[2023] KEHC 26431 (KLR)

Kenya Power & Lighting Company Ltd v Chelimo (Civil Appeal E184 of 2022) [2023] KEHC 26431 (KLR) (8 December 2023) (Ruling)

Neutral citation: [2023] KEHC 26431 (KLR)

Republic of Kenya

In the High Court at Eldoret

Civil Appeal E184 of 2022

JRA Wananda, J

December 8, 2023

Between

Kenya Power & Lighting Company Ltd

Appellant

and

Allan Chelimo

Respondent

Ruling

1. This Appeal arises from the Judgment delivered on 2/11/2022 in Iten SPMCC No. E30 of 2022. In the suit, the Respondent sued the Appellant for loss occasioned to him when a fire allegedly caused by a faulty electric connection razed down the Respondent’s house. He blamed the Appellant for the same. The Court entered Judgment in favour of the Respondent and awarded him damages. Aggrieved by the Judgment, the Appellant filed this Appeal on 2/12/2022.

2. Now before Court is the Application brought by way of the Notice of Motion dated 27/02/2023 and filed on behalf of the Appellant on 8/03/2023 through Messrs Kitiwa & Partners. It seeks the following orders:a.…………… [Spent]b.…………… [Spent]c.…………… [Spent]d.This Honourable Court do set aside the orders made by the lower Court in its Ruling of 15th of February 2023 ordering the Appellant to have half of the decretal sum secured by bank guarantee and the other half and costs of the suit paid to the Plaintiff’s Advocate.e.This Honourable Court do grant an order of stay of execution of the decree in Iten SPMCC No. E030 of 2022 on condition that the Appellant do give a bank guarantee or deposits the entire decretal sum in a joint interest earning account in the names of the Advocates on record.f.Costs of this suit be in the Cause.

3. The Application is expressed to be brought under Order 42 Rule 6 of the Civil Procedure Rules and Section 3A of the Civil Procedure Act. The grounds of the Application are as set out on the face thereof and it is supported by the Affidavit sworn by one Moses Barasa.

4. In the Affidavit, the deponent describes himself as a Legal Officer of Madison General Insurance Kenya Limited, the insurer of the Appellant. He deponed that on 2/11/2022 the lower Court entered Judgment in favour of the Respondent against which the Appellant preferred an Appeal, the Appellant filed an Application seeking orders of stay of execution pending Appeal which the lower Court allowed on condition that ½ of the decretal sum be secured by a bank guarantee to be executed within 7 days and ½ of the decretal sum and costs of the suit be paid to the Plaintiffs within 20 days. He added that the Appellant is aggrieved by the said orders for the reason that the Respondent’s financial means is unknown and if the money is paid to him the same will not be recoverable in the event that the Appeal is successful, to secure the interests of both parties, the Appellant is ready and willing to give a bank guarantee for the entire decretal sum or deposit the entire decretal sum as will be directed by the Court as a condition for the grant of stay of execution.

Response 5. The Respondent opposed the Application vide the Replying Affidavit filed on 6/03/2023 through Messrs Kimaru Kiplagat & Co. Advocates and sworn by the Respondent, Allan Chelimo. He deponed that the Application is made in bad faith and with the intention of denying him from enjoying the fruits of the Judgment, that the Appellant cannot “have its cake and eat it” since it made a similar Application in the lower Court and undertook in writing to abide by the directions of the Court but now wants to dictate to the Court on how it wishes the orders to be decreed, mere filing of the Appeal does not warrant the grant of the orders for stay of execution sought as no sufficient reasons have been demonstrated, the Appellant has not demonstrated what substantial loss it is likely to suffer should the orders be denied, the averment by the Appellant that it would be impossible to retrieve the decretal amount from the Respondent in the event the Appeal succeeds does not hold water and is unsubstantiated, he is a well established businessman running several businesses and in case of a successful appeal he has the premises the subject of the suit which can be sold to recover the amount.

