[2018] KEHC 5344 (KLR)

REPUBLIC OF KENYA

IN THE HIGH COURT OF KENYA

AT NAIROBI

CIVIL APPEAL CASE NO. 177 OF 2018

HON.MUSALIA MUDAVADI........................1ST APPELLANT

KEVIN LUNANI.............................................2ND APPELLANT

MARGARET NDANYI EMONDE...............3RD APPELLANT

BARACK MULUKA......................................4TH APPELLANT

AMANI NATIONAL CONGRESS...............5TH APPELLANT

VERSUS

ANGELA GATHONI WAMBURA.............1ST RESPONDENT

IBRAHIM BULMOR MEMBA..................2ND RESPONDENT

HON.GODFREY OSOTSI..........................3RD RESPONDENT

RULING

1. The first four appellants/applicants (the appellants) were sued by the 1st and 2nd respondents as substantive parties in Complaint No. 1 of 2018 filed in the Political Parties Disputes Tribunal (the tribunal). The 5th appellant and the 3rd respondent were named in the complaint as the 1st and 3rd interested parties respectively.

In the complaint, the 1st and 2nd respondents mainly challenged the manner in which the 4th appellant, Mr. Barack Muluka, was appointed as the Secretary General of Amani National Congress (the party) to replace Hon. Godfrey Osotsi (the 3rd respondent) who had allegedly resigned from holding that position.

2. The dispute was heard by the tribunal and in a judgment delivered on 12th April, 2018, the tribunal made three declarations which included a declaration that the intended change of the party’s Secretary General was irregular, null and void and that the 3rd respondent was the party’s bonafide Secretary General subject to an election that is held in strict compliance with the party constitution.

3. The appellants were aggrieved by the tribunal’s decision. They proffered the instant appeal vide a memorandum of appeal filed on 13th April, 2018. On the same date, they filed a notice of motion under a certificate of urgency in which they principally sought interim orders of stay of execution of the tribunal’s decision pending the hearing of the application inter parties and pending the hearing of the appeal.

4. The court record shows that on the same date, the appellants were granted interim stay of execution pending the hearing of the application inter parties which were later extended to remain in force until the application was determined.

5. When the respondents were served with the application and orders of interim stay, they also filed an application dated 17th April, 2018. The first three prayers in the application are now spent. What remains for this court’s determination is prayers 4, 5 and 6 in which the respondents sought the following orders:

i. That the memorandum of appeal dated 13th April, 2018 be dismissed under section 79 Bwith costs;

ii. That the appellants be compelled to deposit KShs.3,000,000 as security for costs of the appeal under order 42 rule 14of theCivil Procedure Rules; and

iii. That the costs of and occasioned by the application be borne by the appellants.

6. On 19th April, 2018 when the application dated 13th April, 2018 was scheduled for hearing, mindful of the need to save both judicial and the parties time and resources, the court directed that both applications be heard together.

7. The applications were heard by both oral and written submissions. The appellants filed their written submissions and a list of authorities on 3rd May, 2018 which they orally highlighted in court on the hearing date.

All the respondents chose to make oral submissions but they filed a list of the authorities they relied on. During the hearing, learned counsel Mr. Ameyo and Dr. Alutalala appeared for the appellants while learned counsel Mr. Wandati argued the applications on behalf of the 1st and 2nd respondents. Learned counsel Mr. Awele represented the 3rd respondent.

8. I have carefully considered the two applications, the rival submissions made on behalf of the parties by their learned counsel and all the authorities cited. I wish to deal first with the application dated 17th April, 2018 since it inter alia challenges the competence of the memorandum of appeal filed by the appellants which appeal forms the basis of the application for stay pending appeal.

9. As stated earlier, the prayers remaining for my determination in the application dated 17th April, 2018 are those seeking that the memorandum of appeal be dismissed and that the appellants be ordered to deposit security for costs. The applicant also prays for costs of the application.

