https://new.kenyalaw.org/akn/ke/judgment/kehc/2026/7749

Kariuki v Ayan Automobile Ltd (Civil Appeal E088 of 2024) [2026] KEHC 7749 (KLR) (4 June 2026) (Ruling) Neutral citation: [2026] KEHC 7749 (KLR) Republic of Kenya In the High Court at Murang'a Civil Appeal E088 of 2024 TW Ouya, J June 4, 2026 Between David Muya Kariuki Applicant and Ayan Automobile Ltd Respondent Ruling 1.Before this Court are two Notice of Motion applications dated 2nd September 2024 and 16th January 2025. The Applicant seeks stay of proceedings and stay of execution of the ruling delivered on 21st August 2024 in Kangema MCCC No. E044 of 2023 pending the hearing and determination of this appeal. The Applicant further prays that the costs of the applications be provided for. 2.The background to this matter is that the Appellant instituted proceedings in the trial court seeking damages arising from a road traffic accident. The Respondent was duly served but failed to enter appearance, leading to interlocutory judgment and formal proof. A decree was issued and executed through attachment and sale of a motor vehicle belonging to the Respondent. 3.Subsequently, the Respondent applied to set aside the default judgment. In a ruling delivered on 21st August 2024, the trial court allowed the application, set aside the default judgment and granted leave to the Respondent to defend the suit out of time. 4.Aggrieved by that decision, the Applicant lodged the present appeal and filed the instant applications seeking stay of proceedings and stay of execution. The application is supported by grounds on the face of the record and Affidavit by the Applicant, David Muya Kariuki. 5.The gist of the Application is the need for stay of execution orders in order to preserve the subject matter of the intended Appeal so that it is not rendered nugatory and that the Applicant stands to suffer prejudice if the orders sought are not granted. 6.It is the Applicant’s case that on 21st August 2024 the Magistrate’s Court at Kangema issued a Ruling in Civil Suit E044 of 2023. That the said ruling was prejudicial to him necessitating the filing of an appeal the outcome of which will have a great impact on the ongoing proceedings at the trial court he also seeks to be stayed. He deponed that it is in the interests of justice, that the prayers sought for are granted. 7.The Application was opposed by the Respondent vide replying Affidavit sworn on 2nd September 2024 by Nicholus Ngoli Inyangala, the Respondent’s Operations and Sales Manager. The gist of the Respondent’s Response was that the application herein was an afterthought as the Appellant herein has not even requested for proceedings. That the Honourable trial court through its discretionary powers set aside an Exparte judgment obtained with terms which the respondent complied with and that the Respondent has since filed their defense dated the 21 st day of August 2024 and served the same defence to the Appellant. 8.It was deponed further that the respondent went ahead and filed application to bring on board a third party who was in actual possession of the subject motor vehicle which she bought from defendant. It was contended that the Applicant will not suffer any prejudice he has been compensated with throwaway costs as directed by the trial court directed; that the Respondent will be prejudiced as the intended third party has been served and yet to file its defence and; that the Appeal is a waste of court time and an exercise in futility as it does not raise any triable issues. 9.The matter was canvassed by way of written submissions by the Applicant through his counsel. Counsel for the Respondent did not file submissions to this Application. 10.The Applicant’s key argument is that the prayer for prayer for stay of execution pending hearing of the appeal meets the threshold as provided by the law. The Applicant emphasized the need to preserve the substratum of the appeal so that the Appeal is not rendered nugatory. Reliance was placed on order 42 rule 6 of the Civil Procedure Rulesand on Butt vs Rent Restriction Tribunal [1979] where the Court of Appeal enunciated the above principles that ought to be considered in determining whether to grant or refuse stay of execution pending appeal. Other cases relied upon are Tropical Commodities Suppliers Ltd & Others vs. International Credit Bank Ltd (in liquidation) [2004] 2 EA 331 and James Wangalwa & Another vs. Agnes Naliaka Cheseto [2012] eKLR. 11.It was their submission that their application demonstrates that they are likely to suffer substantial loss if the orders for stay are not granted, that they have a prima facie arguable case with a high likelihood of success as it appears from the listed grounds of appeal and that they made this Application without undue delay. 12.The court was therefore urged to find that the Applicant has a prima facie arguable Appeal which will be rendered nugatory if stay of proceedings orders are not issued pending hearing and determination of the Appeal and to grant orders as prayed in the Notice of Motion applications dated 2nd September 2024 and 16th January 2025. 13.Having carefully considered the two applications in their entirety, together with the parties pleadings and submissions, I have isolated one issue for determination that is whether the Applicant has demonstrated sufficient cause to warrant the grant of stay of proceedings and stay of execution pending appeal. 14.The applicable law on the jurisdiction of this Court is anchored under Order 42 Rule 6 of the Civil Procedure Rules which provides that no appeal shall operate as a stay of execution or proceedings except upon order of the Court. The conditions for grant of stay are that:i.The Applicant must demonstrate substantial loss;ii.The application must be made without unreasonable delay; andiii.The Court may order security for due performance. 15.In Butt v Rent Restriction Tribunal [1979], the Court of Appeal held that the discretion to grant stay should be exercised in a manner that does not render an appeal nugatory. Similarly in Tropical Commodities Suppliers Ltd v International Credit Bank Ltd (2004) 2 EA 331, the Court stated that substantial loss is a qualitative concept referring to real loss of value. The court, in James Wangalwa & Another v Agnes Cheseto [2012] eKLR, held that substantial loss is that which would render an appeal nugatory if not prevented. 16.The Applicant contends that the appeal challenges the propriety of setting aside a judgment that had already been executed. It is argued that if proceedings in the lower court continue, the appeal may be rendered nugatory. This Court agrees that the risk of parallel proceedings leading to conflicting outcomes constitutes substantial loss. The substratum of the appeal may be lost if the trial proceeds to conclusion before the appeal is determined. 17.Regarding whether or not the Application was filed without delay, the ruling was delivered on 21st August 2024. The Applicant filed the appeal and first application on 2nd September 2024 and a further application on 16th January 2025. The Court is satisfied that the Applicant acted without unreasonable delay. 18.In Global Tours & Travel Ltd [2000] eKLR, it was held that stay of proceedings is a grave remedy to be granted sparingly and only where the interests of justice demand. It is therefore upon this court to exercise its discretion carefully with regard to all the factors before it. However, where an appeal raises arguable issues and there is risk of the appeal being rendered nugatory, the Court ought to preserve the status quo. The Applicant's appeal raises serious questions regarding the setting aside of a fully executed judgment and the exercise of discretion by the trial court. 19.Based on the foregoing, the Court finds that the Applicant has established sufficient cause under Order 42 Rule 6 of the Civil Procedure Rules. 20.Final orders: Accordingly, the Court makes the following orders:i.The Notice of Motion applications dated 2nd September 2024 and 16th January 2025 are hereby consolidated.ii.There shall be a stay of proceedings in Kangema MCCC No. E044 of 2023 pending the hearing and determination of the appeal.iii.There shall be a stay of execution of the ruling delivered on 21st August 2024 pending the hearing and determination of the appeal.iv.Costs shall abide the outcome of the appeal.v.Parties to appear before the Deputy Registrar Murang’a for directions on Appeal on 18th of June 2026. DATED, SIGNED AND DELIVERED VIRTUALLY ON THIS 4TH DAY OF JUNE, 2026.HON. T. W. OUYA, OGWJUDGEIn the presence of:Mwangi for RespondentKibe for the Appellant/Applicant in personNyabuto– Court Assistant