[2022] KEHC 11308 (KLR)

Melly & another v Musili (Civil Appeal 145 of 2021) [2022] KEHC 11308 (KLR) (4 May 2022) (Ruling)

Neutral citation: [2022] KEHC 11308 (KLR)

Republic of Kenya

In the High Court at Machakos

Civil Appeal 145 of 2021

MW Muigai, J

May 4, 2022

Between

Christopher Kipkoech Melly

1st Appellant

Joseph Mike Leley

2nd Appellant

and

John Mutiso Musili

Respondent

Ruling

1. By a notice of motion dated July 9, 2021, the applicants/appellants seek the following orders:-1. Thatthe application be certified urgent, service be dispensed with thereof and the same be heard ex parte in the first instance.2. Thatthe Hon. Court be pleased to order stay of execution of the Judgment and/or Decree issued by the Hon. C.C Oluoch (Mrs.) Chief Magistrate dated and delivered on 11th August, 2021 in Mavoko CMCC No. 245 of 2019 pending the hearing and determination of this Application.3. Thatthe Hon. Court be pleased to grant a stay execution of the Judgment and/or Decree issued by the Honourable C.C Oluoch (Mrs.) Chief Magistrate dated and delivered on 11th August, 2021 in Mavoko CMCC No. 245 of 2019 pending the hearing and determination of this Appeal in Machakos HCCA No. 145 of 2021. 4.Thatthis Hon. Court allow the Applicant to furnish Court with security in the form of a Bank Guarantee from the DTB Bank.5. Thatthe application be heard interpartes on such date and time as this Hon. Court may direct.6. Thatthe costs of this application abide the outcome of the Appeal.7. Thatthis Hon. Court be pleased to issue any other order and/or direction it deems fit to grant in the circumstances.

2. The application is supported by the affidavit of the 1st applicant/appellant who is the insured of motor vehicle registration number KBX 716P. The applicants are dissatisfied with the aforesaid judgment of the Trial Magistrate hence lodged the Appeal Machakos HCCA No. 145 of 2021 wherein they are contesting both liability and quantum. According to the Applicants, the appeal has high chances of success.

3. According to the appellants, they are reasonably apprehensive that the respondent may proceed to levy execution against them since the 30 days stay period granted by the trial court lapsed. The appellant consider the total award of damages in the sum of Kshs. 422,996/- is substantial hence apprehensive that if the same is paid to the Respondent and if the appeal is successful, they will not be able recover the amount from the respondent who has not disclosed nor furnished the court with any documentary evidence to prove his financial standing. According to the applicants, if the stay of execution is not granted and the respondent executes the judgment and/or decree, the applicants will suffer irreparable loss and damage and the appeal will be rendered nugatory.

4. The 1st applicant averred that his insurance, Directline Assurance Company Limited is ready, willing and able to furnish the Court with a security in the form of a Bank Guarantee from DTB Bank. He averred that the application was filed in good faith and the respondent will not suffer any prejudice. According to the 1st applicant, it is in the interest of justice and a fair hearing that that application be granted as prayed. The 1st applicant averred that he made the affidavit from facts known to him as the Applicant/Appellant and the driver of the suit motor vehicle the truth of which he verily believes.

Replying Affidavit 5. In opposition to the application, the respondent swore a replying affidavit on October 8, 2021. According to the deponent, the applicants application is misconceived, incompetent and frivolous and an abuse of the court process. He asserts that the application should be dismissed with costs to the applicants.

6. The respondent assert that he was not in court when the trial court at Mavoko Chief Magistrate Court delivered the impugned judgment and a stay of 45 days was granted. He averred that his advocate obtained a Certificate of Costs which was served upon the applicant/defendant on 25th August, 2021.

7. According to the respondent, the appeal has no chances of success as can be seen from the grounds enumerated in the annexed memorandum of appeal.

8. The respondent averred that he wants from the total judgment money inclusive of costs and interest in the sum of Kshs. 539,034 be paid immediately to him but in the event this court finds merit in the application, an amount of Kshs. 270,000/- be deposited into a joint account of the applicants and Respondent advocates pending the hearing and determination of the application and the appeal.

