https://new.kenyalaw.org/akn/ke/judgment/keelc/2026/4471

**REPUBLIC OF KENYA IN THE ENVIRONMENT AND LANDCOURT AT KISUMU ELCLA E022 OF 2026** **GOR CONSTRUCTION & HARDWARE LIMITED.......................................................APPELLANT/APPLICANT** **VERSUS HENRY NDISI OKELLO................................................RESPONDENT** **RULING** **Introduction** 1. Before this Court is the Notice of Motion application dated 30th March 2026, brought pursuant to the provisions of Order 42 Rule 6, Rule 6(3), and Order 51 Rule 1 of the Civil Procedure Rules (2010), alongside Sections 1A, 1B, and 3A of the Civil Procedure Act (Cap 21, Laws of Kenya). The Appellant/Applicant, Gor Construction and Hardware Limited, seeks the following specific prayers: 2. Spent 3. Spent 4. A stay of execution of the judgment and/or order of the lower court dated 3rd March 2026, and all consequential orders flowing therefrom pending the hearing and determination of the Appeal. 5. The costs of the application be provided for. 6. The dispute arises from a judgment delivered on 3rd March 2026 by the Hon. Amos Kiprop Makoross, Senior Principal Magistrate at the Tamu Magistrate’s Court, in MCELC/E017/2021. In that judgment, the trial court found in favour of the Plaintiff/Respondent, Henry Ndisi Okello, and declared that a sale agreement dated 9th February 2012 was null and void. Consequently, the court issued a mandatory injunction directing the Sub-County Lands Registrar (Awasi, Nyando, Nyakach) to cancel the Applicant’s entry as owner of the suit parcel, L.R. KISUMU/FORT-TERNAN/856, and to revert the title to the Respondent. The trial court also awarded the costs of the suit to the Respondent. Upon delivery of the judgment, the trial court granted an automatic 30-day stay of execution, which was set to lapse on 3rd April 2026, prompting the filing of the instant Notice of Motion under a certificate of urgency. ## Summary of the Application 1. The application is supported by the sworn affidavit of Gordon Orure Kaoko, a director of the Applicant company, dated 30th March 2026. The Applicant averred that the execution of the decree, which mandates that the Sub-County Lands Registrar cancel the registered title, would leave it vulnerable and cause substantial and irreparable loss. The Applicant contended that he would lose property that could not be easily recovered if the appeal ultimately succeeds. The Applicant argues that if the title is cancelled and reverted to the Respondent, the Respondent could subsequently alienate, transfer, or charge the property to third parties, thereby rendering the intended appeal nugatory. 2. The Applicant further deposed that the application has been brought in good faith and without unreasonable or inordinate delay, having been filed just weeks after the judgment was delivered. In relation to the statutory requirement for security for due performance, the Applicant averred that he is a businessperson capable of satisfying the Trial Court’s decree if and when required. The Applicant expressed readiness and willingness to abide by any directions issued by the Court in respect of security for costs to meet the ends of justice. **Summary of the Reply** 1. The Respondent, Henry Ndisi Okello, opposed the application by filing a replying affidavit sworn on 4th May 2026. The Respondent averred that the Applicant had paid only Kshs. 3,200,000 of the agreed Kshs. 7,000,000 purchase price, leaving a balance. The Respondent stated that the transfer of the title deed into the Applicant’s name before full payment was due to a close personal relationship. The Respondent noted that, before approaching the court, he had formally rescinded the agreement on 21st March 2014, as it had become clear that the Applicant had no intention of paying the balance. 2. Addressing the issue of substantial loss, the Respondent deposed that the only execution mechanism available under the decree is the transfer of the suit property back into the Respondent’s name. The Respondent argued that it is implausible for the Applicant to claim it will suffer irreparable loss if property, for which it has refused to pay the agreed consideration, is returned to its rightful owner. Conversely, the Respondent asserts that he has suffered, and continues to suffer, unquantifiable loss, having been deprived of the legal title to his land for years without receiving the equivalent monetary consideration. 