10. My perusal of the application reveals that out of the eight grounds anchoring the motion, only two were directly relevant to the aforesaid prayers namely, grounds (m) and (n). In those two grounds, the 3rd respondent claimed that a cursory look at the memorandum of appeal shows that the appellants do not have or have no reasonable appeal against the respondents and that the appellants have failed to comply with the mandatory provisions of order 42 rule 6of theCivil Procedure Rules which requires them to provide security for costs. All the other grounds targeted the prayers seeking discharge of interim orders of stay of execution pending inter parties hearing and determination of the application dated 13th April,2018 which like I observed earlier, are already spent.

11. The same position replicates itself with regard to the affidavit sworn by the 3rd respondent on 17th April, 2018. Though the 3rd respondent averred that he had sworn the affidavit both in support of his application and in opposition to the application dated 13th April, 2018, the depositions therein were almost exclusively made in opposition to the appellant’s application.

The only averment which I have come across that is relevant to the current application is in paragraph 16 where the 3rd respondent depones that the memorandum of appeal makes generalized omnibus grounds of appeal and does not disclose a prima facie case with good and/or any chances of success.

12. The application is not opposed by the 1st and 2nd respondents but is opposed by the appellants through a replying affidavit sworn on 4th May, 2018 by their learned counsel Mr. Dan K Ameyo.

In the affidavit, counsel deponed that the application is filed in bad faith with the object of frustrating the appellants’ right of appeal. Counsel denied the applicants’ claim that the appellants obtained interim orders of stay through non-disclosure of material facts and averred that the appellants had disclosed all the material documentation on record that was necessary for purposes of lodging an appeal. The replying affidavit did not however respond to the prayer that the appellants be ordered to furnish security for costs of the appeal.

13. After considering the application and the affidavits filed by the parties, I find that two issues emerge for my determination, namely:

i. whether the memorandum of appeal dated 13th April, 2018 should be summarily dismissed with costs as prayed;

ii. if the answer to the first issue is in the negative, whether the appellants should be ordered to deposit KSHs.3,000,000 as security for costs of the appeal.

14. Turning to the first issue, under Section 79B of the Civil Procedure Act (the Act), a judge is empowered to peruse an appeal filed from a subordinate court and reject it summarily if the judge is satisfied that the appeal does not disclose sufficient grounds for interfering with the decree, part of the decree or order appealed against. However, in order for the court to decide whether or not the appeal raises sufficient grounds to warrant interfering with the decree or order appealed against, the court must study both the record of appeal and the original record of the lower court to establish whether or not the appeal merits admission for hearing. In this case, the record of appeal has not been filed and the original record of the tribunal is yet to be forwarded to this court.

It is thus my finding that prayer 4 of the application is premature and is incapable of being granted at this stage.

15. Regarding security for costs, Order 42 Rule 14of theCivil Procedure Rules (the Rules) sets out the circumstances under which the court may or should order an appellant to give security for costs of an appeal.

Order 42 Rule 14 (1)states as follows:

“At any time after the memorandum of appeal has been served the court, in its discretion, may order the appellant to give security for the whole or any part of the costs of such appeal.”

Order 42 rule 14 (2) continues to state:

“If the appellant is not ordinarily resident in Kenya and has no sufficient property in Kenya (other than property to which the appeal relates) the court shall order the giving of security for the whole or part of the costs of the appeal within a time to be limited in the order’’.

16. From the above provisions, it is clear that the law makes a distinction between circumstances in which the court is mandatorily required to order an appellant to provide security for costs of an appeal and others where such an order will be dependent on the court’s discretion. Such an order shall be made where it is proved that an appellant does not ordinarily reside in Kenya and does not have sufficient property in Kenya. In all other cases, the court shall exercise its discretion in determining whether or not to order an appellant to give security for costs of an appeal.

17. In the instant case, it has not been claimed or even suggested that the appellants do not ordinarily reside in Kenya and that they do not have sufficient property in Kenya. Consequently, the court is in this case being called upon to exercise its discretion in deciding whether or not to order the appellants to provide security for costs as prayed.

