[2022] KEHC 14978 (KLR)

Kiem & another v Njuku & another (Suing as the legal representatives of the Estate of Patrick Wachira Njuku - Deceased) (Civil Appeal 31 of 2020) [2022] KEHC 14978 (KLR) (2 November 2022) (Ruling)

Neutral citation: [2022] KEHC 14978 (KLR)

Republic of Kenya

In the High Court at Nyeri

Civil Appeal 31 of 2020

JN Njagi, J

November 2, 2022

Between

Kimotho Kiem

1st Applicant

Gendike Enterprises Kenya Ltd

2nd Applicant

and

Mary Njeri Njuku

1st Respondent

Hannah Wanjiru Irungu

2nd Respondent

Suing as the legal representatives of the Estate of Patrick Wachira Njuku - Deceased

Ruling

1. The applicants have filed an application dated August 26, 2021 under the provisions of Section 3, 3A and 79G of the Civil Procedure Act, Order 22 Rule 22, Order 42 Rules 4, 6 and 7 and Order 51 Rules 1 and 3 of the Civil Procedure Rules seeking stay of execution of the judgment and decree issued in Nyeri CMCC No 168 of 2016 on July 17, 2020 pending the hearing and determination of the instant application and appeal. The applicants further seek enlargement of time within which they can comply with the orders for conditions of stay of execution issued by the trial court on December 14, 2020.

2. The application was opposed by the respondent vide a replying affidavit dated October 6, 2021.

Applicants’ Case - 3. It is the case for the applicants that judgment was delivered on July 17, 2020 in favour of the respondents who were awarded damages in Ksh 1,653,377. 50/-. Being dissatisfied with the judgment the applicants preferred an appeal and filed an application dated September 7, 2020 seeking stay of execution pending the hearing and determination of the appeal. The applicants contend that they were granted stay of execution on condition that they deposited the decretal sum in an interest-bearing account in a bank to be agreed upon in the joint names of the advocates for the parties within 45 days.

4. The applicants contend that they were unable to comply with the stay conditions due to financial constraints given the substantial amount of the decretal sum. The applicants thus informed their insurer of the orders of the court in regard to the conditions of stay and the insurer was ready and willing to secure the entire decretal amount by way of bank guarantee from a reputable bank and the same would be availed in court within 14 days. The applicants thus made an application for the same before the trial court which application was dismissed on May 13, 2021.

5. Upon dismissal of the said application, the applicants embarked on complying with the trial court’s earlier orders issued on December 14, 2020 that they deposit the decretal sum in an interest-bearing account. Thus, the applicants initiated communication with the respondents` advocates for the requisite documents to enable the opening of the interest-bearing account. The applicants further state that the respondents` advocates, Wagiita Theuri & Company Advocates declined to share information and documents to enable the opening of the interest-bearing account. As such, the applicants state that they are unable to comply with the orders delivered by the trial court on conditions for stay of execution despite being willing to do so having made an effort on the same by reaching out to the respondents` advocates.

6. The applicants state that they are still interested in pursuing the appeal and that they will be highly prejudiced if the instant application is not allowed as the respondents will be at liberty to execute thus rendering the appeal nugatory. Further that the respondents will not be prejudiced in any way if this court grants the prayers sought in the instant application. The applicants therefore pray that their application be allowed as prayed.

The Respondents’ Case 7. The respondents argue that the application is an abuse of the court process, frivolous and vexatious. They contend that stay of execution was granted on 17/7/2020 for a period of 30 days. The applicants sought further stay by an application dated September 7, 2020 which ruling was delivered on December 14, 2020 granting stay on condition that the applicants deposit the entire decretal sum in a joint interest earning account within 45 days. However, that the applicants did not honour the terms of stay and on 28/1/2021 they filed a fresh application which application was dismissed by the court owing to non-compliance with the earlier orders.

8. The respondents further state that it is not true that the applicants embarked on attempts to deposit the money immediately after December 14, 2020. That their advocates on record declined to participate with the request by the applicants due to the fact that the period granted by the court had lapsed by 1 year and 9 months since the time the orders were issued on December 14, 2020.

