[2022] KEHC 15119 (KLR)

Daily Trucks Ltd v Mwaniki (Civil Appeal E073 of 2021) [2022] KEHC 15119 (KLR) (6 July 2022) (Ruling)

Neutral citation: [2022] KEHC 15119 (KLR)

Republic of Kenya

In the High Court at Kajiado

Civil Appeal E073 of 2021

SN Mutuku, J

July 6, 2022

Between

Daily Trucks Limited

Applicant

and

Paul Kyumwa Mwaniki

Respondent

Ruling

The Notice of Motion 1. The applicant has moved this court through a notice of motion dated December 8, 2021 brought under order 42 rule 6,7 & 9, order 50 rule 4, order 51 rule 1 of the Civil Procedure Rulesand section 3A of the Civil Procedure Act seeking the following orders:1. Spent.2. That this honourable court be pleased to grant temporary stay of execution of the judgement and decree delivered on October 27, 2021 in Kajiado CMCC No 112 of 2019 pending the hearing and determination of this application.3. That this honourable court be pleased to grant temporary stay of execution of the judgement and decree delivered on October 27, 2021 in Kajiado CMCC No 112 of 2019 pending the hearing and determination of the appellant’s appeal.4. That the cost of this application be in the cause.

2. The application is supported by an affidavit dated December 8, 2021 sworn by Lawrence Ongeri. According to the averments in that affidavit, judgement in respect of this matter was delivered on October 27, 2021 in Kajiado CMCC 112 of 2019; that being aggrieved by the said judgement they filed the present appeal on November 24, 2021; that the trial court granted the appellant, on October 27, 2021, a stay of execution of 40 days which has since lapsed leaving the appellant exposed for execution.

3. It is his contention that together with the appeal the appellant filed a certificate of urgency application dated November 24, 2021 seeking,inter alia, stay of execution pending hearing of that application and the appeal but the matter was not certified urgent and therefore no interim orders were issued. He states that this application has become necessary to secure and shield the appeal from losing substratum.

4. He has deposed that the intended appeal is meritorious and raises serious triable issues of law; that the same has high probability of success; that substantial loss and prejudice may befall the appellant in terms of execution and attachment if stay is not granted and that granting the orders will not prejudice the respondents.

5. The application is opposed by the respondents through a replying affidavit dated January 3, 2022 sworn by Paul Kyumwa Mwaniki. It is his contention that judgement was delivered on October 27, 2021 where the appellant was to pay damage amounting toKshs 1,000,000/- with the apportionment of liability at the ratio of 75%: 25% in favour of the respondent.

6. It is claimed that the trial court awarded inordinately high award of damages.

7. The application is opposed by the respondent. It is his case that the application is meant to deny him the fruits of the judgement; is made in bad faith and it ought to be dismissed.

Submissions 8. The matter was canvassed by way of written submissions. The applicant’s submissions are dated March 1, 2022. It is submitted that the conditions for granting stay pending appeal are well set out under order 42 rule 6 of the Civil Procedure Rules 2010. It is submitted that the applicant has an arguable appeal and that the application has been brought without unreasonable delay. It is argued that the appeal was filed within the prescribed time.

9. On the ground of substantial loss it is argued that the decree herein is a monetary one and that the applicant will suffer substantial injury as the respondent may not be able to refund the money paid. The applicant cited the case of Richard Muthusi -vs- Patrick Gituma Ngomo & another[2017] eKLR and Stanley Karanja Wainaina &another -vs- Ridon Anyangu Mutubwa [2016] eKLR. It is argued that going by the above cases the respondent has not demonstrated he has means to enable the court assess his capability to refund any amount of decretal sum paid to them.

10. On the issue of security, it is submitted that the discretion granted under order 42 rule 6(2)(b) and order 42 rule 7 of the Civil Procedure Rules is accompanied by a restricting provision under rule 9; that this aspect is lacking in this case as the respondent has neither an executable decree nor an order made in the execution of the said decree; that as it may be, should the court give a condition to deposit security, they prayed that the court imposes a fair condition that does not technically render the appeal nugatory.

11. The respondents filed his submissions dated March 9, 2022. He has submitted that the judgement of the trial court was well reasoned out and that there is no likelihood that the appeal against it would succeed; that the High Court normally does not interfere with well-reasoned judgments such as this one; that the application is not merited at all, is not made in good faith, is vexatious, misconceived and an abuse of the court process meant to deny the respondent the fruits of the judgement.

12. The respondent urges this court to order for security deposit in interest earning account. He submitted that he is a person of means and that he is not on trial for financial capability therefore the question of refund of decretal sum does not arise. He submitted that the application should be dismissed with costs, or in the alternative, the application be allowed conditionally.

Determination 13. Stay of execution pending an appeal is provided for under order 42 rule 6 of the Civil Procedure Rules, the relevant part of which states that:“(1)No appeal or second appeal shall operate as a stay of execution or proceedings under a decree or order appealed from except appeal case of 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 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; and(b)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."

