[2022] KEHC 1329 (KLR)

REPUBLIC OF KENYA

IN THE HIGH COURT OF KENYA

AT NYERI

CIVIL APPEAL NO. 41 OF 2021

GRACE WANGECHI GIKUNJU ……..1ST APPELLANT/APPLICANT

SIMON MURIITHI GIKUNJU ……….2ND APPELLANT/APPLICANT

VERSUS

SAMUEL KING`ORI NJOKI ………..........…...…………RESPONDENT

RULING

1. The appellants/applicants have filed an application dated 19th September 2021 seeking for stay of execution of the judgment and decree in Nyeri Civil Case No. 110 of 2020 pending the hearing and determination of the appeal that they have filed herein. The application is based on the grounds that the applicants will suffer irreparable damage and substantial loss if the application is not granted and the respondent proceeds to execute the decree.That the respondent is a person of straw with no means to refund the decretal sum were the appeal to succeed. That the applicants are ready and willing to abide by any conditions as to security that the court may issue.

2. The application was opposed by the respondent on the grounds that the same is frivolous, vexatious and an abuse of process of the court. That there is no basis of execution as there is as of now no decree capable of being executed. That the application does not meet the threshold of granting the orders sought. That there exists no arguable appeal and therefore that the orders being sought are an exercise in futility. That the respondent is not a man of straw as alleged as he operates a business and is able to refund the money.

Submissions-

3. The applicants submitted that they are apprehensive that if the decretal sum of Ksh.500,000/- is paid to the respondent he would not be in a position to refund the money in the event that the appeal is successful which will lead to them suffering substantial loss of the stated amount.That the respondent has not demonstrated to the court that he is engaged in any business that can enable the court to infer his ability to refund the money if paid before the appeal is heard and determined.That it was the duty of the respondent to show that he was in a position to refund the money. Counsel for the applicant cited the case of National Industrial Credit Bank Ltd v Aquinas Francis Wasike & Another(2006) eKLR where it was held that:

“This Court has said before and it would bear repeating that while the legal duty is on an applicant to prove the allegation that an appeal would be rendered nugatory because a respondent would be unable to pay back the decretal sum, it is unreasonable to expect such an applicant to know in detail the resources owned by a respondent or the lack of them. Once an applicant expresses a reasonable fear that a respondent would be unable to pay back the decretal sum, the evidential burden must then shift to the respondent to show what resources he has since that is a matter which is peculiarly within his knowledge..”

4. It was submitted that the application was filed without unreasonable delay. Counsel cited the case of G. N. Muema P/A Mt View Maternity & Nursing Home v Miriam Maalim Bishar & Another (2018) eKLR where it was held that in an application for stay of execution pending appeal it must be shown that the delay was not only inordinate but must also not cause prejudice to the opposing party.

5. It was submitted that the applicant is willing to deposit the entire judgment award in court as security in exchange of securing the orders sought. Counsel cited the case of Gitahi & Another v Warugongo, Nairobi Civil Application no. 13 of 1988, (1988) KLR where the Court of Appeal held that:

“..In an application for stay pending appeal the court is faced with a situation where judgment has been given. It is subject to appeal. It may be affirmed or it may be set aside. The court is concerned with preserving the rights of both parties pending that appeal. It is not the function of the court to disadvantage the defendant while giving no legitimate advantage to the plaintiffs. It is the duty of the court to hold the ring even-handedly without prejudicing the issue pending the appeal. For that purpose, it matters not whether the plaintiffs are secured in one way rather than another. It would be easier for the defendants or if for any reason they would prefer to provide security by a bank guarantee rather than cash. There is absolutely no reason in principle why they should not do so…The aim of the court in this case was to make sure, in an even-handed manner, that the appeal would not be prejudiced and that the decretal sum would be available if required.

6. It was finally submitted that the appeal raises arguable issues on liability and quantum. Counsel relied on the case of Manchar Singh Sagoo & Another v Caroline Njeri Mwicigi & 3 Others(2018) eKLR wherethe court quoted the case of Kenya Tea Growers Association v Kenya Planters & Agricultural Workers Union, Civil Application No. 72 of 2001 where it was held that the applicant need not show that the appeal is likely to succeed but that it is enough for him to show that there is at least one issue upon which the court would pronounce its decision.