6. The Respondent deponed further that trite law dictates that a party seeking stay of execution has to fulfil two conditions, namely, demonstrate that the Appeal has high chances of success and that the Applicant may suffer irreparable loss if the stay is not granted, a cursory look at the Memorandum of Appeal does not show any chance of success and granting orders sought will be an exercise in futility, the Appellant has not shown what irreparable loss it may suffer if the orders sought are not granted, the Memorandum of Appeal has never been served upon the Respondent as per the mandatory dictates of the law, and that he only became aware of its existence through the annexures to the Application.

7. In conclusion, the Respondent deponed that in a monetary decree, the jurisdiction of the Court to grant stay of execution, though unfettered, is not capriciously exercised but on reason and with a lot of caution, without prejudice to the foregoing, if stay of execution is to be granted then the same should be on the condition given by the lower Court, and that he is opposed to the money being secured by a bank guarantee since his Advocates will have no control over the same since it will be an agreement between the Appellant and its bank.

Hearing of the Application 8. The Application was canvassed by way of written submissions. Pursuant to directions given, the Applicant filed his Submissions on 23/03/2023 while the Respondent filed on 12/04/2023.

Applicant’s Submissions 9. Counsel for the Applicant reiterated the matters already set out in the Supporting Affidavit. In support of the Application, he cited the case of Equity Bank Ltd v Taiga Adams Company Ltd [2006] eKLR and National Industrial Bank Ltd v Aquinas Francis Wasike and another, Nairobi Civil Application No. 238 of 2005 and submitted that in the said cases it was held that the onus to prove the ability of the Respondent to refund the decretal sum were the Appeal to succeed lies on the Respondent since that is a matter within his knowledge as envisaged in Section 112 of the Evidence Act, the Respondent has not annexed anything to prove that he has businesses that are doing well hence financially able, during hearing before the lower Court the Respondent confirmed that the premises the subject of this suit were completely burnt down, he cannot therefore turn around and claim that the same can be sold to recover the decretal sum, in view of the foregoing, it is clear that the Respondent’s financial status is unknown since he has not filed any Affidavit of means. He then cited the case of Mathu v Gichimu [2004] eKLR and submitted that the interests of both parties will be secured if the lower Court’s Ruling is set aside and varied as sought herein. He then cited Section 27(1) of the Civil Procedure Act and added that in this case, costs of the Application should be in the Cause.

Respondent’s Submissions 10. Counsel for the Respondent, too, generally reiterated the maters already set out in the Replying Affidavit. Regarding the principles guiding grant of orders for stay of execution pending Appeal, Counsel cited Order 42 Rule 6(2) of the Civil Procedure Rules and the case of H.E. v S.M. [2020] eKLR, Civil Appeal No. 20 of 2020. He submitted that the allegations by the Applicant that the Appeal will be rendered nugatory if execution proceeds is not an automatic ground for an order of stay of execution, the Appellant has to prove the allegations, the Respondent owns the premises to which this Cause relates, he is not a pauper and he will refund the decretal sum in case of a successful appeal. He cited the cases of Kenya Hotel Properties Limited v Willesden Investment Limited [2007] eKLR, James Wangalwa & Another v Agnes Naliaka Cheseto and Eldoret Bus Services Ltd v William Kipkurui Korir & Another, Kericho HCC Misc. Appeal No. 34 of 2011.

11. He further submitted further that regarding “substantial loss”, it is the Respondent who will be on the losing side should the orders sought be granted as he will be kept away from enjoying the fruits of his Judgment. He cited the case of Triton Petroleum Co. Ltd v Kirinyaga Construction (K) Ltd, Nairobi HCC No. 830 of 2003.

12. In conclusion, Counsel conceded that the Application has been brought on time. On security for due performance, he reiterated that the Respondent is not agreeable to a bank guarantee.

