https://new.kenyalaw.org/akn/ke/judgment/kehc/2026/10101

Madison Insurance Company Ltd (Now known as Madison General Insurance Kenya Ltd) v Irungu (Civil Appeal E003 of 2021) [2026] KEHC 10101 (KLR) (2 July 2026) (Ruling) Neutral citation: [2026] KEHC 10101 (KLR) Republic of Kenya In the High Court at Murang'a Civil Appeal E003 of 2021 TW Ouya, J July 2, 2026 Between Madison Insurance Company Limited (Now Known As Madison General Insurance Kenya Limited) Appellant and John Mwaura Irungu Respondent (Being an Appeal from the Judgement and Decree of the Senior Principal Magistrates’ Court at Kangema given on 6th January, 2021 by Honourable P. Kiama, SPM in SPMCC No. 1 of 2020) Ruling 1.The Applicant herein, Madison General Insurance Kenya Limited, has moved this court vide the application dated 9th December 2024 filed under Certificate of Urgency seeking an order for stay of execution of the judgement and decree entered on 6th January, 2021 in Senior Principal Magistrates’ Court Kangema case No. 2 of 2020 given on pending the hearing and determination of this appeal. 2.The decree sought to be stayed is for the aggregate sum of Kes. 1,524,983.00 plus costs and interest. 3.The Application is supported by the affidavit of Moses Barasa. 4.According to the Applicant’s court files, the Appellant vide an application dated 22nd October 2024 seeking stay of execution of the judgment and decree of the Honourable Court delivered on 19th October 2024 pending the hearing and determination of the said application as well as the intended appeal. 5.The application was placed before Hon. Justice Wakiaga J. who declined to certify the application as urgent or grant the interim orders of stay since the Appellant/Applicant had not demonstrated that the Respondent had commenced execution proceedings against them. 6.The Court gave directions on the disposal of the said application which is now slated for hearing on 23rd January 2025. 7.That in view of the interim stay orders not being granted, the Respondents through First Choice Auctioneers proclaimed the Appellant's moveable assets on 06/12/2024. 8.The Applicant further states that unless the Honourable Court issues interim orders of stay as sought in this application, the proclaimed assets are at an imminent and real risk of been carried away in execution of the judgment and decree in this matter which will effectively render the Appellant's application dated 22/10/2024 and the intended appeal before the Court of Appeal nugatory. 9.It is deposed that the Appellant had already deposited security for due performance of the decrees of the lower court in the suits the subject of this consolidated appeal by paying the decretal sums in respect thereof into a joint interest earning bank account that was opened in name of the parties' advocates which amounts are still being held in the said account and can still be utilized as security for the due performance of the decree herein should the intended appeal to the Court of Appeal not succeed. 10.That it is therefore in the interest of justice that the orders sought in this application are granted. 11.In opposing the Application, the Respondent deponed that the said application is unmerited and is meant to further delay expeditious completion of this case. 12.The Respondent avers that in granting stay of execution the court exercises its discretion when it is satisfied that there is a special circumstance that warrants granting the stay and that in the present case there is no such special circumstance. 13.Further, the Respondent argues that the Applicant has not demonstrated that it will suffer any prejudice if the orders it is seeking are not granted. 14.The Respondent contends that the application is meant to deny him his fruits of successive litigation. 15.The Respondent prays that the current application by the Applicant be dismissed with costs and the Applicant be directed to satisfy the whole decretal sum forthwith. 16.The matter was canvassed by way of written submissions. Applicant/Appellant’s submissions; 17.The Applicant’s submission is that the he is likely to suffer substantial loss if the order of stay of execution is not granted and it eventually succeeds in the appeal at the Court of Appeal. 18.The Appellant expressed its apprehension that the Respondents may not have the means to refund the decretal sum should the appeal succeed in the grounds on the face of the motion and the supporting affidavit. 19.Despite this, the Respondents did not specifically rebut this apprehension by demonstrating their financial capability. In the circumstances, we humbly submit that the Appellant has shown that it will suffer substantial loss if the stay orders are not granted and the appeal succeeds. 20.The Applicant relies on the case of Muhuyi v Mulinya (Civil Appeal 85 of 2023) [2024] KEHC 2616 (KLR) (11 March 2024) (Ruling), the Court held as follows in this regard.“The decretal sum in this case is Kshs 317,870, and the Appellant has expressed fears that the Respondent may not have the means to refund it in the event that the Appeal succeeds. Once the Appellant has expressed apprehension of the Respondent’s ability to refund the decretal sum, the burden shifts to the Respondent to demonstrate otherwise.” 