[2022] KEHC 10715 (KLR)

Owade & another v Njoroge (Civil Appeal E005 of 2022) [2022] KEHC 10715 (KLR) (9 June 2022) (Ruling)

Neutral citation: [2022] KEHC 10715 (KLR)

Republic of Kenya

In the High Court at Nyeri

Civil Appeal E005 of 2022

FN Muchemi, J

June 9, 2022

Between

Samwel Odhiambo Owade

1st Applicant

Kenya Power and Lighting Company

2nd Applicant

and

Little John Murage Njoroge

Respondent

Ruling

Brief facts 1. The application for determination dated 10th February 2022 brought under Order 42 Rule 6 and Order 51 Rule 1 of the Civil Procedure Rules and Sections 1A, 1B and 3A of the Civil Procedure Act seeks orders of stay of execution of the judgment and decree in Karatina SPMCC No. 59 of 2020 pending the hearing and determination of the application and intended appeal. The applicant also seeks for leave to deposit an insurance bond or a bank guarantee as security in lieu of a cash deposit in the event the court makes an order for security.

2. In opposition of the said application, the respondent filed a Replying Affidavit dated 24th February 2022.

The Applicants’ Case 3. It is the applicants’ case that judgment was delivered on 12th January 2022 in favour of the respondent awarding him Kshs. 1,651,672/- in damages and costs of the suit. The applicants being aggrieved by the decision of the court filed an appeal against the entire award and applied for certified copies of the proceedings to enable them prepare a record of appeal.

4. The applicants are apprehensive that the appeal will be rendered nugatory should the orders sought not be granted as the appeal has high chances of success.

5. The applicants state that they stand to suffer substantial loss if the court declines to grant the orders of stay as the respondent will proceed to execute against them and he may not be in a position to refund the decretal sum in the event the appeal is successful. Based on the foregoing reasons, the applicants contend that they have made out a case for the grant of orders of stay and pray that the court allow their application as prayed.

The Respondent’s Case 6. The respondent states that the applicants have not met the threshold for the grant of stay of execution as they have not shown how they shall stand to suffer substantial loss. In any event, the respondent contends that he is the one who continues to suffer substantial loss as he is still empty handed. The respondent further contends that the trial court granted judgment in his favour and as a successful litigant, he is entitled to enjoy the fruits of his judgment. As such, it is only fair that the applicants compensate him the sums owed so that the parties can proceed for appeal. He further contends that he is due for a future medical procedure which has been and continues to be hindered by the applicants not compensating him.

7. The respondent further argues that the instant application and the appeal lack merit, are misleading, brought in bad faith and ought to be dismissed with costs. He further states that the intended appeal has no chances of success and it would be in vain and unjust to grant orders of stay of execution. The respondent contends that the same is only meant to further delay this matter and prevent him from accessing the fruits of his successful litigation and derail his right to access to justice. Moreover, the respondent states that he is likely to suffer great prejudice if the orders sought are granted as the stay will automatically postpone and delay his enjoyment of the fruits of judgment as he is still in pain and due for a medical procedure to mitigate the injuries sustained during the accident.

8. The respondent further states that the applicants have neither demonstrated that the trial court violated the principle nor has it demonstrated that the discretion was not exercised judicially. As such, the respondent prays that the court dismisses the application with costs.

9. Parties hereby disposed of the application by way of written submissions.

The Applicants’ Submissions 10. The applicants submit that they have satisfied the principles for an order of stay of execution pending appeal. They further submit that their appeal raises weighty triable issues as the applicants seek the court’s guidance on the measure of damages for the particular injuries which will indeed set precedent accordingly. The applicants rely on the case of Jagongo Dominique Ochieng vs Teachers Service Commission [2015] eKLR and submit that they have an arguable appeal. The applicants further contend that the respondent has not demonstrated to the court that he would suffer any loss or damage if the orders sought are granted. Conversely, if the orders sought by the applicants are disallowed they will suffer great loss and damage of having their property wrongfully carted away.

11. The applicants rely on the case of Mombasa Maize Millers Co. Ltd & Another vs Western Cross Express Co. Ltd [2016] eKLR and urge the court to grant their application for stay to serve substantive justice. The applicants further submit that in the event the court is minded to make an order as to security of costs, the applicants be granted leave to deposit an insurance bond or bank guarantee as security in lieu of cash deposit. As such, the applicant prays that the application be allowed.

The Respondent’s Submissions 12. The respondent relies on the case of Charles Irungu vs Elizabeth Kalunda Wakano [2021] eKLR and submits that the applicants have not demonstrated what substantial loss they stand to suffer. The respondent further submits that the instant application was filed 30 days after the judgment was rendered and thus it amounts to unreasonable delay. To support his contention, the respondent relies on the case ofCharles Nyamwega vs Asha Njeri Kimata & Another [2017] eKLR.