Analysis and Determination 13. The issue for determination in this matter is “whether this appellate Court should vary the terms and conditions of stay of execution imposed by the trial Court pending the hearing and determination of this Appeal”.

14. The powers of the trial Court and also an appellate Court to grant orders of stay of execution pending hearing and determination of an appeal is provided under Order 42 Rule 6(1) of the Civil Procedure Rules. The same stipulates as follows:“No appeal or second appeal shall operate as a stay of execution or proceedings under a decree or order appeal from except in as 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 of 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.

15. From the proviso above, it is clear that where an Appeal has been instituted, both the trial Court and the Appellate Court have similar jurisdiction to issue orders of stay of execution. It is also clear that whether the application for such stay shall have been granted or refused by the trial Court, the appellate Court still retains the jurisdiction to hear and determine a similar application made before it. Further, it is evident that any person aggrieved by an order of stay made by the trial Court may apply to the appellate Court to have such order set aside.

16. In view of the foregoing, the present Application is therefore properly before this Court despite the fact that the Appellant had made a similar Application before the trial Court and despite the fact that the trial Court granted the Application. Being aggrieved by the terms and conditions of stay imposed, the Appellant is within its rights to approach this Court and seek for issuance of fresh orders.

17. Regarding the basis upon which the Court should consider an application for stay pending Appeal, Order 42 Rule 6(2) of the Civil Procedure Rules provides as follows:“No order for stay of execution shall be made under subrule (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.

18. Therefore, an Applicant for stay of execution of a decree or order pending Appeal is required to satisfy the conditions set out above. The first one is to demonstrate that substantial loss may result to the Applicant unless the order is made, the second is to demonstrate that the Application has been made without unreasonable delay and the third is to confirm its readiness to deposit security for the due performance of the decree or order.

19. As to what constitutes “substantial loss”, F. Gikonyo J in the case of James Wangalwa & Another v Agnes Naliaka Cheseto [2012] eKLR, stated as follows:“11. 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. This is what substantial loss would entail, a question that was aptly discussed in the case of Silverstein N. Chesoni [2002] 1KLR 867, and also in the case of Mukuma v Abuogaquoted above. The last case, referring to the exercise of discretion by the High Court and the Court of Appeal in the granting stay of execution, under Order 42 of the CPR and Rule 5(2) (b) of the Court of Appeal Rules, respectively, emphasized the centrality of substantial loss thus:“… 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.”With this observation, of course, a frivolous appeal cannot in practical terms be rendered nugatory. The only admonition however, is that the High Court should not base the exercise of its discretion under order 42 Rule 6 of the CPR only on the chances of the success of the appeal. Much more is needed in accordance with the test I have set out above.”

20. Further, Platt, Ag. JA (as he then was) in Kenya Shell Limited v. Kibiru [1986] KLR, expressed himself as follows:“It is usually a good rule to see if Order XLI 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 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”.

21. On his part, in the same case, Gachuhi, Ag. JA (as he then was), stated as follows:“It is not sufficient by merely stating that the sum of Shs 20,380. 00 is a lot of money and the applicant would suffer loss if the money is paid. What sort of loss would this be? In an application of this nature, the applicant should show the damages it would suffer if the order for stay is not granted. By granting a stay would mean that status quo should remain as it were before judgement. What assurance can there be of appeal succeeding? On the other hand, granting the stay would be denying a successful litigant of the fruits of his judgement.”

22. In this matter, the party that has approached this Court and claimed to have been aggrieved by the terms of the orders of stay imposed by the trial Court is the Appellant. The Respondent has not filed any Application of his own challenging the grant of the order of stay or the terms imposed. To my understanding therefore, the Respondent was contented by the orders. Since the grievance placed before this Court for setting aside is only on the terms imposed, I interpret the same to mean that neither of the parties had a problem with the grant of the order of stay. The only issue is the terms imposed and even then, only the Appellant is aggrieved. I will therefore treat any challenge raised herein by the Respondent against the orders of stay as an afterthought. I will not interfere with the general grant of the orders of stay but shall only limit this Ruling to the issue whether or not the terms imposed should be varied.

