https://new.kenyalaw.org/akn/ke/judgment/kehc/2026/12754

**REPUBLIC OF KENYA** **IN THE HIGH COURT OF KENYA AT NAIROBI** **CIVIL APPELLATE DIVISION** **SMALL CLAIMS APPEAL NO. E300 OF 2025** **FIRST ASSURANCE COMPANY LIMITED...............................APPELLANT** **VERSUS** **ZENKO KENYA LIMITED...................................................RESPONDENT** **RULING** **Background** 1. This ruling is in respect to three Notices of Motion filed by the Appellant, namely; applications dated 25th November 2025, 16th January 2026 and 6th February 2026. The applications are principally brought under Sections 1A, 3A and 63(e) of the Civil Procedure Act and Order 42 Rule 6 and Order 51 Rule 1 of the Civil Procedure Rules. 2. The Appellant initially sought stay of execution of the judgment delivered by the Small Claims Court on 15th September 2025 pending the hearing and determination of the appeal. Subsequent applications sought orders restraining execution, a declaration that the Appellant had complied with the conditional stay orders issued on 25th November 2025 and sanctions against the Respondent for allegedly executing in breach of the Court's orders. 3. On 25th November 2025, this Court granted conditional stay of execution on terms that the Appellant deposits the entire decretal sum in Court within thirty (30) days, failing of which the stay would automatically lapse. The Court further directed parties to exchange submissions while maintaining the status quo. 4. The present dispute stems from the parties' divergent positions regarding compliance with those conditional stay orders. While the Appellant maintains that it complied with the Court's directions and that the Respondent unlawfully instructed auctioneers to proclaim its property, the Respondent contends that the Appellant failed to deposit the entire decretal amount within the stipulated period, with the result that the stay automatically lapsed, thereby entitling it to proceed with execution. **The Appellant's Case** 1. The Appellant submits that it satisfied the requirements for grant of stay under Order 42 Rule 6 of the Civil Procedure Rules by demonstrating substantial loss, filing the application without unreasonable delay and furnishing security for the due performance of the decree. It argues that unless stay is granted, execution will render the appeal nugatory because the Respondent is a company of unknown means and has not demonstrated its ability to refund the decretal sum should the appeal succeed. 2. Reliance was placed on ***National Industrial Credit Bank Ltd vs. Aquinas Francis Wasike & Another,* Civil Appeal No. 238 of 2005**, ***Focin Motorcycle Co. Ltd vs. Ann Wambui Wangui & Another* [2018] eKLR**, and ***Stanley Karanja Wainaina & Another vs. Ridon Anyangu Mutubwa,* Nairobi HCCA No. 427 of 2015**, for the proposition that once an applicant alleges that a respondent would be unable to refund the decretal sum, the evidential burden shifts to the respondent to demonstrate its financial capability. 3. The Appellant further submits that it complied with the Court's order by depositing the decretal sum and that, in computing the thirty-day period, the Court ought to exclude the Christmas vacation pursuant to Order 50 Rule 4 of the Civil Procedure Rules. It therefore contends that the Respondent acted in contempt of Court by instructing auctioneers to proclaim its property notwithstanding the subsisting stay orders. It urges the Court to restrain further execution and affirm that it complied with the conditional stay orders. **The Respondent's Case** 1. The Respondent opposes all the applications through the Replying Affidavits sworn by **Jackline Chebet** and the written submissions dated 16th March 2026. The Respondent submits that the Court expressly ordered the Appellant to deposit the entire decretal sum within thirty days but that the Appellant only made a partial deposit and did so outside the period stipulated by the Court. It contends that the conditional stay therefore lapsed automatically by operation of the Court's order, thereby entitling the Respondent to execute the decree. 2. It is further submitted that the applications dated 16th January 2026 and 6th February 2026 were filed after the stay orders had already lapsed and therefore there were no subsisting orders capable of extension. The Respondent relies on ***Muriithi vs. Mburia* (Civil Appeal No. 5 of 2019) [2023] KEHC 17680 (KLR)**, where the Court held that time can only be extended while the conditional order is still extant, and on ***Kwacha Group Companies vs. Pindoria Holdings Ltd* [2022] KEHC 2008 (KLR)** for the proposition that where an applicant fails to comply with conditions attached to a stay order, the stay automatically lapses and execution becomes available to the decree-holder. 