https://new.kenyalaw.org/akn/ke/judgment/kehc/2026/8091

Directline Assurance Company Limited v Handa (Miscellaneous Civil Suit E109 of 2026) [2026] KEHC 8091 (KLR) (10 June 2026) (Ruling) Neutral citation: [2026] KEHC 8091 (KLR) Republic of Kenya In the High Court at Nakuru Miscellaneous Civil Suit E109 of 2026 JK Sergon, J June 10, 2026 Between Directline Assurance Company Limited Applicant and Mary Nyanguka Handa Respondent Ruling 1.Before this Court is a Notice of Motion dated 13th April 2026 brought under Order 42 Rule 6, Order 22 Rule 22, Order 50 Rule 6 and Order 51 Rule 1 of the Civil Procedure Rules, and Sections 1A,1B & 3A of the Civil Procedure Act and all the enabling provisions of the law, filed by Directline Assurance Company Limited, the Applicant herein. 2.The Applicant prays for the following orders inter alia:a)Spent.b)Spent.c)That this Honourable Court be pleased to issue an order for stay of execution of the judgment of the subordinate court in Molo CMCC No. E191 of 2025 delivered on the 12th day of March 2026 before Hon. Samuel K. Mutai pending the hearing and determination of this intended appeal.d)That this Honourable Court be pleased to grant leave to the applicant to appeal out of time against the judgments delivered in Molo CMCC No. E191 of 2025 delivered on the 12th day of March 2026 before Hon. Samuel K. Mutai.e)That the time for lodging an appeal against the judgments in Molo CMCC No. E191 of 2025 delivered on the 12th day of March 2026 before Hon. Samuel K. Mutai be enlarged/extended.f)That the draft annexed Memorandum of Appeal be deemed as filed upon leave being granted and upon payment of the requisite fees thereto.g)That the applicant/appellant is ready, able and willing to comply with such reasonable stay conditions that this Honourable Court may grant.h)That costs of the application be in the cause. 3.This Court directed that this application be disposed of written by submissions. The Respondent filed a replying affidavit dated 22nd April 2026 and the written submissions dated 26th May 2026. The applicant at the time of writing this ruling had not filed their submissions. 4.The Applicant’s case is set out in its Notice of Motion dated 13th April 2026 and the supporting affidavit of Kelvin Ngure, the Deputy Claims Manager for the Applicant, sworn on even date. 5.The Applicant contends that the subordinate court delivered Judgment on 12th March 2026 awarding the Respondent Kshs. 534,853.00 each and declaring the Applicant liable to satisfy the same. The Applicant argues that the trial court failed to take into account the Insurance Policy under Section 2 (B) Exceptions to Section 2, specifically that the Insurance Company shall not be liable for payments regarding accidents involving family members or members of the same household as the insured. Under Section 2 (B) Exceptions to Section 2 (A) paragraph 1, the Company shall not be liable in respect of death or bodily injury to members of the Insured’s household or any person claiming to be indemnified under Section 2 (A) Clause (2) who are passengers in the Insured Motor Vehicle. The trial court also failed to consider the elements of customer fraud and unjust enrichment that would be prejudicial to the insurer. 6.The Applicant states that no stay of execution was granted by the subordinate court and the applicant’s property risks being attached and sold, causing prejudicial harm to its daily running as a corporate institution. The applicant has exhibited warrants of attachment and proclamations dated 8th April 2026. If execution is allowed to proceed before the appeal is heard, the sums executed will be gone and the appeal will be rendered a mere academic exercise. The applicant may be unable to recover the decretal sum from the respondent in case the appeal succeeds. 7.On the intended appeal, the applicant states that it is dissatisfied with the finding of the trial court and intends to lodge an appeal which raises arguable grounds and has high chances of success. The Applicant relies on the draft memorandum of appeal filed in this matter. The draft Memorandum raises grounds that the learned Magistrate erred in interpretation of the insurance policy, overlooked the exclusion clause at Section 2 (B)(3)(iii), failed to consider that the policy does not cover family members, failed to consider the doctrine of unjust enrichment, failed to address the existing family relationships between the insured and the victims, and failed to consider the documents filed by the applicant. 8.The applicant states that the application has been brought without inordinate delay and that it is ready, able and willing to comply with such reasonable stay conditions as the Court may grant. 9.The respondent opposed the application through the replying affidavit sworn on 22nd April 2026 and the written submissions dated 14th May 2026. 10.The respondent stated that the lower court granted the applicant thirty days stay of execution and equally granted thirty days leave to appeal, but it did nothing within that period. Having realized that the stay was about to lapse, the applicant filed the instant application. 11.The respondent submitted that the decree is a money decree and the applicant is not entitled to any stay in a money decree, especially given that the application has been presented in bad faith. The applicant has not demonstrated any sufficient cause for failing to file an appeal within the prescribed statutory timelines, nor has it offered any explanation for the delay. 12.On stay of execution, the respondent submitted that the applicant has failed to demonstrate substantial loss. Citing Kenya Shell Limited v Benjamin Karuga Kibiru & Another (1986) KECA 94 (KLR), arguing that the applicant has made generalized allegations without demonstrating the nature of loss likely to be suffered. The decree is monetary in nature and the applicant has not demonstrated that the respondent is incapable of refunding the decretal sum. 13.On delay, the respondent submitted that the applicant squandered the opportunity granted by the trial court and allowed both the stay and leave periods to lapse without any explanation. Citing Leo Sila Mutiso v Rose Hellen Wangari Mwangi (Civil Application No. NAI 251 of 1997) as cited by the Court of Appeal in Raphael Musila Mutiso & 3 others v Joseph Ndava Nthuka & another (2019) KECA 463 (KLR), they argue that the most critical consideration in extension of time is the explanation for the delay, and the Applicant has provided none. 14.On the issue of security, the respondent submitted that Order 42 Rule 6(2)(b) of the Civil Procedure Rules mandatorily requires an applicant to furnish security. The applicant’s general statement of willingness to comply with conditions is insufficient. 