https://new.kenyalaw.org/akn/ke/judgment/kehc/2026/9812

Mwananchi Credit Ltd v Mutune (Civil Appeal E356 of 2025) [2026] KEHC 9812 (KLR) (17 June 2026) (Ruling) Neutral citation: [2026] KEHC 9812 (KLR) Republic of Kenya In the High Court at Mombasa Civil Appeal E356 of 2025 WM Kagendo., J June 17, 2026 Between Mwananchi Credit Ltd Appellant and Peter Mutune Respondent Ruling A. Introduction 1.Before the Court are two applications filed by the Appellant, Mwananchi Credit Limited. The first is a Notice of Motion dated 21st March 2026 (hereinafter "the review application"), seeking review and setting aside of this Court's ruling dated 19th March 2026 which dismissed the Appellant's earlier application for stay of execution. The second is a Notice of Motion dated 14th April 2026 (hereinafter "the stay application"), seeking re-certification of the review application as urgent and a stay of execution of the decree in Mombasa Small Claims Court Commercial Civil Suit No. E268 of 2025 pending the hearing and determination of the review application. Both applications are brought under Section 80 of the Civil Procedure Act, Order 45 Rule 1 of the Civil Procedure Rules, and Sections 1A, 1B and 3A of the Civil Procedure Act. 2.Both applications were directed by the Court to be served for inter partes hearing on 29th April 2026. The Respondent filed Grounds of Opposition dated 23rd April 2026 in opposition to the review application. The Appellant filed a Supplementary Affidavit sworn on 23rd May 2026 by Cedella Otieno, in-house counsel for the Appellant, in response to the Grounds of Opposition. The two applications are consolidated herein for determination. B. Background 3.The background to these applications is as follows. The Respondent, Peter Mutune, instituted a claim against the Appellant in the Mombasa Small Claims Court in Commercial Civil Suit No. E268 of 2025. The claim related to the repossession and sale of the Respondent's motor vehicle, a Nissan Caravan E25 registration number KCE 565Q, which the Appellant had taken as security under a logbook loan financing arrangement. The Respondent claimed, among other reliefs, a sum of Kshs. 650,000/= as the value of the motor vehicle. 4.The trial court entered judgment in favour of the Respondent on 30th April 2025 and issued a decree on 14th July 2025, delivered on 29th October 2025. Critically, the decree directed judgment in the sum of Kshs. 1,000,000/= in favour of the respondent as against the Appellant. However, the decree expressly qualified the decretal sum with the following condition: "in order to cater for the wear and tear during the period the Claimant had the subject motor vehicle, this sum will be subject to the valuation of the subject motor vehicle at the time of its repossession." There was to be no order as to costs. 5.Following the issuance of the decree, the Appellant filed an application on 16th September 2025 to set aside the ex parte judgment. That application was dismissed on 29th October 2025. The Appellant then filed a Notice of Motion dated 19th November 2025 seeking a stay of execution of the decree pending the hearing and determination of the main appeal. That application was heard inter partes and dismissed by this Court in a ruling delivered on 19th March 2026. The ground upon which the Court dismissed the stay application was that the Appellant had not provided any valuation evidence of the subject motor vehicle. 6.Following the delivery of the ruling of 19th March 2026 dismissing the stay application, the Respondent moved swiftly to execute the decree. The Respondent instructed Makini Auctioneers who, on 13th April 2026, proclaimed the Appellant's movable assets under Proclamation No. 1688 and issued a seven days' notice of removal and public auction sale. The proclaimed goods included office equipment, furniture, printers, computers, air conditioners and a reception desk, with an amount due of Kshs. 1,000,000/= plus auctioneer's charges of Kshs. 98,500/=. 7.The Appellant now brings the review application on the ground that the ruling of 19th March 2026 was made in error apparent on the face of the record, in that the Court found that no valuation evidence had been provided when in fact a valuation report dated 27th September 2021 prepared by Union Assessors and Contractors Limited under reference number UNAC/Mwananchi/VAL/KCE 565Q/27/09/2021 had been annexed to the supporting affidavit of Cedella Otieno as annexure CO-4. The said valuation report assessed the forced value of the motor vehicle at Kshs. 230,000/=. The Appellant contends that the Court may not have sighted the report and thereby fell into error, and that the error is apparent on the face of the record and ought to be corrected. 