https://new.kenyalaw.org/akn/ke/judgment/kehc/2026/7239

Gathungu t/a Afriland Agencies v Kaggs Investment Ltd & 2 others (Civil Appeal E1243 of 2023) [2026] KEHC 7239 (KLR) (Civ) (21 May 2026) (Ruling) Neutral citation: [2026] KEHC 7239 (KLR) Republic of Kenya In the High Court at Nairobi (Milimani Law Courts) Civil Civil Appeal E1243 of 2023 WA Okwany, J May 21, 2026 Between Peter Gathungu t/a Afriland Agencies Appellant and Kaggs Investment Limited 1st Respondent Keithian Investment Limited 2nd Respondent Nyoike Njenga Hinga 3rd Respondent Ruling Background 1.The dispute between the parties herein originates from Milimani Commercial CMCC No. E4962 of 2020. The dispute arose from a Property Management Agreement allegedly entered into between the parties. 2.Judgment was entered against the Applicant in the subordinate court. Aggrieved by the said decision, the Applicant filed the present appeal challenging, inter alia; the the authenticity of signatures appearing on the Property Management Agreement; the admissibility and probative value of the forensic document examiner’s report; alleged conflict of interest involving the Respondents; and the legality and enforceability of the agreement under the Estate Agents Act, Cap 533 Laws of Kenya. 3.The Applicant sought stay of execution before this Court, pending determination of the appeal. Through orders issued on 1st March 2024, the Court granted conditional stay requiring the Applicant to deposit Kshs. 2,000,000/= with the Respondents and furnish a bank guarantee of Kshs. 6,000,000/= within sixty (60) days. 4.The Applicant contends that the Kshs. 2,000,000/= was duly paid as security for due performance of the decree. The Respondents, however, maintain that the Applicant did not fully comply with the conditional orders as the bank guarantee was never furnished. 5.Subsequently, on 6th October 2025, this Court (differently constituted) dismissed the appeal with costs to the Respondents. Dissatisfied with the judgment, the Applicant lodged a Notice of Appeal dated 21st October 2025 signifying intention to appeal to the Court of Appeal and thereafter filed the present application for stay pending appeal. The Application 6.This ruling is in respect to the Appellant/Applicant’s Notice of Motion dated 3rd November 2025. The application is brought under the provisions of Order 42 Rule 6 of the Civil Procedure Rules, Sections 1A, 1B and 3A of the Civil Procedure Act. 7.The Applicant seeks, inter alia, stay of execution of the judgment delivered on 6th October 2025 in HCCA No. E1243 of 2023 and all consequential orders pending the hearing and determination of the intended appeal before the Court of Appeal in COACA/E918 of 2025. 8.The application is supported by the grounds on its face, the Supporting Affidavit sworn by the Applicant, and the written submissions filed on behalf of the Applicant. The Respondents opposed the application through a Replying Affidavit dated 21st November 2025, a Preliminary Objection and written submissions filed in opposition thereto. The Applicant’s Case 9.The Applicant submitted that this Court has jurisdiction under Order 42 Rule 6(1), (2) and (4) of the Civil Procedure Rules to entertain and determine the application for stay pending appeal. 10.The Applicant submitted that the Respondents’ contention that only the Court of Appeal can grant stay under Rule 5(2)(b) of the Court of Appeal Rules is misconceived. Reliance was placed on the decisions in; Kenya Commercial Finance Co. Ltd vs. Afraha Education Society [2001] 2 EA 64; Vishram Ravji Halai vs. Thornton & Turpin [1990] KLR 365; and Stanley Kang’ethe Kinyanjui vs. Tony Ketter & 5 Others [2013] eKLR, for the proposition that the jurisdiction of the High Court and that of the Court of Appeal in applications for stay are concurrent and complementary. 11.The Applicant further submitted that the application is not an abuse of the court process merely because temporary stay had earlier been granted upon delivery of judgment. According to the Applicant, the earlier stay was merely intended to preserve the status quo to enable the Applicant pursue further appellate remedies. 12.On substantial loss, the Applicant argued that execution proceedings have already commenced and that the decretal amount continues to accrue interest daily. It is contended that unless stay is granted, attachment and sale of the Applicant’s assets may ensue, thereby rendering the intended appeal nugatory. 13.The Applicant further averred that auctioneers have previously proclaimed his property and that some of the assets sought to be attached possess sentimental value incapable of compensation by way of damages. 14.The Applicant also submitted that the Respondents have not demonstrated their financial ability to refund the decretal sum should the intended appeal succeed. 