7. The advocates for the respondent on the other hand submitted that the onus was on the applicants to show the kind of loss they were likely to suffer if the prayers sought were not granted. That this was not demonstrated. They relied on the case of Kinyunjuri Muguta v Wotoku Muguta (2018) eKLR where it was held that it was not enough to merely state that loss will be suffered but that the applicant must show the substantial loss that it will suffer in the event that the orders sought are not given. Counsel also cited the case of James Wangalwa & Another v Agnes Naliaka Chesoto (2012) eKLR where it was held that:

“No doubt, in law, the fact that the process of execution has been put in motion, or is likely to be put in motion, by itself , does not amount to substantial loss.Even when execution has been levied and completed, that is to say, the attached properties have been sold, as is the case here, does not in itself amount to substantial loss under Order 42 Rule 6 of the CPR. This is so because execution is a lawful process. The applicant must establish other factors which show that the execution will create a state of affairs that will irreparably affect or negate the very essential core of the applicant as the successful party in the appeal..

8. It was submitted that the applicants have not demonstrated that there is an arguable appeal. That the applicants did not attach a copy of the judgment of the trial court. Counsel relied on the case of Kinyunjuri Muguta v Wotuku Muguta (supra) where it was observed that without a copy of the judgment being availed to the court,it was not possible to interrogate whether the appeal had any chances of success.

9. It was submitted that it was not demonstrated that there exists a decree capable of execution. In this regard counsel cited the case of Ektela Ekailodio & 11 Others v Christopher Kurutyon Lonyala & 37 Others (2020)eKLR where the court dismissed an application for stay of execution where there was no decree or order capable of being executed.

10. Counsel submitted that the respondent has demonstrated in his replying affidavit that he is capable of refunding the entire decretal sum were the appeal to succeed.

11. It was further submitted that in the event that this court is inclined to grant the application then to order that the applicants pay half of the judgment sum plus costs to the respondent and the other half be deposited in a joint interest earning account to be opened between the advocates for the parties. The case of Francis Kakeu Muunda v Josephine Mulinge Kiluu & Another (2019) eKLR was cited where the court granted stay of execution of the lower court`s decree on condition that half of the decretal sum was paid to the respondent.

Analysis and Determination–

12. Order 42 Rule 6 of the Civil Procedure Rules provides the conditions under which an order for stay of execution pending the determination of an appeal can be granted. An applicant has to demonstrate the following:

(1) Substantial loss may result to the applicant unless the order was made.

(2) The application was made without delay.

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

13. In determining the application, the court has to bear in mind that thepower to grant stay of execution pending appeal is a discretionary one and like every aspect of discretion must be exercised judicially. The Court of Appeal in Butt v Rent Restriction Tribunal [1982] KLR 417gave guidance on how a court should exercise such discretion and held 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 unique requirements.The special circumstances in this case were that there was a large amount of rent in dispute and the appellant had an undoubted right of appeal.

14. The judgment in the case appealed against herein was delivered on the 19th July 2021 and the appeal was filed on the 17th August 2021. The appeal was therefore filed timeously without any delay. That condition has therefore been met.

15. The applicant says that she is apprehensive that if the decretal sum of Ksh.533,800/- is paid to the respondent, he may not be in a position to refund the money in the event that the appeal succeeds, in which case they will suffer substantial loss of the stated amount.She submitted that the respondent has not demonstrated that he is in a position to refund the judgment sum if it is paid to him before the appeal is heard and determined.

16. The duty to proof that the respondent is in a position to refund the money was on him as it is him who knows the resources that are in his possession–see National Industrial Credit Bank Ltd v Aquinas Francis Wasike & Another(supra). The respondent did not discharge that burden. All that he said in response is that he runs a business without disclosing the type of business he is involved in.This was not sufficient to prove that he is not a man of straw as alleged.He has therefore not shown that he is in a position to refund the money in case the appeal succeeds.The apprehension by the appellant that they stand to suffer substantial loss is well founded.

17. On security, the applicant is offering to have the decretal sum deposited in court pending the hearing and determination of the appeal. The respondent on the other hand proposes that half of the decretal sum be paid to the respondent and the other half be deposited in an interest earning account in the names of the advocates for the parties.

18. The offer by the applicant to have the decretal sum deposited in court is good security.It will ensure that the respondent is paid his due in the event that the appeal is unsuccessful.In the premise, there is no reason to deny the applicant the stay orders being sought when she is willing to have the money held by an independent party pending the hearing and determination of the appeal.

19. I have however considered the proposal by the respondent to have the money deposited in a joint account of the advocates representing the parties. I think that this is a better proposal as the parties will be in a position to negotiate the applicable interest with the bank.

20. The upshot is that I grant the prayer for stay of execution of the lower court`s judgment as prayed in prayer No.3 of the notice of motion pending the hearing and determination of the appeal herein. I further order that the judgment sum be deposited in an interest earning account to be opened jointly by the advocates representing the parties.

Orders accordingly. Costs to be in the cause.

Delivered, dated and signed at Nyeri this10TH day of March 2022.

J.N. NJAGI

JUDGE

In the presence of:

…………………N/A……for Appellants/Applicants

....………………N/A……for Respondent

Court Assistant:KINYUA

30 days R/A