[2023] KEHC 25443 (KLR)

Kapsimbiri Secondary School v Chepngetich (Suing as the Legal Representative of Nicholas Kipkorir Chirchir) & another (Civil Appeal E037 of 2023) [2023] KEHC 25443 (KLR) (17 November 2023) (Ruling)

Neutral citation: [2023] KEHC 25443 (KLR)

Republic of Kenya

In the High Court at Bomet

Civil Appeal E037 of 2023

RL Korir, J

November 17, 2023

Between

Kapsimbiri Secondary School

Applicant

and

Beatrice Chepngetich (Suing as the Legal Representative of Nicholas Kipkorir Chirchir)

1st Respondent

Kenya Commercial Bank Ltd

2nd Respondent

Ruling

1. The Applicant filed a Notice of Motion Application dated 7th July 2023 which sought the following Orders: -i.Spent.ii.Spent.iii.That there be a stay of execution of the Judgment herein pending the hearing and determination of this Appealiv.That costs of this application be provided for.

2. The Application was brought under section 1A, 3A and 79G of the Civil Procedure Act, Order 22 Rule 22 and Order 42 Rule 6 (1) and (2) of the Civil Procedure Rules and it was based on the grounds on the face of the Application and further by the Supporting Affidavit sworn by Peter K. Cheboi on 7th July 2023.

The Applicant’s Case. 3. The Applicant stated that the subordinate court delivered a Judgment dated 6th June 2023 where the court ordered the Applicant to pay the 1st Respondent Kshs 1,955,100/= as general and special damages.

4. It was the Applicant’s case that its Board of Governors were aggrieved by the trial court’s decision and lodged an appeal and as such they sought stay of execution of the said Judgment pending the hearing and determination of their appeal.

5. The Applicant stated that unless this court restrains the 1st Respondent, she may proclaim and cart away its attachable assets thereby making this Application and their Appeal superfluous. The Applicant further stated that it would suffer substantial loss and damage if execution was to proceed.

6. It was the Applicant’s case that its Appeal was arguable and had a high chance of success. It was the Applicant’s further case that the 1st Respondent was a person of unknown means and it was apprehensive that if the Decretal sum was paid out and the Appeal was successful, it would not be refunded.

7. The Applicant stated that it was ready and willing to give security for the decretal amount in the form of an Insurance Bond or Bank Guarantee or any other form that the court deems fit.

8. It was the Applicant’s case that the 1st Respondent would suffer no prejudice if the stay was granted.

The Response 9. Through her Replying Affidavit dated 14th July 2023, the 1st Respondent stated that she opposed the Application as it was meant to frustrate her from enjoying the fruits of her Judgment. She further stated that she would be prejudiced if the stay was granted.

10. It was the 1st Respondent’s case that the Applicant should pay her half the decretal sum pending the hearing and the determination of its Appeal.

11. On 25th July 2023, I directed that the Appeal be canvassed by way of written submissions.

Applicant’s Written Submissions. 12. Through its written submissions dated 14th September 2023, the Applicant submitted that the decretal sum was Kshs 1,955,100/= and that it would suffer substantial loss if execution was allowed to proceed. That the ability of the 1st Respondent to refund the decretal sum if the Appeal was successful was unknown. The Applicant further submitted that its Appeal would be rendered nugatory and would become an academic exercise if the 1st Respondent would be unable to refund the decretal sum.

13. It was the Applicant’s submission that it had a legitimate fear that the 1st Respondent may cart away their motor vehicle registration number KCE 815D an Isuzu bus in execution of her Decree.

14. The Applicant submitted that its Appeal raised triable issues and had a high chance of success.

15. It was the Applicant’s submission that they brought the present Application without delay. That the Judgment in the trial court was delivered on 6th June 2023 and the present Application was filed on 10th July 2023 which difference was 1 month and 4 days. It was the Applicant’s further submission that there was no inordinate delay in filing the present Application.

16. The Applicant submitted that it was ready and willing to give security for the decretal amount in the form of an Insurance Bond or Bank Guarantee or any other form that the court deems fit.

1st Respondent’s written submissions 17. The 1st Respondent submitted that Judgment in the trial court had been issued in her favour and she should not be denied the fruits of her success. That the Applicant had not proved any substantial loss it would suffer if she was to be paid the decretal sum. The 1st Respondent further stated that the prayer for stay of execution was oppressive.

