[2023] KEHC 25100 (KLR)

Njenga v Kinyanjui & 2 others (Civil Appeal E124 of 2023) [2023] KEHC 25100 (KLR) (10 November 2023) (Ruling)

Neutral citation: [2023] KEHC 25100 (KLR)

Republic of Kenya

In the High Court at Nakuru

Civil Appeal E124 of 2023

SM Mohochi, J

November 10, 2023

Between

Joel Njenga

Appellant

and

Hannah Wambui Kinyanjui

1st Respondent

Njenga Karumba

2nd Respondent

Sam Maina Wangethi

3rd Respondent

Ruling

1. The Applicant by Notice of Motion pursuant to Sections 3A, 79G & 95 of the Civil Procedure Act, Orders 42 Rule 6, Order 50 Rule 6 and Order 51 Rule 1 of the Civil Procedure Rules and Section 5 (b) of the Insurance Motor vehicle third Party Risks) Act and Article 159 of the Constitution moves this court for the following Orders;a.Spent.b.Spent.c.That this Honourable Court be pleased to order a Stay of Execution of the Judgment delivered by the Trial Court on 29th May, 2023 in pending the Hearing and determination of the Appeal herein.d.That the Appellants/ Applicants be allowed to furnish the court with bank guarantee as security pending the hearing and determination of the intended appeal and the instant application.e.That the costs of this Application abide the outcome of the Appeal.

2. The Application is supported by a sworn Affidavit of Njenga Joel dated 20th July 2023, and is based on the following grounds:a.That Judgment before the Trial Court was delivered on 29th May, 2023 and the Respondent was awarded Liability 100% and General damages Kshs 450,000/-, special damages Kshs 6,600 costs and interest a stay order was issued by the trial court but the same has lapsed.b.That the Appellant being aggrieved with the decision of this Honourable court has lodged an appeal against the entire judgment delivered on 29th May. 2023 in Nakuru HCCA No El24 of 2023; Njenga Joel v Hanna Wambui Kinyanjul & others.c.That the judgment subject matter herein, being substantial and should the execution process commence the appellant stands to suffer irreparable loss and prejudice as the ability of the respondent's herein to refund the decretal amounts is unknown.d.That HCCA No E124 of 2023 raises triable issues and unless the proceedings herein are stayed the appeal lodged stands to be rendered nugatory.e.That the appeal is meritorious with high chances of success.f.That the Appellant herein are ready and willing to furnish bank guarantee of 50% of the principal sum awarded by the trial court in terms of liability as apportioned by the trial court pending the hearing and determination of the Appeal.g.That it is in the interest of justice and fairness that the orders sought herein be granted.

3. On the 1st August 2023, this court directed that the Application was to be heard and determined on the basis of written submissions, and parties were to file and exchange their written submissions by the 13th of August 2023 and a ruling date was reserved for the 24th September 2023.

4. The both parties herein have not complied and the court shall consider the Application in the Absence of any written submission.

5. The Application is unopposed but there is lack of clarity on proper service being effected on the Respondents.

Applicant’s Case 6. The Applicant’s notice of motion is anchored on Rule 1 of the Civil Procedure Rules state the instances under which the trial court may order stay of execution of a decree or order pending appeal.

7. That the criteria for granting Stay of execution are well founded in precedence as was held In Elena D. Korir v Kenyatta University [2012] eKLR, Justice Nzioki Wa Makau, who place reliance on the case of Halai &anotherv Thorton & Turpin (1963) Ltd[1990] KLR 365 where the Court of Appeal Gicheru JA, Chesoni & Cockar Ag. JA (as they all were) held that: -“The High Court's discretion to order stay of execution of its order or decree is fettered by three conditions, namely: - Sufficient cause, Substantial loss would ensue from a refusal to grant stay, the applicant must furnish security, the application must be made without unreasonable delay. In addition, the applicant must demonstrate that the intended appeal will be rendered nugatory if stay is not granted"

8. With regards to the Sufficient Cause test, it is the Applicant’s cease that, he has met the conditions required for stay to be granted, that failure to grant the applicant stay of execution would render the Appeal nugatory and an exercise in futility as the respondents would have already executed the decree and attached the Applicant’s property.

9. With regards to the Substantial Loss test, it is the Applicant Application that, he will suffer prejudice if the Application is not allowed, as his properties risk being attached and sold and further the appeal has high chances of success will be rendered nugatory.

10. That further, the appeal is on liability and the applicants are apprehensive that it the Respondents are paid, they may deal with the same in a manner prejudicial to the Applicant and if the appeal is successful, the Applicants might not be able to recover the same from the respondent.

11. The Applicant has undertaken to issue a bank Guarantee with a reputable bank as attached in their application which goes to show that they are willing to abode to any condition of stay by depositing security.

12. Appellant is willing to satisfy stay conditions and offer security to the Respondents which would be fair and just to both parties and that the Respondents will not be in a position to refund the money paid to them if fany in the event the appeal succeeds.

13. That the Applicant has established that will suffer substantial loss if the intended execution is not stayed and urge the court to consider the cited authorities in allowing the application.

14. That the Applicant is ready and willing to furnish the court with a bank guarantee which is reasonable security pending hearing and determination of the Appeal filed herein.

15. That in the event the appeal succeeds the Applicant has been apprehensive that the Respondents will not be in a position to refund the money to the Applicant which will be prejudicial to him. The Applicant pray to be allowed to furnish the court with a bank guarantee pending hearing and determination of the appeal.

16. That the Appeal and the Application have been filed without any Unreasonable Delay and that it is in the interest of justice that the Application be allowed.