14. The court, in RWW vs EKW [2019] eKLR, addressed its mind to the purpose of a stay of execution order pending appeal, in the following words:“The purpose of an application for stay of execution pending an appeal is to preserve the subject matter in dispute so that the rights of the appellant who is exercising the undoubted right of appeal are safeguarded and the appeal if successful, is not rendered nugatory. However, in doing so, the court should weigh this right against the success of a litigant who should not be deprived of the fruits of his/her judgment. The court is also called upon to ensure that no party suffers prejudice that cannot be compensated by an award of costs.9. Indeed to grant or refuse an application for stay of execution pending appeal is discretionary. The court when granting the stay however, must balance the interests of the appellant with those of the respondent.”

15. Further in Vishram Ravji Halai vs Thornton & Turpin Civil Application No Nai 15 of 1990 [1990] KLR 365, the Court of Appeal held that whereas the Court of Appeal’s power to grant a stay pending appeal is unfettered, the High Court’s jurisdiction to do so under order 41 rule 6 of the Civil Procedure Rulesis fettered by three conditions namely, establishment of a sufficient cause, satisfaction of substantial loss and the furnishing of security. Further the application must be made without unreasonable delay. To the foregoing I would add that the stay may only be granted for sufficient cause and that the court in deciding whether or not to grant the stay and that in light of the overriding objective stipulated in sections 1A and 1B of the Civil Procedure Act, the court is no longer limited to the foregoing provisions. The courts are now enjoined to give effect to the overriding objective in the exercise of its powers under the Civil Procedure Act or in the interpretation of any of its provisions

16. As to what amounts to substantial loss is, it was observed inJames Wangalwa & another vs Agnes Naliaka Cheseto [2012] eKLR, 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.”

17. In this instant case the appellant has argued that they should be granted stay pending appeal for the reason that if the same is not granted the respondent will initiate execution upon which they will suffer substantial injury as the respondent may not be able to refund the money paid up and that the respondent has not demonstrated his means before court to enable court assess their capability to refund any amount of decretal sum paid to them.

18. In our case herein the respondent did not provide proof of their resources he however stated that he did not file suit before the subordinate court as a pauper and that he is a man of means.

19. On the issue of security, Court of Appeal in Nduhiu Gitahi vs Warugongo [1988] KLR 621; 1 KAR 100; [1988-92] 2 KAR 100 where the Court of Appeal expressed itself as follows:“The process of giving security is one, which arises constantly. So long as the opposite party can be adequately protected, it is right and proper that security should be given in a way, which is least disadvantageous to the party giving the security. It may take many forms. bank guarantee and payment into court are but two of them. So long as it is adequate, then the form of it is a matter, which is immaterial. In an application for stay pending appeal the court is faced with a situation where judgement has been given. It is subject to appeal. It may be affirmed or it may be set aside. The court is concerned with preserving the rights of both parties pending that appeal. It is not the function of the court to disadvantage the defendant while giving no legitimate advantage to the plaintiffs. It is the duty of the court to hold the ring even-handedly without prejudicing the issue pending the appeal. For that purpose, it matters not whether the plaintiffs are secured in one way rather than another. It would be easier for the defendants or if for any reason they would prefer to provide security by a bank guarantee rather than cash. There is absolutely no reason in principle why they should not do so…The aim of the court in this case was to make sure, in an even-handed manner, that the appeal would not be prejudiced and that the decretal sum would be available if required. The respondent is not entitled, for instance, to make life difficult for the applicant, so as to tempt him into settling the appeal. Nor will either party lose if the sum is actually paid with interest at court rates. Indeed, in this case there is less need to protect the defendant because nearly half the sum will have been paid and the balance was at one stage open to negotiation to reduce it”.

20. The applicant has argued that the respondent has not demonstrated that he has means to enable the court assess his capability to refund any amount of decretal sum paid to him.

21. I have considered this argument. An applicant seeking stay of execution normally fears that should he/she pay the decretal sum to the respondent and the appeal succeeds, then he may not recover the monies so paid, especially where the respondents capability of refunding the money has not been demonstrated. This fear can be mitigated by orders of the court to deposit the amount in a safe account and not directly to the respondent.

22. I have considered this application and all the arguments for and against as well as cited authorities. In order to take care of the interests of both parties and in the interest of justice, I will and do hereby allow this notice of motion dated December 8, 2021 in following terms:i.Prayers 3 and 4 are granted.ii.The applicant shall pay half of the decretal sum to the respondent and shall deposit the remaining half of the decretal sum in a joint interest earning account held in the names of both counsel pending hearing and determination of this appeal.iii.The applicant shall prepare, file and serve the record of appeal within 60 days from today’s date.iv.Upon service the respondent shall have 30 days to put in response.v.This matter shall be mentioned on November 28, 2022 for directions.

23. Orders shall issue accordingly.

DATED, SIGNED AND DELIVERED THIS 6TH JULY 2022. S. N. MUTUKUJUDGE