[2023] KEHC 19488 (KLR)

Kibe & 5 others v Attorney General & 2 others (Miscellaneous Civil Application 860 of 2001) [2023] KEHC 19488 (KLR) (Civ) (29 June 2023) (Ruling)

Neutral citation: [2023] KEHC 19488 (KLR)

Republic of Kenya

In the High Court at Nairobi (Milimani Law Courts)

Civil

Miscellaneous Civil Application 860 of 2001

CW Meoli, J

June 29, 2023

Between

J.G Kibe

1st Applicant

Samuel Kamau Macharia

2nd Applicant

Sceneries Limited

3rd Applicant

George Kang’ethe Waruhiu

4th Applicant

Grace Githu

5th Applicant

Solomon Karanja

6th Applicant

and

The Hon. Attorney General

1st Respondent

Ngengi Muigai

2nd Respondent

David Irungu Ndegwa t/a City Merchant Auctioneers

3rd Respondent

Ruling

1. This ruling is in respect of the Chamber Summons dated September 2, 2022 (the application) brought by JG Kibe, Samuel Kamau Macharia, Sceneries Limited, George Kang’ethe Waruhiu, Grace Githu and Solomon Karanja (hereafter the Applicants) supported by the grounds set out on its body and the facts stated in the affidavit of Gilbert Macharia and seeking an order to the effect that the late Joseph Gilbert Kibe (hereafter the 1st Applicant) be substituted with Gilbert Macharia Kibe and stay of execution of the ruling delivered by the court on August 4, 2022 pending the hearing and determination of an appeal against the aforementioned ruling. The first prayer for substitution was allowed by consent of the parties.

2. In his supporting affidavit, the deponent stated regarding the prayer for stay that the court vide the ruling delivered on August 4, 2022 dismissed the Applicants’ Reference filed against the taxation ruling of May 8, 2020. Whilst allowing an application by Ngengi Muigai (hereafter the 2nd Respondent) seeking the adoption of the costs taxed in the sum of Kshs 6,450,394/- pursuant to the Party and Party Bill of Costs dated August 30, 2016.

3. That the Applicants who are aggrieved by the said ruling are desirous of challenging it by way of an appeal to the Court of Appeal and have lodged a Notice of appeal to that effect. It was stated that leave to file an appeal was sought and granted on August 4, 2022 and that in the circumstances, it is imperative that the orders sought be granted in a bid to preserve the subject matter of the suit, else the 2nd Respondent may move to execute the order arising out of the ruling thereby rendering the appeal ineffective. It was equally stated that the Applicants are ready and willing to furnish security but the court was urged to exercise its discretion in setting reasonable conditions on provision of security.

4. The 2nd Respondent resisted the application by swearing a replying affidavit on November 29, 2022 averring that the application does not disclose any facts that would justify the stay of execution sought since the Applicants have not satisfied the legal threshold for granting such order. More specifically, the 2nd Respondent averred that there has been an inordinate delay of over two (2) months on the part of the Applicants in bringing the application; that no substantial loss has been demonstrated since it is unlikely that the decretal sum will be set aside in its entirety even on appeal; that it has not been shown that the 2nd Respondent, a person of good financial standing, will not be able to refund the decretal sum paid to him , in the event of a successful appeal. The 2nd Respondent stated that the application is purely a delaying tactic to prevent him from enjoying the fruits of his judgment.

5. As earlier stated, the parties on February 22, 2022 agreed by consent that the order for substitution be allowed, thus leaving the pending prayer seeking to stay execution, on which the parties filed and exchanged written submissions. On his part, the Applicants’ counsel anchored his submissions on the provisions of Order 42, Rule 6(2) of theCivil Procedure Rules (CPR) on the conditions to be met in order for a stay of execution to be granted and which conditions are echoed in Butt v Rent Restriction Tribunal [1979] eKLR and African Safari Club Limited v Safe Rentals Limited [2010] eKLR.

6. Counsel argued that unless an order for a stay of execution is granted, the Applicants are likely to suffer substantial loss in view of the fact that the 2nd Respondent has commenced execution proceedings against them and that any continued execution will strain their financial capacity and place them at risk of losing their properties and/or assets, thus rendering the appeal nugatory. That the 2nd Respondent has not demonstrated his ability to refund the decretal amount if the appeal succeeds.

7. It was submitted that in the interest of justice and promotion of the Applicants’ right of appeal under Article 48 of the Constitution, as well as to maintain the status quo of the subject matter, an order to stay execution ought to be granted. Reference was made toJames Wangalwa & Another v Agnes Naliaka Cheseto [2012] eKLR. In respect to the subject of provision of security, it was submitted that the Applicants have already complied with the initial court order requiring them to deposit the sum of Kshs 500,000/- on or before December 13, 2022 as condition for the grant of an interim stay order. On those grounds, the court was urged to grant the application.

8. On behalf of the 2nd Respondent, it was contended that for the Motion to succeed, the Applicant would be required to meet the threshold set out in Order 42, Rule 6(2) of theCPR and reaffirmed in Mohammed Saleh Hassan v Feisal Jama t/a Kenuga Enterprise [2020] eKLR. It was also contended that in considering an application for stay of execution, the court must balance the competing interest of the parties namely the right of a successful litigant to enjoy the fruits of his judgment versus the right of the adverse party to pursue his appeal, citing Machira t/a Machira & Co Advocates v East African Standard [2002] eKLR.

9. On the subject of substantial loss, counsel contended that the question as to whether or not the Applicants will be able to recover the decretal amount from the 2nd Respondent upon payment thereof and in the eventuality of a successful appeal was not raised in the application and/or supporting affidavit. That nonetheless, the 2nd Respondent by way of his replying affidavit stated that he is capable of refunding the decretal sum if called upon to do so.

