[2022] KEHC 11742 (KLR)

Gede Enterprises Limited v Cheboi & another (Civil Appeal E153 of 2021) [2022] KEHC 11742 (KLR) (17 May 2022) (Ruling)

Neutral citation: [2022] KEHC 11742 (KLR)

Republic of Kenya

In the High Court at Eldoret

Civil Appeal E153 of 2021

EKO Ogola, J

May 17, 2022

Between

Gede Enterprises Limited

Appellant

and

Charles Yator Cheboi

1st Respondent

Wiskam Limited

2nd Respondent

(Being an Appeal from the ruling and orders of the Chief Magistrates’ Court at Eldoret (Hon. E. Kigen SRM) delivered on 12th November 2021 in Eldoret CMCC No. E773 of 2021)

Ruling

1. What is pending before the court is the Notice of Motion dated December 6, 2021. The application seeks the following orders;1. Spent2. a stay of execution on the ruling and order of November 12, 2021 in Eldoret CMCC No. E773 of 2021 pending the hearing of the Notice of motion dated December 6, 20113. Costs.

2. That application is based on the grounds contained therein and the deponements in the affidavit in support of the application.

3. There is also a preliminary objection dated December 14, 2021 where the 1st respondent raises the following objections;That the appellant has no right of appeal as this is an appeal on order outside section 75 of the Civil Procedure ActThat the applicant did not seek leave of court to appeal heretoThat this court has no jurisdiction to entertain the appeal at this stageThat the applicant has come to this court with unclean hands in that the subordinate court had pointed out to it that their earlier contempt could only be entertained if they purged their contempt which they have not.That the applicant is in contempt of court and should not be heard unless and until the contempt is purged.That the applicant should not be granted fresh orders when he is acting in I impunity against the previous orders of the subordinate court.

4. The applicant filed submissions on March 2, 2022. He submitted that the preliminary objection is without merit. Further, that the leave to appeal is not required. He cited section 75 of Cap 21 which provides for when appeals lie as of right and when they lie only with leave. He cited Order 51 Rule 10 (1) of the Civil Procedure Rulesand submitted that the application was brought before the trial court under sections 3 & 3A and Order 40 and 51. The magistrate demonstrated that she was considering an application for injunction under order 40 of the Civil Procedure Rules and therefore appeals from decisions made under order 40 lie as of right.

5. The applicant contended that as much as the trial court made a remark on content on 1st December 2021 they do not think that such a finding can be made in a casual manner. Order 40 rule 3 of the civil procedure rules provides how such applications are to be made. The applicant submitted that hearing a contemnor is an exercise of discretion and cited the case of Hadkinson v Hadkinson as cited in Nation Media Group v Child Welfare Society of Kenya (2021) eKLR and Rose Detho v Ratilal Automobiles Ltd & 6 others CA No. 304 of 2006 in support of the submission. The applicant maintained that the objection should be overruled and the applicant be granted audience.

6. The applicant submitted that it agrees that as a general rule an application for stay should in the first instance be made to the trial court but it is far from persuaded that such a rule ousts the appellate court’s jurisdiction to entertain a similar application. the applicant relied on the cases ofDennis Odhiambo v Elius Njoka & Another (2011) eKLR and the case of Aisha Motor Dealers Limited & Another v Wanza Kisuli & Peter Nzangi (2019) eKLR.

7. The applicant submitted that the test of stay of execution is settled by order 42 rule 6 of the Civil Procedure Rules. It cited the case of RWW v EKW (2019) and submitted that it is the appellant’s duty to show it will suffer substantial loss absent stay. If the suit vehicle is released it may never be recovered even if the appeal is successful. The basis for the fear is that the 1st respondent logged onto the appellant’s NTSA portal and without the appellant’s permission booked the vehicle for inspection. The respondent could vandalise the vehicle or put it out of its reach.

8. The 1st respondent lacks the means to pay the kshs. 1,031,700. 00 owed. The basis is the struggle the 1st respondent had in paying the instalments which led to the repossession. It cited the case of Charles Irungu v Elizabeth Kalunda Wakano (2021) eKLR and submitted that the 1st respondent has not attempted to show his financial means.

