[2021] KEHC 5744 (KLR)

REPUBLIC OF KENYA

IN THE HIGH COURT OF KENYA

AT MOMBASA

CIVIL CASE NO. 72 OF 2012

FUAD MAHAMOUD MOHAMED.................................................................PLAINTIFF

VERSUS

DIAMOND TRUST BANK KENYA LIMITED...................................1ST DEFENDANT

DIAMOND TRUST INSURANCE AGENCY LTD.............................2ND DEFENDANT

(CONSOLIDATED WITH MOMBASA HCCC NO.16 OF 2011)

FUAD MAHAMOUD MOHAMED..................................................................PLAINTIFF

VERSUS

DIAMOND TRUST BANK KENYA LIMITED..........................................DEFENDANT

RULING

1. This Ruling is in respect of application dated 2nd March, 2021 by 1st Defendant/Applicant seeking for the following orders: -

Spent;

Spent;

Spent;

THAT the Honourable Court be pleased to extend the time within which the 1st Defendant may file a Notice of intention to appeal against its judgment and decree delivered on the 25th January, 2021 pursuant to section 7 of the Appellant Jurisdiction Act;

THAT this Honourable Court be pleased to grant stay of execution of the judgment and decree delivered on the 25th January, 2021 and all consequential proceedings pending the hearing and determination of the intended appeal;

THAT the costs of this application be in the cause.

2. The Motion is supported by the grounds presented on its body and the Affidavit sworn on 2nd March, 2021 by Jackson Muema Kisinga, the Applicant’s/1st Defendant’s Counsel.

3. Mr. Jackson Muema Kisingahas deponed that a Judgment was delivered on 25th January 2021 by Hon. P.J. Otieno in favour of the Plaintiff for the of Kshs.82,129,963 together with interest at 16. 25% while the Applicant’s/1st Defendant’s Counterclaim for Kshs.35,940,514. 49 & Kshs.877,753. 68 was allowed together with interest at 16. 25% subject to provisions of the Section 44(D) of the Banking Act.

4. He stated that being aggrieved by the Judgment delivered on25th January 2021, the Applicant’s /1st Defendant proceeded to instruct his firm Madhani Associates LLP to file an Appeal and they proceeded to file a Notice of Appeal on the 29th January, 2021 and the same was served as per the requirements of Rule 75 (2) of the Court of Appeal Rules 2010.

5. According to the Applicant/1st Defendant, on 18th February, 2021 while preparing the Memorandum of Appeal he noticed that the Notice of Appeal dated 28th January, 2021 had erroneously indicated that the Applicant/1st Defendant was appealing ‘part’ of the Judgment instead of the ‘whole’ of the Judgment delivered on 25th January 2021.

6. The Applicant avers that the error was inadvertent and due to human error on the part of Counsel and thus ran afoul of the provisions Rule 75 (3)of theCourt of Appeal Rules 2010.

7. That upon realizing the Notice of Appeal dated 28th January, 2021 was defective and could not be amended, Counsel for the Applicant/1st Defendant filed a Notice of Withdrawal of the same dated 19th February, 2021, on the 22nd February, 2021.

8. The Applicant/1st Defendant claims that attempts to file this application were unsuccessful as the court file could not be traced at the court registry. The Applicant/1st Defendant further claims that it stands to lose substantially assets worth Kshs.127,038,465. 13/= as the Plaintiff/Respondent has commenced the execution process via the Proclamation Notice dated the 1st March, 2021.

9. According to the Applicant/1st Defendant it has an arguable Appeal and that he has moved this court without unreasonable delay and it ought not to be driven from the seat of justice due to the inadvertent error of their Advocate. That further the Respondent will not suffer any prejudice considering that the Applicant/1st Defendant has filed a Notice of Appeal against the said Judgment and is also ready and willing to provide a Bank Guaranty as security or any other security as may be ordered by this Court.

10. The Applicant prays that the application be allowed as it is equitable and just to ensure that a deserving litigant is accorded their day in court.

11. The Respondent opposed the application vide a Replying Affidavit sworn on 15th March, 2021 by Fuad Mahmoud Mohamed together with Grounds of Opposition dated 16th March, 2021.

12. The Respondent’s case is that the Applicant has not provided any evidence to show in which way it would suffer prejudice if an Order of Stay of Execution is not granted.

13. It was deponed that this court should disregard the Affidavit sworn by Jackson Muema Kisinga, Advocate as it raised general and unsubstantiated statements since he is not an employee or authorized person to adduced evidence on behalf of the Applicant.

14. According to the Respondent, he sent various notices to the Applicant demanding for payment, all of which were ignored and they did not acknowledge the draft decree, hence they cannot claim that there is presently a looming threat of execution.

