[2023] KEHC 27250 (KLR)

Ngao Credit Limited v Kitsao & another (Miscellaneous Application E197 of 2023) [2023] KEHC 27250 (KLR) (14 December 2023) (Ruling)

Neutral citation: [2023] KEHC 27250 (KLR)

Republic of Kenya

In the High Court at Mombasa

Miscellaneous Application E197 of 2023

DKN Magare, J

December 14, 2023

Between

Ngao Credit Limited

Applicant

and

Abel Hahati Kitsao

1st Respondent

Harrison Mkanyi Katana

2nd Respondent

Ruling

1. This is a Ruling over an Application dated 7/8/2023. The prayers sought are as follows: -a)Spentb)This Honourable Court be pleased to stay execution of the Judgement and Decree in Mombasa CMCC Suit No. 828 of 2020 delivered on 23rd June 2023 pending the hearing and determination of the Intended Appeal.c)This Honourable Court be pleased to grant the Applicant leave to file Appeal out of time.d)Costs be in the cause.

2. The grounds upon which the Application is made is that the Applicant intends to appeal against the Judgement of the Trial Court.

3. The Intended Appellant is willing to deposit security for the Appeal.

4. Further, it was stated that there was eminent danger of execution and which would render the intended Appeal academic and as a result of which the Applicant will suffer irreparable harm.

5. It was also pleaded that the Intended Appeal had high chances of success.

6. It was averred that the Applicants were ready and willing to deposit the decretal sum and had written a letter dated 23rd August 2023 to that effect.

7. The Application was opposed on the grounds that the Appeal was not lodged within the requisite time and stay cannot be granted.

8. Further, that the Applicant failed to demonstrate why they delayed in lodging the Appeal in time.

Submissions 9. It was submitted for the Appellant that substantial loss would occur to the Applicant as stipulated under Order 42 Rule 6 of the Civil Procedure Rules if because the respondent would not be able to refund the decretal sum.

10. The Applicant also urged the court to apply discretion in its favour not to prevent an Appeal which was as of right and with chances of success.

11. It was submitted that the Appeal would thus be rendered nugatory of execution proceed.

12. Counsel further submitted that the delay was occasioned by the failure to obtain copies of the typed court proceedings and Judgement from the lower court.

13. I was urged to allowed the Application.

14. On their part, the Respondent submitted that the Application ought to be dismissed since stay order could not issue before extension of Appeal time.

15. Further, that the reasons for extension of time were not satisfactory.

16. I was urged to dismiss the Application.

Analysis 17. I have perused the Application, response and submissions and authorities filed by respective parties in support and opposition to the Application.

18. The issue before me is whether the delay in lodging a Memorandum of Appeal has been satisfactorily explained. If the reason for delay is not sufficient, then the issue as to whether stay of execution should be granted will not fall for determination because there will be no Appeal.

19. Waki, JA in Seventh Day Adventist Church East Africa Ltd. & Another v M/S Masosa Construction Company Civil Application No. Nai. 349 of 2005 held that:“As the discretion to extend time is unfettered, there is no limit to the number of factors the Court would consider so long as they are relevant; the period of delay, (possibly) the chances of the appeal succeeding if the application is granted, the degree of prejudice to the Respondent if the application is granted, the effect of the delay on public administration, the importance of compliance with the time limits, the resources of the parties, whether the matter raises issues of public importance are all relevant but not exhaustive factors ... In an application for extension of time, each case must be decided on its own peculiar facts and circumstances and it is neither feasible nor reasonable to lay down a rigid yardstick for measuring periods of delay as explanations for such delays are as many and varied as the cases themselves…The ruling striking out the appeal is not only necessary for exhibiting to the application for extension of time but also for consultations between the applicant’s counsel and their clients and the fact that the ruling was returned to Nairobi for corrections is a reasonable explanation for the delay ... Where the Respondent has already recovered all the decretal sum and costs attendant to the litigation, the right of appeal being a strong right which is rivalled only to the right to enjoy the fruits of judgement, no prejudice would be caused to the respondent who has enjoyed his rights in full if an opportunity is given to the applicants to enjoy theirs too, even if it is on a matter of principle.”

