[2023] KEHC 25244 (KLR)

Mwanthi v Muthusi (Civil Appeal E106 of 2023) [2023] KEHC 25244 (KLR) (8 November 2023) (Ruling)

Neutral citation: [2023] KEHC 25244 (KLR)

Republic of Kenya

In the High Court at Machakos

Civil Appeal E106 of 2023

MW Muigai, J

November 8, 2023

Between

Mathew Muli Mwanthi

Appellant

and

Alphonce Kioko Muthusi

Respondent

Ruling

Notice of Motion 1. Vide a Notice of Motion under a Certificate of Urgency dated 15th May,2023 and filed in court on 17th May,2023 brought under sections 3A,79G and 95 of the Civil Procedure Act, Cap 21, Orders 22 Rule 22, 42 Rules 4, 6 and 7, 50 Rule 6 and 51 Rules 1 and 3 of the Civil Procedure Rules, 2010, wherein, the Applicant sought ORDERS THAT:1. This Court orders stay of execution of the Judgement delivered by the Trial Court on 8th May,2023 pending the Hearing and determination of the intended Appeal.2. The Application be heard inter partes on such date and time as this Court may direct.3. The Appellant/Applicant be allowed to furnish the court with bank guarantee as security pending the hearing and determination of the intended appeal and the instant application.4. The costs of this application abide the outcome of the appeal.

2. Grounds upon which the Application is premised are on the face of the Application herein.

Supporting Affidavit 3. The said application is supported by an affidavit dated 15th May,2023 sworn by Mathew Muli Mwanthi, the Applicant herein wherein, he deposed that judgment was delivered by the trial court on 8th May,2023 in the following terms liability 100% General damages Kshs. 250,000/- and special damages Kshs. 7,100 costs and interest.

4. He deponed that he is informed by his Advocate on record that the judgment on quantum is excessive and has a high chances of success if the appeal is upheld; further he is informed by his Advocate on record that the Appeal has a high chances of success (annexed and marked copy of the draft Memorandum of Appeal).

5. Deposing that he is apprehensive the Respondents are likely to commence executing at the lapse of 30 days hence rendering this appeal nugatory.

6. He opined further that the application has been presented without inordinate delay and his underwriter is ready, willing and able to give bank guarantee as security for the entire judgment award pending hearing and determination of this application and the intended appeal herein.

7. He deposed that the Respondent is a person of unknown means hence he is apprehensive that if the decretal sum is paid out, the appeal will be rendered an academic exercise since he will not be in a position to refund the amount.

8. Unless he is granted stay of execution as prayed, the Applicant stands to suffer irreparable loss and damage and his underwriter herein Directline Assurance Company Limited is ready willing and able to furnish the Court with Reasonable Bank Guarantee as Security to the court (annexed and marked copy of a Bank Guarantee)

Replying Affidavit 9. The Application is opposed by the Replying Affidavit dated 25th May,2023 sworn by Alphonce Kioko Muthusi the Respondent herein, wherein he deposed that the provisions of Order 42 Rule 6 of the Civil Procedure Rules had been explained to him and averred that no substantial loss has been established as execution has yet to issue, no iota of evidence has been availed to prove that limb of substantial loss.

10. He opined that his lowly estate ought not be utilized to unseat him from the citadel of justice. alleged poverty cannot be a ground on which he can be locked out of the fruits of his rightfully obtained judgment.

11. He deposed that he is of means to refund the decretal sum in the highly unlikely event the Appeal is successful.

12. Deposing that he is advised by his Advocate on record that no security for due performance of the decree has been availed by the Appellant and the alleged bank guarantee is general and not specific to the instant matter, it is vague and remote to the instant matter and he has no nexus and/or connection to it, it doesn’t suffice to be a security in the matter.

13. Further, he deponed that in the event the court would exercise its discretion in favour of the Appellant/Applicant despite the scarcity of merit in the instant application, he proposed that they release half the decretal sum to him and deposit the other half in a joint interest earning account in the names of both advocates on record.

14. The matter was disposed by way of written submissions.

Submissions Applicant’s Written SubmissioNs. 15. The Applicant in his submissions dated 7th July, 2023 and filed in Court on 11th July,2023 wherein, counsel for the Appellant/Applicant submitted inter alia that the principles guiding the grant of a stay pending appeal are well settled. Reliance was made under order 42 Rule 6 (2) of the Civil Procedure Rules which provides: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.”

16. Submitting that their Appeal raises triable issues with high chances of success of success and that failure to stay execution proceedings herein, the appeal stands to be rendered nugatory.

