[2022] KEHC 26928 (KLR)

REPUBLIC OF KENYA

IN THE HIGH COURT OF KENYA AT NAIROBI

CIVIL DIVISION

CIVIL APPEAL NO. E151 OF 2021

MARY WANJIKU WAGURA....................................1ST APPLICANT/APPELLANT

MARTIN GIKUMBI.................................................2ND APPLICANT/APPELLANT

VERSUS

TIMOTHY WAMBUGU MBURU (Suing as father and next friend of

SAMUEL WAWERU WAMBUGU) ..................................................RESPONDENT

RULING

1. The motion dated 24th March, 2021 by Mary Wanjiku Waguraand Martin Gikumbi(hereafter the Applicants) seeks an order to stay execution of the judgment delivered in favour of Timothy Wambugu Mburu (hereafter the Respondent) in MilimaniCMCC No. 4599 of 2019 pending the hearing and determination of the appeal herein. The motion is expressed to be brought under Order 42 Rules 6 of the Civil Procedure Rules, inter alia. The grounds on the face of the motion are amplified in the supporting affidavit of Christopher Chengecha, counsel having conduct of the matter on behalf of the Applicants.

2. The affidavit is to the effect that the Applicants having being aggrieved by the judgment of the lower court delivered on 26th February, 2021 preferred the present appeal on quantum; that the Applicants have an arguable appeal with a very high chance of success ; that the Applicants are apprehensive they will suffer irreparable loss on successful appeal should the decretal sum be paid out to the Respondent whose financial status is unknown, and is therefore unlikely refund the decretal sum; and it is only fair and just that the Applicants be granted stay of execution pending appeal. Finally, counsel deposed that the motion has been filed without undue delay and that the Applicants were willing to provide such reasonable security as may be ordered by the court for the due performance of the decree.

3. The motion was opposed by the replying affidavit sworn by the Respondent. The Respondent views this motion as an abuse of the court process and as merely brought to prevent him from enjoying the fruits of his judgment. He deposes that the Applicants have not met the legal requirements for the grant of stay of execution pending appeal. He further states that if the court is inclined to allow the motion, it ought to order payment of two thirds of the decretal sum to him and require security for the due performance of the balance of the decretal sum. He urged the court to dismiss the motion with costs and allow the execution process to proceed.

4. The motion was canvassed by way of written submissions. As regards the applicable principles, the Applicants’ counsel anchored his submissions on the provisions of Order 42 Rule 6 of the Civil Procedure Rules. While placing reliance on the decisions in Swanya Limited v Daima Bank Limited Civil Application No. Nai. 45 of 2001and National Industrial Credit Bank Ltd v Aquinas Francis Wasike and Another [2006] eKLR counsel submitted that the court ought to find that the Applicants have an arguable appeal before the court and have equally discharged their legal burden in establishing substantial loss, whereas the Respondent has failed to demonstrate his ability to refund the decretal amount on successful appeal. Counsel went on to submit that the motion was timeously filed and thus urged the court to allow the motion as prayed.

5. On the part of the Respondent, counsel submitted that the Respondent is entitled to enjoy the fruits of his valid judgment. He asserted that the guiding principles for an order of stay execution pending appeal were well settled in the case of Antoine Ndiaye v African Virtual University (2015) Civil Suit No. 422 of 2006. On the question of substantial loss, he cited New Wide Garments EPZ (K) Limited v Ruth Kanini Kioko [2019] eKLR to submit that the Applicants have not established that substantial loss will occur if stay of execution is not granted. Finally, concerning security, while calling to aid the case of Edward Kamau & Another v Hannah Mukui Gichuki Misc. No. 78 of 2015, he urged the court in balancing the competing interests of the parties herein to make an order for security for the due performance of the decree.

6. The court has considered the material canvassed in respect of the motion. It is pertinent to state that at this stage, the Court is not concerned with the merits of the appeal. It is trite that the power of the court to stay the execution of a decree pending appeal is discretionary, however the discretion should be exercised judicially. See Butt V Rent Restriction Tribunal [1982] KLR 417.