15.On security, the Applicant contended that the Kshs. 2,000,000/= previously paid pursuant to the orders of 1st March 2024 constituted security for due performance of the decree and not satisfaction thereof. The Applicant urged the Court to deem the same sufficient security or impose such additional conditions as may be just. 16.The Applicant maintained that the intended appeal raises substantial and arguable points of law including whether the Property Management Agreement was illegal and unenforceable under the Estate Agents Act, Cap 533; whether the Court properly evaluated the forensic document examiner’s report; whether there existed a conflict of interest tainting the agreement; and whether the Court misdirected itself on the standard of proof. The Applicant cited several authorities to support the contention that the intended appeal is arguable, including, Githunguri vs. Rushinga [1976] KLR 43; Muchoki Gitau & Another vs. Eastern and Southern African Trade and Development Bank [1993] eKLR and Arun C. Sharma vs. Ashana Raikundalia t/a Raikundalia & Co. Advocates & 2 Others [2014] eKLR. 17.The Applicant further cited National Industrial Credit Bank Ltd vs. Aquinas Francis Wasike & Another [2006] eKLR and Tropical Commodities Suppliers Ltd vs. Kenya Revenue Authority [2014] eKLR on the principles governing substantial loss. The Respondents’ Case 18.The Respondents opposed the application and submitted that the same is incompetent, devoid of merit and an abuse of the court process. 19.It was the Respondents’ position that the judgment delivered on 6th October 2025 was a negative order dismissing the appeal with costs and that there is therefore nothing capable of being stayed save for costs. 20.Reliance was placed on the decisions in Western College of Arts and Applied Science vs. Oranga & Others (1976) KLR 63; David Kipruto Chingi & Another vs. Director of Public Prosecutions & 2 Others [2016] eKLR; and Margaret Ndunge Kioko vs. Manase Ananda Caleb [2013] eKLR, where the courts held that negative orders are incapable of stay. 21.The Respondents further submitted that the Applicant has not demonstrated substantial loss or imminent execution and that the application is based merely on speculation and apprehension. 22.The Respondents additionally contended that the Applicant failed to comply with the conditional stay orders issued on 1st March 2024 because although Kshs. 2,000,000/= was paid, the Applicant did not furnish the required bank guarantee of Kshs. 6,000,000/=. 23.According to the Respondents, any consequential stay orders issued in relation to security lapsed upon delivery of judgment dismissing the appeal on 6th October 2025. Consequently, the Kshs. 2,000,000/= allegedly paid cannot constitute security for purposes of the present application and instead amounted to partial satisfaction of the decree. 24.The Respondents also argued that this Court is functus officio having already heard and determined the appeal on merit. It was submitted that the Court conclusively determined the issue of whether the appeal was arguable and cannot now sit on appeal over its own judgment by considering whether the intended appeal has chances of success. 25.Reliance was placed on Asige Keverenge and Anyazwa Advocates vs. Kenya Revenue Authority & Another [2019] eKLR, where the Court held that after determining an appeal on merit, it became functus officio regarding questions touching on arguability of the appeal. 26.The Respondents therefore urge the Court to dismiss the application with costs. Analysis and Determination 27.Having considered the pleadings, affidavits, submissions and authorities cited, I find that the main issues arising for determination are:a.Whether this Court has jurisdiction to entertain the application for stay of execution pending appeal;b.Whether the Court is functus officio;c.Whether the judgment sought to be stayed is a negative order incapable of stay;d.Whether the Applicant has satisfied the requirements for grant of stay under Order 42 Rule 6 of the Civil Procedure Rules; 28.Order 42 Rule 6(1) and (2) of the Civil Procedure Rules (CPR) provides that:“No appeal or second appeal shall operate as a stay of execution or proceedings under a decree or order appealed from except in so far as the court appealed from may order…” 29.The Rule further provides that an applicant seeking stay of execution must demonstrate that substantial loss may result unless the order is made; that the application has been made without unreasonable delay; and that security for due performance of the decree has been furnished. Jurisdiction 30.On this court’s jurisdiction, the Respondents submitted that the proper forum for the application is the Court of Appeal under Rule 5(2)(b) of the Court of Appeal Rules. The Applicant, however, relied on Order 42 Rule 6 of the Civil Procedure Rules and authorities affirming concurrent jurisdiction between the High Court and the Court of Appeal. 31.Order 42 Rule 6(1) of the CPR expressly empowers “the court appealed from” to grant stay pending appeal. In Kenya Commercial Finance Co. Ltd vs. Afraha Education Society [2001] 2 EA 64 the Court of Appeal held that the jurisdiction of the High Court and that of the Court of Appeal in stay applications are concurrent and complementary. In the said case, the court also emphasized that a party whose stay application fails in the High Court may still move the Court of Appeal independently for relief pending appeal. 32.Similarly, in Vishram Ravji Halai vs. Thornton & Turpin [1990] KLR 365, the Court affirmed that an applicant may first approach the court appealed from before moving to the Court of Appeal. 