18. It was the 1st Respondent’s submission that the Applicant should pay her half the decretal sum and the other half to be deposited in court as security pending the hearing and determination of the Appeal. She relied onNicholas Stephen Okaka & another vs Alfred Waga Wesonga (2022) eKLR.

19. I have read through and carefully considered the Notice of Motion Application dated 7th July 2023, the 1st Respondent’s Replying Affidavit dated 14th July 2023, the Applicant’s Written Submissions dated 14th September 2023 and the 1st Respondent’s Written Submissions dated 19th September 2023. The only issue for my determination was whether the Applicant had satisfied the requirements for the grant of the Order of Stay of Execution.

20. The principles that relate to Stay of Execution Orders are well settled. Order 42 Rule 6 of the Civil Procedure Rules stipulates: -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 orders 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; andb)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”.

21. Thus under Order 42 Rule 6(2) of the Civil Procedure Rules, the Applicant should satisfy the court that:-i.Substantial loss may result to it unless the order is granted.ii.That the Application has been made without unreasonable delay.iii.The Applicant gives such security as the court orders for the due performance of such Decree or order as may ultimately be binding to them.

22. Regarding the issue of substantial loss, the Court of Appeal in the case of Kenya Shell Limited vs Benjamin Karuga Kibiru & another (1986) eKLR, held that: -“Substantial loss in its various forms, is the cornerstone of both jurisdictions for granting 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.”

23. Similarly inJames Wangalwa & Another vs Agnes Naliaka Cheseto (2012)eKLR, Gikonyo J 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 theCPR. 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 ... the issue of substantial loss is the cornerstone of both jurisdictions. Substantial loss is what has to be prevented by preserving the status quo because such loss would render the appeal nugatory.”

24. The Applicant stated that it would suffer substantial loss unless the execution of the Decree was stayed. That the decree was for a substantial amount of Kshs 1,955,100/= and the 1st Respondent being a person of unknown means would not be able to refund it the decretal sum in the event that its Appeal succeeded.

25. In my view, the burden is on the Applicant to prove that the 1st Respondent would not be able to refund the decretal sum. Shifting that burden to the 1st Respondent who is the Judgment holder is unjust. In the case of ABN AMRO Bank vs Lemond Foods Limited Civil Application No.15 of 2002 the Court Appeal held that:-“The burden is on the applicant to show that the appeal shall be rendered nugatory say by swearing upon reasonable grounds that the respondent will not be in a position to refund the decretal sum if it were paid over to him and the pending appeal was to succeed. . . .”

26. The Applicant, other than alleging that the 1st Respondent was a person of straw, did not adduce any evidence or set out factual circumstances to demonstrate that it would suffer substantial loss if the execution was not stayed.

27. Based on the evidence before me, it is my finding that the Applicant has not proved the substantial loss that it would suffer.

28. On the issue of unreasonable delay, In Republic vs Attorney General & Another, Baps International Limited (Interested Party) Ex parte (2020) eKLR, Nyamweya J. (as she then was) stated: -“The concept of what is reasonable time is flexible, and will depend on the circumstance of a case, as held in Law Society of Kenya v Attorney General &2 others [2016] eKLR. Relevant circumstance includes the nature of the matter to which the inaction relates, any mitigating circumstances on the part of the decision make, and adverse consequences of delay, and the need to ensure fairness………….”

29. Judgment in the trial court was delivered on 6th June 2023. The present Application for stay of execution was filed on 10th July 2023. It is my finding that the seven weeks’ difference represents a reasonable timeline within which this Application was filed.

30. Regarding security for the performance of the Decree, Gikonyo J in the persuasive case of Arun C Sharma vs. Ashana Raikundalia t/a Raikundalia & Co. Advocates & 2 Others (2014) eKLR held 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.”

31. Similarly, inGianfranco Manenthi & Another vs Africa merchant Assurance Co. Ltd (2019) eKLR Nyakundi J. observed: -“The applicant must show and meet the condition of payment of security for due performance of the decree. Under this condition, a party who seeks the right of appeal from a money decree of the lower court for an order of stay must satisfy this condition on security. In this regard, the security for due performance of the decree under Order 42 Rule 6(1) of the Civil Procedure Rules, it is trite that the winner of litigation should not be denied the opportunity to execute the decree in order to enjoy the fruits of his judgment in case the appeal falls.Further Order 42 should be seen from the point of view that a debt is already owed and due for payment to the successful litigant in a litigation before a court which has delivered the matter in his favour. This is therefore to provide a situation for the court that if the appellant fails to succeed on appeal there could be no return to status quo on the part of the plaintiff to initiate execution proceedings where the judgment involves a money decree. The court would order for the release of the deposited decretal amount to the respondent in the appeal….Thus, the objective of the legal provisions on security was never intended to fetter the right of appeal. It was also put in place to ensure that courts do not assist litigants to delay execution of decrees through filing vexatious and frivolous appeals. In any event, the issue of deposit of security for due performance of decree is not a matter of willingness by the applicant but for the court to determine……..”