3. The Respondent also cited ***Kamau (Acting as the Personal Representative of Francis Thuo Kamau t/a Segero Club & Bar) vs. Odhiambo & 2 Others* (Civil Appeal No. 24 of 2019) [2023] KEHC 24661 (KLR)** and ***Muriithi vs. SLM Woodworks Ltd* (Civil Appeal E183 of 2025) [2025] KEHC 18327 (KLR)** in urging the Court not to reward non-compliance with conditional stay orders. **Issues for Determination** 1. Having considered the three applications, the affidavits on record, the rival submissions and the authorities cited, I find that the following issues arise for determination: 2. ***Whether the Appellant complied with the conditional stay orders issued on 25th November 2025.*** 3. ***Whether the Appellant has established a basis for restraining execution or extending the stay orders.*** **Analysis and Determination** 1. The applicable law is Order 42 Rule 6 of the Civil Procedure Rules, which empowers the Court to grant stay of execution pending appeal on such conditions as it considers just. Once the Court imposes conditions for stay, those conditions become binding upon the parties and failure to comply has the consequences specified in the order itself. 2. The record shows that on 25th November 2025 this Court granted stay of execution on condition that the Appellant deposits the entire decretal sum in Court within thirty (30) days. The order was explicit that the stay was conditional. The record further reveals that the Appellant deposited the sum of Kshs. 427, 853 in court on 15th January 2026 and that on the same date, the Respondent sent auctioneers to proclaim the Appellant’s property in execution of the decree. 3. The Appellant argued that Respondent’s action of engaging the auctioneers to attach its property on 15th January 2026 was premature as time ought to have been computed by excluding the Christmas recess period pursuant to Order 50 Rule 4 of the Civil Procedure Rules and that it had complied with the Court's directions by depositing the decretal sum. 4. The Respondent, however, maintained that the Appellant deposited only part of the decretal sum and did so after expiry of the period stipulated by the Court. 5. **Order 50 Rule 4 of the Civil Procedure Rules** provides as follows: ***Except where otherwise directed by a Judge for reasons to be recorded in writing, the period between the twenty-first day of December in any year and the thirteenth day of January in the next year, both days inclusive, shall be omitted from any computation of time (whether under these Rules or any order of the Court) for amending, delivering or filing any pleading or the doing of any other act:*** ***Provided that this rule shall not apply to applications for temporary injunctions.*** 1. The import of Order 50 Rule 4 CPR is that the **Christmas recess period is excluded when computing time** prescribed by the Civil Procedure Rules or by an order of the court, unless the court expressly directs otherwise for recorded reasons; or the matter relates to an application for a temporary injunction, to which the rule does not apply. 2. My understanding of the rule is that it does **not extend time** but rather**, suspends the running of time** during the Christmas vacation. The days between **21st December and 13th January (both inclusive)** are treated as if they do not exist for purposes of computation. 3. The question which then arises is whether the time for compliance with the stay conditions had lapsed as at 15th January 2026 when the Respondent instructed the auctioneers to proclaim the Appellant’s property. In other words, did the Appellant comply with the conditional stay order? 4. I have carefully considered the rival positions on whether the Appellant complied with the conditional stay order issued on 25th November 2025. The Respondent's contention is that the Appellant failed to deposit the decretal sum within thirty (30) days and that the conditional stay therefore lapsed automatically. The Appellant, on the other hand, argued that the computation of time is governed by Order 50 Rule 4 of the Civil Procedure Rules, which excludes the Christmas vacation from the computation of time. 5. In the present case, the conditional stay order was made on 25th November 2025 requiring the Appellant to deposit the entire decretal sum within thirty (30) days. Applying Order 50 Rule 4 of the CPR, time ran from 26th November 2025 to 20th December 2025, accounting for twenty-five (25) days. The period between 21st December 2025 and 13th January 2026 is excluded by operation of law. Time therefore resumed running on 14th January 2026, leaving five (5) days for compliance. The thirtieth day consequently fell on 18th January 2026. 6. I am satisfied that Order 50 Rule 4 CPR is applicable to the computation of time in the present case. The order of 25th November 2025 did not expressly exclude the application of the rule, nor was it an application for a temporary injunction to which the proviso applies. Accordingly, the Appellant had up to 18th January 2026 within which to comply with the condition imposed by the Court. 