23. Applying the principles set out in the authorities set out above to the facts of this case, I agree with the Appellant’s submissions that the Appellant having raised doubts over the Respondent’s ability to refund the decretal sum should the Appeal succeeds, the onus to prove such ability shifted to the Respondent. This is because the Respondent’s financial status is a matter strictly within his personal knowledge and only he can therefore accurately address the same. However, apart from merely stating that he is a man of means, the Respondent has not adduced any evidence to support this assertion. The Respondent stated that he owns the rental premises the subject of this matter but it is also true that in his Witness Statement which he adopted as his evidence-in-chief during the hearing before the trial Court, he stated that the premises were completely burnt down and that he has lost all rental income that used to accrue from the premises. He has not stated whether the premises were subsequently refurbished or renovated and reverted to being rented out as before.

24. By no means am I making any declaration that the orders of stay of execution should be interfered with simply because the Respondent is indigent, far from it. In fact, I agree with the view taken by my sister, Mbaru J in the case of Cosmas Kawelu – v- Kabuito Constructors [2014] eKLR, where she correctly stated as follows:“17. In this case the respondent submitted that the claimant is a man of straw and will not be able to refund the decretal sum in the event the appeal is successful. However, being indigent, a man of straw is poor looked at alone is not an enough sufficient reason for an applicant to base an application for stay on. The man of straw that indigent person and poor respondent in this case, being the claimant had a judgment of this court. This remains a valid judgment until overturned by a Court on appeal which is not the case here.”

25. I agree with the above view save that in this case, I feel that the Respondent has been unnecessarily evasive. I would have expected him to assist the Court in reaching a determination by disclosing a little bit more about his financial ability to refund the decretal sum. This he did not do.

26. Regarding whether the Application has been brought without any delay, there is no allegation that there was any such delay.

27. On the chances of the appeal succeeding, although this is not strictly one of the grounds expressly required to be considered under Order 42 Rule 6, I agree with Gikonyo J’s statement made in the case of James Wangalwa Another v Agnes Naliaka Cheseto (supra) that “a frivolous appeal cannot in practical terms be rendered nugatory”. I have perused the Memorandum of Appeal as well as the Record of Appeal and my view is that the Appeal is not one that can be termed “frivolous”. This is not to say that the Appeal will succeed or not, all I am advancing is that prima facie, the Appeal raises justiciable points.

28. In view of the foregoing, I am of the view that, pending the hearing and determination of this Appeal, the interests of both parties will be better and fairly secured if the decretal sum is deposited in a bank account in the joint names of the Advocates on record.

Final Orders 29. The upshot of my findings above is that the Notice of Motion dated 27/02/2023 succeeds. Accordingly, I order as follows:i.The Ruling/orders made on 15/02/2023 in Iten SPMCC No. E030 of 2022 giving terms and conditions for stay of execution of the Judgment delivered therein on 2/11/2022, pending hearing and determination of the appeal preferred, is hereby set aside and substituted with the order set out in (ii) hereinbelow.ii.The order set aside in (i) above is hereby substituted with the order granting to the Appellant stay of execution against the said Judgment on the condition that the Appellant shall, within a period of thirty (30) days, deposit the entire decretal sum in an interest earning bank account to be opened in the joint names of the Advocates.iii.In default, the Respondent shall be at liberty to proceed with execution of the Decree.iv.This being an Appeal emanating from the Iten Magistrates Court and since there is now an operational High Court sub-Registry at Iten, this file shall now be transferred to the Iten High Court for hearing and determination.v.The Appellant shall then take steps to ensure expeditious prosecution and disposal of the Appeal.

DELIVERED, DATED AND SIGNED AT ELDORET THIS 8TH DAY OF DECEMBER 2023…………………WANANDA J.R. ANUROJUDGE