18. Like all other judicial powers, the aforesaid discretion must be exercised judiciously as opposed to arbitrarily. Though each case must be decided on its own peculiar facts and circumstances, an applicant seeking security for costs must lay a good basis for the exercise of the court’s discretion in his favour.

19. The Court of Appeal in Upward Scale Investments Co. Ltd & 7 Others v Mwangi Keng’ara & Co. Advocates Civil Appeal No. 88 of 2015 [2017] eKLRquoted with approval the case of Noormohamed Abdulla v Ranchhodbhal J. Patel & Another [1962] E.A. 448where it was held that:

“In an application for security for costs, the applicant ought to establish that the respondent, if unsuccessful in the proceedings, would be unable to pay costs due to poverty. It is not enough to allege that a respondent will be unable to pay costs in the event that he is unsuccessful. The same must be proven.” [Emphasis added]

20. In this case, the applicant has not claimed, let alone proved that any of the appellants will be unable to pay costs for any reason if they are unsuccessful in their appeal.

21. In view of the foregoing, I am satisfied that the application dated 17th April, 2018 is devoid of merit and it is hereby dismissed with costs to the appellants.

22. Having determined the application dated 17th April, 2018, I now turn to consider the appellants’ Notice of Motion dated 13th April, 2018.

23. As stated earlier, the application substantively seeks orders of stay of execution of the tribunal’s orders in Complaint No. 1 of 2018 pending the hearing of the appeal. The application is expressed to be made under section 41 (2)of thePolitical Parties Act; order 42 rule 6 (1); Order 51 rule 1of theCivil Procedure Rules, 2010; section 3Aof theCivil Procedure Act and all enabling provisions of the law.

24. The application is premised on grounds inter alia that the appellants have already filed an appeal which has strong chances of success; that the 5th appellant which is a public entity will suffer irreparable loss and damage should the decision of the tribunal be executed as this would seriously destabilize and destroy it; that this will in turn affect the interests of the party members and the public. The appellants further contended that if the stay orders are refused, their appeal will be rendered nugatory.

25. The application is supported by the affidavit sworn on 13th April, 2018 by the appellants’ learned counsel Mr. Dan Kenneth Ameyo and the supplementary affidavit sworn on 4th May, 2018 by Kelvin Lunani (the 2nd appellant).

26. The application is opposed. The 1st respondent, Angela Gathoni Wambura swore a replying affidavit on her own behalf and on behalf of the 2nd respondent on 18th April, 2018. On his part, the 3rd respondent, Hon Godfrey Osotsi, opposed the application through his replying affidavit sworn on 18th April, 2018.

27. The gravamen of the opposition to the application by all the three respondents is that the appellants are undeserving of the orders sought allegedly because the interim stay granted by the court on 13th April, 2018 was obtained through deliberate non-disclosure of material facts; that the appellants have failed to satisfy the preconditions for grant of stay pending appeal as set out in order 42 rule 6of theCivil Procedure Rules as they have not offered any security for the performance of the decree and they have not demonstrated what substantial loss they would suffer if the stay sought is not granted.

28. In the elaborate and comprehensive written submissions filed by the appellants on 3rd May, 2018 and in the rival oral submissions made on behalf of the parties during the hearing of the applications, a lot of time and effort was spent buttressing the parties respective positions on whether the tribunal had jurisdiction to entertain and hear the complaint lodged before it by the 1st and 2nd respondents. The appellants urged the court to find that the tribunal did not have jurisdiction since the party’s internal dispute resolution mechanism had not been exhausted before the complaint was filed. The respondents were however of the contrary view.

29. In my considered view, whether or not the tribunal had jurisdiction to hear and determine the complaint in question is a substantive issue of law which ought to be canvassed during the hearing of the appeal. A look at the memorandum of appeal shows that the jurisdictional question is at the very heart of the appellants’ appeal. It would therefore not be prudent or appropriate for me to consider or make any findings on it at this interlocutory stage. My take is that this is an issue that ought to be conclusively determined after the hearing of the appeal.

