[2023] KEHC 23993 (KLR)

Njenga v Maina & 2 others (Civil Appeal E125 of 2023) [2023] KEHC 23993 (KLR) (24 October 2023) (Ruling)

Neutral citation: [2023] KEHC 23993 (KLR)

Republic of Kenya

In the High Court at Nakuru

Civil Appeal E125 of 2023

SM Mohochi, J

October 24, 2023

Between

Joel Njenga

Applicant

and

Peter Njogu Maina

1st Respondent

Njenga Karuma

2nd Respondent

Samwel Maina Wangethi

3rd Respondent

Ruling

1. The Applicant by Notice of Motion pursuant to Sections 1A, 1B, and 3A of the Civil Procedure Act, orders 42 rule 6 (1) & 2) and 51 rule 1 of the Civil Procedure Rules moves this Court for the following Orders;i.Spent.ii.Spent.iii.The Court, be pleased to grant an order of stay of execution of the judgment and/or the decree delivered on 29/05/2023 and all consequential orders arising therefrom pending the hearing and determination of the Appeal lodged by the Appellant/Applicant herein vide Nakuru HCCA NO. E123 OF 2023. iv.The Court, be pleased to issue an Order for provision of a Bank Guarantee of the entire decretal sum awarded by the trial Court as security pending hearing and determination of the Appeal lodged vide Nakuru HCCA NO. E123 OF 2023. v.The Court, be pleased to issue any other Order as it may deem just, appropriate and expedient in the interest of justice.vi.Costs of this application be provided for.

2. The Application is supported by a sworn Affidavit of Njenga Joel dated 20th July 2023, and is based on the following grounds:a.The judgment was delivered on 29th May, 2023 in favors of the Respondent as against the Appellant/Applicant in the following terms; liability 50% in favor of the Respondent against Applicant; general damages of Kshs. 90, 000/=; special damages of Kshs. 7,000/=; costs of the suit and interest was awarded to the 1st Respondent.b.The Appellant/Applicant being aggrieved by the said judgment delivered on 29/6052023 by P.W Nyotah (SRM) has preferred an Appeal against the determination on quantum vide Nakuru HCCA NO. E123 OF 2023. c.The Appeal raises triable issues and has high chances of success.d.The Appellant/Applicant was granted la 30 days stay of execution from the date of the judgment, which has since lapsed.e.The Appellant/Applicant is apprehensive that the 1st Respondent will commence execution proceedings against him to his detriment.f.The Appellant/Applicant stand to suffer substantial loss and damage, if orders sought herein are not granted and further that the Appeal will be rendered nugatory.g.The Respondents will not be prejudiced in any way if the orders sought herein are granted as prayed.h.That it is in the interest of Justice that the execution of Judgment and/or decree delivered on 29th May, 2023 be stayed to pave way for the hearing and determination of the Appeal.i.That there will be no irreparable damage occasioned to the Respondents if the orders sought herein are granted.j.Should the execution process commence the Appellant/Applicant stand to suffer irreparable loss and prejudice as the ability of the Respondent herein to refund the decretal amount is unknown.k.The Appellant/Applicant are willing and ready to furnish a bank guarantee for the entire decretal sum pending the hearing and determination of the Appeal; as a condition for allowing this application.l.That this Court has powers to grant the orders sought herein in the interest of justice and fairness.

3. On the 31st July 2023, this Court directed that the Application was to be heard and determined on the basis of written submissions, and parties were to file their written submissions within fourteen days.

Applicant’s Case 4. The Applicant did not file written submissions as directed but the Court nonetheless considers the application as presented

5. The Applicant in his application dated 20th July, 2023 has undertaken to issue a bank Guarantee with a reputable bank as attached in our application. This goes to show that the Applicant is willing to satisfy stay conditions and offer security to the 1st Respondent and thus the 1st Respondent would not suffer loss.

6. The Applicant is ready and willing to furnish the Court with a bank guarantee pending hearing and determination of the Appeal Nakuru HCCA NO. E123 0F 2023. In the event the appeal succeeds the Applicant is apprehensive that the 1st Respondent will not be in a position to refund the money to the Applicant which will be prejudicial to him. The Applicant prays that he be allowed to furnish the Court with a bank guarantee pending hearing and determination of the appeal.

