https://new.kenyalaw.org/akn/ke/judgment/kehc/2026/10489

**REPUBLIC OF KENYA** **IN THE HIGH COURT OF KENYA AT NAIROBI** **CIVIL APPELLATE DIVISION** **CIVIL APPEAL NO. E831 OF 2024** **DOUGLAS MOEGI MACHUKI…………………………..APPELLANT** **VERSUS** **SAMUEL B.KEENGWE………………..………………..RESPONDENT** *(Being an appeal from the Judgment and Decree of the Small Claims Court at Milimani in SCCC No. 939 of 2021 delivered on 7th October 2021)* **RULING** **Introduction** 1. Before this Court is the Appellant's Notice of Motion dated 28th October 2024 seeking an order of stay of execution of the judgment and decree issued in Milimani Small Claims Court Case No. 939 of 2021 pending the hearing and determination of this appeal. 2. The application is expressed to be brought under Article 159 (2 a &d) of the constitution 2010, Sections 1A, 1B and 3A of the Civil Procedure Act, Order 22 rule 22, order 42 Rule 6, order 50 rule 6, order 51 rule 1&3 of the Civil Procedure Rules and all other enabling provisions of the law. 3. The application is supported by the affidavit sworn by the Appellant, who deposes that unless an order of stay is granted, the Respondent is likely to execute the decree thereby rendering the appeal nugatory. The Appellant further avers that the appeal raises arguable grounds with reasonable prospects of success and that substantial loss would be occasioned if execution proceeds before the appeal is heard. 4. The Respondent opposes the application through a replying affidavit, contending that the Appellant has failed to satisfy the legal threshold for the grant of stay pending appeal. It is further deposed that the Respondent is entitled to enjoy the fruits of a lawful judgment and that no sufficient basis has been laid to warrant the exercise of this Court's discretion. **Background** 1. The record shows that judgment in Milimani Small Claims Court Case No. 939 of 2021 was delivered on 7th October 2021 in favour of the Respondent. Aggrieved by that decision the Appellant applied to set aside the judgment but the court declined to do so via a ruling issued on the 24th June 202.The Appellant lodged the present appeal and contemporaneously filed the instant application seeking stay of execution pending the determination of the appeal. 2. When the application came up for inter partes hearing on 29th October 2024, this Court, being alive to the competing rights of both parties, directed the Appellant, as an interim measure pending determination of the application, to deposit the decretal sum or furnish security of an equivalent value. The order was intended to preserve the subject matter of the appeal while safeguarding the Respondent's decree. Counsel did not comply and on the 13/11/2024 requested an extension of further 60 days to comply which time was granted by the court. 3. It is common ground that the Appellant did not comply with the said order. The explanation advanced is that the Respondent had not demonstrated the financial ability to refund the decretal sum in the event the appeal succeeds and that, consequently, the Appellant considered it unnecessary to deposit the decretal amount or furnish security. 4. Following the Appellant's failure to comply, the Court directed the parties to file written submissions on the application, which submissions have now been duly considered together with the pleadings and the record. **The Appellant's Case** 1. Learned counsel for the Appellant submits that the intended appeal is arguable and raises substantial questions of law and fact deserving consideration by this Court. 2. Counsel further argues that unless execution is stayed, the Appellant stands to suffer substantial loss if the decretal sum deposited or security provided to the Respondent who has allegedly failed to demonstrate the financial ability to refund the same if the appeal ultimately succeeds. 3. Reliance is placed on the decision of the case ***of Kenya Orient Insurance Co. Ltd vs Paul Mathenge Gichuki & Anor (2014) eKLR*** where it was stated that the burden of proving that the Respondent was in a position to repay the decretal sum if the appeal succeeds lay with the same respondent the moment the appellant states that it is unaware of the Respondent’s resources. 4. The Appellant further argued that the application was filed and served in good time without delay. 5. It is therefore submitted that the Court should grant stay pending appeal in order to preserve the substratum of the appeal and prevent it from being rendered nugatory. **The Respondent's Case** 1. The Respondent opposes the application and submits that the Appellant was first served with the pleadings on 1st September 2021 via his email address. A request for judgment was made on 29th September 2021 and endorsed on31st May 2021. Thereafter the Appellant was served with a notice of entry of judgment on 11th February 2022 and 21st February 2022 through his last known emai to which he never respondent and that he only became aware of the suit when he was served with a Notice to show cause. 