[2015] KEELC 169 (KLR)

REPUBLIC OF KENYA

IN THE ENVIRONMENT AND LAND COURT OF KENYA

AT NYERI

ELCA NO. 5 OF 2015

JOHN GACHUNJA NJOROGE .......................................APPELLANT/APPLICANT

-VERSUS-

JOSEPH NJOROGE MWANGI ......................................................... RESPONDENT

RULING

Introduction

1. Vide a plaint dated 25th January, 2010 and amended on 15th April, 2010 the respondent instituted a suit in the lower court to wit, Kigumo PMCCC No. 24 of 2010, seeking judgment against the appellant(applicant) for:-

a) An order of transfer of 0. 75 acres out of Loc. 2/Makomboki/1541 from the defendant to the plaintiff or in the alternative refund of Kshs.400,500/=.

b) Costs of the suit;

c) Interest on (b) above.

d) Further relief as may be fit and just.

2. After considering the case presented before him, the trial magistrate (TM), D. Orimba Ag. SPM, entered judgment in favour of the respondent in the following terms:-

“After considering the entire evidence, it is my humble finding that the plaintiff proved his case on a balance of probability. I will therefore enter judgment in his favour as prayed. I will also allow the costs of the suit.”

3. Aggrieved by the judgment of the lower court, the appellant preferred an appeal to this court and subsequently filed the notice of motion dated 21st November, 2013 seeking stay of execution of the judgment pending the hearing and determination of the appeal.

4. The application is premised on the grounds that the applicant has appealed the decision of the lower court; that the appeal was filed without unreasonable delay and that the appeal arguable (has high chances of success). Further that the respondent will not be unduly prejudiced if the orders sought are granted.

5. It is the appellant’s case that unless the orders sought are granted, the appeal may be rendered nugatory.

6. The application is opposed through the respondent’s replying affidavit sworn on 10th March, 2014. In that affidavit, the respondent has deposed that the application is made to defeat the course of justice and as such lacking in merit. In this regard, the respondent has pointed out that his cause of action was a breach of a contract executed

between him and the appellant. He argues that the appellant having failed to honour his part of the bargain, he cannot have his cake and eat it. In this regard, he points out hat the appellant failed to transfer the suit land to him and failed to refund the consideration he received. For theforegoing reasons, the appellant has no reason to continue holding the money.

7. In the unlikely event that this court is inclined to allow the application, he urges the court to order the appellant to deposit the decretal sum in an interest earning account to be opened in the names of the advocates for the parties pending the hearing and determination of the appeal.

8. The application was disposed of by way of written submissions.

Submissions

9. On behalf of the appellant, it is submitted that the judgment is ambigious as it does not make it clear whether the appellant should transfer the land or refund the consideration received. Arguing that it is reasonable to assume that the lower court decreed that the appellant transfer the suit property to the respondent, counsel for the appellant submits that it is fair that a stay order be granted to protect and preserve the status quo and the suit property.

10. On behalf of the respondent, it is submitted that no good reasons have been given to warrant keeping the respondent away from the fruits of his judgment; that the appellant who received consideration in respect of the suit property but failed to refund the consideration he receivedafter he failed to transfer the suit property to the respondent is unworthy of an equitable remedy and that the respondent, has approached court with unclean hands. The notwithstanding, the respondent urges the court if it is inclined to allow the application, to order that the entire decretal sum be deposited in an interest earning account to be opened in the joint names of the advocates for the parties.

11. The sole issue for the court’s determination is whether the applicant has made up a case for issuance of an order for stay pending appeal.

Analysis and determination:

Law applicable:

12. The relief of stay of execution pending appeal is governed by Order 42 Rule 6 of the Civil Procedure Rules. In determining an application for stay pending appeal, a court should be guided by the three prerequisites provided under Order 42 Rule 6 of the Civil Procedure Rules. These are:-

a) The application is brought without undue delay;

b) The court is satisfied that substantial loss may result to the applicant unless stay of execution is ordered;

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

Has the applicant herein satisfied the above requirements?

13. Starting with the requirement that the application must be brought without unreasonable delay, the instant application was filed barely two weeks after the judgment appealed from was delivered. Hence there was no unreasonable delay in bringing the application.

14. On whether substantial loss may result to the applicant unless stay of execution is ordered, I begin by pointing out that this test is the Cornerstone of the jurisdiction of the High Court in granting stay of execution. In this regard see the case of Kenya Shell Limited vs. Benjamin KarugaKigibu & Ruth Wairimu Karuga (1982-1988)l KAR 1018 where the Court of Appeal stated that:

“It is usually a good rule to see if Order 41 Rule 4 of the Civil Procedure Rules can be substantiated. 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 cornerstone of both jurisdiction for granting stay”(Emphasis supplied).

15. In the case of Bungoma Hc Misc Application No 42 of2011 James Wangalwa & Another vs. Agnes Naliaka Chesetoconcerning substantial loss it was held that:

“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. This is what substantial loss would entail...’’

16. In the case of Antoine Ndiaye v. African Virtue University(2015)eKLR Gikonyo J., observed

“The applicant must show he will be totally ruined in relation to the appeal if he pays over the decretal sum to the respondent. In other words he will be reduced to a mere explorer in the judicial process if he does what the decree commands him to do without any prospects of recovering his money should the appeal succeed. Therefore, in a money decree, like is the case here, substantial loss lies in the inability of the Respondent to refund the decretal sum should the appeal succeed. It matters not the amount involved as long as the Respondent cannot pay back. The onus of proving substantial loss and in effect that the Respondent cannot repay the decretal sum if the appeal is successful lies with the Applicant; follows after the long age legal adage that he who alleges must proof. Real and cogent evidence must be placed before the court to show that the Respondent is not able to refund the decretal sum should the appeal succeed. It is not, therefore, enough for a party to just allege as is the case here that the Respondent resides out of Kenya and his means is unknown. See what the Court said in the case of Machira t/a Machira & Co. Advocates vs. East African Standard (No. 2) (2002) KLR 63, that;

“In this kind of application for stay, it is not enough for the applicant to merely state that substantial loss will result. He must prove specific details and particulars… where no pecuniary or tangible loss is shown to the satisfaction of the court, the court will not grant a stay...”