15. The Respondent has averred that he is not a man of straw as he owns several properties will be able to compensate the Applicant in the event that the Appeal succeeds. He has stated that he owns property known as 3420/Sec 1/MN, Nyali Mombasa worth Kshs.250,000,000/= situated at a prime central business area and he will be able to compensate the Applicants. The property’s worth can be evidenced by the Valuation Report dated 13th March, 2021.

16. Also, the Respondent has averred that apart from applying for certified copies of proceedings and Judgment, there is no evidence that the Applicant is desirous to pursue the Appeal, which conduct is undeserving of any of the orders as prayed.

17. The Respondent has urged this Court to dismiss the Applicant’s application and be allowed to enjoy the fruit of success in the matter herein.

18. The Applicant further filed a Further Affidavit sworn on 13th April, 2021 by Amaan Kassam, the Applicant’s Legal Manager. He has deponed that Jackson Muema Kisinga, Advocate was duly authorized to swear the Supporting Affidavit on behalf of the Bank as the issues arising therein, are within his knowledge.

19. It has been deponed that the Applicant holds a charge of the property known as 3420/Sec 1/MN, Nyali Mombasa dated the 29th September, 2009 and that the valuation of the said property is below Kshs.250,000,000/= as per the Valuation Report dated the 2nd September, 2009. Further, that as at 9th April, 2021 the property is valued at Kshs.140,000,000/= and a forced sale of Kshs.105,000,000/= and not the alleged Kshs.250,000,000/=.

20. According to the Applicant, the charged property cannot therefore satisfy the decretal sum of Kshs.127, 036, 215. 13/= as the same has a value of Kshs.105,000,000/=for a forced sale.

21. Further, the Applicant avers that in the event the Appeal succeeds, the amount sought under the Charge plus interest accrued will have exceeded the value of the charged property hence the Applicant will suffer substantial loss.

22. The Applicant has emphasized that this application has been made without undue delay and they are willing and ready to provide a Bank Guaranty as security for the Appeal or any other Appeal as ordered by the court.

23. Following the directions given by the court, the matter was disposed of by way of written submissions. The Applicant’s submissions are dated the 13th April, 2021 and filed on 14th April, 2021 whilst the Respondent’s submissions are dated and filed on 16th March, 2021. The Respondent further filed supplementary submissions dated 28th April, 2021 and filed on 29th April, 2021.

24. Parties highlighted and relied on their submissions in their entirety.

Analysis and determination

25. Having considered all the pleadings and written submissions by the parties, the issues that arise for determination are: -

a. Whether this Court can extend time for the 1st Defendant/Applicant to file a Notice of Intention to Appeal against the Judgment and Decree dated 25th January, 2021

b. Whether this Court can grant Stay of Execution of the Judgment and Decree delivered on the 25th January, 2021 pending hearing and determination of the intended appeal.

a. Whether this court can extend time for the 1st Defendant/Applicant tofile a Notice of Intention to Appeal against the judgment and decree dated 25th January, 2021

26. The Judgment in this case was delivered on 25th January, 2021. The Applicant filed its Notice of Intention to Appeal to the Court of Appeal on the 29th January, 2021. Rule 75 (2) of the Court of Appeal Rules, 2010, requires that a Notice of Appeal be lodged within fourteen days of the date of Judgment.

27. It is apparent that the Applicant in this matter filed the Notice of Appealtimely. However, on realizing that it had erroneously indicated that it intends to appeal against ‘part’ of the Judgment instead of the ‘whole’ Judgement, withdrew the said Notice of Appeal filed on 29th January, 2021.

28. Section 7of theAppellate Jurisdiction Act provides as follows:

Power of High Court to extend time

“The High Court may extend the time for giving notice of intention to appeal from a judgment of the High Court or for making an application for leave to appeal or for a certificate that the case is fit for appeal, notwithstanding that the time for giving such notice or making such appeal may have already expired...”

29. The above provisions of Section 7 of the Appellate Jurisdiction Act leave no doubt that the High Court, and indeed all courts with the status of the High Court, have jurisdiction to extend the time for filing a Notice of Appeal in respect a Judgment of the court.

30. The Applicant has thus approached this Court seeking extension of time to file a fresh Notice of Intention to Appeal. Extension of time is a discretionary and a very powerful tool which should be exercised with abundant caution, care and fairness. The Supreme Court in Nicholas Kiptoo Arap Korir Salat –Vs- Independent Electoral and Boundaries Commission & 7 Others [2014]Eklr, lay down the following general principles to guide the courts in applications for extension of time: -

“…This being the first case in which this Court is called upon to consider the principles for extension of time, we derive the following as the under-lying principles that a Court should consider in exercise of such discretion:

1. Extension of time is not a right of a party. It is an equitable remedy that is only available to a deserving party at the discretion of the Court;

2. A party who seeks for extension of time has the burden of laying a basis to the satisfaction of the court

3. Whether the court should exercise the discretion to extend time, is a consideration to be made on a case to case basis;

4. Whether there is a reasonable reason for the delay. The delay should be explained to the satisfaction of the Court;

5. Whether there will be any prejudice suffered by the respondents if the extension is granted;

6. Whether the application has been brought without undue delay; and

7. Whether in certain cases, like election petitions, public interest should be a consideration for extending time…”

31. On the basis of the principles in Nicholas Kiptoo Arap Korir Salat (supra), the Applicant has not wasted any time whatsoever in their cause of action.

