[2022] KEHC 3221 (KLR)

Nyamwaya v Obwayo (Civil Appeal E068 of 2021) [2022] KEHC 3221 (KLR) (9 May 2022) (Ruling)

Neutral citation: [2022] KEHC 3221 (KLR)

Republic of Kenya

In the High Court at Nyamira

Civil Appeal E068 of 2021

FA Ochieng, J

May 9, 2022

Between

Anthony Nyamwaya

Appellant

and

Grace Kemuma Obwayo

Respondent

(Being an appeal from the Judgment/Decree of Hon. M. O. Wambani – CM Nyamira dated and delivered on 17th August 2021 in the original Nyamira CMCC NO. 182 of 2016)

Ruling

1. On 17th August 2021 the learned trial magistrate delivered a Judgment in which the Defendant was held 100% liable for the accident in which the Plaintiff sustained injuries.

2. The trial court awarded General Damages in the sum of Kshs 350,000/=.

3. Being dissatisfied with the judgment, the Defendant has lodged an appeal to this Court. By the said appeal the Appellant was challenging the findings on both the issue of liability and the quantum of damages.

4. Having filed the appeal, the Appellant has asked the Court to grant a stay of execution of the Decree, until the appeal was heard and determined.

5. The Appellant has offered to provide sufficient security, in the form of a suitable Bank Guarantee from a reputable financial institution, to secure the decretal amount.

6. The Appellant expressed the fear that if his appeal did succeed after the decretal amount had been paid to the Respondent, he would be unable to recover the said money. Therefore, in order not to render the appeal nugatory, the Appellant asked the Court to grant an order for stay of execution.

7. In the light of the fact that he was offering security, the Appellant reasoned that the stay of execution would not be prejudicial to the Respondent.

8. In answer to the application, the Respondent filed a Replying Affidavit, stating that she ought to be allowed to enjoy the fruits of the lawful judgment, as that is her entitlement.

9. The Respondent also said that the Appellant had failed to demonstrate that he would suffer substantial loss if the Court did not stay execution.

10. It was her considered view that because the decree herein was for the payment of money, the Appellant could not suffer substantial loss.

11. The Respondent deponed that M/s Directline Assurance Company Limited, who are the insurer for the Appellant, has;“….. a multifarious number of unpaid claims wherein it has offered the same (Bank Guarantee facility) as security, hence availability of the same as security for ultimate execution of my decree is not guaranteed and reliancethereon would be unsafe.”

12. She went on to depone that a Bank Guarantee is not a safe kind of security;“……. since most of Public Service Vehicles underwriters including M/s Directline Assurance Company Limited, have collapsed and/or are on the verge of collapsing ……..”

13. In the light of that fear, the Respondent’s view was that it would only be fair and just to require the Appellant to pay 50% of the decretal amount to her, and to deposit the remaining 50% in a joint interest-earning account.

14. The Respondent said that it had now become a practice in our courts, that in cases in which the accident was not disputed by the Appellant, the Appellant would pay 50% to the Respondent as one of the conditions upon which the court would anchor an order for stay of execution pending appeal.

15. The foregoing was the Respondent’s position, as stated in her replying affidavit.

16. When the application came up for hearing, on March 3, 2022, the Respondent informed the Court that provided the decretal amount was deposited in a joint interest-earning account, she would not object to stay of execution.

17. At that stage, the Appellant reiterated his offer, which was to provide a Bank Guarantee.

18. On her part, the Respondent reiterated her rejection of the Bank Guarantee which was being offered as security. She said that in the event that the Insurance Company collapsed, she would have to sue the bank.

19. When the Court inquired from the Respondent about the statutory provision which she was relying upon as the basis for the insistence that the decretal amount be deposited in an interest-earning account, Mr. Gichana, the learned advocate for the Respondent said that he was relying on Order 42 Rule 6 of the Civil Procedure Rules.

