[2022] KEHC 11972 (KLR)

Milhan Access Capital Limited v Kaptui (Civil Appeal E111 of 2022) [2022] KEHC 11972 (KLR) (Civ) (21 July 2022) (Ruling)

Neutral citation: [2022] KEHC 11972 (KLR)

Republic of Kenya

In the High Court at Nairobi (Milimani Law Courts)

Civil

Civil Appeal E111 of 2022

JN Mulwa, J

July 21, 2022

Between

Milhan Access Capital Limited

Appellant

and

Winfred Wanza Kaptui

Respondent

Ruling

1. Before the court is a Notice of Motion dated March 7, 2022brought by the Appellant under Order 42 Rule 6 and Order 51 Rule 1 of the Civil Procedure Rules, Section 3A and 63E of the Civil Procedure Act and all other enabling provisions of the Law. The Appellant is seeking a stay of execution of an interlocutory judgment on the Counterclaim entered in favour of the Respondent on October 15, 2021 in Nairobi Small Claim Court SCCOMM Case No 762 of 2021: Milhan Access Capital Limited v Winfred Wanza Kaptui pending the hearing and determination of the Appeal.

2. The Application is supported by the supporting affidavit and further affidavit of the appellant’s Collection Officer Michael Bitok. He avers that the appellant filed an application in the trial court seeking to set aside an interlocutory judgment in respect to the respondent’s counterclaim and leave to file a defence to the same. The application was dismissed on February 24, 2022and the lower court granted ten days' stay of execution pending appeal which has already lapsed. The appellant is now apprehensive that the respondent may execute the judgment any time as she has already obtained warrants of attachment and sale thus rendering the appeal, which has chances of success, nugatory. Further, he stated that the Appellant is ready and willing to deposit the entire decretal amount sum in court or in a joint interest earning account in the names of the parties’ advocates as security. He also avers that this application has been made timeously and no prejudice will be occasioned to the respondent.

3. In opposition, the respondent filed a replying affidavit in which she averred that the application does not meet the threshold for the grant of stay pending appeal. She averred that the Appellant has not demonstrated the substantial loss it will suffer if stay is not granted and that there was undue delay in bringing the present application. It was her contention that the appellant seeks to delay the just determination of the lower court proceedings and to keep her away her from the fruits of the judgment. Further, she faulted the appellant for failing to attach a Memorandum of Appeal setting out the grounds of its appeal.

4. Only the respondent filed written submissions. The respondent maintained that the stay should not be granted as the Appellant does not stand to suffer substantial loss if order is not granted. She relied on several decisions where courts discussed the importance of demonstrating the substantial loss likely to be suffered. These were Meteine Ole Kilelu & 10 others v Moses K Nailole[2009] eKLR; Sarah N Sakwa v Elizabeth Wamwanyi t/a Namukhosi Ltd & another [2017] eKLR; Northwood Service Ltd v Mac & More Solution Ltd(2015) eKLR; Butt v Rent Restriction Tribunal and Antoine Ndiaye v Africa Virtual University: Nairobi HCCC No, 422 of 2006.

5. The conditions necessary for the grant of stay of execution pending appeal are laid out in Order 42 Rule 6(1) & (2) of the Civil Procedure Ruleswhich provides that:“6. (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 order set aside.(2) No order for stay of execution shall be made under sub-rule (1) unless 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 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."

6. From the said provision, it is clear that in order to succeed in an application for stay of execution, an applicant must demonstrate that substantial loss may result unless the order of stay is issued; that the application has been brought without undue delay; and must give security for the due performance of any decree or order that may ultimately be found to be binding on the applicant.

7. In the instant case, I have no doubt that the present application was made without unreasonable delay. Although the impugned judgment of the trial court was entered on October 15, 2021, the appellant immediately lodged an application in the trial court seeking to set it aside. The trial court dismissed the application in a ruling delivered on February 28, 2022 and the present application was filed twelve days later.

8. As regards substantial loss, it is well settled that an applicant must demonstrate the substantial loss it stands to suffer if stay is not granted in order to justify keeping a decree holder out of the fruits of his or her judgment. In Kenya Shell Limited v Benjamin Karuga Kibiru & anorther[1986] eKLR, Platt JA stated thus:“It is usually a good rule to see if order XLI rule 4 of theCivil Procedure Rules can be substantiated. 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 event. Substantial loss in its various forms, is the corner stone of both jurisdictions for granting a 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.”

9. In the present application, I agree with the respondent that the appellant has not demonstrated the substantial loss it shall suffer should the order for stay be declined. However, the appellant has annexed Warrants of Attachment and Sale as well as a Proclamation Notice to show that execution is imminent. Indicated thereon is Kshs. 287,300/-. In the premises, since it is not known when the appeal shall be heard and determined, there is a possibility that its right to be heard on appeal will be extinguished if the order is not granted.

10. On the issue of security, the Appellant has expressed willingness to deposit the entire decretal sum in court or in a joint interest earning account in the names of the parties’ advocates. Therefore, I am satisfied that the appellant has partially met the basic requirements for grant of stay pending appeal.

11. Consequently, I find merit in the appellant’s Notice of Motion dated March 7, 2022 and hereby allow it in the following terms:(1) There shall be a stay of execution of the interlocutory judgment entered on the Counterclaim on 15th October 2021 in Nairobi Small Claim Court SCCOMM Case No. 762 of 2021: Milhan Access Capital Limited v Winfred Wanza Kaptui pending the hearing and determination of the Appeal, on condition that the appellant deposits the entire decretal sum of Kshs. 287,300/- in a joint interest earning account in the names of the parties’ advocates within 30 days from the date of this ruling.(2) In default, the stay of execution granted herein shall automatically lapse and execution shall issue.(3) The costs of this application shall be borne by the appellant.(4) On the progression of the appeal, the Appellant is directed to file the Record of Appeal within sixty (60) days of this ruling and return for MENTION on October 6, 2022 to confirm the status of the above.Orders accordingly.

DATED SIGNED AND DELIVERED AT MILIMANI THIS 21ST DAY OF JULY 2022. J.N.MULWAJUDGE.