21.The said court also cited with approval the Court of Appeal decision in Superior Homes Ltd v Musango Kithome (2018) eKLR where the said Court stated the following:“…The law, however appreciates that it may not be possible for the Applicant to know the Respondent’s financial means. The law is therefore that all an Applicant can reasonably be expected to do, is to swear, upon reasonable grounds, that the Respondent will not be in a position to refund the decretal sum if it is paid over to him and the pending appeal was to succeed but is not expected to go into the bank accounts, if any, operated by the Respondent to see if there is any money there. In those circumstances, the legal burden still remains on the Applicant, but the evidential burden would then have shifted to the Respondent to show that he would be in a position to refund the decretal sum.” 15.The Applicant further submits that the application was made without undue delay. The impugned judgment was delivered on 19/9/2024. The court gave a 30-day stay of execution. The said period lapsed on 19/10/2024. The application under consideration was filed on 22/10/2024, slightly over a month after the judgment was made and 3 days after the initial stay period granted by the court lapsed. It is therefore submitted that the application was brought promptly. Depending on Muhuyi v Mulinya (supra) the court held that an application filed two months after the judgment was delivered was brought without undue delay. We urge Your Ladyship to accordingly find. 22.The Applicant additionally contends that there is security for the performance of the decree in place. As a condition for stay pending this appeal, the Court ordered the decretal sum be deposited in a joint interest earning account in the names of the parties advocates. The same was done as can be seen from annexure MB-4 to the supporting affidavit being an email from Prime Bank Limited confirming the particulars of the said account and the amounts held therein. And thereby the Applicant brings the court to note that the Respondents have not, in their replying affidavit, contested the sufficiency of this security. Therefore, the Applicant prays that the Honourable Court directs that the said security continues being held pending the hearing and determination of the intended appeal. Respondents Submissions; 23.The Respondent in his submissions oppose the application on the premise that it is misconceived, vexatious, an afterthought and an abuse of the court process. 24.The Respondents state that the intended appeal has the sole purpose of delaying execution proceedings. Furthermore, the Applicant has not given any good or sufficient cause for the delay in compiling the Record of Appeal. 25.The Respondent rely on the case of Olivia Wamuhu Kinyanjui vs Margaret Njeri Ndircngu [20151 eKLR and submit that the Applicant does not deserve to have the discretion exercised in its favour as it has not sufficiently explained the delay in filing the Record of Appeal. 26.The Respondents further rely on Order 42 Rule 6 of the Civil Procedure Code and the cases of RWW vs EKW (2019) eKLR and Vishram Ravji Halai vs Thornton d Turpin 119901 KLR 365 and submit that the Applicant has not met the threshold for stay of execution pending appeal. 27.The Respondents rely on the cases of James Wangalwa & Another vs Agnes Naliaka Cheseto [20121 eKLR and Absalom Dova vs Tarbo Transporters [20131 eKLR and submit that if the court were to grant the Applicant the order for stay of execution, it would place them at a more prejudicial position than the Applicant. 28.The Respondents rely on Section 27 of the Civil Procedure Act and submit that they are entitled to costs as the appeal application lacks merit. 29.The Respondent submit that the Applicant ought to file the application for stay of execution before the Court of Appeal and not before this Honourable High Court. Therefore, lacking jurisdiction. Analysis and Determination; 30.The main issue for my determination is whether to grant stay of execution pending appeal and if so, what are the conditions to be set? 31.The principles governing the granting of orders for stay of execution are outlined under Order 42 Rule 6 of the Civil Procedure Rules (2010) which stipulate as follows: -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 referred 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; 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.3.Notwithstanding anything contained in subrule (2), the court shall have power, without formal application made, to order upon such terms as it may deem fit a stay of execution pending the hearing of a formal application.4.For the purposes of this rule an appeal to the Court of Appeal shall be deemed to have been filed when under the rules of that court notice of appeal has been given.5.An application for stay of execution may be made informally immediately following the delivery of judgment or ruling.6.Notwithstanding anything contained in subrule (1) of this rule the High Court shall have power in the exercise of its appellate jurisdiction to grant a temporary injunction on such terms as it thinks just provided the procedure for instituting an appeal from a subordinate court or tribunal has been complied with. 32.Thus, a party seeking stay of execution of a decree or order of a trial court must satisfy the conditions set out in Rule 6(2) which are: -i.That substantial loss may result to the Applicant unless the order is made;ii.That the application has been made without unreasonable delay; andiii.That such security as the court orders for the due performance of such decree or order as may ultimately be binding on the Applicant has been given. 