13. The respondent further submits that since the applicants have failed to prove the substantial loss they will suffer, they are financially capable of issuing the security to the respondent in performance of the decree. The respondent states that he is due for a medical examination regarding the injuries he sustained as a result of the accident caused by the applicants and thus he should not be denied from enjoying the fruits of the judgment. He relies on the case of H.G.E vs S.M. [2020] eKLR to support his contention. In the event the court is inclined to grant stay of execution, the respondent prays that the same e conditional upon the applicants depositing into court security for costs in the sum of the entire decretal amount or alternatively depositing half of the decretal sum into a joint interest earning account in the names of both the parties advocates.

14. The respondent further submits that the intended appeal lacks merit, is misleading and has been brought in bad faith. The respondent states that the intended appeal has no chance of success and it would be vain and unjust to grant orders of stay of execution. The respondent reiterates that the applicants are only delaying this matter and preventing the respondent from accessing the fruits of a successful litigation.

15. The respondent relies on the case of Morgan Air Cargo Limited vs Everest Enterprises Limited [2014] eKLR and submits that costs follow the event and thus the instant application ought to be dismissed with costs to him.

Issues for determination 16. The main issue for determination is whether the applicants have met the prerequisite for grant of stay of execution pending appeal.

The Law Whether the applicants have satisfied the conditions set out in Order 42 Rule 6 of the Civil Procedure Rules for stay of execution pending appeal. 17. As a rule of thumb, an appeal does not operate as an automatic stay of execution. The conditions which a party must establish in order for the court to order stay of execution are provided for under Order 42 Rule 6(2) Civil Procedure Rules. Order 42 Rule 6 of the Civil Procedure Rules stipulates:-1. “No appeal or second appeal shall operate as a stay of execution or proceedings under a decree or order appealed from except in so far as the court appealed from may order but the court appealed from may for sufficient cause order stay of execution of such decree or order and whether the application for such stay shall have been granted or refused by the court appealed from the court to which such appeal is preferred shall be at liberty on application being made to consider such application and to make such order thereon as may to it seem just and any person aggrieved by an order of stay made by the court from whose decision the Appeal is preferred may apply to the appellate court to have such orders set aside.2. No order for stay of execution shall be made under sub rule 1 unless:-a.The Court is satisfied that substantial loss may result to the 1st Applicant unless the order is made and that the application has been made without unreasonable delay; andb.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.

18. Thus under Order 42 Rule 6(2) of the Civil Procedure Rules, an applicant should satisfy the court that:1. Substantial loss may result to him/her unless the order is made;2. That the application has been made without unreasonable delay; and3. The applicant has given such security as the court orders for the due performance of such decree or order as may ultimately be binding on him.

19These principles were enunciated in Butt vs Rent Restriction Tribunal [1979] the Court of Appeal stated what ought to be considered in determining whether to grant or refuse stay of execution pending appeal. The court said that:-1. The power of the court to grant or refuse an application for a stay of execution is discretionary; and the discretion should be exercised in such a way as not to prevent an appeal.2. Secondly, 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 the appeal court reverse the judge’s discretion.3. Thirdly, 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. Finally, the Court in exercising its discretion whether to grant or refuse an application for stay will consider the special circumstances and its unique requirements. 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 of costs as ordered will cause the order for stay of execution to lapse.

Substantial loss 20. Under this head, an applicant must clearly state what loss, if any, they stand to suffer. This principle was enunciated in the case of Shell Ltd vs Kibiru and Another [1986] KLR 410 Platt JA set out two different circumstances when substantial loss could arise as follows:-“The appeal is to be taken against a judgment in which it was held that the present respondents were entitled to claim damages….It is a money decree. An intended appeal does not operate as a stay. The application for stay made in the high Court failed because the gist of the conditions set out in Order XLI Rule 4 (now Order 42 Rule 6(2)) of the Civil Procedure Rules was not met. There was no evidence of substantial loss to the applicant, either in this matter of paying the damages awarded which would cause difficulty to the applicant itself, or because it would lose its money, if payment was made, since the Respondents would be unable to repay the decretal sum plus costs in two courts….”The learned judge continued to observe that:-“It is usually a good rule to see if Order XLI Rule 4 of the Civil Procedure Rules can be substantiated. If there is no evidence of substantial loss to the applicant, it would be a rare case when an appeal would be rendered nugatory by some other event. Substantial loss in its various forms is the cornerstone of both jurisdictions for granting stay. That is what has to be prevented. Therefore, without this evidence, it is difficult to see why the respondents should be kept out of their money.