7. The prayer for stay of execution pending appeal is brought under Order 42 Rule 6 of the Civil Procedure Rules which provides 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 Applicants 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 Applicants”.

8. The first question to be determined is whether the Applicants have demonstrated the likelihood of suffering substantial loss if stay is denied. One of the most enduring legal authorities on the issue of substantial loss is the case of Kenya Shell Ltd v Kibiru & Another [1986] e KLR 410. The principles enunciated in this authority have been applied in countless decisions of superior courts, including those cited by the parties herein. Holdings 2, 3 and 4 of the Shell case are especially pertinent. These are that:

“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.”

9. The decision of PlattAg JA, in theShell case, in my humble view sets out two different circumstances when substantial loss could arise, and therefore giving context to the 4th holding above. The Ag JA (as he then was) stated inter alia that:

“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 Applicants, either in the matter of paying the damages awarded which would cause difficulty to the Applicants 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…(emphasis added)”

10. 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 Applicants, 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.”(Emphasis added)

11. Earlier on, Hancox JAin 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 L J in Wilson -Vs- Church (No 2) (1879) 12ChD 454 at page 458 where he said:-

“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 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.”

See also Samvir Trustee Limited vs. Guardian Bank Limited Nairobi (Milimani) HCCC 795 OF 1997.

12. The Applicants have maintained that they stand to suffer substantial loss if stay of execution is denied as the Respondent’s means are unknown, and may likely be unable to refund any sums paid out on account of the decree, thereby rendering a successful appeal nugatory and occasioning them substantial. On his part the Respondent countered that the Applicants ought to demonstrate their assertions but did not offer any proof of his means. As stated in the Shell case, substantial loss is the cornerstone of the jurisdiction under Order 42 Rule 6 of the Civil Procedure Rules, and is what must be prevented, else the successful appeal might be rendered nugatory. It is enough that the Applicants herein have expressed apprehension concerning the Respondent’s ability to refund the decretal sum on successful appeal.

13. In the National Industrial Credit Bank Ltd v Aquinas Francis Wasike & Anor. (2006 the Court of Appeal stated that:

“This court has said before and it would bear repeating that while the legal duty is on an Applicants to prove the allegation that an appeal would be rendered nugatory because a respondent would be unable to pay back the decretal sum, it is unreasonable to expect such Applicants to know in detail the resources owned by a respondent or the lack of them. Once an Applicants 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 – see for example Section 112 of the Evidence Act, Chapter 80 Laws of Kenya.”

14. The judgment in the lower court was for a sum of Kshs 906,202/- with costs and interest. This is a substantial sum as rightly asserted by the Applicants. Upon the Applicants expressing doubt and apprehension about the Respondent’s capacity to repay, the burden shifted on him to controvert the assertion by proving his means. He has not and it therefore seems likely that the Applicants will suffer substantial loss and the appeal rendered nugatory if stay is not granted.

15. The Applicants have expressed willingness to provide security. The court must balance the competing interests of the parties so as not to prejudice the matter pending appeal and the words stated in Nduhiu Gitahi & Another v Anna Wambui Warugongo [1988] 2 KAR, citing the decision of Sir John Donaldson M. R. in Rosengrens -Vs- Safe Deposit Centres Limited [1984] 3 ALLER 198 and others, are apt:

“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……”

16. Finally, on the subject of delay, it is noted that the judgment appealed from was delivered on 26th February, 2021 and the instant motion filed on 24th March, 2021. It can thus be said the Applicants moved with alacrity in presenting the motion. In view of all the foregoing, the Court is satisfied that the motion is merited and is allowed on condition that the Applicants do within 45 days hereof deposit the entire decretal sum into an interest earning account in the joint names of the parties’ respective advocates. Costs will abide the outcome of the appeal.

DELIVERED AND SIGNED ELECTRONICALLY ON THIS 10TH DAY OF FEBRUARY 2022

C. MEOLI

JUDGE

IN THE PRESENCE OF:

FOR THE APPLICANTS: MR CHENGECHA

FOR THE RESPONDENTS: MR OTIENO

C/A: CAROL