two competing interests. It is my view that the Respondents should have a bite of the decretal sum while the applicants should not be driven away from the seat of justice.

39. In the final analysis, I find the Application merited. Prayer 2 of the Notice of Motion dated July 15, 2022 is granted on the following conditions:-i.The Applicants shall pay the Respondents 30% of the Decretal Sum being Kshs 805,500/= and deposit the balance of Kshs 1,879,500/= in an interest earning account in the joint names of the advocates of the parties within 30 days of this Ruling.ii.Failure by the Applicants to deposit the amounts as stipulated in (I) above will void the stay granted.iii.The Applicants shall set down the Appeal for admission and directions within 30 days of today.

RULING DELIVERED, DATED AND SIGNED AT BOMET THIS 8TH DAY OF DECEMBER, 2022. .............................R. LAGAT-KORIRJUDGERuling delivered virtually in the presence of Mr. Olonde for the Applicant, and Ms. Kusa for the Respondent and Kiprotich (Court Assistant).Ruling emailed to parties atfor the RespondentsFor the Applicants