[2023] KEHC 26969 (KLR)

Dominic v Muyienda {Suing as the personal representative and administrator of the Estate of Nicholas Maraga (Deceased) (Civil Appeal E049 of 2023) [2023] KEHC 26969 (KLR) (14 December 2023) (Ruling)

Neutral citation: [2023] KEHC 26969 (KLR)

Republic of Kenya

In the High Court at Nyamira

Civil Appeal E049 of 2023

WA Okwany, J

December 14, 2023

Between

Nyatundo Orwoba Dominic

Appellant

and

Violet Nyakebati Muyienda {Suing as the personal representative and administrator of the Estate of Nicholas Maraga (Deceased)

Respondent

Ruling

1. This ruling is in respect to the Application dated 11th October 2023 in which the Applicant seeks orders for stay of execution of the judgment/decree dated 8th September 2023 delivered in Keroka PMCC No. E180 of 2021 pending the hearing and determination of the instant appeal.

2. The Application is premised on the ground that the Applicant will suffer irreparable loss if the orders sought are not granted since the Respondent will not be able to refund the decretal amount in the event that the appeal succeeds. The Applicant further states that he is ready to provide a Bank Guarantee as security for the decretal sum pending the determination of the Appeal.

3. The Respondent opposed the application through the Replying Affidavit dated 16th February 2022 wherein he states that the application is merely intended to delay her realisation of the fruits of the judgment. It was the respondent’s case that the application does not meet the threshold set for the granting of orders for stay of execution pending appeal.

4. The Application was canvassed by way of written submissions which I have considered. The main issue for determination is whether the Application is merited.

5. Order 42 rule 6 of the Civil Procedure Rules stipulates 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 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 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; 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.(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.”

6. The principles governing stay of execution pending appeal were restated in the case of Elena Doudoladova Korir v Kenyatta University [2012] eKLR at paragraph 7 as follows: -“The High Court's discretion to order stay of execution of its order or decree is fettered by three conditions, namely: - Sufficient cause, Substantial loss would ensue from a refusal to grant stay, the applicant must furnish security, the application must be made without unreasonable delay. In addition, the applicant must demonstrate that the intended appeal will be rendered nugatory if stay is not granted as was held in Hassan Guyo Wakalo v Straman EA Ltd (2013) eKLR and Hassan Guyo Wakalo v Straman FA Ltd [2013] eKLR in which it was held thus;‘In addition, the applicant must prove that if the orders sought are not granted and his appeal eventually succeeds, then the same shall have been rendered nugatory. These twin principles go hand in hand and failure to prove one dislodges the other.’”(see also the Court of Appeal decision in Court of Appeal case of Halai & Another v Thorton & Turpin[1963] Ltd [1990] KLR 365).

7. An Applicant seeking orders for stay of execution pending appeal must therefore satisfy the following conditions: -i.That substantial loss may result to them unless the orders sought are granted by the Court;ii.That the Application must be brought without unreasonable delay; andiii.That the Applicant has given such security as the Court orders for the due performance of such a decree or order which may be binding on them.

8. Courts have also taken the position that they must balance the Appellant’s right to appeal with the right of a decree-holder to the fruits of his decree. In striking this balance, the court must consider that a decree holder should not be unduly prejudiced or precluded from enjoying the fruits of their judgment. This was the determination in RWW v EKW [2019] eKLR, where the court stated thus:-“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.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.”

9. It was the Applicant’s case that the decretal sum of Kshs. 4,161,242/= is a colossal amount that he may not recovery from the Respondent should the appeal succeed and the Court does not grant the orders sought. It is plainly obvious that substantial loss forms the cornerstone of an order for stay of execution. This was the finding by Kneller J. in Kenya Shell Limited v Kibiru & Another [1986] KLR, 410 where he held thus: -“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. 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.”