30. Mr Ameyo in his submissions also raised the issue of coercion; that the tribunal erred in holding that the 3rd respondent was coerced into signing the letter of resignation from the position of Secretary General of the party (the 5th appellant). This is another issue which in my opinion should await full hearing of the appeal.

31. The only issue which this court should address its mind to at this stage is whether or not the appellants are deserving of the orders of stay as sought.

32. As noted earlier, the 3rd respondent has argued that the court should decline to grant the appellants’ stay pending appeal because they failed to disclose material facts to the duty court when they obtained interim orders of stay exparte; that they deliberately failed to exhibit the ruling delivered by the tribunal on the preliminary objection challenging the tribunal’s jurisdiction. This allegation is denied by the appellants who maintained that they disclosed to the court all the material that was necessary for adjudication of the instant application.

33. It is important to note that the appellants lodged an appeal against the judgment of the tribunal not against the ruling on their preliminary objection. At paragraphs 2 and 3 of the supporting affidavit, Mr Ameyodisclosed that the appellants had raised a preliminary objection on jurisdiction which was dismissed by the tribunal. The judgment appealed against was exhibited as an annexture to the supporting affidavit.

34. In the circumstances, it is my view that the omission to exhibit the actual ruling on the preliminary objection by itself did not amount to non-disclosure of material facts considering that what was before the court was a prayer for interim stay pending hearing of the application and the appeal against the final judgment of the tribunal.

In the premises, though I wholly concur with Mr. Awele that it is the court which should determine what amounts to material non-disclosure and not a party, I am unable to agree with his submission that there was material non-disclosure in this case. I thus find no merit in the contention that the appellants are guilty of non-disclosure of material facts and are therefore not deserving of the orders sought.

35. The respondents also urged the court to refuse to grant the stay orders on grounds that the appellants have failed to meet the threshold for grant of stay pending appeal as provided by Order 42 rule 6of theCivil Procedure Rules save for the condition that the application must be filed without delay. Order 42 Rule 6of the Rules provides that for an applicant to be entitled to orders of stay pending appeal, he must establish to the court’s satisfaction that he will suffer substantial loss if stay is not granted; that the application has been made timeously and that the appellant was willing to offer security for due performance of the decree as the court may in its discretion ultimately order.

36. In his riposte, Dr Alutalala stated that Order 42 Rule 6 is not applicable to the instant appeal as what is appealed against is not a monetary decree. He also submitted that if the stay orders are not granted, the 5th appellant will suffer substantial loss as its operations are likely to stall given the special and critical role played by the Secretary General in the affairs of the party.

37. Having considered the parties rival submissions on this point, I wish to disagree with Dr Alutalala’s submission that Order 42 Rule 6of the Rules is not applicable to this case because the decree appealed against is not a monetary decree. It is clear from the title of Order 42 Rule 6 which is “stay in case of appeal” and a reading of Rule 6 (1) thereof that the provision applies to all applications for stay pending appeal irrespective of the nature of the decree or order appealed against.

38. That said, I wish to point out that the relief of stay pending appeal is discretionary in nature. The Court of Appeal in Butt V Rent Restriction Tribunal [1982] KLR 419 emphasized this position when it stated as follows:

“The power of the court to grant or refuse an application for stay of execution is a discretionary power. ... The general principle in granting or refusing stay is; If there is no other overwhelming hindrance, a stay ought to be granted so that an appeal if successful may not be rendered nugatory should that appeal court reverse the judge’s (read tribunal’s) discretion. A stay which would otherwise be granted ought not to be refused because the judge considers that another, which in his opinion will be a better remedy, will become available to the applicant at the conclusion of the proceedings”.

Madan JA (as he then was) expressed himself thus at page 419:

“It is in the discretion of the court to grant or refuse a stay but what has to be judged in every case is whether there are or not particular circumstances in the case to make an order staying execution. It has been said that the court as a general rule ought to exercise its best discretion in a way so as not to prevent the appeal, if successful from being nugatory”.