Analysis & Determination 12. The principles upon which this court may grant stay of execution pending appeal are well-settled as enshrined in Order 42 Rule 6 of the Civil Procedure Rules, which requires an applicant seeking a stay of execution pending appeal to demonstrate that -a.Substantial loss may result to the applicant unless the order was made;b.The application was made without unreasonable delay; andc.Such security as the court orders for the due performance of such decree or order as may ultimately be binding on him as been given by the applicant.

13. A stay of execution of judgment/decree should only be granted where sufficient cause is shown. In Antoine Ndiaye v African Virtual University (2015)eKLR Gikonyo J opined that -….stay of execution should only be granted where sufficient cause has been shown by the applicant. And in determining whether sufficient cause has been shown, the court should be guided by the three prerequisites provided under order 42 rule 6 of the Civil Procedure Rules…

14. An Order of stay of execution pending appeal is a discretion of the court. In Butt v Rent Restriction Tribunal (1982) KLR the court gave guidance on how such discretion should be exercised and held that –“1. The power of the court to grant or refuse an application for a stay of execution is a discretionary power. The discretion should be exercised in such a way as not to prevent an appeal.2. The general principle in granting or refusing a stay is; if there is no other overwhelming hindrance, a stay must be granted so that an appeal may not be rendered nugatory should that appeal court reverse the judge’s discretion.3. A judge should not refuse a stay if there are good grounds for granting it merely because in his opinion, a better remedy may become available to the applicant at the end of the proceedings.4. The court in exercising its discretion whether to grant [or] refuse an application for stay will consider the special circumstances of the case and unique requirements. The special circumstances in this case were that there was a large amount of rent in dispute and the appellant had an undoubted right of appeal.5. The court in exercising its powers under Order XLI rule 4(2)(b) of the Civil Procedure Rules, can order security upon application by either party or on its own motion. Failure to put security for costs as ordered will cause the order for stay of execution to lapse.”

15. The Primary purpose of stay of execution is to preserve the status quo pending the hearing of the appeal. In RWW v EKW [2019] eKLR, it was observed that:“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.

16. The above are the principles are brought to bear in mind in determining this Application. The first consideration is whether the Application was filed timeously. The judgment of the trial court in this matter was delivered on 29/5/2023 and the memorandum of appeal filed with the court on the 27th June 2023. The Application under Certificate of Urgency was filed on the 25th July 2023, a cursory look indicates that the Applicant has moved this court in a timely manner and without any delay.

17. The Applicant contends that he will suffer substantial loss if the orders sought are not granted as the Respondents will execute the Decree and thereby attach his motor vehicle that according to him is the source of his livelihood. The Respondents on the other hand contends that there is no loss to be suffered as non-has been demonstrated.

18. No Evidence of substantial loss has been tendered in support of the Application

19. It is the duty of the Applicant in an application for stay of execution to establish that he/she will suffer substantial loss if the orders sought are not granted. In Machira t/a Machira & Co. Advocates v East African Standard (No 2) (2002) KLR 63 the Court of appeal considered as to what amounts to substantial loss and held 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.”

20. The other consideration is security. In the case of Arun C. Sharma v Ashana Raikundalia T/A Rairundalia & Co. Advocates (2014) eKLR the court held that:“The purpose of the security needed under Order 42 is to guarantee the due performance of such decree or order as may ultimately be binding on the Applicant. It is not to punish the judgment debtor … Civil process is quite different because in civil process the judgment is like a debt hence the Applicants become and are judgment debtors in relation to the respondent. That is why any security given under Order 42 rule 6 of the Civil Procedure Rules acts as security for due performance of such decree or order as may ultimately be binding on the Applicants. I presume the security must be one which can serve that purpose.”

21. The Applicant in this matter has offered security in the nature of a bank guarantee in the event that the appeal fails. The court notes that the copy annexed to the Applicant’s Supporting Affidavit dated 10th July 2023 marked as “NJ-02” is a copy of a bank guarantee dated 18th February 2022, referenced as FBL/003000033721 with a validity of twelve months with an option to renew.

22. The security thus offered by the Applicant is unenforceable, is in the name of a non-party to the Appeal, it is expired and no explanation is offered as to whether the same was renewed?

23. The three (3) conditions for granting stay of execution pending appeal must be met simultaneously. They are conjunctive and not disjunctive. It is my finding that the Applicant herein, though he brought this Application without undue delay, he has not adequately demonstrated the substantial loss that he would suffer and has failed to furnish security as stipulated by sub-rule 2b, however this court in dispensing justice is of the considered opinion that, the Applicant stands a disadvantage should stay orders be declined before hearing and determination of the Appeal.

24. In the upshot of the above, this court in exercise of its discretion and in the interests of justice, grant the Applicant an Order for stay of execution of judgment/Decree in Nakuru CMCC No 423 of 2013 on the following condition;a.That the Applicant shall Pay to the 1st Respondent Half (50%) the Decretal Amount in judgment/Decree in Nakuru CMCC No 423 of 2013, within the next thirty (30) days from the date hereof.b.That the Applicant shall deposit, half the decretal amount in a joint interest-earning bank account to be held in the Names of the Counsel for the Applicants and Counsel for the 1st Respondent within the next thirty (30) days from the date hereof.c.The Applicant shall set-down the Appeal for hearing within the next 45 days from the date hereof.d.The Costs of this Application is awarded to the Respondents.e.A default of Order (a) and/ or (b) above by the Applicants, shall automatically lapse the Order of Stay of Execution of Judgment/Decree granted.This Ruling shall be sent on Email to the ApplicantIt is so ordered.

SIGNED, DELIVERED VIRTUALLY ON TEAMS PLATFORM ON THIS 10TH DAY of NOVEMBER 2023MOHOCHI S.MJUDGE