15.The respondent stated that they are victims of a road traffic accident and have waited patiently for justice to be served. The delay is causing them financial and emotional hardship. They pray that the application be dismissed with costs. 16.Having considered the material on record, the following issues arise for determination;a)Whether the Applicant has made out a case for stay of execution pending appeal.b)Whether the Applicant should be granted leave to appeal out of time, enlargement of time, and deeming of the draft Memorandum of Appeal as filed.c)Whether the Applicant's declaration of willingness to comply with conditions satisfies the requirement for security.d)Who bears the costs of the applications? 17.This Court has carefully considered the applicant's notice of motion and supporting affidavit, the respondent’s replying affidavit and written submissions, the draft memorandum of appeal and the applicable law. 18.This Court notes that the applicant did not file written submissions as directed. The applicant’s case therefore rests solely on its pleadings without the benefit of legal elaboration or citation of authorities. 19.This Court has considered the draft memorandum of appeal filed by the applicant and acknowledges that the applicant has arguable grounds for appeal regarding the interpretation of the household exclusion clause in the insurance policy. However, the presence of arguable grounds does not automatically entitle the applicant to the orders sought, as each prayer must meet its own legal threshold. 20.The law governing stay of execution pending appeal is settled under Order 42 Rule 6(2) of the Civil Procedure Rules, 2010, which provides as follows;“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."The Court of Appeal in Kenya Shell Limited v Benjamin Karuga Kibiru & Another (1986) KECA 94 (KLR) held that;“Substantial loss in its various forms is the cornerstone of both jurisdictions for granting stay." 21.On the first condition of substantial loss, this Court finds that the decree herein is a money decree. The applicant has not provided any evidence or material to suggest that the respondent is a person of straw who would be unable to refund the decretal sum if the intended appeal were to succeed. Attachment and execution of a lawful decree, without more, does not constitute substantial loss. This condition is not satisfied. 22.On the second condition of delay, this Court finds that while a one-month delay from the date of judgment may not be inordinate on its own, the trial court had already granted the applicant thirty days stay and thirty days leave to appeal. The applicant allowed that period to lapse without filing an appeal. When invited to explain this failure, the Applicant offered no explanation whatsoever. This condition is not satisfied either. 23.On the third condition of security, this Court finds that the applicant has not proposed any specific security. No amount has been offered. No form of security such as a bank guarantee or deposit in court has been specified. A general statement of willingness to comply with conditions is insufficient to satisfy the mandatory requirement of Order 42 Rule 6(2)(b). This condition is also not satisfied. 24.Having failed to satisfy all three mandatory conditions, Prayer (c) for stay of execution pending appeal is declined. 25.The principles governing extension of time were settled in Leo Sila Mutiso v Rose Hellen Wangari Mwangi (Civil Application No. NAI 251 of 1997) as cited by the Court of Appeal in Raphael Musila Mutiso & 3 others v Joseph Ndava Nthuka & another (2019) KECA 463 (KLR), where the Court held;“In an application for extension of time the most critical consideration is the explanation for the delay."This Court further observed that extension of time is not a right but an equitable remedy available only to a deserving party. Equity aids the vigilant, not the indolent. 26.The trial court granted the applicant thirty days leave to appeal. The applicant allowed that period to lapse without filing an appeal and has offered no explanation for this failure. This Court cannot exercise its discretion in favour of an applicant who does not even attempt to explain the delay. Accordingly, Prayers (d) and (e) are declined. Prayer (f), being contingent upon the grant of leave, is also declined. 27.On Prayer (g), where a declaration of willingness to comply with conditions was sought, it was intended to support Prayer (c) for stay of execution. Having declined Prayer (c), Prayer (g) cannot be granted. 28.On costs, Section 27 of the Civil Procedure Act provides that costs follow the event unless the Court orders otherwise. The Court of Appeal in Cecilia Karuru Ngayu v Barclays Bank of Kenya & another (2016) eKLR held that a successful party should ordinarily be awarded costs unless the court, for good reason, directs otherwise. The respondent has successfully opposed the application. This Court finds no good reason to depart from the general rule. The applicant's Prayer (h) is determined in favour of the respondent, and her prayer for costs is hereby granted. 29.For the reasons set out above, the Notice of Motion dated 13th April 2026 is dismissed with costs to the Respondent. This ruling to apply to Misc. Civil Suit No. E110 of 2026 Directline Assurance Company Limited vs Pauline Odenyo Dihanda. Therefore, the motion dated 13/4/2026 is dismissed with costs to the Respondent. DATED, SIGNED AND DELIVERED AT NAKURU THIS 10TH DAY OF JUNE 2026.........................J. K. SERGONJUDGEIn the Presence of:Jamleck/Rutoh C/AMiss Nyamiwa for ApplicantMiss Akinyi for Respondent