33.The Court of Appeal outlined the issues to be considered in determining whether to grant or refuse to grant a stay of execution pending appeal in the case of Butt vs. Rent Restriction Tribunal [1982] KLR 417, thus: -“The litigants and their professional advisors are the best judges of their affairs. If there is no other overwhelming hindrance, a stay ought to be granted so that an appeal, if successful, may not be nugatory. A stay which would otherwise be granted ought not to be refused because the judge considers that another, which in his opinion will be a better remedy, will become available to the Applicant at the conclusion of the proceedings.It is in the discretion of the court to grant or refuse a stay but what has to be judged in every case is whether there are or not particular circumstances in the case to make an order staying execution. It has been said that the court as a general rule ought to exercise its best discretion in a way so as not to prevent the appeal, if successful from being nugatory, per Brett, LJ in Wilson v Church (No 2) 12 Ch D (1879) 454 at p 459. In the same case, Cotton LJ said at p 458:“I will state my opinion that when a party is appealing, exercising his undoubted right of appeal, this court ought to see that the appeal, if successful, is not nugatory.”Megarry J, as he then was, followed Wilson (supra) in Erinford Properties Limited v Cheshire County Council [1974] 2 All ER 448 at p 454 and also held that there was no inconsistency in granting such an injunction after dismissing the motion, for the purpose of the order is to prevent the Court of Appeal’s decision being rendered nugatory should that court reverse the judge’s decision. The court will grant a stay where special circumstances of the case so require, per Lopes LJ in the Attorney General v Emerson and Others 24 QBD (1889) 56 at pg. 59.” 34.On the first parameter of substantial loss, the Court in James Wangalwa & Another vs. Agnes Naliaka Cheseto [2012] eKLR, discussed what amounts to substantial loss as follows:“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.” 35.In the instant case, the Applicant argued that the judgment debt was a substantial amount and they were apprehensive that if the Respondent levied execution against them, the Appeal would be rendered nugatory because the Respondent did not disclose or furnish the Court with any documentary evidence to prove his financial standing. It was their argument that the burden of proving that the Respondent could refund the decretal sum vested on him as held in High Court of Kenya at Mombasa, Civil Appeal No. 40 of 2014, Kenya Orient Insurance Company Limited vs. Paul Mathenge Gichuki & Another (2014) eKLR. 36.It is my considered view that the Applicants’ assertions concerning the Respondent’s financial standing are plausible since the Respondent did not raise any objections to these claims or demonstrate to the Court that he was a man of means and not a man of straw. Thus, the first parameter has been met because the Respondent failed to discharge his burden of proof. 37.I have also considered the timelines within which this Application was brought before the Court. The impugned judgment was delivered on 19/9/2024. The court gave a 30-day stay of execution. The said period lapsed on 19/10/2024. The application under consideration was filed on 22/10/2024, slightly over a month after the judgment was made and 3 days after the initial stay period granted by the court lapsed. I therefore find that the application was brought promptly. On this, the court relies on Muhuyi v Mulinya (supra) the court held that an application filed two months after the judgment was delivered was brought without undue delay. 38.It is my finding that the present Application was brought without undue delay. 39.As a condition for stay pending this appeal, the Court ordered the decretal sum be deposited in a joint interest earning account in the names of the parties advocates. The Applicant thereby deposited a sum to operate as security as can be seen from annexure MB-4 to the supporting affidavit. The Court also took note of the fact that the Respondent have not, in their replying affidavit, contested the sufficiency of this security. 40.It is my view that the issue of the nature of security rests within the court’s authority and is based on the court’s discretion. Further, this discretion entails a delicate balancing of the interests of the parties and a consideration of the adequacy of the security proposed. On security, Order 42 Rule 6(2)(b) of the Civil Procedure Rules is couched in mandatory terms. In Andrew Rajab Kalume v Stephen Mnjala and 6 others Civil Appeal E164 of 2025 the trial judge in coming to a decision relied on Focin Motorcycle Co. Limited v Ann Wambui Wangui & another [2018] KEHC 8358 (KLR), the court held that:“In Arun C Sharma -V- Ashana Raikundalia T/A Rairundalia & Co. Advocates Justice Gikonyo 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 dierent 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 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.” 41.It is my view that the Applicant has satisfied the requirement of security as provided for under Rule 6(2) as a sum of Kshs.1, 968, 390 has been deposited in a joint interest earning account in the names of the parties’ advocates. 42.In the premise, I find that this Application is merited and is thus allowed. The costs will abide by the outcome of the appeal. DATED, SIGNED AND DELIVERED VIRTUALLY ON THIS 2ND DAY OF JULY, 2026.HON. T. W. OUYA, OGWJUDGEIn the presence of:Juma for the AppellantNyabuto – Court Assistant