9. The respondents aver that they stand to suffer irreparably as the 1st respondent lost her sister 8 years ago having gone through the court process for the last 5 years since 2016. Further that the applicants now want to obey court orders at their instance and when they want as the respondents continue to suffer. The 1st respondent states that she is capable of refunding the entire decretal sum. She attached her payslips to demonstrate so.

10. The respondents argue that the applicants flaunted court orders yet they seek equity while they are indolent and have come to court with tainted hands. The respondents thus aver that the application is a waste of time and ought to be dismissed with costs to them.

11. Parties disposed of the application by way of written submissions.

The Applicants’ Submissions 12. The applicants submit that this honourable court has jurisdiction to grant stay of execution pending appeal. To support this contention, they rely on Order 42 Rule 6 and cited the case of Global Tours & Travels LtdNairobi HC Winding Up Cause No 43 of 2000 where Ringera J (as he then was) held that:“As I understand the law, whether or not to grant a stay of proceedings or further proceedings on a decree or order appealed from is a matter of judicial discretion to be exercised in the interests of justice. Such discretion is unlimited save that by…virtue of its character as a judicial discretion it should be exercised rationally and not capriciously or whimsically. The sole question is whether it is in the interest of justice or order to stay of proceedings and, if it is, on what terms it should be granted. In deciding whether or not to order stay the Court should essentially weigh the pros and cons of granting or not granting the order. And in considering those matters it should bear in mind such factors as the need for expeditious disposal of cases, the prima facie merits of the intended appeal, in the sense of not whether it will probably succeed or not but whether it is an arguable one the scarcity and optimum utilization of judicial time and whether the application has been brought expeditiously”.

13. The applicants contend that their appeal raises triable issues with high chances of success. Moreso, that the issues raised merit consideration by this court as they mainly include contention that the award of compensatory damages was in breach of the common law doctrine of stare decisis which ensures that cases with similar facts are approached in the same way.

14. The applicants rely on the cases of Butt vs Rent Restriction Tribunal [1982] KLR 417; Nairobi Civil Application No 238 of 2005 Nairobi Industrial Credit Bank Limited vs Aquinas Francis Wasike & Another (UR) and Kenya Hotel Properties Limited vs Willesden Properties LimitedCivil Application Nai No 322 of 2006 and submit that if stay of execution is not granted, the appeal will be rendered nugatory and the applicants shall suffer irreparable damage as the respondents may proceed to execute.

15. The applicants submit that the decree is for a substantial sum of money and if paid to the respondents, they are apprehensive that they will not be able to recover the whole sum. Further, the applicants submit that the ability to furnish security should not give an unfair advantage to the applicants as Article 27(1) of the Constitution provides for equality of all persons before the law. Moreover, the applicants submit that they have an arguable appeal which stands to be prejudiced should execution proceed and they pray that the instant application be allowed to enable the applicants issue the said security in form of a bank guarantee from Family Bank.

16. Further the applicants plead with the court that it be pleased to enlarge time within which to comply with the stay conditions to enable them issue a bank guarantee. To support their contention, they rely on the cases of Water Resources Management Authority vs Krystalline Salt Limited(2018) eKLR where the court allowed security in form of a bank guarantee andShanzu Beach Resort Limited vs Crown Marble & Quartz Ltd(2020) eKLR where the court allowed time to comply with the orders of the court upon recognising the deteriorating state of our economy.

17. The applicants submit that the instant application will not occasion any prejudice to the respondents. They pray that the application be allowed.

The Respondents’ Submissions 18. The respondents reiterated the contents of the replying affidavit of the 1st respondent and submit that the applicants have not met the threshold for the grant of stay of execution orders. The respondents rely on Order 42 Rule 6 of the Civil Procedure Rulesand cite the case ofAntoine Ndiaye vs African Virtual University (2015) eKLR where it was held that the relief of stay of execution is discretionally and should only be granted where sufficient cause has been shown.

19. The respondents further submit that the applicants have merely stated that prejudice shall be occasioned to them but they have not demonstrated via any evidence what kind or magnitude of loss they shall be occasioned. To support their contention, the respondents rely on the cases of Kerugoya HC Misc Application No 11 of 2017 Kinyunjuri Muguta vs Wotuku Muguta; Kitui HC Misc Application No 55 of 2018 Collins Musyoka Mutuku vs Miriam Nzulaand Machakos HCCA No 26 of 2017 Shadrack Mutuku Musili vs Jonathan Nzioka Nzukiwhere the courts emphasized that substantial loss to be suffered must be shown in an application for stay of execution.

