[2023] KEHC 26445 (KLR)

Murigi v Onyango (Civil Appeal E792 of 2022) [2023] KEHC 26445 (KLR) (Civ) (8 December 2023) (Ruling)

Neutral citation: [2023] KEHC 26445 (KLR)

Republic of Kenya

In the High Court at Nairobi (Milimani Law Courts)

Civil

Civil Appeal E792 of 2022

CW Meoli, J

December 8, 2023

Between

Brenda Murigi

Appellant

and

Eric Ochieng Onyango

Respondent

Ruling

1. This ruling relates to the Notice of Motion dated 13th October, 2022 brought by Brenda Murigi (hereafter the Applicant) and supported by the grounds therein as amplified in the affidavit of the Applicant. The Motion seeks to stay execution of the judgment delivered by the subordinate court on 12th September, 2022 in Milimani CMCC No. E2826 of 2021 pending the hearing and determination of the present appeal.

2. The gist of the affidavit being that the trial court in its judgment had awarded the sum of Kshs. 1,000,000/- as general damages to Eric Ochieng Onyango (hereafter the Respondent) and which award the Applicant desires to challenge on her appeal which is arguable and has reasonable chances of success. That unless the stay order is granted, the Applicant may suffer substantial loss through the imminent threat of execution and the fact of the Respondent’s financial means being unknown creates apprehension that the decretal sum may not be recoverable from him if the appeal succeeds, thus rendering the appeal nugatory. The Applicant further expressed her readiness and willingness to provide security for the due performance of the decree.

3. The Respondent swore a replying affidavit on 10th November, 2022 to resist the Motion therein stating inter alia, that the appeal does not raise any arguable grounds and is an afterthought, and brought to hinder him from enjoying the fruits of his judgment. In the alternative, the Respondent averred that should the court be inclined to grant stay, it should impose a condition that the Applicant deposits the entire decretal sum in a joint interest earning account.

4. When the parties attended court for hearing, the court directed that the Motion be canvassed through written submissions. The Respondent on his part opted to rely on the averments made in the replying affidavit.

5. Submitting in support of the Motion, the Applicant’s counsel anchored his submissions on the decision in Carter and Sons Ltd v Deposit Protection Fund Board and Others, Civil Appeal No. 291 of 1997 as to the principles for consideration in applications of this nature. Counsel submitted that the Motion was timeously filed and that unless a stay is granted, the Applicant is likely to suffer substantial loss arising out of the uncertainties concerning the financial standing of the Respondent. Here citing the decision in National Industrial Credit Bank Ltd v Aquinas Francis Wasike & another [2006] eKLR. Counsel further submitted that sufficient cause has been shown to warrant the grant of stay of execution in the present instance so as to prevent the eventuality of the appeal being rendered nugatory. Regarding security for the performance of the decree, counsel reiterated that the Applicant is ready and willing to comply accordingly.

6. The court has considered the grounds laid out on the body of the Motion, the affidavit material and the submissions on record. At the outset, it is appropriate to state here that the merits of the appeal are not part of the considerations applicable before the High Court in dealing with this kind of application.

7. That said, it is trite law that the courts have discretionary power to grant an order for a stay of execution of a decree or order pending appeal and which discretion ought to be exercised judicially. See Butt v Rent Restriction Tribunal (supra). The applicable provision surrounding a stay of execution is Order 42, Rule 6 of the Civil Procedure Rules (CPR) which stipulates 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 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”.

8. Concerning the question whether the application has been brought without unreasonable delay, it is apparent that the judgment which triggered the instant Motion was delivered on 12th September, 2022 whereas the instant Motion was brought about one (1) month later. Consequently, the court does not find the delay to be unreasonable.

9. Concerning the centrality of the matter of substantial loss in a stay application, this was long settled by the Court of Appeal in the renowned case of Kenya Shell Ltd v Kibiru & Another [1986] KLR 410. The Court stated that:“Substantial loss in its various forms is the cornerstone of both jurisdictions for granting stay. That is what has to be prevented…”

10. The Court’s held 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.”

11. The decision of Platt Ag JA, in the Shell case in the humble view spells out two different circumstances when substantial loss could arise, and therefore giving context to the 4th holding above. Platt 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 Applicant, either in the matter of paying the damages awarded which would cause difficulty to the Applicant 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.”

12. 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 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 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.”

13. Earlier on, Hancox JA in 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 v 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.”

14. The court has considered the averments by the Applicant on the manner in which she stands to suffer substantial loss, while noting that the Respondent did not address the subject in his replying affidavit. Ordinarily, a successful party to be granted the privilege of enjoying the fruits of his or her judgment. Where however an applicant demonstrates apprehension of the likelihood of suffering substantial loss that portends rendering of the appeal nugatory, the burden shifts upon the respondent to make a rebuttal.

15. The Court of Appeal in the case of National Industrial Credit Bank Ltd v Aquinas Francis Wasike & another [2006] eKLR 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…”

16. In the present instance, the Respondent did not rebut the concerns raised regarding his financial capacity to refund any sums paid over should the appeal succeed, or address the matter at all. The decretal sum is substantial. Consequently, the court finds that the Applicant has reasonably demonstrated the manner in which substantial loss may occur if the order stay of execution is not denied.

17. On the provision of security for the due performance of the decree, the Applicant declared her willingness to comply and proposed that she be allowed to deposit the decretal sum in court. In contrast, the Respondent suggested that the decretal sum be deposited in a joint interest earning account. The court is inclined in favour of the proposal by the Respondent that the sum be deposited in a joint interest earning account.

18. The upshot therefore is that the Notice of Motion dated 13th October, 2022 is hereby allowed, on the condition, that the Applicant shall deposit the entire decretal sum of Kshs. 1,014,688/- into an interest earning account in the joint names of the parties’ advocates within 45 days of today’s date, failing which the stay order shall automatically lapse. The costs of the Motion shall abide the outcome of the appeal.

DELIVERED AND SIGNED ELECTRONICALLY AT NAIROBI ON THIS 8TH DAY OF DECEMBER 2023. C.MEOLIJUDGEIn the presence ofFor the Applicant: Mr Musana holding brief for Mr NgugiFor the Respondent: Ms Masika