39. In my opinion, the court’s aforesaid discretion in deciding whether or not to grant stay is not fettered by the three conditions enumerated under Order 42 Rule 6. I say so because the court in the exercise of its powers under the Civil Procedure Act (the Act) and the Rules and in the interpretation of any of its provisions is enjoined by Section 1A (2)to give effect to the overriding objective of the Act as stipulated in Section 1A (1)which includes the just, expeditious, proportionate and affordable resolution of the civil disputes governed by the Act which includes appeals. Section 3Aof theAct which has been invoked by the appellants in this application also preserves the inherent power of the court to make such orders as it may consider necessary for the ends of justice or to prevent abuse of the court process. I therefore take the view that the conditions in order 42 rule 6 are just guidelines which the court should use as beacons while exercising its discretion in deciding whether or not to grant stay pending appeal. The overarching consideration should be whether the applicant has established sufficient cause to justify grant of stay pending appeal.

40. In applications of this nature, the court is always called upon to rise to the occasion and balance the competing interests of the parties to an appeal. In this case, the appellants have a right to exercise their constitutional right of appeal and to have that right safeguarded by ensuring that the appeal is not rendered nugatory. The respondents on the other hand have a right to enjoy the fruits of their judgment. In balancing those rights, the court is enjoined to make orders that as far as possible accommodates the interests of all parties to the appeal.

41. In this case, the appellants have argued that if the stay orders are not granted, the 5th appellant will suffer substantial loss if there is a change of guard in the position of its Secretary General at this point in time. The court was asked to take judicial notice of the political developments currently unfolding in the country involving political formations in the Jubilee and NASA coalitions, which I hereby do. It was stated and this was not disputed that the 5th appellant is a political party within the NASA Coalition.

42. I have considered the central role played by the Secretary General in the running of the 5th appellant. According to Article 19. 1.5of the 5th appellant’sConstitution, the Secretary General is the Principal Accounting Officer of the party and is responsible for the management of the national secretariat which is the principal custodian of all party records. His functions generally entail ensuring a smooth running of the operations of the party on a day to day basis. The Secretary General is also a signatory to the party’s bank accounts and to all coalition agreements, mergers or related documents.

43. The respondents have denied that substantial loss will be occasioned to the 5th appellant if the stay orders are not granted. It was contended that the 3rd respondent is the founder Secretary General of the party and can thus competently take over the reigns of leadership from the 4th appellant. The 3rd respondent did not however show what prejudice he is likely to suffer if the stay orders are granted. Similarly, the 1st and 2nd respondents did not also show that they will suffer any prejudice if the stay orders were granted.

44. I have noted from the material placed before me that the 4th appellant has been the party’s Secretary General for slightly over one year since 4th May, 2017 when the 3rd respondent allegedly resigned from that position. Considering that fact and having taken into account all other relevant factors, I am persuaded to find that the scales of justice in this case tilts more in favour of granting the stay orders as sought in order to preserve the appeal and to ensure that there is continuity and stability in the party’s operations pending final determination of the issues raised in the appeal.

45. I am thus satisfied that the appellants have demonstrated sufficient cause to warrant grant of stay of execution pending appeal. Consequently, I find merit in the Notice of Motion dated 13th April, 2018 and it is hereby allowed on terms that there shall be a stay of execution of the tribunal’s orders in Complaint No.1 of 2018 pending the hearing and determination of the appeal.

46. Costs of the application shall abide the outcome of the appeal.

47. In conclusion, given the nature of the appeal and the public interest involved, there is an obvious need to have it expeditiously determined and to this end, I direct that the appeal shall be mentioned on 19th June, 2018 for directions.

48. It is so ordered.

DATED, SIGNED and DELIVERED at NAIROBI this 25th day of May 2018.

C. W. GITHUA

JUDGE

In the presence of:

Mr Ameyo & Dr Alutalala for the Appellants

Mr Wandati for the 1st & 2nd Respondents and h/b for Mr Awele for the 3rd Respondent

Mr Fidel Salach Court Assistant