21. Earlier on, Hancox JA in his ruling observed that:-“It is true to say that in consideration [sic] an application for stay, the court doing so must address its collective mind to the question of whether to refuse it would…render the appeal nugatory.This is shown by the following passage of Cotton LJ in Wilson vs Church (No.2) (1879) 12 ChD 454 at page 458 where he said:-“I wish to state my opinion that when a party is appealing, exercising his undoubtedly right of appeal, this court ought to see the appeal, if successful, is not rendered nugatory. “As I said, I accept the proposition that if it is shown that execution or enforcement would render a proposed appeal nugatory, then a stay can properly be given. Parallel with that is the equally important proposition that a litigant, if successful, should not be deprived of the fruits of a judgment in his favour without just cause.”

22. The applicants counsel has deponed that the decretal sum is colossal and the respondent if paid, would be unable to pay back the said sum. Further, the applicants have stated that they stand at the risk of being executed against. Though the applicants contend that the respondent will proceed to execute against them, there is no evidence on record that the respondent has initiated the execution process.

23. I find that the applicants have not demonstrated the loss they will suffer if the decretal sum is paid to the respondent.

The application has been made without unreasonable delay. 24. Judgment was delivered on 12th January 2022 and the applicants filed this application on 10th February 2022. The applicants filed the application about 28 days after judgment was delivered. As such, the application in my view has been filed timeously.

Security of costs. 25. The applicant ought to satisfy the condition of security. In the persuasive case of Gianfranco Manenthi & Another vs Africa merchant Assurance Co. Ltd [2019] eKLR the court observed:-“The applicant must show and meet the condition of payment of security for due performance of the decree. Under this condition, a party who seeks the right of appeal from a money decree of the lower court for an order of stay must satisfy this condition on security. In this regard, the security for due performance of the decree under Order 42 Rule 6(1) of the Civil Procedure Rules, it is trite that the winner of litigation should not be denied the opportunity to execute the decree in order to enjoy the fruits of his judgment in case the appeal falls.Further Order 42 should be seen from the point of view that a debt is already owed and due for payment to the successful litigant in a litigation before a court which has delivered the matter in his favour. This is therefore to provide a situation for the court that if the appellant fails to succeed on appeal there could be no return to status quo on the part of the plaintiff to initiate execution proceedings where the judgment involves a money decree. The court would order for the release of the deposited decretal amount to the respondent in the appeal….Thus, the objective of the legal provisions on security was never intended to fetter the right of appeal. It was also put in place to ensure that courts do not assist litigants to delay execution of decrees through filing vexatious and frivolous appeals. In any event, the issue of deposit of security for due performance of decree is not a matter of willingness by the applicant but for the court to determine. Counsel for the applicant submitted that he is ready to provide a bank guarantee as security for due performance of the decree.”

26. Similarly in Arun C. Sharma vs Ashana Raikundalia t/a Rairundalia & Co. Advocates & 2 Others [2014] eKLR the court stated:-“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 the 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.”

27. From the above persuasive decisions, it is clear that the issue of security is discretionary and it is upon the court to determine the same. Notably, the applicants have not offered to give any security but have deponed that in the event the court is inclined to grant stay, the applicants be granted leave to deposit an insurance bond or bank guarantee in lieu of a cash deposit.

28. Additionally, the right of appeal must be balanced against an equally weighty rigid right of the plaintiff to enjoy the fruits of the judgment delivered in his favour. In the case of Mohammed Salim t/a Choice Butchery vs Nasserpuria Memon Jamat (2013) eKLR where the Court upheld the decision ofPortreitz Maternity vs James Karanga Kabia Civil Appeal No. 63 of 1991 and stated that:“That right of appeal must be balanced against an equally weighty rigid right that 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.”

29. The court in granting stay has to consider the balancing act between the rights of the two parties. The question to consider herein is to whether there is just cause for depriving the respondent his right of enjoying the judgment. The respondent states that the applicants have not satisfied the conditions to warrant them stay of execution. Further, the respondent states that he has to undergo further medical care arising from the injuries sustained in the road accident caused by the applicants. The applicants on the other hand state that the appeal has high chances of success and will be rendered nugatory if the orders of stay are granted. This being a money decree, it has not been shown that the appeal will be rendered nugatory.

30. In my view, I find that on a balance of interests, it will not prejudice the applicants if the application of stay is not granted. In the interests of justice, the respondent is likely to be prejudiced more than the applicants if the application for stay is allowed.

Conclusion 21. The applicant has failed to demonstrate that they will suffer substantial loss in the event that the orders sought are not granted which is the cornerstone in granting stay. Having failed to pass the test of substantial loss, I hereby find that the application dated 10th February 2022 lacks merit.

21. The application is hereby dismissed with costs.

21. It is hereby so ordered.

DELIVERED, DATED AND SIGNED AT NYERI THIS 9TH DAY OF JUNE, 2022. F. MUCHEMIJUDGERuling delivered through video-link this 9th day of June, 2022