10. In the present case, the Applicant is apprehensive about the Respondent’s financial standing. It was therefore incumbent upon the Respondent to prove that she is not a woman of straw and is capable of refunding the decretal amount in the event that the appeal succeeds. Proof of financial standing is an evidential burden that can only be discharged by the Respondent. In ABN Amro Bank v Lemond Foods Limited Civil Application No.15 of 2002 the Court Appeal held that:“The legal burden still remains on the applicant, but the evidential burden would then have shifted to the respondent to show that he would be in a position to refund the decretal sum if it is paid out to him and the pending appeal was to succeed. The evidential burden would be very easy for the respondent to discharge. He can simply show what assets he has – such as land cash in bank and so on.”

11. The Respondent asserted that she is a business lady and a farmer who will be able to refund the decretal amount should the need arise. I am however not satisfied that the Respondent will be able to refund the decretal amount because she did not file any affidavit of means or furnish any evidence to show her net worth.

12. I have also considered the timelines within which this Application was filed and I note that while judgment in Keroka MCC No. E180 of 2021 was delivered on 8th September 2023, Applicant filed a Memorandum of Appeal on 19th November 2021. The present application was filed on 11th October 2023. I find that the present Application was brought without undue delay.

13. Turning to the issue of security, I note that the main consideration is whether such security can secure the eventual performance of the judgment decree. In Gianfranco Manenthi & another v Africa Merchant Assurance Company Ltd [2019] eKLR, Nyakundi J. observed that: -“… 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 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 degree in order to enjoy the fruits of his judgment in case the appeal fails.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 judgement 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. Counsel for the applicant submitted that he is ready to provide a bank guarantee as security for due performance of the decree.”

14. In Mwaura Karuga t/a Limit Enterprises v Kenya Bus Services Ltd & 4 Others [2015] eKLR, the court held thus:-“… the security must be one which shall achieve due performance of the decree which might ultimately be binding on the applicant. The rule does not, therefore, envisage just any security. The words ‘ultimately be binding’ are deliberately used and are useful here, for they refer to the entire decree as will be payable at the time the appeal is lost. That is the presumption of law here. Therefore, the ultimate decree envisaged under order 42 rule 6 (2) (b) of the Civil Procedure Rules includes costs and interest on the judgment sum unless the latter two were not granted-which is seldom. The security to be given is measured on that yardstick.”

15. The Applicant filed a bank guarantee from Family Bank which I have carefully examined. I note that the Bank Guarantee is valid for 12 months from 6th July 2023 with an option to renew. The Applicant has not furnished the Court with a renewed bank guarantee for its consideration. The Respondent argued that the security provided will not be sufficient to cover the decretal amount in the event of expiry. My finding is that the Respondent’s concerns are valid and that there is need to consider alternative security.

16. Lastly, as a principle, stay of execution will be granted based on the Court’s discretion which must be exercised judiciously bearing in mind the circumstances of each case. The Court must also take care not to render the subsequent appeal nugatory. This was the finding by the Court of Appeal in Chris Mungai N. Bichage v Richard Nyagaka Tongi & 2 Others [2013] eKLR where the court held thus: -“……………. The law as regards applications for stay of execution, stay of proceedings or injunction is now well settled. The applicant who would succeed upon such an application must persuade the court on two limbs, which are first, that his appeal or intended appeal is arguable, that is to say it is not frivolous. Secondly, that if the application is not granted, the success of the appeal, were it to succeed, would be rendered nugatory. These two limbs must both be demonstrated and it would not be enough that only one is demonstrated………”

17. I have perused the grounds listed in the Memorandum of Appeal dated 18th September 2023 and I note that the crux of the Appeal is the issue of quantum. My take is that this being a money decree, it will be just to allow the application, subject to the following conditions: -i.That the Applicant shall, within 30 days from the date of this ruling deposit the entire decretal sum of Kshs. 4,161,242/= in court OR in a joint interest earning account to be held in the joint names of advocates for both parties.ii.That in the event of failure to comply with orders in (i) above, the Respondent will be at liberty to proceed with execution.iii.The costs of the application shall abide the outcome of the appeal.

18. It is so ordered.

JUDGMENT DATED, SIGNED AND DELIVERED VIRTUALLY VIA MICROSOFT TEAMS THIS 14TH DAY OF DECEMBER 2023. W. A. OKWANYJUDGE