Further Affidavit 9. In response to the respondent’s replying affidavit, the 1st applicant based on the advice of their advocate, assert that the appeal raises triable issues being liability and excessive quantum hence has high chances of success. He averred that his insurance Company has a formal contract on bank guarantee with DTB and Equity Banks which is renewable annually.

10. He assert that no documentary evidence has been provided by the respondent to show his financial standing hence prejudicial to the Applicants/ appellants if the amount is paid and the appeal is successful.

Applicants Submissions 11. In support of the application, the applicants placed reliance on order 42 rule 6(2) of the Civil Procedure Rules, 2010, a provision which set out the conditions upon which the applicant must satisfy in order to be granted orders of stay of execution pending the appeal.

12. As to whether the applicant has an arguable appeal, it is submitted that the appeal is against the quantum being excessive hence arguable and raises points of law to warrant this court’s intervention as per the draft memorandum of appeal filed on June 29, 2021.

13. Reliance was placed on the case of Kenya Revenue Authority vs. Sidney Keitany Changole & 3 others (2015) eKLR. It is submitted that the grounds of appeal have high chances of success hence the Applicant should be given an opportunity to ventilate their appeal on merit.

Unreasonable Delay 14. On the first condition that the application was filed without unreasonable delay, it is submitted that the impugned judgment was delivered on August 11, 2021 and the application stay of execution was filed on September 24, 2021. To the applicants, the period appeal is filed is without undue and/or unreasonable delay.

Substancial Loss 15. Regarding whether substantial loss will occur, it is submitted that the respondent means are unknown hence a high likelihood that the respondent will not be capable of refunding the decretal amount in the event that the appeal succeeds. Reliance was placed on the case of Edward Kamau &another vs. Hannah Mukui Gichuki &another(2015) eKLR where Aburili J. cited the Court of Appeal decision of National Industrial Credit Bank Ltd vs. Aquinas Francis Wasike, CA Civil Application No. 238 of 2005 on the proposition that the burden is shifted to the Respondent to show what resources he has since the particulars are within his knowledge.

16. It is submitted that in the absence of an affidavit of means from the respondent, his financial standing is unknown which according to the applicants, no substantial loss will the respondent suffer if the decretal sum is not paid. Reliance was placed on the case of Recoda Freight & Logistics Ltd vs. Elishana Angote Okeyo [2015] eKLR and section 112 of the Evidence Act as regards the Respondent’s discharge of evidential burden of proof.

17. According to the applicants, the grounds set out in the memorandum of appeal dated August 23, 2021are arguable because they raise serious questions of law and fact to be examined on appeal. Reliance was placed on the case of Kenya Revenue Authority vs. Sidney Keitany Changole & 3others [2015]eKLR.

18. It is submitted that the applicant is ready and willing to furnish security in the form of a Bank Guarantee from a well-functioning bank.

19. According to the Applicants, they have satisfied all the conditions set under order 2 rule 6 of the Civil Procedure Rules, 2010. The Applicants prayed that the costs of the application abide the outcome of the appeal.

Respondent’s Submissions 20. On behalf of the respondent, it is submitted that the appeal has no chances of success and it’s meant to prevent the respondent from enjoying the fruits of judgment. The respondent urge this court to dismiss the application with costs to therespondent but if this court allows the appeal to proceed, the appellant submitted that the sum of Kshs. 270,000/- be deposited into a joint advocates account.

21. Reliance was placed on the case of Patrick Nyaga & Rentokill Initial Kenya Ltd vs. Sanitam Services (E.A) Limited Civil Appeal No.332 of 2013 and Juliah Wambui Ngaruiya(Suing as the Administrator of the Estate of the deceased Samuel Mbugua Mungai)vs. Kassam Hauliers LimitedCivil Case No.9 of 2019.

Determination 22. I have considered the application, affidavits in support and in opposition to, submissions and the authorities relied upon.

23. The application is premised on order 42 rule 6(2) of the Civil Procedure Rules,2010 provides that:-“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 order 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 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.