20. I have perused the reasons for the delay in the Application and the Supporting Affidavit. The Applicant states that there was delay in obtaining typed proceedings and Judgement of the Lower Court.

21. It is imperative to note the Supreme Court of Kenya decision (M.K. Ibrahim & S.C. Wanjala SCJJ) in Nicholas Kiptoo Arap Korir Salat v Independent Electoral and Boundaries Commission & 7 others [2014] eKLR where the learned Judges held as follows: -“(1)Extension of time is not a right of a party. It is an equitable remedy that is only available to a deserving party at the discretion of the court.(2)A party who seeks for extension of time has the burden of laying a basis to the satisfaction of the court.(3)Whether the Court should exercise the discretion to extend time, is a consideration to be made on a case to case basis.(4)Whether there is reasonable reason for the delay. The delay should be explained to the satisfaction of the court."

22. In Dilpack Kenya Limited v William Muthama Kitonyi [2018] eKLR Odunga J. observed that:-“In an application for extension of time, where the Court is being asked to exercise discretion, there must be some material before the Court to enable its discretion to be so exercised. Once there is non-compliance, the burden is upon the party seeking indulgence to satisfy the court why the discretion should nevertheless be exercised in his favour and the rule is that where there is no explanation, there shall be no indulgence. See Ratman vs. Cumarasamy [1964] 3 All ER 933; Savill vs. Southend Health Authority [1995] 1 WLR 1254 at 1259. "

23. It follows therefore that the Applicants explanation for the delay is key in guiding the Court’s exercise of discretion on the issue of leave to appeal out of time.

24. It is self-evidence that the Judgment was available for the parties on the day of delivery on 23rd June 2023 or soon thereafter. The copies were not sought by the Applicant. No letter was annexed seeking the judgment or paying for the same.

25. I also note that as the Judgement was delivered on 23rd June 2023, the Appeal to this Court should have been filed by 6th July 2023. This Application was filed on 7th August 2023. There is a delay of 1 month after the delivery of the impugned Judgment. The Applicant was under duty to show the reasons for delay. However short the period of delay, it must be explained. In Alfred Iduvagwa Savatia v Nandi Tea Estate & another [2018] eKLR J. Mohammed JA. cited Aganyanya, JA in Monica Malel & Another v R, Eldoret Civil Application No. Nai 246 of 2008 where the Learned Judge stated: -“When a reason is proposed to show why there was a delay in filing an appeal it must be specific and not based on guess work as counsel for the applicants appears to show …. the applicants are not quite sure of why the delay in filing the notice of appeal within the prescribed period occurred, which amounts to saying that no valid reason has been offered for such delay.”

26. Further, Section 79 G of the Civil Procedure Act provides as doth: -“Every appeal from a subordinate court to the High Court shall be filed within a period of thirty days from the date of the decree or order appealed against, excluding from such period any time which the lower court may certify as having been requisite for the preparation and delivery to the appellant of a copy of the decree or order: Provided that an appeal may be admitted out of time if the appellant satisfies the court that he had good and sufficient cause for not filing the appeal in time.

27. Therefore, in my view, without a valid reason, this court has no jurisdiction to extend time. It is not manna to dish out. It is exercise of discretion. Unless the court is properly moved, it has no power to exercise discretion. It is not by whim but though judicious consideration that such an Application is considered.

28. The factors to consider in dealing with such an application are: -a)The length of delay.b)The reason for delay.c)The animus of the applicant.d)The prejudice to the Respondent.

29. The Applicant has not explained the delay. It is my considered opinion that the 4 factors above are sequential. Therefore, one must fulfil each as you move to the next. If the delay is inordinate, it may not be necessary to go to the reason for delay. When the delay is reasonable, there must be a real and genuine reason for delay.

30. Where there is doubt, either way, the court can then exercise discretion one way or another. The court cannot find that the delay is inexcusable, inordinate and no reason is given and then, out of sheer whims and fiat, extend time. That makes litigation unpredictable and unending.