2. It is further submitted that although the Court afforded the Appellant interim protection by directing the deposit of the decretal sum or equivalent security during the hearing of the application, the Appellant deliberately failed to comply with that order. Reliance was placed upon the case of ***Housing Finance company of Kenya v Sharok Kher Mohamed Ali Hirji & Anor (2015) KECA 447 (KLR***) and ***Hebatula Brothers Ltd v Michael Nguthu Kimwele (2019) KEHC 469 (LKR)***. 3. According to the Respondent, the Appellant could not unilaterally disregard a subsisting court order merely because he disagreed with the basis upon which it was made. If dissatisfied with the interim condition imposed by the Court, the proper course would have been to seek review, variation or clarification of the order rather than to ignore it altogether. 4. The Respondent consequently urges the Court to decline the equitable relief sought, contending that a litigant who has failed to comply with a lawful order of the Court is undeserving of the Court's discretionary intervention. **Issues for Determination** 1. I have carefully considered the Motion, the affidavits on record, the rival submissions and the applicable law. 2. In my respectful view, the following issues arise for determination: 1. ***Whether the Appellant has satisfied the conditions for the grant of stay of execution pending appeal under Order 42 Rule 6 of the Civil Procedure Rules.*** 2. ***What is the legal effect of the Appellant's failure to comply with the interim order directing the deposit of the decretal sum or equivalent security.*** 3. ***Whether the Appellant's contention that the Respondent had not demonstrated the financial ability to refund the decretal sum justified the failure to comply with the Court's interim order.*** 4. ***Who should bear the costs of the application***. 3. I now proceed to consider each of the foregoing issues. **Analysis and Determination** **(a) The Applicable Principles** 1. The jurisdiction of this Court to grant stay of execution pending appeal is donated by Order 42 Rule 6(2) of the Civil Procedure Rules, which provides that: ***"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."*** 1. It is settled that the power to grant stay is discretionary and must be exercised judiciously, balancing the competing interests of the parties. The discretion is intended neither to deny a successful litigant the fruits of his judgment nor to render an appeal illusory. 2. In ***Butt v Rent Restriction Tribunal [1979] eKLR***, the Court of Appeal stated that the power to grant or refuse stay is discretionary and should be exercised in a manner that does not render an appeal nugatory. The Court further held that where there is no overwhelming hindrance, stay may be granted upon such terms as the Court considers just. 3. Equally, in ***Kenya Shell Limited v Benjamin Karuga Kibiru & another [1986] KECA 94 (KLR)***, the Court of Appeal emphasized that substantial loss is the cornerstone of an application for stay and that, in its absence, there is no basis for depriving a successful litigant of the fruits of a lawful judgment. 4. It therefore follows that an applicant bears the burden of satisfying the Court that all the statutory requirements under Order 42 Rule 6 have been met before the Court's discretion can be exercised in his favour. **(b) Whether the Appellant Demonstrated Substantial Loss** 1. The Appellant contends that unless stay is granted, the decretal sum may be paid to the Respondent who, according to the Appellant, has not demonstrated the financial ability to refund the same should the appeal ultimately succeed. 2. The Court of Appeal addressed this question in ***National Industrial Credit Bank Ltd v Aquinas Francis Wasike & another [2006] KECA 333 (KLR),*** where it held that while the legal burden remains upon the applicant, once a reasonable apprehension is expressed that a respondent may not be able to refund the decretal sum, the evidential burden shifts to the respondent since the facts relating to his financial means are peculiarly within his knowledge. 3. I respectfully agree with that principle. It is intended to ensure that an appellant with an arguable appeal is not exposed to the risk of an irrecoverable loss merely because execution has proceeded. 4. However, the principle does not operate in isolation. The inability of a respondent to refund the decretal sum is only one of the considerations relevant to the Court's exercise of discretion. It does not displace the other mandatory requirements under Order 42 Rule 6, including the requirement for security. 5. Indeed, the requirement for security exists precisely because the Court is required to balance the Appellant's right of appeal against the Respondent's right to enjoy the fruits of a valid judgment. It is a mechanism through which the competing rights of both parties are accommodated. **(c) Whether the Interim Order on Security Was Binding** 1. The record shows that during the inter partes hearing of the application on 29th October 2024, this Court directed the Appellant to deposit the decretal sum or furnish security of an equivalent amount pending the determination of the application. 