32. The Applicant has demonstrated willingness to deposit security as a condition for the award of the stay of execution. The Applicant submitted that the security would be in the form of an Insurance Bond, a Bank Guarantee or any other form that this court deemed necessary.

33. It is salient to note that the power of the court in deciding whether or not to grant a stay of execution is discretionary. In the case of Butt v Rent Restriction Tribunal (1982) KLR 417 the Court of Appeal 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.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 order for stay of execution to lapse.”

34. Also in the case of Samvir Trustee Limited vs Guardian Bank Limited (UR), Warsame J (as he then was), held that:-“The Court in considering whether to grant or refuse an application for stay is empowered to see whether there exist any special circumstances which can sway the discretion of the court in a particular manner. But the yardstick is for the court to balance or weigh the scales of justice by ensuring that an appeal is not rendered nugatory while at the same time ensuring that a successful party is not impeded from the enjoyment of the fruits of his judgement. It is a fundamental factor to bear in mind that, a successful party is prima facie entitled to the fruits of his judgement; hence the consequence of a judgement is that it has defined the rights of a party with definitive conclusion”.

35. I have noted that the Applicant’s main reason for the prayer of stay of execution is that it was apprehensive that the 1st Respondent would be unable to refund it the decretal sum if the Appeal succeeded. I have also noted that the 1st Respondent was the decree holder who should be enjoying the fruits of the Judgment. This Court while balancing these two interests, must satisfy itself that that no party would suffer undue prejudice.

36. This principle was enunciated in the decision of Gikonyo J. in Absalom Dova vs. Tarbo Transporters (2013) eKLR, where he stated: -“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…”

37. Similarly in RWW vs EKW (2019) eKLR, the court held that:-“The purpose of an application for stay of execution pending an appeal is to preserve the subject matter in dispute so that the rights of the appellant who is exercising the undoubted right of appeal are safeguarded and the appeal if successful, is not rendered nugatory. However, in doing so, the court should weigh this right against the success of a litigant who should not be deprived of the fruits of his/her judgment. The court is also called upon to ensure that no party suffers prejudice that cannot be compensated by an award of costs.Indeed to grant or refuse an application for stay of execution pending appeal is discretionary. The Court when granting the stay however, must balance the interests of the Appellant with those of the Respondent………..”

38. In the final analysis, even though the Applicant has failed to satisfy all the three conditions for the grant of stay of execution, it is my finding that the Applicant does not deserve to be driven away from the seat of justice as its right of appeal is enshrined in the constitution. The Court of Appeal in Judicial Service Commission & Secretary, Judicial Service Commission v Kalpana H. Rawal (2015) eKLR held that: -“………..a right to appeal is part of a right to fair trial…..”

39. In the end, having considered the pleadings and evidence before me and in the final analysis thereof, stay of execution of the Judgment in Sotik Civil Suit Number 142 of 2018 is granted on the following conditions: -i.The Applicant shall pay the 1st Respondent half of the decretal sum being Kshs 977,550/= within 45 days of this Ruling.ii.As Security for the performance of the Decree, the Applicant shall provide a bank guarantee of Kshs. 977,550 from a reputable Bank within 45 days of this Rulingiii.Failure by the Applicant to meet (I) and (II) above within the stipulated time will void the stay of execution.iv.The Applicant shall file its record of Appeal within 30 days of today. The said appeal shall be deemed properly on record upon fulfilment of condition I and II above.

40. Orders accordingly

RULING DELIVERED, DATED AND SIGNED AT BOMET THIS 17TH DAY OF NOVEMBER, 2023. ...................R. LAGAT-KORIRJUDGERuling delivered in the presence of Mr. Kinoti holding brief for Ajola for the Appellant, No Appearance for J.K. Rono for the Respondents. Siele (Court Assistant)