20. The respondents contend that the applicants were ordered to deposit security way back on December 14, 2020 within 45 days and it is currently one year down the line and they are yet to comply. The respondents further submit that the applicants only made an attempt to deposit the same 7 months later in utter disobedience of the court orders. To support their contention, the respondents rely on the case of Simba Coach Limited vs Kiriiyu Merchants Auctioneers (2019) eKLR for the proposition that the purpose of security is for due performance of the decree or order as may be binding on the applicant.

21. The respondents submit that the applicants now only intend to comply with the orders granted by the court at their own convenience and to the detriment of the respondents. The respondents further submit that they have been prejudiced enough as they have been in court for the past 5 years and have waited more than 1 year after judgment to get realize the fruits of their judgment however the applicants have frustrated them over and over. The respondents thus submit that there is no guarantee that once the court enlarges the time, the applicants will comply with the orders and as demonstrated by the applicants actions they shall continue to frustrate the respondents. The respondents rely on the case of Econet Wireless Kenya Ltd vs Minister for Information & Communication of Kenya & Another[2005] KLR 828 where the court emphasized the importance of complying with court orders.

22. The respondents further submit that the 1st respondent in her affidavit demonstrated that she is a woman of means and attached her payslips and is thus capable of refunding the decretal sum if the appeal succeeds. The respondents state that they have a valid and lawful judgment and should not be denied the fruits of their litigation.

23. The respondents further submit that the applicants’ application was supported by an affidavit sworn by the applicants’ counsel. The applicants’ counsel averred that the applicants were unable to comply with the stay conditions due to financial constraints, information to which counsel is not privy to. Further she deposed that the applicants will be highly prejudiced if the application is not allowed. The respondents submit that counsel is not the applicant and therefore she cannot be deposing to information privy to the applicants without proof of authority to depose the same. To that end, the respondents rely on Order 19 Rule 3 of the Civil Procedure Rulesand the case of Mombasa HCCA No 175 of 2002 Stephen Bernard Oduor vs Afro Freight Forwarders where the court struck out an affidavit sworn by counsel without him revealing his source of authority to swear it. The respondent urged the court to expunge the offensive paragraphs from the record.

24. The respondents submit that the trial court in awarding damages relied on applicable precedents while placing reliance on the submissions tendered by both the defence and the plaintiffs` counsels. As such, the applicants do not have an arguable appeal. The respondents thus pray that the application be dismissed with costs.

Analysis and Determination 25. The issues for determination herein are:(1)Whether the applicants have met the prerequisite for grant of stay of execution pending appeal; and(2)Whether this court can enlarge time to enable the applicants comply with the orders issued by the trial court on December 14, 2020.

Whether the applicants have satisfied the conditions for stay of execution pending appeal - 26. As a rule of thumb, an appeal does not operate as an automatic stay of execution. The conditions which a party must establish in order for the court to order stay of execution are provided for under Order 42 Rule 6(2) Civil Procedure Rules. 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 1st 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.

27. Thus, under Order 42 Rule 6(2) of the Civil Procedure Rules, an applicant should satisfy the court that:-(1)"Substantial loss may result to him/her unless the order is made;(2)That the application has been made without unreasonable delay; and(3)The applicant has given such security as the court orders for the due performance of such decree or order as may ultimately be binding on him."

28. These principles were stated in Butt vs Rent Restriction Tribunal(1979) where the Court of Appeal stated what ought to be considered in determining whether to grant or refuse stay of execution pending appeal. The court said that:-1. "The power of the court to grant or refuse an application for a stay of execution is discretionary; and the discretion should be exercised in such a way as not to prevent an appeal.2. Secondly, 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 the appeal court reverse the judge’s discretion.3. Thirdly, 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. Finally, the Court in exercising its discretion whether to grant or refuse an application for stay will consider the special circumstances and its unique requirements. 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 of costs as ordered will cause the order for stay of execution to lapse."

29. This court is therefore obligated to determine whether the above stated conditions were met in the instant application.