9. The appellant also contends that if stay does not issue the appellant will face a penalty for being in contempt. It cited the case of Michael Rotich v republic (2016) eKLR.

10. The order was made on November 12, 2021 and the application for stay was filed in the trial court on November 26, 2021. It was withdrawn and the present application made on December 7, 2021. There are 25 days from when the order was given to the making of the present application. there was no unreasonable delay.

11. The order sought is for the release of the suit vehicle to the 1st respondent, there is no monetary award. The applicant cited the case of Gianfranco Manenthi & another v Africa Merchant Assurance Company Ltd (2019) eKLR on the purpose of security and submitted that what needs to be preserved is the suit vehicle. The appellant has undertaken not to dispose of the suit vehicle while the appeal pends. However, it is willing to abide by any other order on security the court may deem fit.

Respondent’s Case: 12. The 1st respondent filed submissions on December 30, 2021. He submitted that the appellant has no right of appeal as he did not seek leave to appeal. he cited section 75 of the Civil Procedure Act and submitted that an appeal shall lie as a matter of right under the order specified therein. Where no right arises leave must be sought therein.

13. He contends that the court has no jurisdiction to entertain the appeal at this stage under order 22 rule 22(1) of the Civil Procedure Rules. An application for stay of execution must first be made to the court which passed the decree. The appellant has demonstrated impunity by failing to comply with the orders of the subordinate court and by withdrawing its application for stay which was already before court. the applicant is not deserving of the orders sought having failed to comply with the orders of the subordinate court.

14. He maintains that the applicant is in contempt of court as the stay of execution of the order in the lower court lapsed on November 26, 2021 and has not been stayed or set aside. he cited the case of Hadkinson v Hadkinson (1952) ALLER 567. He submitted that the vehicle was in the possession of the respondent when it was unlawfully taken away by the respondent. the court was right to release the vehicle to the plaintiff pending the hearing and determination of the suit. It is clear that the applicant is coming to this court with unclear hands.

15. The applicant has not satisfied the conditions for stay under order 21 rule 42 (6) of the Civil Procedure Rules.

16. Upon perusing the pleadings and submissions I have identified the following issues for determination; Whether the applicant has a right of appeal

Whether the court has jurisdiction to entertain the appeal at this stage

Whether the appellant should not be heard due to contempt of court

Whether stay of execution should be granted

Whether the Applicant has a right of Appeal 17. Section 75(1)(h) of the Civil Procedure Act states as follows;(1)An appeal shall lie as of right from the following orders, and shall also lie from any other order with the leave of the court making such order or of the court to which an appeal would lie if leave were granted—(h)any order made under rules from which an appeal is expressly allowed by rules.

18. Order 43 Rule 1(u) of theCivil Procedure Rules provides;(1)An appeal shall lie as of right from the following Orders and rules under the provisions of section 75(1)(h) of the Act—(u)Order 40, rules 1, 2, 3,7 and 11 (temporary injunctions);

19. A perusal of the ruling of the trial court indicates that the application was brought under Order 40 and 51 of the Civil Procedure Rules. The appeal is sought against the orders granted under Order 40 of the rules. In the premises it is clear that the appeal lies as of right and therefore the appellant has a right of appeal without seeking leave.

Whether the Court has Jurisdiction to entertain the Appeal at this Stage 20. The respondent’s position is that the court cannot hear the appeal as an application for stay must be made to the court which passed the decree.

21. Order 22 rule 22 of the Civil Procedure Rules provides;(1)The court to which a decree has been sent for execution shall, upon sufficient cause being shown, stay the execution of such decree for a reasonable time to enable the judgment-debtor to apply to the court by which the decree was passed, or to any court having appellate jurisdiction in respect of the decree or the execution thereof, for an order to stay the execution, or for any other order relating to the decree or execution which might have been made by the court of first instance, or appellate court if execution has been issued thereby, or if application for execution has been made thereto.

22. In Dennis Odhiambo v Elius Njoka & Another [2021] eKLR the court held as follows;Nowhere under Order 42 Rule 6 of the Civil Procedure Rules does it expressly provide that an Applicant seeking orders for stay pending appeal has to first make that application before the lower court and thereafter to this court. I agree that the recommended practice for a party seeking for stay of execution is for the Applicant to first seek those orders before the court which heard the case.