20. I believe that learned counsel had in mind the provisions of Order 42 Rule 4 (2) of the Civil Procedure Rules, which is in the following terms;“No order for stay of execution shall be made 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.”

21. As the Respondent conceded, the rule does not contain a mandatory requirement for the deposit of the decretal amount, into an interest-earning account.

22. In the case of Joseph Kiiru Mugambi & Another vFaith Wayua Muthiani HCCA No. E329 of 2021; Chitembwe J. held that the Appellants were likely to suffer substantial loss, given that the Respondent had not disclosed how she would repay the decretal amount, if the appeal succeeded.

23. When granting an order for stay of execution, the learned Judge ordered the Respondent to provide security in the form of a Bank Guarantee.

24. In the case of Royal Group Industries Limitedvs Godfrey Mwenda Kithinji HCCA No. E130/2021, E.M. Muriithi J. ordered the Appellant to pay one-third (1/3) of the decretal sum to the Respondent. The balance of the decretal sum was to be held in a joint interest-earning account.

25. The learned Judge observed as follows;“The Applicant has indicated his willingness to offer security for the due performance of the decree, which he urges should be in the form of a bank guarantee since their operations are dependent on their liquidity. The court considers that the fact that the Respondent, being a private company, largely unknown, makes it necessary for the court to order for security in the form of cash. Had the Respondent been a well renown financial institution, such as a bank, the Court would have ordered for a bank guarantee.”

26. In that case, I was unable to verify whether the appeal was in respect of the quantum only, or also in respect to the issue of liability.

27. In the case of Marlboro Express Limited vs Mary Nyaboke Amoro & Another HCCA No.E031 of 2021, R. Lagat-korirJ. held as follows;“I must state that the Court is not bound by the type of security furnished by the Applicant. It must instead weigh and consider whether the same will serve the purpose for which it is intended, with the ultimate goal being to guarantee the due performance of the decree, while not unduly punishing the Applicant ……”

28. The learned Judge rejected the security in the nature of a bank guarantee. Out of the decretal sum of Kshs 1,300,000/=, the Court ordered the Appellant to pay Kshs 300,000/= to the Respondent within 30 days. The further order was that the balance of the decretal amount be deposited into a joint interest-earning account.

29. In the case of Catherine Wambui Karuno v TrocaireELRC Case No. 1325 of 2015 Wasilwa J., noted that the Respondent had asked the court to order the Applicant to pay 50% to the Respondent, and to order that the remaining 50% be deposited in an interest-earning account.

30. The learned Judge allowed the said request.

31. In the case of Damacline Kwamboka Kunga vs Caroline Moraa Ogata & AnotherHCCA No. E41 of 2021, the Appellant had offered to deposit the whole decretal amount in court, as a condition for being granted the order for stay of execution.

32. On the other hand, the Respondent asked the Court to order the Appellant to make an outright payment of 50% of the decretal amount; whilst the balance would be held in a joint interest-earning account.

33. E. N. Maina J. ordered the Appellant to deposit the whole decretal amount either in court or in an interest-earning account.

34. In my considered view, one factor which the court is obliged to take into account when it is called upon to grant an order for stay of execution pending the determination of an appeal, is whether the Appellant was challenging only the quantum or also the findings on liability.

35. Where the appeal was only in relation to the quantum of damages awarded, I find that it would ordinarily be in the interest of justice, (to both the parties), to have the Appellant pay to the Respondent a fair percentage of the decretal amount. In determining the quantum to be paid to the Respondent, the Court would derive some guidance from the submissions which the parties had made before the trial court, on the issue of quantum.

36. When an Appellant was appealing against quantum only, he cannot be heard to say that he has reason to withhold from the Respondent, the amount which he had offered in the submissions that he made during the trial.

37. On the other hand, when the appeal was also in relation to liability, there would always be a possibility that the appellate court might, at the very least, reduce the degree to which the trial court had held the Appellant responsible for the accident.