24. It therefore follows that no appeal or second appeal will operate as a stay. A party must show sufficient reasons why stay orders should be granted. See Vishram Ravji Halai vs. Thornton & Turpin Civil Application No. Nairobi 15 of 1990 [1990] KLR 365.

25. The court, in RWW vs. EKW [2019] eKLR, addressed its mind to the purpose of a stay of execution order pending appeal, in the following words:“The purpose of an application for stay of execution pending an appeal is to preserve the subject matter in dispute so that the rights of the appellant who is exercising the undoubted right of appeal are safeguarded and the appeal if successful, is not rendered nugatory. However, in doing so, the court should weigh this right against the success of a litigant who should not be deprived of the fruits of his/her judgment. The court is also called upon to ensure that no party suffers prejudice that cannot be compensated by an award of costs.”

26. The only issue necessary for determination would be whether the application seeking stay of execution is merited.

Substantial Loss 27. On the first condition, the court in Tropical Commodities Suppliers Ltd andothers vs. International Credit Bank Limited (in liquidation)(2004) E.A. LR 331,defined substantial loss in the sense of Order 42 rule 6 as follows:-“…Substantial loss does not represent any particular mathematical formula. Rather, it is a qualitative concept. It refers to any loss, great or small, that is of real worth or value as distinguished from a loss without value or a loss that is merely nominal…”

28. In Masisi Mwita vs. Damaris Wanjiku Njeri [2016] eKLR, Mativo J relied on the case of Equity Bank Ltd vs. Taiga Adams Company Ltd, [2006] eKLR to explain the onus of the Applicant where the court stated a follows: -“…The only way of showing or establishing substantial loss is by showing that if the decretal sum is paid to the respondent—that is execution is carried out-in the event the appeal succeeds, the respondent would not be in a position to pay-reimburse- as/he is a person of no means. Here, no such allegation is established by the appellant.”

29. In National Industrial Credit Bank Ltd vs. Aquinas Francis Wasike & another [2006] eKLR Court of Appeal held 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…In Paragraph 11 of the replying affidavit, the 1st respondent set out the contracts in which the 2nd respondent was engaged in but the values of those contracts were not disclosed. We repeat that the decretal sum was awarded to the 1st respondent, not the 2nd respondent and all that the 2nd respondent is entitled to from the judgment are the costs of the applicant's dismissed suit. The sum awarded to the 1st respondent was on a counter-claim. On the material before us, the means or resources of the 1st respondent remain wholly unknown and in those circumstances, we agree with Mr. Laibuta that if the decretal sum was paid over to the 1st or even to the 2nd respondents, the two might not be able to repay it back and in that case, if the applicant's intended appeal were to succeed, that success would be rendered nugatory.

30. The applicants contention is that the respondent is a person of unknown means hence incapable of refunding the decretal sum is paid to him. According to theapplicant, the decretal sum is substantial yet the respondent has not furnished court with documentary evidence to show his inability to refund the money.Odunga J. in George Kimotho Ilewe Annastacia Wanza Muthuka & Joseph Mutuku Ngewa (suing as legal representatives of the estate of Judy Kioo Wanza – deceased) stated that:-“It is not enough to simply speculate that the Respondent, a successful litigant would not be able to refund the decretal sum. As far as the Court is concerned, she is a successful litigant and is entitled to the sum decreed in her favour. Similarly, there is no allegation that the payment of the said sum would ruin the applicant’s business.” See in Bungoma High Court Misc Application No 42 of 2011 - James Wangalwa & Another vs. Agnes Naliaka Cheseto and James Wangalwa & Another vs. Agnes Naliaka Cheseto [2012] eKLR.

32. Gichuhi, Ag.JA (as he then was) in Kenya Shell Limited v Kibiru[1986] KLR 410,at 417 held:“It is not sufficient by merely stating that the sum of Shs. 20,380. 00 is a lot of money and the applicant would suffer loss if the money is paid. What sort of loss would this be? In an application of this nature, the applicant should show the damages it would suffer if the order for stay is not granted. By granting a stay would mean that status quo should remain as it were before judgement. What assurance can there be of appeal succeeding? On the other hand, granting the stay would be denying a successful litigant of the fruits of his judgement.”