17. I was averred by counsel that the judgment subject matter herein being substantial, should the execution proceed, the Applicant stands to suffer irreparable loss and prejudice and further the ability of the Respondent to refund the decretal amount is unknown. Contending that the Applicants’ appeal will be rendered nugatory and expose the Applicant to irreparable loss and damage as the Respondent is a man of straw would be incapable of effecting a refund thereof.

18. It was the counsel’s position that the Respondent has not filed an Affidavit of means to confirm his financial means or status thus there is a risk of failure to compensate the applicant should the appeal succeeds. Credence was placed on the case of G.N Muema P/A (Sic) Mt View Maternity & Nursing Home V Miriam Bishar & Another [2018] eklr where the court considered the Respondent’s ability to repay the decretal sum in case the appeal succeeded as there was no affidavit evidence by the Respondent on record on the Means.

19. Counsel opined that there is no inordinate delay by the appellant in bringing the instant appeal as it was filed vide Memorandum of Appeal on 15th May,2023 whereas the judgement being appealed was delivered on the 8th May,2023.

20. On security for costs counsel contended that the same was complied with was demonstrated by the Bank Guarantee provided and annexed to the Applicant’s Supporting Affidavit. Submitting that bank guarantee is an acceptable way of furnishing security as was held in the case of Justin Mutinga David V China Road & Bridge Corporation (k) Limited (2019) eklr.

Respondents Submissions 21. The Respondent did not file written submissions but instead filed his list of authorities dated 12th June,2023 and filed in Court on 14th June, 2023, wherein counsel for the Respondent relied on the following authorities:1. Bollore Transport & Logistics Ltd V Kidaha (Appeal E060 OF 2022) [2022] KEELRC 1613. 2.Jamii Bora Bank Limited & Another V Samuel Wambugu Ndirangu [2021] eklr.3. Michael Ntouthi Mitheu V Abraham Kivondo Musau [2021] eKLR.

Determination/Analysis 22. I have considered the application for stay, grounds thereof, supporting affidavit and annextures. I have also considered the Replying affidavit and submission(s) together with case law cited by both Counsel for their respective clients

23. The main issue that commends itself for determination is whether the applicants have demonstrated that the orders of stay of execution pending appeal are merited.

24. The principles for the grant of a stay of execution pending appeal are well settled. These principles are provided for under Order 42 rule 6(2) of the Civil Procedure Rules which provides:“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.”

25. In furtherance to the above stay may only be granted for sufficient cause and that the Court in deciding whether or not to grant the stay and that in light of the overriding objective stipulated in Sections 1A and 1B of the Civil Procedure Act, the Court is no longer limited to the foregoing provisions. The courts are now enjoined to give effect to the overriding objective in the exercise of its powers under the Civil Procedure Act or in the interpretation of any of its provisions.

26. Section 1A(2) of the Civil Procedure Act provides that “the Court shall, in the exercise of its powers under this Act or the interpretation of any of its provisions, seek to give effect to the overriding objective” while under section 1B some of the aims of the said objectives are;“the just determination of the proceedings; the efficient disposal of the business of the Court; the efficient use of the available judicial and administrative resources; and the timely disposal of the proceedings, and all other proceedings in the Court, at a cost affordable by the respective parties.”

27. It is worth noting here that for a party to qualify for the stay of execution pending appeal, the parameters set out in Order42 Rule 6(2) aforementioned namely:a.that substantial loss may result to the applicant unless the order is made.b.that the application has been made without unreasonable delay.c.that such security as the court orders for the due performance of such decree or order as may ultimately be binding on the applicant has been given.

28. On what substantial loss is, I am guided by the case of James Wangalwa & Another v Agnes Naliaka Cheseto [2012] eKLR, where it was observed that:“No doubt, in law, the fact that the process of execution has been put in motion, or is likely to be put in motion, by itself, does not amount to substantial loss. Even when execution has been levied and completed, that is to say, the attached properties have been sold, as is the case here, does not in itself amount to substantial loss under Order 42 Rule 6 of the CPR. This is so because execution is a lawful process. The applicant must establish other factors which show that the execution will create a state of affairs that will irreparably affect or negate the very essential core of the applicant as the successful party in the appeal ... the issue of substantial loss is the cornerstone of both jurisdictions. Substantial loss is what has to be prevented by preserving the status quo because such loss would render the appeal nugatory.” (emphasis added)

29. In the instant case, the Applicant submitted that his appeal will be rendered nugatory should execution of the judgement proceed hence he will be exposed to irreparable loss and damage as the respondent being a man of straw would be incapable of effecting a refund thereof. The respondent on the other hand in his replying affidavit averred that no substantial loss has been established as execution has yet to issue and that he is of means to refund the decretal sum in the event the Appeal is successful.