8.Simultaneously, the Appellant brought the stay application on 14th April 2026 upon being served with the proclamation notice, seeking urgent certification and a stay of execution of the decree pending the hearing of the review application. The stay application is supported by the affidavit of Jackline Saleh, also in-house counsel for the Appellant, sworn on 14th April 2026. The stay application arose directly from the urgent threat posed by the proclamation of the Appellant's assets, which are described as tools of trade of a logbook lending company that depends on walk-in clients. C. The Parties' Respective Positions The Appellant 9.The Appellant's position on the review application, as deposed by Cedella Otieno in the supporting affidavit dated 21st March 2026 and the supplementary affidavit dated 23rd May 2026, is that the ruling of 19th March 2026 was premised on an error apparent on the face of the record. The valuation report referenced above was duly annexed to the application that was before the Court at the time the impugned ruling was made. The Appellant contends that the Court thereby overlooked evidence that was squarely on the record, and that such oversight constitutes the kind of error that is amenable to review under Order 45 Rule 1 of the Civil Procedure Rules. 10.On the stay application, the Appellant further avers through the affidavit of Jackline Saleh that unless a stay is issued, the Respondent will execute the decree on what the Appellant characterises as a manifestly wrong and unconditioned decretal sum of Kshs. 1,000,000/=. The Appellant emphasises that the decree of the Small Claims Court is conditional — its operative sum is tied to the valuation of the motor vehicle — and that execution on the full decretal sum without reference to the valuation would amount to unjust enrichment. The Appellant has expressed willingness and ability to deposit the sum of Kshs. 230,000/= as security for the due performance of the decree. The Respondent 11.The Respondent opposes the review application through Grounds of Opposition dated 23rd April 2026, filed by Mburu Kariuki & Company Advocates. The Respondent's position is that no grounds for review have been established, and that the applications constitute an abuse of the process of the Court. The Respondent contends that the finding of the Court in the ruling of 19th March 2026 cannot be impugned merely on the basis that the Appellant is dissatisfied with it. The Respondent further argues that the valuation report, which the Appellant purports to rely upon, lacks relevant information, in particular: (a) it does not explain the dramatic reduction in value from Kshs. 650,000/= to Kshs. 230,000/= within a short period; (b) it does not indicate the costs of repairs; (c) it is partial and inconclusive; and (d) the date of its preparation is uncertain. The Respondent also asserts that the Appellant approaches the Court with unclean hands, has failed to provide a proper statement of account of the proceeds of the sale, and is unwilling to deposit adequate security. The Respondent prays that both applications be dismissed with costs. D. Issues For Determination 12.Having considered the pleadings, affidavits and grounds filed by the parties, this Court identifies the following issues for determination:a.Whether the ruling of this Court dated 19th March 2026 was made in error apparent on the face of the record so as to warrant review under Order 45 Rule 1 of the Civil Procedure Rules read together with Section 80 of the Civil Procedure Act;b.Whether, in the circumstances, a stay of execution of the decree ought to be granted pending the hearing and determination of the review application;andc.What orders as to costs are appropriate. E. Analysis And Determination Issue (a): Whether the ruling of 19th March 2026 discloses an error apparent on the face of the record 13.The jurisdiction to review an order or decree is conferred by Section 80 of the Civil Procedure Act, which provides that any person considering himself aggrieved by a decree or order from which no appeal lies may apply for a review of the judgment on grounds prescribed. Order 45 Rule 1 of the Civil Procedure Rules prescribes the grounds upon which review may be sought, and includes the discovery of new and important matter or evidence which, after the exercise of due diligence, was not within the knowledge of the appellant at the time of the decree, as well as an account of some mistake or error apparent on the face of the record or for any other sufficient reason. The applicable threshold for review on the ground of an error apparent on the face of the record is well settled: the error must be self-evident and must not require elaborate argument to establish. In Chandrakhant Joshibhai Patel-vs-'R (2004) TLR it was held as follows:“An error apparent on the face of the record must be such as can be seen by one who runs and reads that is, an obvious and patent mistake and not something which can be established by a long-drawn process of reading on points which may be conceivably be two opinions.” 