10. Besides, the 1st, 2nd, 4th and 6th Applicants in particular are persons of means and hence able to provide security. On security, it was submitted that should the court be inclined to grant the order sought, then the Applicants ought to be ordered to pay half the decretal sum to the 2nd Respondent together with auctioneer’s fees. The court was urged to dismiss the application.

11. The record shows that the 1st and 3rd Respondents did not participate in the hearing of the application or file any material in that respect.

12. The court has considered the grounds laid out on the body of the application, the facts deponed to in the affidavits supporting and opposing the application, and the rival submissions.

13. The courts have discretionary power to grant an order for a stay of execution of a decree or order pending appeal. The discretion ought to be exercised judicially. SeeButt v Rent Restriction Tribunal(supra). The applicable provision regarding stay of execution is Order 42, Rule 6 of the CPR which stipulates that:“(1)No appeal or second appeal shall operate as a stay of execution or proceedings under a decree or order appealed from except appeal case of 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 order set aside.(2)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”

14. Concerning the condition on whether the application has been brought without unreasonable delay, it is apparent that the ruling on which the present application is premised was delivered by the court on August 4, 2022. The instant Motion was brought less than one (1) month thereafter sometime on or about September 2, 2022. The application has therefore been timeously filed.

15. On the second condition, the relevance of substantial loss in any application for a stay of execution was aptly addressed by the Court of Appeal case in the renowned case of Kenya Shell Ltd v Kibiru & Another [1986] KLR 410 when it held that:“Substantial loss in its various forms is the cornerstone of both jurisdictions for granting stay. That is what has to be prevented…”

16. The Court went on to set out the following still on the subject of substantial loss:“1. …..

2. In considering an application for stay, the Court doing so must address its collective mind to the question of whether to refuse it would render the appeal nugatory.

3. In applications for stay, the Court should balance two parallel propositions, first that a litigant, if successful should not be deprived of the fruits of a judgment in his favour without just cause and secondly that execution would render the proposed appeal nugatory.

4. In this case, the refusal of a stay of execution would not render the appeal nugatory, as the case involved a money decree capable of being repaid.”

17. In the present instance, the Applicants have expressed apprehension that unless an order for a stay of execution is granted, the 2nd Respondent will proceed to execute the decree against them. The 2nd Respondent disagrees that substantial loss has been demonstrated here, on the basis that the decision rendered is reasonable, and in the absence of proof that the decretal sum once paid will not be refunded to the Applicants in the event that the appeal proves successful.

18. Upon the court’s consideration of the rival arguments presented on this subject, the court is of the view that execution is a lawful process and a successful party is entitled to the fruits of his or her judgment.

19. In addition to the foregoing, the court notes that the likelihood of substantial loss raised obtusely by the Applicants in the application and/or the supporting affidavit was only expressly canvassed in their written submissions. Be that as it may, the question on who has the burden of proof on the issue of refund of the decretal sum was discussed by the Court of Appeal in the case of National Industrial Credit Bank Ltd v Aquinas Francis Wasike & another [2006] eKLR thus:“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…”

20. In the absence of material to ascertain the 2nd Respondent’s financial capacity to refund the decretal sum which constitutes a colossal amount, the court is satisfied that in any event, there is a likelihood of the Applicants suffering substantial loss if the order for a stay of execution is not granted.

21. On the provision of security, the court considered the proposals by the respective parties: namely, the request by the Applicants that they be allowed to deposit a reasonable sum as security and the submission by the 2nd Respondent that half the decretal sum be paid to him inclusive of auctioneer costs. The record shows that previously, the Applicants had been ordered to deposit the sum of Kshs. 500,000/- in court pursuant to the order made on November 17, 2022 as a condition for the grant of interim stay order.

22. It is apparent from the record that the Applicants complied with the above conditions. Suffice it to say that from the court’s reading of the proviso of Order 42, Rule 6(2) (supra), it is clear that the security ought to constitute an amount which is commensurate with the decretal sum in question. Be that as it may, the court acknowledges that it must exercise its discretion in balancing the competing interests of the parties so as not to prejudice the matter pending appeal, upon being guided by the case of Nduhiu Gitahi & Another v Anna Wambui Warugongo [1988] 2 KAR, with reference to the decision in Sir John Donaldson MR in Rosengrens v Safe Deposit Centres Limited [1984] 3 ALLER 198 that:“We are faced with a situation where a judgment has been given. It may be affirmed, or it may be set aside. We are concerned with preserving the rights of both parties pending that appeal. It is not our function to disadvantage the Defendant while giving no legitimate advantage to the Plaintiff……It is our duty to hold the ring even-handedly without prejudicing the issue pending the appeal…”

23. In view of all the foregoing, the court is persuaded to grant the application dated September 2, 2022 in terms of the prayer for stay of execution of the ruling delivered on August 4, 2022 in this cause, pending the hearing and determination of the appeal. On the condition that the Applicants deposit the sum of Kes 3000,000/- (Three Million), inclusive of the sum already deposited into court, into a joint interest earning account within 45 days. For this purpose, the sum of Kes 500,000/- earlier deposited in court shall be released to the Applicant/depositor. Costs will abide the outcome of the appeal in the Court of Appeal.

DELIVERED AND SIGNED ELECTRONICALLY AT NAIROBI ON THIS 29THDAY OF JUNE 2023. C.MEOLIJUDGEIn the presence of:For the Applicants: Mr. Ndung’uFor the 2nd Respondent: Mr. Muturi NjorogeC/A: Carol