Substantial loss - 30. Under this head, an applicant must clearly state what loss, if any, they stand to suffer. This principle was enunciated in the case of Shell Ltd vs Kibiru and Another(1986) KLR Platt JA set out two different circumstances when substantial loss could arise as follows:-“The appeal is to be taken against a judgment in which it was held that the present respondents were entitled to claim damages….It is a money decree. An intended appeal does not operate as a stay. The application for stay made in the High Court failed because the gist of the conditions set out in Order XLI Rule 4 (now Order 42 Rule 6(2)) of the Civil Procedure Rules was not met. There was no evidence of substantial loss to the applicant, either in this matter of paying the damages awarded which would cause difficulty to the applicant itself, or because it would lose its money, if payment was made, since the Respondents would be unable to repay the decretal sum plus costs in two courts….”The learned judge continued to observe that:-“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 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.

31. Earlier on, Hancox JA in his ruling observed that:-“It is true to say that in consideration [sic] 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.This is shown by the following passage of Cotton LJ in Wilson vs Church (No 2) (1879) 12 ChD 454 at page 458 where he said:-“I wish to state my opinion that when a party is appealing, exercising his undoubtedly right of appeal, this court ought to see the appeal, if successful, is not rendered nugatory. “As I said, I accept the proposition that if it is shown that execution or enforcement would render a proposed appeal nugatory, then a stay can properly be given. Parallel with that is the equally important proposition that a litigant, if successful, should not be deprived of the fruits of a judgment in his favour without just cause.”

32. The applicants through their advocate has deposed in her affidavit that the decretal sum is colossal and the respondent if paid, would be unable to pay back the said sum. The 1st respondent on the other hand has stated in her affidavit that she is financially capable of refunding the money if the appeal succeeds. To demonstrate this, she has attached her payslips. In that regard, I find that the respondent has discharged the burden and thus the applicants have failed to demonstrate that they shall suffer substantial loss if the decretal sum is paid to the respondent.

Whether application has been made without unreasonable delay 33. Judgement in the matter that gave rise to the appeal was delivered on July 17, 2020 and the applicants moved the trial court through an application dated September 7, 2020 seeking for stay of execution. The trial court granted conditional stay of execution on December 14, 2020. The applicants subsequently filed another application dated 28/1/2021 seeking to vary the conditions of stay of execution granted by the court on December 14, 2020. They prayed for the substitution of the order of depositing of the entire decretal sum with an order that the entire decretal sum be secured in court by way of a bank guarantee. The court dismissed the application on May 13, 2021.

34. It is then apparent that the applicants have filed the present application 1 year and 8 months after the ruling granting conditional stay. The reasons of the delay are not plausible as they contend that they filed the application seeking to vary the conditions because the applicants were financially constraint. No proof was tendered to support their claims. In the premises, I find that the application has been made with unreasonable delay which is inordinate and inexcusable.

Security of costs 35. The applicant ought to satisfy the condition of security. In the case of Gianfranco Manenthi & Another vs Africa Merchant Assurance Co Ltd [2019] eKLR the court observed that:“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. Counsel for the applicant submitted that he is ready to provide a bank guarantee as security for due performance of the decree.”

36. Similarly in Arun C Sharma vs Ashana Raikundalia t/a Rairundalia & Co Advocates & 2 Others[2014] eKLR the court stated 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 the 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.”

37. From the above persuasive decisions, it is clear that the issue of security is discretionary and it is upon the court to determine the same. Notably, the applicants have stated that they are willing and ready to give a bank guarantee for the whole decretal amount to secure the performance of the decree. However, it is to be noted that the trial court granted stay of execution on condition that the applicants deposit the decretal sum in a joint interest earning account in the names of the advocates of both parties within 45 days. The trial court granted stay on December 14, 2020. The applicants did not deposit the said sum but instead sought to file the current application. It is 1 year and 8 months since the orders issued on December 14, 2020 lapsed. Judging from the conduct of the applicants it would be unjust to grant them stay of execution again, yet they blatantly disobeyed the orders of the trial court.