32. It should be noted that the Applicant detected what they viewed to be an error on their part and have taken judicious steps to correct them. I have taken into consideration that the Notice of Appeal dated the 28th January, 2021 was filed in a timely manner and were it not of the error on the face of it, the Appeal would have been set down for hearing.

33. The Applicant as a matter of right should be allowed to appeal against ‘part’ or the ‘whole’ of the Judgment and this Court cannot be seen to curtail such right. The conduct of the Applicant can only be described as an exercise of diligence.

b. Whether this Court can grant Stay of Execution of theJjudgment and Decree delivered on the 25th January, 2021 pending hearing and determination of the intended Appeal

34. Order 42Rule 6 of theCivil Procedure Rules, 2010 specifies the circumstances under which the court may order Stay of Execution of a Decree or Order pending an Appeal. It provides that an Applicant must demonstrate the following: -

a. Substantial loss may result to the applicant unless the order was made;

b. The application was made without unreasonable delay; and,

c. Such security as the court orders for the due performance of such decree or order as may be ultimately binding on him has been given by the applicant.

35. An Applicant seeking Stay of Execution pending hearing and determination of an Appeal must demonstrate that substantial loss which will result if Stay is not granted and that the application has been made without unreasonable delay. As Platt Ag JA (as he then was) stated in Kenya Shell Limited –vs- Benjamin Karuga Kibiru & Another [1986]eKLR, substantial loss is the corner stone of the jurisdiction to grant stay of execution pending appeal. Further, the Applicant is required to give such security as the court may order for the due performance of the decree.

36. The Applicant’s main averment is that a sum of Kshs.127,038,465. 13/= is such a huge sum that the Respondent will not be able to compensate in the event that the Appeal succeeds. The Applicant attached a Valuation Report that the property relied on by the Respondent is the property known as 3420/Sec I/ MN, Nyali Mombasa as at 9th April, 2021 is valued at Kshs.140,000,000/= and a forced sale of Kshs.105,000,000/=. The Applicant insisted that the charged property cannot satisfy the decretal sum of Kshs.127,038,465. 13/=as the same is higher than the amount of the forced sale.

37. The Respondent on the other hand maintained that the property known as 3420/Sec I/ MN, Nyali Mombasa as at 13th March, 2021 is valued at Kshs.250,000,000/= and they are able to repay the Applicant in the event the Appeal is successful.

38. In this regard the court is unable to without a doubt establish the value the property known as 3420/Sec I/ MN, Nyali Mombasa as both parties have brought before this Court conflicting amounts. The court is thus convinced that the Respondent has not proved how they will compensate the Applicant if the Appeal succeeds.

39. It is also the Applicant’s concern that the Respondent will commence execution of the Decree to their detriment. The Appellant is convinced that should the Decree be executed, their Appeal will be rendered nugatory.

40. Regarding security, it has clearly come out that the Applicant is ready and willing to provide a Bank Guaranty or any other security as ordered by this Honourable Court. Hence, without going into details, the Applicant has satisfied the condition required for the grant of stay of execution pending appeal.

41. In view of the foregoing, I make the following orders: -

a. Time for giving Notice of intention to Appeal from the Judgment of this Court delivered on 25thJanuary, 2021 is extended by 7 (Seven) days.

b. Pending the hearing and determination of the intended Appeal to the Court of Appeal, there be Stay of Execution of the Judgment of this Court delivered on 25thJanuary, 2021and the Decree arising therefrom.

c. The Stay is conditional in that Applicant shall within 30 days from the date hereof provide a bank guarantee of the sum adequate to cover the entire Decree of Kshs.100,000,000. 00/= within 30 days from today.

d. The Stay Orders shall, if the Applicants timeously comply with the condition in (c) above, remain in force for a period of only 1 (one) year from the date of delivery of this Ruling, unless otherwise extended by the Court of Appeal.

e. Cost shall abide by the outcome of the Appeal.

It is so ordered.

DATED, SIGNED AND DELIVERED VIRTUALLY AT MOMBASA THIS 3RD DAY OF JUNE, 2021

D. O. CHEPKWONY

JUDGE