This legal burden does not shift to the Respondent to prove he is possessed of means to make a refund. Except, however, once the Applicant has discharged his legal burden and has adduced such prima facieevidence such that the Respondent will fail without calling evidence, the law says that evidential burden has been created on the Respondent. And it is only where financial limitation or something of sort is established that the evidential burden is created on the shoulders of the Respondent, and he may be called upon to furnish an affidavit of means. See Harlsbury’s Law of England on this subject. In my view, substantial loss under order 42 Rule 6 is not in relation to the size of the amount of the decree or judgment because however large or small, the judgment-debtor is liable to pay it. The fact that the decree is of a colossal amount will only be useful material if the Applicant shows that the Respondent is not able to refund such colossal sum of money; it is not that the Respondent should always be a person of straw; the opposite could be true and a respondent may be a lucratively well-endowed person, individual or institution, who is able to refund the colossal sum of money. I also think the submission by the Applicant that the sum involved is substantial and if paid out will lead to the stalling of many projects by the Applicant, is not relevant as long as it has not shown that the Respondent cannot refund the money. Again, as long as the decree has not been reversed, the fear that projects will stall if the Respondent pays out of the decretal sum is also misplaced, for, the judgment-debtor remains liable to pay the decretal sum. The argument is fit in an application to pay by instalments or in some other acceptable mode…I say all these things because both parties have rights; the Applicant to his appeal which includes prospects of success; and the Respondent to the fruits of his judgment and that right should only be restricted or postponed where there is sufficient cause to do so.

On the basis of the above, the Applicant has not established that substantial loss will occur unless stay of execution is made. The Applicant seems to rely more on the success of the appeal to the extent of almost urging the grounds of appeal on immunity. The inquiry for purposes of stay pending appeal under Order 42 Rule 6 of the CPR is not really about the merits of the appeal but rather the loss which will be occasioned by satisfaction of the appeal in the event the appeal succeeds. I have extensively discussed this matter above and I cite the case of Jason Ngumba [2014] eKLR that:

‘’...Here, it is not really a question of measuring the prospects of the appeal itself, but rather, whether by asking the Applicant to do what the judgment requires, he will become a pious explorer in the judicial process.

But what was stated in the case of Absalom Dova vs.Tarbo Transporters [2013] eKLR is relevant,that:

‘’The discretionary relief of stay of execution pending appeal is designed on the basis that no one would be worse off by virtue of an order of the court; as such order does not introduce any disadvantage, but administers the justice that the case deserves. This is in recognition that both parties have rights; the Appellant to his appeal which includes the prospects that the appeal will not be rendered nugatory; and the decree holder to the decree which includes full benefits under the decree. The court in balancing the two competing rights focuses on their reconciliation which is not a question of discrimination’’.

How, therefore, will the court balance the rights of parties in the circumstances of this case?

Despite my findings above, I reckon that the Applicant is alive to the fact that even where stay is granted it must be on terms in the form of a security for the due performance of such decree or order as may ultimately be binding on the Applicant. And the Applicant has offered USD 20,000 as security. That may be a good gesture. But importantly I reckon that the Respondent made a proposal that, in the event stay of execution is granted, one half of the decretal sum be paid to the Respondent and the other half to be deposited in an interest earning account in the joint names of parties. Accordingly, there is room for a stay of execution given these sentiments by the parties as long as the parties’ rights are held in almost symmetrical bound. In light thereof, I order that there be a stay of execution of the decree herein on condition that the Applicant pays one half of the decretal sum to the Respondent within 45 days and deposits the other half in a joint interest earning account at Kenya Commercial Bank, Milimani High Court Branch. Within 60 days of today. The deposit shall be held as security for performance of the decree which may be ultimately binding on the Applicant. It is so ordered. I will not condemn the Applicant to pay costs of the application.”

17. In applying the principles enunciated in the case of AntoineNdiaye v. African Virtue University (supra) to the instant application, the appellant who was given an option to either pay the amount decreed in the judgment that is Kshs.400, 500/= plus costs and interest decided to give the judgment selective interpretation that it directed that he transfers the suit property to the respondent, which is not the case. The judgment clearly gave the appellant an option to wit, either to refund the failed consideration or honour his part of the bargain by transferring the suit property. To use the phrase used by the respondent, the appellant chose to eat his cake and have it, something that never happens in real life. One can either choose to eat their cake or have it. If they choose to eat it, they lose it. If they choose to have it, they then must forego the enjoyment that comes from eating it.

18. Unlike in the case of Antoine Ndiaye v. African VirtueUniversity (supra) where the applicant had offered security for due performance of such order as may ultimately be binding on it, in the instant case, the applicant has neither demonstrated the loss he would suffer unless stay of execution is granted nor provided security for due performance of any order as may be ultimately be binding on him.

19. For those reasons, I find and hold that the applicant have failed to satisfy the court that he will suffer irreparable loss unless the orders sought are granted.

20. Consequently, I find the application to be lacking in merits and dismiss it with costs to the respondent.

Dated, signed and delivered at Nyeri this 30th day of September, 2015.

L N WAITHAKA

JUDGE.

In the presence of:

Joseph Njoroge Mwangi – respondent

N/A for the appellant

Court assistant - Lydia