[2019] KEHC 6236 (KLR)

REPUBLIC OF KENYA

IN THE HIGH COURT

AT EMBU

CIVIL APPEAL NO. 5 OF 2019

NANCY WAKUTHI KAGO.............................APPELLANT/APPLICANT

VERSUS

MARGARET MUTHONI NYAGA.......................................RESPONDENT

R U L I N G

A. Introduction

1. This is a ruling for the application dated 8th February 2019 which seeks for orders for stay in Embu CMCC No. 85 of 2017 in a ruling delivered on the 5th February 2019 that dismissed the application seeking to set aside ex-parte judgment and subsequent orders awarding the respondent general and special damages. The decree including costs and interests is for Kshs. 1,203,593/= according to the applicant.

B. The Applicant’s case

2. The applicant submits that the application for stay was filed timeously as the decision she seeks for orders of stay made on the 5th February 2019. On substantial loss, the applicant submits that the respondent has a correlative duty to show that he can refund the decretal sum if the same is granted to him which duty the respondent has not demonstrated as he admits in his affidavit dated 11th March 2019 that he is a man of straw. The applicant relies on the case of Amal Hauliers Limited v Abdulnassir Abukar Hassan [2017] eKLR and that of Andrew Okoko v John Waweru Ngatia where the court held that all an applicant is expected to do is state upon reasonable grounds that the respondent will not be able to refund he decretal sum in case the appeal is successful after which the burden shifts to the respondent to disprove the same.

3. The applicant further submitted that the question of substantial loss does not arise in an application predicated on the setting aside of interlocutory judgement as was opposed to judgement on merit and where the decree is not grounded on a full hearing on merits the issue of security does not arise, as was held in the case of Diamond Systems Limited v Josatronic Data Systems Limited [2017] eKLR.

4. The applicant further called on the court to call upon Article 159 of the Constitution as well as the overriding objectives in arriving at their decision. She relied on the cases of Nicholas Kiptoo arap Korir Salaat v IEBC & 7 Others [2013] eKLRand that of Coast Development Authority v Adam Kazungu Mzamba 49 Others [2016] eKLR where the courts held that it has to weigh one thing against another for the benefit of the wider interests of justice before coming to a decision on the issue of security.

C. The Respondent’s case

5. The respondent opposes the application on the grounds that the applicant has failed to satisfy the requirements of Order 42 Rule 6 of the Civil Procedure Rules 2010. He submits that the applicant has failed to demonstrate that she will suffer substantial loss and that her appeal will be rendered nugatory if the application is not granted.

6. The case of Masisi Mwita v Damaris Wanjiku Njeri Muranga HCCA No. 107 of 2015 was relied on where it was held that the twin principles of suffering substantial loss and negating the appeal must be proved by the applicant for an application for stay of execution to succeed. The respondent argued that the applicant must discharge the said obligation.

7. It was further submitted that the application was not filed timeously as it was received in court on the 11th February 2019 and it seeks stay of orders granted on the 12th June 2018. He further submits that the applicant’s failure and/or unwillingness to offer security if stay is granted disqualifies her from benefiting from the discretion of the court to grant the stay as this requirement for security is mandatory.

D. Analysis & Determination

8. The principles upon which the court may stay the execution of orders appealed from are settled. The Applicant must approach the court timeously and demonstrate the likelihood that he will suffer substantial loss if the order is denied. He must also furnish security for the performance of the decree in the event the appeal does not succeed. These are the requirements stipulated in Order 42 Rule 6 of the Civil Procedure Rules.

9. In the Court of Appeal decision in the case of Nairobi Civil Application No. 238 of 2005 National Industrial Credit Bank Limited v Aquinas Francis Wasike & another (UR)as cited by the High Court in Stanley Karanja Wainaina & another v Ridon Anyangu Mutubwa [2016] eKLR it was held that:

“This court has said before and it would bear repeating that while the legal duty is on an applicant to prove the allegation that an appeal would be rendered nugatory because a respondent would be unable to pay back the decretal sum, it is unreasonable to expect such an applicant to know in detail the resources owned by a respondent or lack of them. Once an applicant expresses 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.”

10. The respondent avers that the applicant has failed to establish that she will be in a position to reimburse her if she pays the decretal amount and the appeal is successful. This is contrary to the case of Stanley Karanja Wainaina (supra) wherein the court held that it is upon the respondent to prove that he can reimburse the applicant if the decretal sum is paid and the appeal is successful.

11. The applicant has thus established that she will suffer substantial loss if the intended execution is not stayed. It also follows that if the respondent executes the judgement and the applicant’s appeal succeeds, then not only will the applicant suffer substantial loss but the appeal will also be rendered nugatory.

12. On the issue of delay, it is evident that the applicant seeks for stay orders in regard to the orders of the trial magistrate in Embu CMCC No. 85 of 2017 made on the 5th February 2019. The application was filed on the 11th February 2019 just a few days after the ruling delivered on 5/02/2019 which is in my view timeous. Consequently, I find that the application for stay of execution was filed within a reasonable time.

13. The applicant has not offered any security arguing that there was no judgement on merit against the applicant as the ruling he seeks to stay was on an application to set aside an ex-parte judgement. It was also submitted that Article 159 of the Constitution as well as the Overriding Objectives of the Civil Procedure impose a duty upon this court to make its decision with regard to the best interest of justice. The respondent on his part is opposed to this and submits that the application for stay of execution ought to be denied as the requirement for provision of security is mandatory.

14. Evidently, the three (3) prerequisite conditions set out in the said Order 42 Rule 6 of the Civil Procedure Rules, 2010 cannot be severed. The key word is “and”. It connotes that all three (3) conditions must be met simultaneously.

15. However, taking into consideration that the provisions of Article 159 of the Constitution as well as the Overriding Objectives of the Civil Procedure that impose upon this court to exercise its discretion with the best interest of justice, I am persuaded that the applicant who through this appeal wil cause delay of execution of judgment is obligated to provide security. The final judgment delivered on 8/05/2018 cannot be executed if the orders sought herein are granted.

16. The final judgment cannot be separated from the exparte judgment for the reason that the applicant seeks stay of both exparte and the final judgment. In my view, the two judgments became one and the same thing after delivery of the final judgment.

17. I am of the considered view that in this application the court ought to give orders for security for the final judgment has to be held in abeyance pending the determination of this appeal.

18. I hereby find this application is merited and allow it on the following terms: -

a) That the orders for stay of execution pending appeal are hereby granted.

b) That the applicant deposits Kshs. 600,000/= being half of the decretal amount in an interest earning account in the joint names of the advocates on record for the parties within thirty (30) days and in default, the orders for stay will be automatically vacated.

c) That the costs of this application will be in the cause.

19. It is hereby so ordered.

DELIVERED, DATED AND SIGNED AT EMBU THIS 26TH DAY OF JUNE 2019.

F. MUCHEMI

JUDGE

In the presence of: -

Mr. Ondigi for Githinji for Appellant

Respondent in person