7. The record shows that the decretal sum was deposited in Court on 15th January 2026. I therefore find that the deposit was made within the period allowed by law after taking into account the exclusion of the Christmas recess under Order 50 Rule 4 CPR. 8. The Respondent further argued that only part of the decretal sum had been deposited. The Court is unable to agree with that contention. Judicial notice is taken of the well-established practice relating to deposits made into Court. Where a party is directed to deposit a decretal sum, the amount payable is ordinarily assessed and computed administratively by the Court registry officials, which thereafter issues the requisite payment invoice or assessment to facilitate the deposit. A party making payment through that process is entitled to rely on the computation furnished by the Court. There is nothing on the record to show that the Appellant failed to deposit the amount assessed by the Court registry or that any deficiency was ever communicated to it. In the absence of such evidence, this Court is satisfied that the Appellant complied with the order requiring the deposit of the entire decretal sum. I however hasten to add that should it turn out that the court registry under-assessed the full decretal sum to be deposited by the Appellant in this case, then a proper re-assessment should be done for the Appellant’s compliance. 9. In the circumstances of this case, it follows that, as at 15th January 2026, the conditional stay order remained valid and subsisting. I therefore find that the Respondent's decision to instruct auctioneers to proclaim the Appellant's property on the said date was premature, as the period granted by the Court for compliance had not expired. The execution process commenced while the stay order was still in force and was consequently undertaken in contravention of the orders of this Court. 10. Having found that the Appellant complied with the conditional stay order within the prescribed time, the Court further finds that the stay of execution granted on 25th November 2025 did not lapse and has remained in force pending the determination of this appeal. It follows that the Respondent was not entitled to proceed with execution, and the proclamation undertaken on 15th January 2026 cannot be sustained. 11. Having considered the three applications, the affidavits on record, the submissions of counsel and the applicable law, I am satisfied that the Appellant complied with the conditional stay order issued by this Court on 25th November 2025 by depositing the entire assessed decretal sum (as assessed) in Court on 15th January 2026, which was within time upon proper computation under Order 50 Rule 4 of the Civil Procedure Rules. 12. Consequently, the conditional stay did not lapse, and the Respondent's execution process commenced while the stay of execution remained in force. 13. In the premises, I make the following orders: 14. ***The Notice of Motion dated 25th November 2025 is marked as spent to the extent that the orders of stay sought therein were granted by this Court on 25th November 2025 and the Appellant duly complied with the conditions attached thereto.*** 15. ***The Notice of Motion dated 16th January 2026 is hereby allowed. It is hereby declared that the Appellant duly complied with the conditional stay order issued on 25th November 2025 by depositing the decretal sum in Court within the time prescribed by law but with a rider that the court registry/Court Administrator shall re-assess the full decretal sum payable after which the Appellant shall deposit the outstanding balance, if any, within 7 days from the date of such re-assessment.*** 16. ***The Notice of Motion dated 6th February 2026 is allowed to the extent that an order is hereby issued restraining the Respondent, whether by itself, its servants, agents, auctioneers or otherwise howsoever, from executing or taking any further steps in execution of the decree arising from the judgment of the Small Claims Court delivered on 15th September 2025 pending the hearing and determination of this appeal.*** 17. ***The proclamation and all consequential execution processes undertaken on or about 15th January 2026 pursuant to the decree of the Small Claims Court are hereby declared irregular, unlawful and of no legal effect, having been undertaken in breach of the subsisting order of stay issued by this Court, and are accordingly set aside.*** 18. ***The prayer seeking punitive or contempt sanctions against the Respondent is declined. Although the Court has found that execution was undertaken prematurely, contempt proceedings are quasi-criminal in nature and require proof to the requisite standard. The material placed before the Court is insufficient to warrant the grant of the punitive orders sought.*** 19. ***The decretal sum deposited in Court shall remain as security pending the hearing and determination of the appeal or until further orders of the Court.*** 20. ***The appeal shall be fast-tracked. The Deputy Registrar shall forthwith call for the original record of the Small Claims Court, if not already received, and thereafter the appeal shall be mentioned before the Judge for directions on its hearing.*** 21. ***The costs of the three applications shall abide the outcome of the appeal.*** **It is so ordered.** **DATED, SIGNED AND DELIVERED VIRTUALLY THIS 30TH DAY OF JULY 2026** **HON W A OKWANY** **JUDGE**