3. Regarding security for the due performance of the decree, the Respondent averred that the suit property is extensive, measuring 69.75 acres. Based on current market valuation, the Respondent asserts that agricultural and commercial land in the area is at least Kshs. 800,000 per acre. Consequently, the Respondent values the suit property at approximately Kshs. 55,800,000. Based on this valuation, the Respondent urged that, should the Court be inclined to exercise its discretion to grant a stay of execution, the Applicant be ordered to deposit a cash sum of Kshs. 30,000,000 into an interest-bearing account in the joint names of the advocates for both parties as security. **Summary of Submissions** 1. The Applicant’s submissions, dated 23rd June 2026, ground their arguments in the court’s broad discretion under Order 42 Rule 6 of the Civil Procedure Rules. The Applicant argues that this discretion must be exercised to preserve the subject matter of the appeal. To articulate this principle, the Applicant relied on ***Felix Mochiemo Oindi v Gutonya Newton Mbogo [2018] eKLR,*** which states that: ***“1. The power of the court to grant or refuse an application for a stay of execution is a discretionary power. The discretion should be exercised in such a way as not to prevent an appeal.*** ***2. The general principle in granting or refusing a stay is; if there is no other overwhelming hindrance, a stay must be granted so that an appeal may not be rendered nugatory should that appeal court reverse the judge's discretion...*** ***3. A judge should not refuse a stay if there are good grounds for granting it merely because in his opinion, a better remedy may become available to the applicant at the end of the proceedings.*** ***4. The court in exercising its discretion whether to grant or refuse an application for stay will consider the special circumstances of the case and the unique requirements...*** ***5. The court, in exercising its powers under Order XLI, Rule 4(2)(b) of the Civil Procedure Rules, can order security upon application by either party or on its own motion. Failure to put security for costs as ordered will cause the stay of execution to lapse.”*** 1. On the cornerstone requirement of substantial loss, the Applicant cited ***Michael Wanjihia Onesmus v Francis Karanja Waihiga [2017] eKLR*** to argue that the court must protect an appellant from securing a hollow victory: ***“It has been said before that substantial loss is the cornerstone upon which an application for stay of execution pending appeal is anchored (See the case of Kenya Shell Limited vs Benjamin Karuga Kigibu & another1982-1988) I KAR 1018). The Court needs to strive to protect the Appellant so that he does not end up leaving a paper judgment in the even that his appeal succeeds.”*** 1. The Applicant contended that if the Respondent is permitted to execute the decree, he will instruct the Registrar of Lands to revoke the title, thereby ignoring the commercial interests and investments the Applicant claims to have made in the land. If the appeal is successful, restoring the previous situation would be impossible, causing a significant setback to the Applicant’s business and rendering the appeal effectively nugatory. 2. Regarding security, the Applicant proposed depositing the title deed of the suit property as security for costs citing ***Focin Motorcycle Co. Limited v Ann Wambui Wangui & another [2018] eKLR,*** that: ***“Where the Applicant proposes to provide security as the Applicant has done, it is a mark of good faith that the application for stay is not just meant to deny the Respondent the fruits of judgment. My view is that it is sufficient for the Applicant to state that he is ready to provide security or to propose the kind of security but it is the discretion of the court to determine the security. The Applicant has offered to provide security and has therefore satisfied this ground for stay.”*** 1. The Respondent’s submissions, dated 25th June 2026, counter the Applicant’s assertion that the threshold for a stay has been met. The Respondent relied on the Court of Appeal decision in ***Halai & Another v Thornton & Turpin (1963) Ltd [1990] eKLR,*** which set out the tripartite test that fetters the court’s discretion, thus: ***“The High Court’s discretion to order stay of execution of its Order or Decree is fettered by three conditions, namely; Sufficient Cause, substantial loss would ensue from a refusal to grant stay, the Applicant must furnish security, the application must be made without unreasonable delay. In addition, the Applicant must demonstrate that the intended Appeal will be rendered nugatory if stay is not granted...”*** 1. The Respondent contended that the Applicant cannot claim substantial property loss when full payment was never made, and viewed the claim as legally inappropriate. To support the view that the Applicant must provide concrete evidence of substantial loss rather than merely asserting it, the Respondent cited ***Kenya Shell Limited v Benjamin Karuga Kibiru & another [1986] KECA 94 (KLR),*** where the court stated: ***“If there is no evidence of substantial loss to the applicant, it would be a rare case when an appeal would be rendered nugatory by some other event. Substantial loss in its various forms, is the corner stone of both jurisdictions for granting a stay. That is what has to be prevented. Therefore without this evidence it is difficult to see why the respondents should be kept out of their money.”