[2025] KEHC 4515 (KLR)

Kinyanjui v Directline Assurance Company Limited; Mugambi (Interested Party) (Miscellaneous Civil Case E035 of 2024) [2025] KEHC 4515 (KLR) (3 April 2025) (Ruling)

Neutral citation: [2025] KEHC 4515 (KLR)

Republic of Kenya

In the High Court at Thika

Miscellaneous Civil Case E035 of 2024

FN Muchemi, J

April 3, 2025

Between

Paul Kimani Kinyanjui

Applicant

and

Directline Assurance Company Limited

Respondent

and

Dedan Ndegwa Mugambi

Interested Party

Ruling

Brief facts 1. The application dated 13th December 2024 seeks for orders of stay of execution in respect of the judgment in Thika Small Claims Court Case No. E392 of 2024 Dedan Ndegwa Mugambi vs Paul Kimani Kinyanjui pending the hearing and determination of this suit.

2. The defendant did not put in a response to the application.

Applicant’s Case 3. The applicant states that he is the registered owner of motor vehicle registration number KBN 331J/ZG 5047 which was involved in a road traffic accident with the interested party’s motor vehicle registration number KCS 314F on 3rd May 2021. The applicant avers that at the time of the said accident, his motor vehicle was insured by Directline Assurance Company Limited.

4. The applicant states that he informed and supplied his insurer, the respondent herein with a copy of the judgment dated 3rd October 2024. The insurer promised to go on record and settle the claim but failed to do so leading to his moveable and immovable properties being attached by Trophy Auctioneers and the said properties face threat of sale by public auction in the event that the orders of stay do not issue.

5. The applicant states that the said auctioneers served the insurer with the warrants of attachment on 2nd December 2024 but instead of satisfying the claim, the respondent informed him that they have received a warrant of attachment for him to collect.

6. The applicant avers that he seeks to institute a declaratory suit against his insurer to satisfy the judgment because he was led to believe that the insurer would defend the suit and satisfy the decretal sum and costs. The applicant argues that it is unfair for him to satisfy the decretal sum yet he paid all the premiums to the said insurance company which is required to satisfy the judgment under Section 10 of the Insurance (Motor Vehicle Third Party Risks) Act.

7. The applicant refers to the case of Peter Mwau, Intercounty Express Limited vs Insurance Regulatory, Invesco Assurance Company Limited & Others Petition No. 20 of 2018 Machakos HC. And argues that an insured should not be made to pay out from his pocket if the insured paid out premiums to the insurance company which is obliged by the law to pay the claims against the insured.

8. The applicant states that he has always served the said insurance company with the execution documents which is an indication that they are aware that they are under a duty to satisfy the claim.

9. The applicant is apprehensive that he faces imminent danger of being condemned to satisfy the decretal sum yet the law requires the respondent to satisfy the same under Section 10 of the Insurance (Motor Vehicle third Party Risks) Act.

10. The applicant states that no party will suffer any prejudice if the proceedings and all consequential orders are stayed as the respondent is up and running and will eventually satisfy his claim.

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

The Applicant’s Submissions 12. The applicant reiterates what he deponed in his affidavit and submits that his policy with the respondent was still valid as the accident occurred on 3/5/2021 and the cover was operational for the period between 23/04/2021 to 15/02/2022. The applicant further submits that he had fully complied and paid all the premiums required for the comprehensive cover and the respondent was notified in good time of the filing of the pleadings pursuant to Section 10(2), (3A) and (4) of the Insurance (Motor Vehicles Third Party Risks) Act, vide a letter dated 21st May 2024 while the claim was dated 3rd May 2024. The claim was slated to be mentioned on 11/07/2024 which was reasonable time for the respondent to enter appearance and defend the claim. As such, the applicant argues that it would be unjust and unfair for him to pay the decretal sum in favour of the interested party.

13. The applicant relies on the case of Mbula t/a Tamarillo Junior Academy vs Africa Merchant Assurance Company Limited; Indusu (Interested Party) (Civil Case 48 of 2019) [2024] KEHC 14283 (KLR) (18 November 2024) and submits that the respondent is obliged in law to pay the decretal sums awarded to the interested party but presently, the respondent has abandoned doing so thus leaving the applicant to shoulder the obligation contrary to Section 4(1) and 10(1) of the Insurance (Third Party Risks) Act. The applicant further relies on the case of Ogada Odongo Phoenix of E.A Insurance Co. Ltd Kisumu HCC 132/2003 and submits that the respondent in issuing a policy insurance, it means that the rights and obligations of the insured are automatically transferred to the insurer unless proved otherwise.

The Interested Party’s Submissions 14. The interested party relies on the case of Nairobi HCCC No. 1453 of 2005 Thomas Muoka Muthoka & Another vs Ernest Jacob Kisaka and submits that the subject matter of the claim was for negligence against the applicant personally brought under the insurance principle of subrogation outside the purview of Section 10 of Cap 405 as the said section is in respect to claims arising out of personal injuries and death to third parties.