14.In the present case, the impugned ruling of 19th March 2026 dismissed the Appellant's application for stay of execution principally on the ground that the Appellant had not provided any valuation evidence of the subject motor vehicle. At paragraph 14 of that ruling, the Court stated: "The Appellant claims that execution of the decree will cause substantial loss because the decretal sum exceeds the true value of the vehicle. However, the Appellant has not provided any valuation evidence or supporting documentary evidence to substantiate this claim." At paragraph 15, the Court further stated: "The draft Defence annexed to the application does not quantify the loss with precision. The vehicle was sold in public auction on 25th November 2021, and no independent valuation has been filed." 15.Upon a careful re-examination of the record, this Court notes that the supporting affidavit of Cedella Otieno sworn on 21st March 2026 which was the affidavit in support of the application for stay of execution that was dismissed on 19th March 2026 ,indeed annexed at paragraph 10 thereof a valuation report prepared by Union Assessors and Contractors Limited, dated 27th September 2021, under reference UNAC/Mwananchi/VAL/KCE 565Q/27/09/2021, in respect of the Nissan Caravan E25, registration number KCE 565Q. That report was marked as annexure CO-4. The report assesses the forced value of the motor vehicle at Kshs. 230,000/= and its market value at Kshs. 300,000/=. 16.The Court therefore finds that the assertion in the ruling of 19th March 2026 that no valuation evidence had been filed was not an accurate reflection of the record as it then stood. The valuation report was a document on the record of this Court at the time the ruling was made. The finding to the contrary is, in the circumstances, an error apparent on the face of the record within the meaning of Order 45 Rule 1 of the Civil Procedure Rules. The error does not require elaborate argument to establish — it is demonstrable by reference to the record itself. 17.The Respondent argues that the valuation report is deficient, inadequate and questionable, raising objections as to its content and methodology. With respect, those are substantive arguments that go to the merits of the original stay application, and they are proper arguments to be ventilated before the Court when the review application is heard on the merits. At this stage of determining whether an error exists on the face of the record for purposes of granting leave to proceed with review, the Court is not called upon to adjudicate upon the adequacy or sufficiency of the valuation report. As the Appellant correctly submits through the Supplementary Affidavit of Cedella Otieno, the question of whether the report is proper or otherwise is a matter for the trial court hearing the substantive review and not for this Court at this interlocutory stage. 18.The Respondent also argues that the Appellant approaches the Court with unclean hands and that the application is an abuse of court process. The Court does not find merit in this contention at this stage. The doctrine of unclean hands is an equitable principle that must be substantiated on the facts of each case. The fact that the Appellant sold the motor vehicle , a matter that remains in dispute , does not per se establish unclean hands in the context of an application for review of a ruling that overlooked a document on the record. 19In the result, this Court finds that the ruling of 19th March 2026 was made in error apparent on the face of the record. The review application discloses a sufficient ground for review under Order 45 Rule 1 of the Civil Procedure Rules read together with Section 80 of the Civil Procedure Act. Issue is determined in favour of the Appellant. Issue (b): Whether a stay of execution ought to be granted 20.Having found that a ground for review has been established, the Court must now consider the appellant’s stay application dated 19th November 2025. The applicable legal framework for stay of execution is Order 42 Rule 6(2) of the Civil Procedure Rules, which provides: "No order for stay of execution shall be made unless (a) the court is satisfied that substantial loss may result to the appellant 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 appellant." 