38. Additionally, the right of appeal must be balanced against an equally weighty rigid right of the plaintiff to enjoy the fruits of the judgment delivered in his favour. In the case of Mohammed Salim t/a Choice Butchery vs Nasserpuria Memon Jamat (2013) eKLR where the Court upheld the decision ofPortreitz Maternity vs James KarangaKabiaCivil Appeal No 63 of 1991 and stated that:-“That right of appeal must be balanced against an equally weighty rigid right that of the plaintiff to enjoy the fruits of the judgment delivered in his favour. There must be a just cause for depriving the plaintiff of that right.”

39. The court in granting stay has to carry out a balancing act between the rights of the two parties. The question then begs as to whether there is just cause for depriving the respondents their right of enjoying their judgment. The respondents state that the applicants have not satisfied the conditions to warrant them stay of execution. The applicants on the other hand state that the appeal will be rendered nugatory if the orders sought are not granted and that the applicant stands to suffer substantial loss.

40. I find that on a balance of interests, it will be more prejudicial to the respondents than the applicants to grant stay of execution. This is because judgment in the matter was delivered in July 2020 which is 2 years now and the respondents are yet to enjoy the fruits of their judgment. In that regard, I find that in the interests of justice, the application for stay lacks merit.

Whether this court can enlarge time to enable the applicants comply with the orders issued by the trial court on December 14, 2020 - 41. Order 50 Rule 6 of the Civil Procedure Rules is instructive and it provides:-"Where a limited time has been fixed for doing any act or taking any proceedings under these Rules, or by summary notice or by order of the court, the court shall have power to enlarge such time upon such terms (if any) as the justice of the case may require and such enlargement may be ordered although the application for the same is not made until after the expiration of the time appointed or allowed."

42. In the case ofICDC & Another vs Hannah Moraa BulumaCivil Appeal 254 of 2007 HC Nrb cited with authority in Kenya Power & Lighting Company Ltd vs Winfred Ndunge Katiwa [2016] eKLR the court in allowing an application for enlargement of time to deposit the decretal sum in court stated:-"This court is also empowered to grant such orders even in circumstances such as in the present case where the application for enlargement of time is made after the expiration of the time allowed or appointed for the doing of the act or complying with orders of the court."

43. In the instant case the trial magistrate granted stay on condition that the applicants do deposit the entire decretal sum in an interest-earning account in a bank to be agreed upon in the joint names of the advocates of the applicants and the respondents. The deposit was to be made within 45 days from the date of the ruling which was delivered on December 14, 2020. The applicants subsequently filed an application dated 28/1/2021 seeking to vary the conditions of stay of execution granted by the court on December 14, 2020. The applicants prayed for substitution of the order of depositing of the entire decretal sum with an order that the entire decretal sum be secured by way of a bank guarantee. The court dismissed the application on May 13, 2021.

44. The applicants thereafter wrote to the respondents’ advocates on June 9, 2021 in respect of opening the joint account. On June 10, 2021 the respondents` advocates wrote back to the applicants and declined to sign the documents as at the time it was over 6 months since the deposit ought to have been made and counsel for the respondents further intimated that they had previously signed similar documents following a court order in Nyeri High Court Civil Application No 37A of 2019 but the applicants` counsels never opened the account thus frustrating the settlement process.

45. It is thus clear from the conduct of the applicants that they are reluctant to obey court orders. In any event the delay in complying with the said orders is over 1 year 8 months which is inordinate and inexcusable to warrant exercise of judicial discretion of this court in the applicants’ favour. In my view there is no sufficient cause or good reason why this court ought to enlarge time for the applicants to comply with the orders of December 14, 2020. The application for enlargement of time has been made after undue delay and the explanation for the delay is unsatisfactory. In the case of Dickson Miriti Kamonde vs Kenya Commercial Bank Ltd [2006] eKLR it was held that:-"The delay cannot be excused and an indolent party must reckon with consequences of inaction."

47. Consequently, I find that the application dated August 26, 2021 lacks merit and is dismissed with costs to the respondent.

Signed this 14th September 2022. J. N. NJAGIJUDGEDELIVERED, DATED AND SIGNED AT NYERI THIS 2ND DAY OF NOVEMBER, 2022. By:HON. JUSTICE M. MUYAJUDGEIn the presence of:Kimondo Gachoka: for ApplicantsMahuhu Mbari: for RespondentsCourt Assistant: Kinyua30 days R/A.