7. The Applicant being dissatisfied with the said judgment delivered on 27th June, 2023, filed an appeal and this application on 25th July, 2023 before the stay period that had been granted lapsed therefore the application was brought within reasonable time and without delay and would not be prejudicial to the 1st Respondent.

8. The Applicant contends in his application that, the Appeal raises substantial issues for determination and hence has high chances of succeeding, further the judgment is of a substantial amount he is at risk of execution which would render the Appeal nugatory. It is therefore in the interest of justice that this application be allowed as prayed.

Respondents Case 9. The Respondent opposed the Application by filing written submissions Dated 5th October 2023 urging that being aggrieved by the Court’s decision the Applicant filed an Appeal and filed the present application in the Appellate Court and not in the trial Court that delivered the judgement which is in contravention with order 22 rule 22 (1) of theCivil Procedure Rules.

10. Being aggrieved by the Court’s decision the Applicant filed an Appeal and filed the present application in the appellate Court and not in the trial Court that delivered the judgement which is in contravention withorder 22 rule 22 (1) of the Civil Procedure Rules.

11. The 1st Respondent filed a Replying Affidavit dated 31st August, 2023 and parties were directed to canvas the Application by way of written submissions the Applicant has not complied to date.

12. That, order 42 rule 6 (2) (a) (b) clearly states that: -“Noorder for stay of execution shall be made under sub rule (1) unless 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 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."

13. From the foregoing, the 1st Respondent therefore submits under the following two tiers.Firstly, whether the Applicants will suffer any loss if the application herein is not allowed? And that they have not specified the exact loss?

14. In the case of Mutua Kilonzo -Vs- Kioko David Machakos [2008] Eklr the Court in dismissing an application for stay pending appeal for a monetary decree as the applicant/appellant failed to prove how he will suffer substantial loss stated that:“To my mind, the Applicant has failed to establish what loss he would suffer if the decree is executed. I say this with respect because Lilian Munyiri aforesaid is an officer at Gateway Insurance Company Ltd and has not stated that she personally knows the means of the Respondent. She merely states that from evidence at the trial he is a man of straw. How that conclusion is reached and based on what evidence, I cannot tell. It is now a catchphrase that every Respondent in an application for stay of execution is called a man of no means? That is all fine if there is evidence to back up that position.If the job done or other means of living are clearly deponed to, then it is easy to fathom what means the Respondent has. Ringera J in Lalji Bhimji put it succintly when he stated thus;"..he (the applicant) must persuade the Court that the decree holder is a man of straw from whom it will be nigh to impossible or at least very difficult to obtain back the decretal amount in the event the intended appeal succeeding. Such persuasion must spring from affidavits or evidence on record."

15. The Respondent submits that, the Applicant has deposed that they will suffer substantial loss if this application is not allowed and the decretal sum is released to the Respondent herein. That that the decree herein is a money decree and the same can be reimbursed by the respondent if the appeal is successful and thus releasing part of the decretal sum to the Respondent will not render this appeal nugatory. The Court is urged to be guided by the authority of Kenya Shell Limited v Benjamin Karuga Kibiru & another [1986] eKLR where the Court stated that;“It is not normal in money decrees for the Appeal to be rendered nugatory, if payment is made"

16. That the Applicant's intended appeal is based on a money decree and such Appeals are never rendered nugatory for one can sue for recovery.

17. That the Appellant/Applicant have not at any point submitted and proved the alleged substantial loss they will suffer if the Application is not allowed. The Appellant/Applicant has not satisfied this/Court that if the decretal sum is paid to the 1st Respondent it will affect them negatively and cause them irreparable loss.

18. It is submitted that the Appellant/Applicant has failed to prove his allegations under this limb and therefore their application ought to be dismissed with costs to the Respondents and further that the Respondent be allowed to proceed with execution process unless the entire claim is settled.

Secondly whether the Appellant/Applicants have given any security? 19. That according to the Applicants application, they have claimed that they are amenable to furnishing security pending appeal by depositing the entire decretal sum in form of a bank guarantee. It is the Respondent submission that security in form of a bank guarantee is not suitable considering that there is a possibility of the bank not honoring the bank Guarantee as the bank that would issue the same would not be a party to the suit herein making it difficult for the 1st Respondent to enforce any orders it would get regarding the said bank guarantee, if at all. That therefore the security must be furnished in form of cash to be released to the 1st Respondent or in the alternative, the decretal sum to be deposited entirely in Court.