21.In this Court's ruling of 19th March 2026, the principles applicable to stay of execution were comprehensively set out by reference to Order 42 Rule 6(2) of the Civil Procedure Rules and applicable authorities. The concept of substantial loss was held to be the cornerstone of the jurisdiction for granting a stay, as expressed in Kenya Shell Limited v Benjamin Karuga Kibiru [1986] KLR . The Court also applied the principle that mere assertions are insufficient and that the appellant must substantiate the claim of substantial loss by empirical or documentary evidence, as stated in Pan African Insurance Co. Ltd v International Air Transport Association, Uganda High Court No. 86 of 2006 and Samvir Trustee Limited v Guardian Bank Ltd [2007] KEHC 2438 (KLR). Those principles continue to apply in the present application for stay pending the review application. 22.The question is whether the Appellant has now met the threshold that was found to be deficient in the ruling of 19th March 2026. In that ruling, the primary deficiency identified was the absence of valuation evidence. This Court has found in the preceding section that the valuation report was in fact on record at the time of the ruling. In the context of the stay application, this means that there was documentary evidence , the valuation report ,which, if considered, could have established that the decretal sum of Kshs. 1,000,000/= was in excess of the actual conditional value of the motor vehicle. The decree itself qualifies the decretal sum by reference to the valuation of the motor vehicle at the time of repossession. 23.In the circumstances, execution of the decree for the full sum of Kshs. 1,000,000/= without regard to the valuation condition in the decree would expose the Appellant to the real and immediate loss of its office equipment, furniture and other tools of trade, which have been proclaimed by Makini Auctioneers. The Appellant is a logbook lending company whose operations depend on walk-in clients, and the removal of its office assets by public auction would constitute a substantial loss to its business operations. This loss cannot be undone if the review application ultimately succeeds. This is the kind of irreversible harm that the stay jurisdiction is designed to prevent. 24.The Appellant has demonstrated willingness and ability to deposit the sum of Kshs. 230,000/= being the forced value of the motor vehicle as assessed in the valuation report — as security for the due performance of the decree. This is a conditional decree, and Kshs. 230,000/= represents the valuation figure upon which the conditional decretal sum is said to be based. However, the Court is not satisfied that this constitutes adequate security in the circumstances as the respondent has raised issues with the report as afore stated. The decretal sum of Kshs. 1,000,000 shall stand as security in the circumstances. 25.As regards delay, the review application was filed on 21st March 2026, two days after the delivery of this court’s ruling on 19th March 2026. The stay application was filed on 14th April 2026 immediately upon the proclamation of the Appellant's assets by Makini Auctioneers following service of the review application on the Respondent. The Court is satisfied that neither application has been made with unreasonable delay within the meaning of Order 42 Rule 6(2)(a) of the Civil Procedure Rules. 26.In the result, the Court is satisfied that the conditions for a stay of execution under Order 42 Rule 6(2) of the Civil Procedure Rules have been met. A stay of execution of the decree in Mombasa Small Claims Court Commercial Civil Suit No. E268 of 2025 shall issue, subject to the Appellant depositing the sum of Kshs. 1,000,000/= in court as security for the due performance of the decree within twenty 0ne (21) days of the date of this ruling. Issue (b) is determined in favour of the Appellant. Issue (c): Costs 27.The general rule as to costs is provided under Section 27 of the Civil Procedure Act, which vests costs in the discretion of the Court. The costs of these interlocutory applications shall be in the cause. F. Disposition 28.In the result, and for the foregoing reasons, the Court makes the following orders:i.Both applications dated 21st March 2026 and 14th April 2026 are allowed as follows hereunder.ii.A stay of execution of the decree issued in Mombasa Small Claims Court Commercial Civil Suit No. E268 of 2025 is hereby granted, pending the hearing and determination of the appeal, subject to the following condition:The Appellant shall deposit the sum of Kshs. 1,000,000/= (Kenya Shillings One Million) into court as security for the due performance of the decree within twenty-one (21) days from the date of this ruling. In default of such deposit, the stay shall lapse automatically and execution may proceed.iii.The costs of both applications shall be in the cause. It is so ordered. DATED, SIGNED, AND DELIVERED IN OPEN COURT/ONLINE THROUGH MS TEAMS, THIS 17TH…… DAY OF JUNE 2026.HON. LADY JUSTICE W. K. MICHENI JUDGESIGNED BY/FOR:The Judiciary of Kenya