2. That direction was neither ambiguous nor optional. It constituted a lawful order of the Court issued in the exercise of its discretion under Order 42 Rule 6. 3. The Appellant concedes that no security was deposited. The explanation offered is that the Respondent had failed to establish the financial ability to refund the decretal sum if the appeal were eventually to succeed. 4. With respect, that explanation cannot avail the Appellant. 5. Once the Court exercised its discretion and imposed a condition regarding security, the Appellant became bound to comply with that condition unless and until it was varied, reviewed or set aside by a court of competent jurisdiction. A litigant cannot elect which court orders to obey and which to disregard depending on his own view of their correctness. 6. The issue concerning the Respondent's financial ability was one properly falling for determination during the hearing of the application. If the Appellant considered that the interim condition imposed by the Court failed to take sufficient account of that concern, the proper recourse lay in seeking review, variation or clarification of the order. It did not lie in unilateral non-compliance. 7. The Court of Appeal has repeatedly emphasized that judicial discretion must be exercised on settled principles and that parties who seek equitable relief must themselves act equitably. A party who seeks the Court's protection while disregarding the conditions upon which that protection has been extended places himself in an unfavourable position when inviting the Court to exercise its discretion. **(d) The Effect of the Failure to Furnish Security** 1. I am alive to the fact that the interim order made on 29th October 2024 and extended on 13/11/24 did not specify the period within which security was to be furnished. Neither did it expressly provide that the stay would automatically lapse in default of compliance. 2. Consequently, I am unable to conclude that the interim stay lapsed automatically by operation of the order itself. Had the Court intended such a consequence, it would have expressly stated so. That, however, is not the end of the matter. 3. The omission to prescribe a timeline did not relieve the Appellant of the obligation to comply. The order requiring security remained an integral condition attached to the equitable relief sought by the Appellant. Compliance was therefore expected within a reasonable time or, at the very least, the Appellant ought to have sought further directions from the Court if uncertainty existed regarding the manner or timing of compliance. 4. Instead, the Appellant chose neither to furnish security nor to move the Court for review, variation, clarification or comply within the enlargement of time sought. The explanation advanced in these proceedings demonstrates that the failure to comply was not occasioned by uncertainty arising from the wording of the order but by the Appellant's deliberate view that compliance was unnecessary. 5. Such conduct undermines the very foundation upon which discretionary relief is granted. Stay of execution is not a right. It is an equitable remedy granted upon terms that the Court considers just. Where an applicant elects not to honour those terms without first obtaining the Court's sanction, the Court is entitled to take that conduct into account in determining whether the discretion should ultimately be exercised in his favour. 6. In the circumstances of this case, I find that the Appellant's deliberate failure to comply with the Court's interim direction regarding security is a material factor weighing against the grant of the orders sought. The explanation that the Respondent had not demonstrated financial ability to refund the decretal sum does not constitute a lawful justification for disregarding a subsisting court order. **(e) Whether the Court Should Exercise Its Discretion in Favour of the Appellant** 1. Having considered the material placed before the Court, it is evident that the Appellant seeks the equitable relief of stay of execution pending appeal. Such relief is not available as of right but lies within the sound discretion of the Court to be exercised judicially and on settled principles. 2. The Court has already found that the Appellant expressed apprehension regarding the Respondent's ability to refund the decretal sum should the appeal ultimately succeed. That apprehension, standing on its own, was a relevant consideration in determining whether substantial loss had been established. It did not, however, absolve the Appellant from complying with the Court's interim directions regarding security. 