*** 1. To further reinforce the requirement for evidentiary proof of loss, the Respondent quotes the High Court decision in ***Equity Bank Limited v Taiga Adams Company Limited [2000] eKLR,*** where the court held: ***“In the application before me, the applicant has not shown or established the substantial loss that would ensue if this stay is not granted. The only way of showing or establishing substantial loss is by showing that if the decretal sum is paid to the Respondent - that is execution is carried out - in the event the appeal succeeds, the Respondent would not be in a position to pay- reimburse as he/it is a person of no means. Here, no such allegation is made, much less established, by the appellant/applicant.”*** 1. On the issue of security, the Respondent vehemently opposed the Applicant’s proposal to use the title deed of the suit property, arguing that because the Trial Court declared the sale agreement null and void and ordered the cancellation of the title, the document constitutes tainted security that cannot guarantee performance. Relying on the alleged current valuation of the land at Kshs. 55,800,000, the Respondent proposed a cash deposit of Kshs. 30,000,000. The Respondent cites the reasoning in ***Arun C. Sharma v Ashana Raikundalia T/A A. Raikundalia & Co. Advocates [2014] eKLR,*** that: ***“The purpose of the security needed under Order 42 is to guarantee the due performance of such decree or order as may ultimately be binding on the applicant. It is not to punish the judgment debtor… Civil Process is quite different because in civil process the judgment is like a debt hence the applicants become and are judgment debtors in relation to the respondent. That is why any security given under Order 42 rule 6 of the Civil Procedure Rules acts as security for due performance of such decree or order as may ultimately be binding on the applicants. I presume the security must be one which can serve that purpose.”*** **Analysis and Determination** 1. Having meticulously considered the Notice of Motion, the supporting and reply affidavits, and the parties' submissions, the sole issue that crystallises for determination is whether the Applicant has met the threshold for granting stay of execution pending appeal. The substantive legal threshold for the grant of a stay of execution is codified in Order 42 Rule 6(1) and (2) of the Civil Procedure Rules, 2010, which provides that: *“(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.* *(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.”* 1. It is trite that the Court’s power to grant a stay of execution of a decree pending appeal is discretionary. However, that discretion should be exercised judicially, as in ***Butt v Rent Restriction Tribunal [1979] KECA 22 (KLR),*** where the Court of Appeal held: ***“A stay which would otherwise be granted ought not to be refused because the judge considers that another, which in his opinion will be a better remedy, will become available to the applicant at the conclusion of the proceedings. It is in the discretion of the court to grant or refuse a stay but what has to be judged in every case is whether there are or not particular circumstances in the case to make an order staying execution. It has been said that the court as a general rule ought to exercise its best discretion in a way so as not to prevent the appeal, if successful from being nugatory…”*** 1. It follows, therefore, that, in order to succeed in an application for a stay of execution or proceedings pending appeal, an applicant must demonstrate that: i). The application has been brought without undue delay; ii). Substantial loss may result unless the order of stay is issued; and iii). The applicant must provide security for the due performance of any decree or order that may ultimately be found binding on the applicant. **Unreasonable Delay** 1. The first statutory prerequisite requires that the application be brought without unreasonable delay. The trial court delivered its judgment on 3rd March 2026, granting an automatic 30-day stay of execution. The applicant filed the notice of motion herein on 30th March 2026. This was well within the 30-day moratorium period initially granted by the lower court. As the application was instituted before the initial stay expired and within the same month as the judgment was delivered, the requirement that it be brought without unreasonable delay is satisfied. **Substantial Loss** 1. The second prerequisite is the demonstration of substantial loss. The Respondent relied on the premise that the Applicant cannot suffer legally recognisable loss in relation to a property for which it has failed to remit the agreed consideration. The Respondent attempted to align the dispute with the principles governing standard commercial money decrees, in which substantial loss is typically established by showing the decree-holder’s inability to refund the decretal sum should the appeal succeed. However, an analysis of the decree issued by the Trial Court reveals that it orders a mandatory injunction directing the Sub-County Lands Registrar to cancel the Applicant’s entry as the absolute proprietor of the suit land and to revert the title to the Respondent. 