15. The interested party submits that the dispute between the plaintiff and the defendant is in the nature of a private commercial and contractual dispute to which he is not privy to and hence should not deny him legitimate realization of the fruits of his judgment obtained against the plaintiff arising out of his own negligence. The interested party relies on the case of In the Matter of Re Concord Insurance Company Limited Civil Case No. 88 of 2013 and submits that he shall be prejudiced as he is not privy to the contract between the plaintiff and the defendant. The interested party further submits that such prayers cannot suffice in the instance case as there is no moratorium in place protecting the insurer. That notwithstanding, the applicant argues that courts have suggested that a moratorium dose not protect policy holders from meeting their liabilities which they may be obliged to perform for third parties whether in contract, tort or under a statute.

16. The interested party refers to the cases of Kiplagat Kotut vs Rose Jebor Kipngok [2015] eKLR and Kenya Commercial Bank Limited vs Sun City Properties Limited & 5 Others [2012] eKLR and submits that stay of execution cannot be granted unless the conditions in Order 42 Rule 6 of the Civil Procedure Rules are granted.

17. The interested party further relies on the cases of Patel vs East Africa Cargo Handling Services Ltd (1974) EA 75; Kenya Shell vs Karuga (1982-1988) 1 KAR 1018 and Machira t/a Machira & Co. Advocates East Africa Standard (No.2) (2002) KLR 63 and submits that a successful litigant should not be deprived of the fruits of a judgment. The applicant argues that the primary suit having been determined and judgment rendered by a competent court, to invoke the court’s jurisdiction and discretion to deny him the chance to realize the fruits of the judgment based on an allegation whose merit is yet to be determined will be tantamount to abusing the court process and frustrating the course of justice.

18. The interested party submits that the court ought to consider whether the appeal if successful will be rendered nugatory. The court must consider what is sought to be stayed and whether if allowed to happen the situation is reversible; or if it is not reversible whether damages will reasonably compensate the aggrieved party. To support his contentions, the interested party relies on the case of Stanley Kangethe Kinyanjui vs Tony Ketter & 5 Others (no citation given). The interested party argues that the applicant has stated that his insurer has massive resources and is up and running and will eventually satisfy his claim. The interested party further argues that it beats logic why the applicant would not want to satisfy the decree then pursue his insurer later on as guided by the Insurance Act. The interested party submits that what is sought to be stayed is reversible and damages will reasonably compensate the aggrieved party.

19. The main issue for determination is whether the applicant has satisfied the conditions set out in Order 42 Rule 6 of the Civil Procedure Rules for stay of execution pending the suit filed herein.

The Law Whether the applicant has satisfied the conditions set out in Order 42 Rule 6 of the Civil Procedure Rules for stay of execution pending the suit filed herein. 20. It is trite law that 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.

21. 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; and3. 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.

22. Substantial loss was clearly explained in the case of James Wangalwa & Another vs Agnes Naliaka Cheseto [2012] eKLR:-“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…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.

23. The applicant states that he stands to suffer substantial loss as the interested party shall proceed to execute the decree yet the law requires his insurer, the respondent to satisfy the same.

24. It is trite law that execution is a lawful process and it is not a ground for granting stay of execution. The applicant is required to show that execution shall irreparably affect him or will alter the status quo to its detriment therefore rendering the appeal nugatory. In the instant case, the applicant has not shown that he stands to suffer substantial loss. The applicant has only mentioned that should the respondent proceed with the execution, the instant proceedings and the appeal shall be rendered nugatory and an exercise in futility. Furthermore, the interested party filed a suit against the applicant in Thika SCCC No. E392 of 2024 Dedan Ndegwa Mugambi vs Paul Kimani Kinyanjui. The applicant seeks to file a declaratory suit against his insurer, the respondent herein. Notably, the interested party is not a party to the contractual relationship between the applicant and the respondent. Thus, it would be unfair to subject the interested party to these declaratory proceedings when he has a decree in his favour. Since the contractual relationship of insurance is between the applicant and the respondent, the applicant is likely to suffer substantial loss by the act of the interested party executing the judgment in his favour. Thus, it is my considered view that the applicant has not demonstrated that he stands to suffer substantial loss.

Has the application has been made without unreasonable delay 25. Judgment was delivered on 3rd October 2024 and the applicant filed the instant application on 17th December 2024, which is a period of two months from the date of delivery of the judgment. It is trite that duration of two months delay is not inordinate.

Security of costs. 26. The purpose of security was explained in the case of Arun C. Sharma vs Ashana Raikundalia t/a Raikundalia & Co. Advocates & 2 Others [2014] eKLR the court stated:-“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.

27. Evidently, the issue of security is discretionary and it is upon the court to determine the mode and quantify the same. The applicant has not offered any security for the due performance of the decree being well aware of the provisions of order 42 Rule 6 of the Civil Procedure Rules.

28. Accordingly, it is my considered view that the application dated 13th December 2024 lacks merit and is hereby dismissed with costs.

29. It is hereby so ordered.

RULING DELIVERED VIRTUALLY, DATED AND SIGNED AT THIKA THIS 3RD DAY OF APRIL 2025. F. MUCHEMIJUDGE