20. Further, as far as the Applicant is contesting the issue of liability, it is the Respondent’s submission that he is entitled to a certain amount of money since the Applicant has not clarified what injury and/or loss that the Applicant would suffer if the Court should order that the Applicant releases ½ of the decretal sum to the Respondent.

21. The Respondent prays that; the Applicant be ordered to pay % of the decretal amount to the 1st Respondent plus the costs.

22. In the case of Benard Kigada & another v Tom Ochieng Odeny[2021] eKLR the Applicant had specifically sought to provide security by way of bank guarantee and the Court held: -“The Applicants' insurer had indicated that they were willing to provide security and consequently, it was therefore the considered opinion of this Court that they had demonstrated that they had complied with the third condition of being granted an order for stay of execution pending appeal. However, this Court took the view that security in form of a bank guarantee was not suitable considering that there was a possibility of the bank not honouring the bank Guarantee as the bank that would issue the same would not be a party to the suit herein making it difficult for the Respondent to enforce any orders it would get regarding the said bank guarantee, if at all. This Court therefore determined that the security to be furnished would be in form of money. Further, as the Applicants were not contesting the issue of liability, it was the considered view of this Court that the Respondent would be entitled to a certain amount of money. As it was not clear to this Court what the injury and/or loss was, it was hesitant to order that the Applicants release half of the decretal sum to the Respondent herein but only part of it'

23. It is the 1st Respondent submission that the Courts in granting stay orders must balance the rights of the Applicant to appeal as against those of the rightful judgment.

24. The Court in the case of Luxus woods (K Limited v Patrick Amugữre Kamadi [2016] eKLR relied on M/S Portreitz Maternity v. James Karanja Kabia Civil - Appeal No.6 of 1997 where the Court stated that:“The right of appeal must be balanced against an equally weighty right of the plaintiff to enjoy the fruits of the judgment delivered in his favour. There must be a just cause for depriving the plaintiff of that right.""In the upshot, I find that the Application dated 23rd November, 2015 is not merited and the same is dismissed with costs to the Respondent."

25. That the Application herein is unmerited as the same does not entirely satisfy all the requirements of order 42 rule 6 (2)(a)(b).

26. The 1st Respondent pray that this application be dismissed with costs to the Plaintiff/Respondent.

27. That the 1st Respondent herein has been prejudiced since it has been over 10 years and the 1st Respondent is yet to enjoy the fruits of its judgment it will be unjust for the 1st Respondent to wait until the appeal is determined before he enjoys the fruits of his judgment and that this Court sets stay conditions that % of the decretal sum plus costs be released to the Respondent so that he does not leave the Court empty handed pending the appeal.

28. Reliance is placed on the case of Amal Hauliers Limited V Abdul Nasir Abukar Hassan (2017) eKLR. Where the Court observed as follows: -“I do not think that the Respondent will leave this Court empty-handed. He says he needs the money for treatment. His proposal that he gets half the decretal amount is therefore reasonable".

29. It is the Respondent’s submission that this Court considers the principle below in setting the stay condition.“The right of appeal must be balanced against an equally weighty right of the plaintiff to enjoy the fruits of the judgment delivered in his favour. There must be a just cause for depriving the plaintiff of that right."

30. That the Application herein is unmerited as the same does not entirely satisfy all the requirements oforder 42 rule 6 (2)(a) (b). We therefore pray that this application be dismissed with costs to the Plaintiff/Respondent.

Analysis and Determination 31. 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.

32. 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…"

33. 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.”

34. The Primary purpose of stay of execution is to preserve the status quo pending the hearing of the appeal. In RWW vs. 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.

35. 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 29th May, 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.

36. 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.

37. 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.”

38. The other consideration is security. In the case of Arun C. Sharma vs. 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.”

39. 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 20th 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.

40. 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?

41. 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 Applicants herein, though they brought this Application without undue delay They have not adequately demonstrated the substantial loss that they would suffer and have 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.

42. 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 262 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 262 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 Applicant 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) above by the Applicant, shall automatically lapse the Order of Stay of Execution of Judgment/Decree granted.

It is so ordered.

SIGNED, DELIVERED VIRTUALLY ON TEAMS PLATFORM ON THIS 24TH DAY OF OCTOBER 2023________________________MOHOCHI S.MJUDGE