2. The nature of the decree in this matter is such that, if execution is permitted to proceed unabated, the title will pass to the Respondent, who will then have the legal capacity to alienate, charge, subdivide, or transfer the property at will. In this context, the underlying consideration for a stay of execution is the need to preserve the subject matter of the appeal, so as to give this Court the opportunity to evaluate the legality of the rescission. The Applicant has, therefore, discharged the burden of proof on this point. **Security for Due Performance** 1. The final condition is the provision of security for the due performance of the decree. Order 42 Rule 6(2)(b) requires an applicant to furnish such security as the court orders for the due performance of any decree or order that may ultimately be binding on the Applicant. 2. The parties’ positions on the appropriate security mechanism are diametrically opposed. The Applicant proposed depositing the original title deed for the suit land, while the Respondent proposed payment of Kshs. 30,000,000 as an estimated market value of the property. This Court holds that the Trial Court evaluated the evidence, declared the sale agreement null and void, and ordered the cancellation of the title deed. A title whose very existence and validity are the subject of a cancellation order currently under appeal cannot serve as an independent guarantee of performance. Accordingly, the Applicant’s proposal is rejected. 3. Conversely, the Respondent’s demand for a cash deposit of Kshs. 30,000,000 must be scrutinised through the lens of proportionality. The Respondent bases this figure on an alleged, unverified current market valuation of the 69.75 acres in the amount of Kshs. 800,000 per acre. Notably, the dispute before the Trial Court arose from a 2012 contract in which the mutually agreed purchase price for the entire parcel was Kshs. 7,000,000. The record shows, and the Respondent admits, that the Applicant paid Kshs. 3,200,000 of this sum, leaving an unpaid contractual balance of Kshs. 3,800,000. 4. While courts judicially notice the appreciation of real estate over time, an order for security under Order 42 Rule 6 must remain directly proportionate to the decree and the original dispute. Ordering the Applicant to deposit Kshs. 30,000,000 to secure a decree arising from a Kshs. 7,000,000 land sale contract, with nearly half paid, borders on the punitive and may be viewed as a deliberate barrier to justice. However, the Respondent is entirely justified in demanding that he not be deprived of the fruits of litigation without adequate security. Therefore, to balance the scales of justice, and given the undisputed paid balance of Kshs. 3,800,000 from the original contract, an order for a cash deposit of Kshs. 2,000,000 is deemed just, proportionate, and sufficient to guarantee the due performance of the decree. This sum should be deposited in a joint interest-bearing account to protect its value against inflation for whichever party ultimately succeeds. **Disposition** 1. The Court finds that the Applicant has met the threshold for the grant of a conditional stay of execution pending appeal. For the foregoing reasons, the Notice of Motion application dated 30th March 2026 is allowed upon the following terms: 2. A conditional stay of execution of the judgment and decree of the Trial Court delivered on 3rd March 2026 is issued, pending the hearing and determination of the appeal. 3. The Appellant/Applicant shall deposit Kshs. 2,000,000 (Two Million Kenya Shillings) into a joint interest-earning account in the names of the Advocates on record within forty-five (45) days of the date of this Ruling. 4. If the Appellant/Applicant fails to comply with the condition in order (ii) above within the stipulated forty-five (45) days, the order for stay of execution shall automatically lapse without further reference to this Court, and the Respondent shall be at liberty to proceed with the full execution of the decree. 5. The costs of this application shall abide the outcome of the appeal. **Delivered virtually, signed and dated this 16th day of July 2026.** **C.C. Oluoch-Judge** In the presence of: Mr Odero for the Applicant Faith Court Assistant