38. Just because an accident did take place, cannot be a reason enough to hold that the Defendant would definitely be liable for the said accident.

39. In this case the Appellant will be challenging the decision by the trial court, by apportioning 100% liability to the Defendant.

40. As I have not had the benefit of seeing the pleadings and proceedings, together with the submissions of the parties, I do not know what either of the parties stated before the trial court. I have not been able to ascertain the degree of blameworthiness that the Appellant might have conceded, nor the quantum of damages which the Appellant had suggested, during the trial.

41. In the circumstances, it would be difficult to determine how much it would be safe to have the Appellant pay outright, to the Respondent at this stage.

42. I am not laying down a rule, that that which a Defendant had conceded, in his submissions should be amount which the court would be ready to have the said Defendant pay outright to the Plaintiff, as a part of the security for the due performance of the decree. Such concessions serve to give the court, a basis upon which it may exercise its discretion when deciding whether or not a certain portion should be paid, and the quantum of such portion.

43. In my considered opinion, the Respondent’s assertion, concerning the potential collapse of the insurer herein, is without foundation.

44. But, in any event, it is not the insurer that would be providing the security. The Appellant did ask for authority to get a guarantee from the insurer’s Bank.

45. The Appellant asked that he be allowed to procure a bank guarantee. In my understanding the Appellant’s insurer would have to meet some agreed conditions before the banker can issue a bank guarantee.

46. Once the guarantee is issued, it would not matter if the insurer were to be wound-up. The Respondent would look to the bank, to get payment.

47. Of course, when the security was in the form of cash, which is held in a joint interest-earning account, it would be much easier to get payment, after the appeal was determined.

48. Whereas a bank guarantee may not be as attractive to a Respondent, as a cash deposit, I hold the considered view that that does not render a bank guarantee any less of a security.

49. Depending on the circumstances of each particular case, the court would have the discretion to determine the nature of the security to be provided by the Appellant.

50. One of the factors to be taken into account is the possible impact upon the Appellant, if he has to put aside cash, for the duration of the appeal.

51. The Appellant who is ordered to pay compensation, is under a legal obligation to make payment. But it is not the intention of the law to punish the Appellant.

52. Having taken into account all the relevant factors, I now order that there shall be a stay of execution of the Decree until the appeal is heard and determined. This order is, however, conditional upon the Appellant depositing 50% of the decretal amount in a joint interest-earning account. The account shall be in the joint names of the advocates for the parties herein.

53. The Appellant shall make available the requisite funds within the next 30 days, so as to facilitate the opening of the joint account.

54. I further order that the Appellant shall procure a Bank Guarantee from the Family Bank Limited, for 50% of the decretal amount. The said Bank Guarantee shall be procured and handed over to the Respondent within 30 days.

55. A copy of the bank guarantee shall be filed in court within 30 days.

56. A copy of the requisite documents from the bank where the joint account shall have been opened, shall be filed in court within 30 days.

57. In default of compliance, the order for stay shall stand vacated, unless the Appellant can satisfactorily demonstrate to the court, that his efforts to comply were frustrated by the Respondent.

58. Costs of the application shall be in the cause in the appeal. If the appeal is successful, the costs of this application shall be paid by the Respondent. But if the appeal was unsuccessful, the Appellant will pay to the Respondent, the costs of this application.

59. Finally, as regards the Bank Guarantee, I direct that the same shall not only cite, within it, the particulars of this case but must also provide particulars of all other liabilities which it covers, so that the Respondent and the Court can verify that the decretal amounts herein are an integral part of the Bank Guarantee.

60. The alternative to the Guarantee citing a composite amount, (which must incorporate the information particularized above), is for a separate guarantee for each case.

DATED, SIGNED AND DELIVERED AT NYAMIRATHIS 9TH DAY OF MAY 2022FRED A. OCHIENGJUDGE