33.I therefore find that this Court is properly seized of jurisdiction to entertain the present application. Functus officio 34.The Respondents argued that this Court became functus officio upon determining the appeal on merit and could not revisit the issue of arguability of the intended appeal. 35.The doctrine of functus officio bars a court from reopening and reconsidering matters already conclusively determined. However, an application for stay pending appeal does not invite the Court to sit on appeal over its own judgment. The Court is merely called upon to determine whether the statutory threshold for preservation pending appeal has been met. 36.In Stanley Kang’ethe Kinyanjui vs. Tony Ketter & 5 Others [2013] eKLR, the Court recognized that an arguable appeal is not one that must necessarily succeed but one deserving judicial consideration. 37.Accordingly, I am not persuaded that the present application offends the doctrine of functus officio merely because the appeal was previously determined. Negative Order 38.The Respondents relied on Western College of Arts and Applied Science vs. Oranga & Others (supra) where the Court held that a negative order incapable of execution cannot be stayed. 39.It was not disputed that the judgment delivered on 6th October 2025 dismissed the Applicant’s appeal with costs. Ordinarily, a dismissal order is considered a negative order except as to costs. 40.The Applicant has however demonstrated that execution proceedings relating to the decretal sum arising from the subordinate court judgment are ongoing and that the Respondents have already undertaken execution processes against him. 41.In my view, the practical effect of the dismissal of the appeal was to revive and pave way for enforcement of the subordinate court decree. This Court cannot ignore the substance and practical consequences of the judgment merely because the order is framed in dismissive terms. 42.I therefore find that the Court retains residual jurisdiction to preserve the subject matter pending appeal where execution of the underlying decree is imminent. Stay Conditions under Order 42 Rule 6 CPR Substantial Loss 43.The cornerstone of an application for stay is proof of substantial loss as stated in Butt vs. Rent Restriction Tribunal [1982] KLR 417 and National Industrial Credit Bank Ltd vs. Aquinas Francis Wasike & Another [2006] eKLR. 44.The Applicant deponed that execution proceedings have commenced, that the decretal amount continues to accrue interest, and that attachment and sale of his assets may render the intended appeal nugatory. 45.The Applicant also contended that the Respondents have not demonstrated financial capacity to refund the decretal sum should the intended appeal succeed. 46.The Respondents did not place evidence before this Court to demonstrate their financial means or ability to refund the decretal amount if required. 47.In the circumstances of this case, I am satisfied that the Applicant has demonstrated the likelihood of substantial loss if stay is denied. Delay 48.Judgment was delivered on 6th October 2025, the Notice of Appeal was filed on 21st October 2025 while the present application was filed on 3rd November 2025. 49.I find that there was no unreasonable delay in the filing of the application. Security 50.The Applicant previously paid Kshs. 2,000,000/= pursuant to the conditional stay orders issued on 1st March 2024. Parties however disagreed on whether the said amount constituted security or partial satisfaction of the decree. 51.Even though the Applicant admittedly failed to furnish the bank guarantee of Kshs. 6,000,000/= as earlier directed, the Court notes that the sum of Kshs. 2,000,000/= remains in the hands of the Respondents. 52.It is trite that the purpose of security under Order 42 Rule 6 is to guarantee due performance of the decree and not to punish the Applicant. 53.In balancing the competing interests of both parties, I am satisfied that the interests of justice would be met by imposing additional security terms. Disposition 54.In the end, I find that the application dated 3rd November 2025 is merited and I therefore allow it in the following terms:a.There shall be a stay of execution of the judgment delivered on 6th October 2025 in HCCA No. E1243 of 2023 and all consequential proceedings pending the hearing and determination of the intended appeal before the Court of Appeal.b.The stay granted herein is conditional upon the Applicant depositing a bank guarantee of Kshs. 6,000,000/= from a reputable financial institution within forty-five (45) days from the date hereof.c.The Kshs. 2,000,000/= previously deposited pursuant to the orders of 1st March 2024 shall remain as security pending determination of the intended appeal.d.In default of compliance with Order (2) above within the stipulated period, the stay granted herein shall automatically lapse.e.Costs of the application shall abide the outcome of the intended appeal.It is so ordered. DATED, SIGNED AND DELIVERED AT NAIROBI THIS 21ST DAY OF MAY 2026.HON W. A. OKWANYJUDGEIn the presence ofMutemi for Simba for AppellantKiunga for RespondentUbah - Court Assistant