[2022] KEHC 1531 (KLR)

REPUBLIC OF KENYA

IN THE HIGH COURT OF KENYA AT MERU

(CORAM: CHERERE-J)

CIVIL APPEAL NO. E007 OF 2022

BETWEEN

MERU NISSAN OPERATORS CO-OP SAVINGS & CREDIT SOCIETY LTD.........................1ST APPELLANT

PATRICK MICHINA MACHORA ..................................................................................................2ND APPELLANT

AND

JANE KAINDA MUTUERA..................................................................................................................RESPONDENT

RULING

Background

1) On 21st December, 2021, the court entered judgment in NKUBU PMCC NO. 73 OF 2019 in favour of the Respondent as against the Appellants/Applicants for Kshs. 2,341,740/-.

1) Stay of execution of judgment in NKUBU PMCC NO. 73 OF 2019pending the hearing and determination of the appeal

2) Costs be provided for

2) The notice of motion is premised on grounds among others that the Appellants/Applicants are aggrieved by the judgment of the trial court and that the appeal has high chances of success.

3) The application is also supported by an affidavit sworn on 25th January, 2022 by Patrick Micheni Machura, the 2nd Applicant in which he reiterates the grounds on the face of the application. Additionally, he avers that his insurer Directline Assurance Company Ltd is willing to furnish a bank guarantee from BTB Bank as security for the judgment sum.

4) Respondent opposed the application by way of an affidavit sworn on 10th February, 2022 and prays that the court allows her to enjoy the fruits of the judgment.

Analysis and Determination

5) I have considered the application in light of affidavit on record the issue for determination is whether there ought to be Stay of execution of judgment in NKUBU PMCCNO. 73 OF 2019pending the hearing and determination of the appeal

6) Concerning stay of execution, Order 42 (6) of the Civil Procedure Rules provides:

(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

b. That the application has been made without unreasonable delay; and

c. 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.

7) There is a myriad of cases on what constitutes substantial loss. In Civil Appeal No. 186 Of 2007 Standard Assurance Co. Ltd –Vs- Alfred Mumea Komu the Court stated-

“Substantial loss, in its various forms is the corner stone of best jurisdictions for granting a stay. That is what has to be presented. Therefore, without this evidence, it is difficult to see why the respondents should be kept out of their money.”

8) Similarly, inCivil Case No. 41 Of 1995 United Builders & Contractors (Africa) Limited –Vs- Standard Chartered Bank Ltd the Court stated-

“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 suits.”

9) Additionally, the court in ABN Amro Bank N.V. v Le Monde Foods Ltd Civil Application No. Nairobi 15 of 2002 held that:

“Each party bears a specific burden regarding proof of substantial loss in a case such as before us. ……….…So all an Applicant in the position of the bank (Appellant) 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 were paid over to him and the pending appeal was to succeed. 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 if it is paid out to him and the pending appeal were to succeed. This evidential burden would be very easy for a Respondent to discharge. He can simply show what assets he has – such as land, cash in the bank and so on.”

10) The Respondent was awarded general damages in the sum of Kshs. 2,341,740/. Whereas this is a money decree, there is no evidence that the Respondent is in a position to refund the decretal sum in the event that the appeal succeeds and that is persuasive evidence that Appellants are likely to suffer substantial loss if an orders sought are not granted.

11) Security is a legal requirement under 42 (6) (2) (c) of the Civil Procedure Rules. The Appellants have offered to furnish a bank guarantee for due performance of the decree herein pending the hearing and determination of the appeal.

12) Whereas it is not my duty at this stage to determine if the Applicants have an arguable appeal, I am minded, in the interest of justice to exercise this court’s discretion under section 3A of the Act to afford the Appellants an opportunity to prosecute their appeal.

13) In the end, dated 02nd February, 2022 is allowed in the following terms:

1) There shall be a Stay of execution of judgment in NKUBU PMCC NO. 73 OF 2019pending the hearing and determination of the intended appeal on condition that the Appellants/Applicants SHALL:

(a) Pay the Respondent Kshs. 500,000/- (five hundred thousand) within 14 days from today’s date

(b) Furnish a bank guarantee from DTB Bank as security for the balance of the decretal sumwithin 30 days of today’s date

2) The Appellants/Applicants are directed to file and serve the record of Appeal not later than 21 days’ from today’s date

3) Mention on 06th April, 2022 to confirm compliance with orders 1 and 2 above

4) Costs shall abide the outcome of the intended appeal

DATED IN MERU THIS 10TH DAY OF MARCH 2022

T.W. CHERERE

JUDGE

APPEARANCES

COURT - MORRIS KINOTI

FOR APPELLANTS/APPLICANTS – MS. LABOSO FOR KIMONDO GACHOKA & CO ADVOCATES

FOR RESPONDENT - MS. MUKABURU FOR KIOGORA ARIITHI & ASSOCIATES