23. Order 42 Rule 6 of the Civil Procedure Rules gives the Applicant an opportunity to elect on whether to file the application before the court of first instance or the appellate court by virtue of its wording.

24. Order 46 provides;(1)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 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.

25. I find that the applicant did not err in withdrawing his application for stay in the lower court and filing the same before this court. As the application is properly before this court it follows that the court does have jurisdiction to entertain the appeal.

Whether the Appellant should not be heard due to contempt of Court 26. In Hadkinson vs Hadkinson (1952) 2 ALL ER 567 the court held;“The fact that a party to a case has disobeyed an order of the court, is not of itself a bar to his being heard, but if the contempt impedes the course of justice, then the court may use its discretion and refuse to hear him”.

27. Whereas I do acknowledge that stay of execution was issued on 14th September 2021 and the same lapsed on 26th November 2021 and has since not been stayed or set aside, I find that the same did not impede the course of justice. The vehicle being a movable property the appellant was apprehensive that the respondent may disappear with the same. While I do not encourage the behaviour of the appellant, I am of the position that it did not impede the course of justice to the extent that this court shall refuse to hear him.

28. I note that the stay of execution was for the purposes of filing a formal application which he did in the lower court and withdrew. In the application it is evident that he was apprehensive of being found in contempt.

29. I find that the appellant should not be barred from the court for the disobedience of the orders to release the suit vehicle.

Whether Stay of Execution should be granted 30. Order 46 Rule 6(2) provides;(2)No order for stay of execution shall be made under sub rule (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.

Substantial Loss 31. InStanley Karanja Wainaina & Another -V- Ridon Ayangu MutubwaNairobi H.C.C.A. 427/2015 it was stated:“It is not enough for the Respondent to merely swear that fact in an affidavit without going further to provide evidence of his liquidity. In my view the Respondent has evidential burden to show that he has the resources since this is a matter that is purely within his knowledge.

32. The applicant has stated that the respondent once logged onto the NTSA portal and booked the vehicle for inspection and that has informed his apprehension as to the release of the vehicle to the respondent. However, I do not think that is sufficient to warrant substantial loss. In keeping a vehicle operational it is required that the vehicle be taken for inspection and the respondent was merely acting in good faith to ensure that the vehicle was still operational legally.

33. In Samvir Trustee Limited v Guardian Bank Limited [2007] eKLR the court held;It is not enough to merely put forward allegations or assertion of substantial loss, there must be empirical or documentary evidence to support such contention. It means the court will not consider mere assertions of substantial loss on the face value but the court in exercising its discretion would be guided by adequate and appropriate evidence of substantial loss.

34. I further note that the trial court had ordered a stay of any attachment, repossession or sale of the said vehicle thereby protecting the subject matter of the suit pending the determination of the suit. This therefore preserves the subject matter of the suit and averts a possibility of substantial loss. The applicant has failed to prove he will suffer substantial loss.

Security 35. The purpose of security is to guarantee due performance of a decree. In the present case the subject matter is a vehicle and not a money decree. The amount in arrears that the applicant seeks to claim is kshs. 1,031,700. 00/-. The applicant’s offer for security is an undertaking that the vehicle will not be sold. I find that that is not a sufficient proposal for security. It is noted, however, that the applicant is open to abiding by any conditions of security.

Unreasonable Delay: 36. The orders were issued on November 12, 2021. The present application was filed on December 6, 2021. The oral orders of stay lapsed on November 26, 2021. The application was filed ten days after the orders lapsed. I do note the averments that the applicant attempted to have the application heard at the lower court but was not granted audience as he had not complied with the orders of the court and he withdrew the same. that notwithstanding, I find that the delay was not unreasonable.

37. Given that stay of execution is discretionary, the conduct of the appellant is not lost on the court. the appellant failed to release the vehicle as per the order of the court when the stay lapsed, without any justification as to the failure to obey the court orders. it is trite law that he who comes to equity must come with clean hands and in the premises the applicant has not.

38. I find that the application is unmerited and dismiss the same with costs.

DATED, SIGNED AND DELIVERED AT ELDORET THIS 17TH OF MAY 2022. E. O. OGOLAJUDGE