31. In our court system, delay is usually documented. Without documentation, it never happened. For example, a lost file where there is no record of follow up, is not lost. When applying for proceedings, they must first be as of necessity, a letter bespeaking the proceedings and payment of deposit. Without such, proceedings were never requested. The raison d’etre for payment is to enable the court prioritize according to payment and only serious applicants for proceedings. Without payment, there are no proceedings being sought. Further, proceedings must be formally sought, even where the same were requested for in court, the registry must be moved and follow ups be done.

32. In this matter, the reasons for the delay is doubtful. However, the length of delay is not inordinate in the circumstances. There is also an expression of good faith in proposing to settle the security which takes care of prejudice to the Respondent. Again, the effect n of the finding in the Lower Court is an imputation of fraud on the part of the Intended Appellant who I understand is in the business of lending. This Appeal cannot be said to be not arguable.

33. The Applicant delayed for 1 month. I note that the Court in Asike-Makhandia J in Gerald Kithu Muchanje v Catherine Muthoni Ngare & another [2020] eKLR stated that:-“There is no maximum or minimum period of delay set out in law. However, a prolonged and inordinate delay is more likely than not to disentitle the applicant of such leave. Likewise, the reason or reasons for the delay must be reasonable and plausible. In Andrew Kiplagat Chemaringo v Paul Kipkorir Kibet [2018] eKLR this Court stated:-“The law does not set out any minimum or maximum period of delay. All it states is that any delay should be satisfactorily explained. A plausible and satisfactory explanation for delay is the key that unlocks the court’s flow of discretionary favour. There has to be valid and clear reasons, upon which discretion can be favourably exercisable.”

34. I have to determine whether the delay of 1 month was prolonged and inordinate as to disentitle the Applicant. Given the circumstances of the case, I have also to consider both parties. The Respondent is entitled to the fruits of the judgment while the Applicant has the right of Appeal which they had given away but seek the intervention of court to redeem it. In my view the injustice to the Applicant if the Application is dismissed exceeds the prejudice to the Respondent if the Application is allowed. In Harris Horn Senior, Harris Horn Junior v Vijay Morjaria Nyeri Civil Appeal No. 223 of 2007 when confronted with similar arguments, the Court made observations therein inter alia as follows:“(32)As for the need to do justice to the parties before it, we have no doubt that this is the core business of the Court. However, a court of law cannot ignore principles of substantive law or case law governing the particular aspect of justice sought from its seat. Its primary role is to ensure that the justice handed out is kept anchored on both the law and the facts of each case.”

35. This is a proper application to allow.

36. On the issue of stay of execution there are principles guiding the grant of a stay of execution pending appeal which 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."

37. Further 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.

38. 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.”

39. Therefore, an Applicant seeking stay of execution of a decree or order pending appeal is obliged to satisfy the conditions set out in Order 42 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, and(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.See Antoine Ndiaye v African Virtual University [2015] eKLR.

40. As to what substantial loss is, it was observed in James Wangalwa & Another v Agnes Naliaka Cheseto [2012] eKLR, 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.”

41. Therefore, the Applicant is willing to deposit security. The Applicant has to deposit funds within a timeline to be fixed by this Court as a condition. Therefore, I do not see how the Respondent will be prejudiced. I am consequently inclined to allow the Application.

Determination 42. The upshot of the foregoing is that I allow the Notice of Motion dated 7th August 2023 as follows:i)The Appeal shall be filed within 14 days together with the written submissions.ii)The Respondent shall file a Response within 14 days of service.iii)The Main Appeal shall be fixed before the Court for directions upon filing.iv)There be stay of execution of the Judgement and Order dated 23rd June 2023 in Mombasa CMCC No. 828 of 2020 pending the Hearing and Determination of the Appeal.v)The Applicant shall deposit security of Kshs. 771,028/= into a Joint Interest Earning Account in the name of the Advocates for the Parties within 30 days failure of which leave shall lapse.

DELIVERED, DATED AND AT MOMBASA ON THIS 14TH DAY OF DECEMBER, 2023. RULING DELIVERED THROUGH MICROSOFT TEAMS ONLINE PLATFORM.KIZITO MAGAREJUDGEIn the presence of: -Miss Kamau for the ApplicantNo appearance for 1st Respondent