33. It therefore follows that the applicant must demonstrate the loss he/she would suffer if the decretal sum is paid to the respondent.

34. The court notes that despite that respondent not stating in his affidavit whether he is capable of refunding the decretal mount or furnishing the court with documentary evidence if paid to him, the applicants have not demonstrated what substantial loss they will suffer. The applicants have not averred or submitted whether the insurance which is ready and willing to provide the Bank Guarantee, its business will be ruined if the decretal sum is given to the respondent. In any case, the court notes that the total decree amount of Kshs.422, 996 is not a substantial amount for the two Appellants and/or the insurance. The court is of the view that the respondent who sustained injuries as result of the accident in 2017, incurred hospital expenses and no single cent has been paid to him or a proposal made is the one who stand to suffer substantial loss.

35. The court is of the view the applicants/appellants have not demonstrated the substantial and/or irreparable damage and loss they will suffer or the insurer. The ground fails.

Unreasonable Delay 36. On the second condition, the applicants stated that their application for stay of execution was filed without unreasonable delay or undue delay. The respondent is silent on whether the delay was unreasonable. The court is of the view the delay of 1 month 10 days since the trial court judgment was delivered is not unreasonable. It will be noted that even the appeal sought to be preserved for determination was filed 13 days later after the judgment was delivered and within the 45 days stay of execution granted by the trial court.

37. The court finds that there is no undue delay in filing the application herein.

Furnish Security 38. The applicants have offered security for the due performance of the decree in the form of a Bank Guarantee from Diamond Trust Bank. According to the Applicants, the guarantee will come from its insurance, Directline Assurance Company Limited.

39. The court in Focin Motorcycle Co. Limited vs. Ann Wambui Wangui & another [2018] eKLR, stated that:-“Where the applicant proposes to provide security as the applicant has done, it is a mark of good faith that the application for stay is not just meant to deny the respondent the fruits of judgment. My view is that it is sufficient for the applicant to state that he is ready to provide security or to propose the kind of security but it is the discretion of the court to determine the security. The applicant has offered to provide security and has therefore satisfied this ground for stay.”

40. It follows therefore that it is the discretion of the court to determine the security. We do not have an undertaking from the insurer that the Bank Guarantee attached will be applied to the Applicants case as a security. The respondent has a judgment in his favour before the trial court hence unfair to him despite this court being enjoined in such application to balance the interest of both the applicant and respondent. It will be noted that the respondent also has not demonstrated the inadequacy of the bank guarantee.

41. The court notes that the applicants are not opposed to the decretal sum of Kshs. 270,000/- be deposited in a joint advocates account but are seeking an order to be allowed to deposit with the court a Bank Guarantee from DTB Bank.

Arguable Appeal 42. As to what constitutes an arguable appeal, the Court of Appeal in Nairobi Women’s Hospital vs. Purity Kemunto [2018] eKLR:“To say that an appeal is arguable is another way of saying that it is not frivolous and that it raises a bona fide issue deserving full consideration by the Court. Even one bona fide issue will satisfy the requirement, for the law does not look for a multiplicity of arguable issues.”

43. The court notes that the grounds of appeal are against both liability and quantum of damages. The applicants contend that the respondent did not prove his case on a balance of probability.

44. The court’s view is that the issues are triable to be considered in the appeal.

Disposition 45. In the premises:-a.There will be a stay of execution pending the said appeal on condition that the Applicants remit to the respondent half of the decretal sum and balance of the decretal sum be deposited in a joint account of both the applicants and respondent’s advocates within 90 days from the date hereof and in default, the application for stay shall stand dismissed.b.The costs of this application abide the outcome of the appeal.c.Thereafter, parties through counsel to file and exchange

Written submissions within 21 days each party and take a mention date before DR MHC/Registry.

It so ordered.RULING DELIVERED, DATED AND SIGNED AT MACHAKOS THIS 4th DAY OF MAY 2022. M.W. MUIGAIJUDGEIN THE PRESENCE OF:NYANARWA H/B KIBAYA FOR APPLICANTSNO APPEARANCE - FOR RESPONDENTGEOFFREY MUTONGA - COURT ASSISTANT