3. The record shows that on 29th October 2024, during the inter partes hearing of the present application, this Court directed the Appellant to deposit the decretal sum or furnish security of an equivalent amount pending the determination of the application. That order was intended to preserve the subject matter of the appeal while at the same time protecting the Respondent's entitlement under the decree. 4. The Appellant neither complied with that order nor sought its review, variation or clarification. Instead, the Appellant elected to await the determination of the application on the basis that the Respondent had not demonstrated the financial ability to refund the decretal sum. 5. In my view, that approach was misconceived. The issue of the Respondent's financial ability was one of the matters placed before the Court in determining the application. It was for the Court—not either party—to determine the appropriate conditions upon which stay should issue. Once the Court exercised that discretion and imposed a condition regarding security, it was incumbent upon the Appellant to comply with the order or to move the Court appropriately if compliance was considered impracticable or unjustified. 6. The Court of Appeal ***in Butt v Rent Restriction Tribunal (supra)*** underscored that the jurisdiction to grant stay is discretionary and must be exercised in a manner that achieves justice between the parties. Likewise, in ***Kenya Shell Ltd v Benjamin Karuga Kibiru & Another*, (supra)** the Court emphasized that the purpose of stay is not to deny a successful litigant the fruits of a lawful judgment but to ensure that an appeal, where justified, is not rendered nugatory. 7. Those principles require the Court to maintain a delicate balance between two competing rights: The Appellant's undoubted right to pursue an appeal and the Respondent's equally important right to enjoy the fruits of a judgment lawfully obtained. It is that balance which informs the statutory requirement for security under Order 42 Rule 6(2)(b) of the Civil Procedure Rules. 8. The requirement for security is therefore not a procedural technicality. It is a substantive safeguard designed to ensure that, while an appellant is protected against the risk of substantial loss, the respondent is equally protected against prejudice arising from delayed enjoyment of the decree. 9. The Court in ***Tabro Transporters Ltd v Absalom Dova Lumbasi [2015] KEHC 6071 (KLR*** observed that the discretionary jurisdiction to grant stay should be exercised in a manner that preserves the rights of both parties and that the Court should strive to ensure that no party suffers undue prejudice pending the determination of the appeal. 10. In the present case, the Court afforded the Appellant an opportunity to demonstrate good faith by complying with the interim condition relating to security. The Appellant failed to do so and offered no legally sustainable justification for that omission. While the Court appreciates that its interim order did not prescribe a specific period within which compliance was to be effected, the absence of a timeline did not relieve the Appellant of the obligation to comply within a reasonable time or to seek appropriate directions from the Court. 11. The Court is therefore left with an applicant who seeks the Court's continued exercise of discretion while having failed to honour the condition upon which interim protection was extended. In the circumstances, I am not persuaded that the Appellant has demonstrated entitlement to the equitable relief sought. 12. Ultimately, the discretion under Order 42 Rule 6 must be exercised in accordance with the interests of justice. Those interests extend to both parties. To grant stay in the present circumstances would permit the Appellant to continue enjoying the benefit of interim protection without satisfying the condition that the Court considered necessary to safeguard the Respondent's interests. Such an outcome would upset the balance that the law requires the Court to maintain. 13. Finally, on the issue of delay, the court dismissed the Applicant’s application to set aside judgment on the 24th June 2024 and it is only after the respondent commenced execution that the Applicant decided to file the instant application on 28th October 2024. That is a period of over 4 months. This delay has not been explained at all. **Disposition** 1. In the result, I find that the Appellant has failed to satisfy this Court that it is deserving of the discretionary orders sought. 2. Accordingly, the Notice of Motion dated 28th October 2024 is hereby dismissed. 3. The interim orders of stay granted on 29th October 2024 are hereby discharged. 4. The Respondent shall be at liberty to execute the decree issued in Milimani Small Claims Court Case No. 939 of 2021 in accordance with the law. 5. The costs of the application shall be borne by the Appellant. It is so ordered. **DATED, SIGNED AND DELIVERED AT NAIROBI THIS 14TH DAY OF JULY, 2026.** **L. P. KASSAN** **JUDGE** **In the presence of:** No appearance for the Appellant Mugambi for the Respondent Leonard – Court Clerk