30. In the case of RWW v EKW [2019] eKLR, where the purpose of the stay of execution was well enunciated as follows:“The purpose of an application for stay of execution pending an appeal is to preserve the subject matter in dispute so that the rights of the appellant who is exercising the undoubted right of appeal are safeguarded and the appeal if successful, is not rendered nugatory. However, in doing so, the court should weigh this right against the success of a litigant who should not be deprived of the fruits of his/her judgment. The court is also called upon to ensure that no party suffers prejudice that cannot be compensated by an award of costs.9. Indeed to grant or refuse an application for stay of execution pending appeal is discretionary. The Court when granting the stay however, must balance the interests of the Appellant with those of the Respondent.” (emphasis added)

31. I note that the applicant is apprehensive that if the order of stay is not granted, the Respondent will proceed and execute the judgement hence render his appeal nugatory exposing him to irreparable loss. In my view the Applicant’s concern has merit having stated that the Respondent is a man of straw and would be incapable of effecting a refund thereof. It is the duty of the Respondent to prove that indeed he is a man of means by providing an affidavit of means to that effect. See G.N Muema P/A (Sic) Mt View Maternity & Housing Home Vs Miriam Bishar & Another [2018] eKLR.

32. As to inordinate delay in bringing the instant appeal, I am convinced that there was no delay as the Memorandum of Appeal was filed on 17TH May,2023 whereas the judgment being appealed against was delivered on 8th May, 2023.

33. As to security the Applicant in his supporting affidavit opined that his underwriter herein Directline Assurance Company Limited is ready, willing and able to furnish the Court with a reasonable Bank guarantee as security to the court. The Applicant annexed a bank guarantee from Family Bank.

34. In the case of Gianfranco Manenthi & another vs. Africa Merchant Assurance Company Ltd [2019] eKLR, where the court observed that:“… the applicant must show and meet the condition of payment of security for due performance of the decree. Under this condition a party who seeks the right of appeal from money decree of the lower court for an order of stay must satisfy this condition on security. In this regard, the security for due performance of the decree under order 42 rule 6(1) of the Civil Procedure Rules, it is trite that the winner of litigation should not be denied the opportunity to execute the degree in order to enjoy the fruits of his judgment in case the appeal fails.Further, order 42 should be seen from the point of view that a debt is already owed and due for payment to the successful litigant in a litigation before a court which has delivered the matter in his favour. This is therefore to provide a situation for the court that if the appellant fails to succeed on appeal there could be no return to status quo on the part of the plaintiff to initiate execution proceedings where the judgement involves a money decree. The court would order for the release of the deposited decretal amount to the respondent in the appeal … This the objective of the legal provisions on security was never intended to fetter the right of appeal. It was also put in place to ensure that courts do not assist litigants to delay execution of decrees through filing vexatious and frivolous appeals. In any event, the issue of deposit of security for due performance of decree is not a matter of willingness by the applicant but for the court to determine.” (emphasis added)

35. Similarly, in Mwaura Karuga t/a Limit Enterprises vs. Kenya Bus Services Ltd & 4 Others [2015] eKLR, where it was held that:“… the security must be one which shall achieve due performance of the decree which might ultimately be binding on the applicant. The rule does not, therefore, envisage just any security. The words ‘’ultimately be binding’ are deliberately used and are useful here, for they refer to the entire decree as will be payable at the time the appeal is lost. That is the presumption of law here. Therefore, the ultimate decree envisaged under order 42 rule 6 (2) (b) of the Civil Procedure Rules includes costs and interest on the judgment sum unless the latter two were not granted-which is seldom. The security to be given is measured on that yardstick.” (emphasis added)

36. In my considered view the applicant has explicitly provided for the security for the due performance of the decree. I find that the bank Guarantee is sufficient security under the circumstances.

37. Taking all relevant factors into account and in order not to render the intended appeal illusory while at the same time securing the interests of the successful plaintiff I grant a stay of execution of the decree herein on the following conditions:a.That the Applicant to furnish the Respondent with the bank guarantee of ½ decretal amount within 45 days.b.The Applicant to deposit half of the decretal sum in a joint earning account of both Advocates within 45 days from the date of this ruling;c.In default the application shall be deemed to have been dismissed with costs and the Respondent will be at liberty to execute.d.The draft Memorandum of Appeal is filed as appeal on record.e.L.C.F. to be availed through DR MHC from Trial Court & Record of Appeal filed and served within 45 days.f.The costs of the application to abide the outcome of the Appeal.

RULING READ, SIGNED AND DELIVERED AT MACHAKOS THIS 8TH DAY OF NOVEMBER 2023 (VITUAL/PHYSICAL CONFERENCE)M. W. MUIGAIJUDGEDelivered In The Presence Of:Mr. Acholi - For the AppellantMs Kwamboka H/B/ Mr. Mburu -For the Respondent