[2021] KEHC 2543 (KLR)
The court found that the proposed bank guarantee was inadequate as security for stay of execution because it was issued in favour of Directline Assurance Company Limited, which is not a party to the proceedings, and its validity was about to expire. The court held that security for the due performance of the decree...
Source-derived case information.
- Citation
- [2021] KEHC 2543 (KLR)
- Parties
- Appellant: Peter Maina Ndungu; Respondent: Damaris Wanjiku Maina
- Court
- High Court
- Court Station
- High Court at Kiambu
- Jurisdiction
- Kenya
- Case Number
- Civil Appeal E139 of 2021
- Procedural Posture
- Civil Appeal / Stay Application
- Outcome
- Stay of execution granted on condition that the decretal sum is deposited in a joint interest earning account within 30 days.
- Judges
- MM Kasango
- Legal Topics
- Stay of Execution, Security for Due Performance, Appeal Conditions
- Source Language
- en
Source-derived case record
Summary, issues, holding and outcome
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Parties
Peter Maina Ndungu
Appellant
Damaris Wanjiku Maina
Respondent
Procedural Posture
Civil Appeal / Stay Application
Legal Issues
- 1 What should be the appropriate condition for granting a stay of execution pending appeal.
- 2 Whether a bank guarantee issued to a non-party (Directline Assurance Company Limited) is sufficient security for stay of execution.
- 3 Whether the proposed bank guarantee is valid and effective security for the due performance of the decree.
Ratio Decidendi
The court found that the proposed bank guarantee was inadequate as security for stay of execution because it was issued in favour of Directline Assurance Company Limited, which is not a party to the proceedings, and its validity was about to expire. The court held that security for the due performance of the decree must be enforceable by the respondent and must remain valid for the duration of the appeal. Therefore, the appropriate security is the deposit of the decretal sum in a joint interest earning account in the names of both parties' advocates, ensuring the respondent's interests are protected pending the outcome of the appeal.
Court Disposition
Stay of execution granted on condition that the decretal sum is deposited in a joint interest earning account within 30 days.
Orders
- There shall be stay of execution of SPMCC Limuru No. 48 of 2018 on condition that the appellant provides the decretal sum within 30 days to be deposited into an interest earning account in the joint names of both law firms.
- The costs of the chamber summons dated 16th August, 2021 shall abide with the outcome of the appeal.
Full Case Text
Judgment text and source record
31 paragraphs
REPUBLIC OF KENYA
IN THE HIGH COURT OF KENYA
AT KIAMBU
CIVIL APPEAL NO. E139 OF 2021
BETWEEN
PETER MAINA NDUNGU..........................................................................................APPELLANT
VERSUS
DAMARIS WANJIKU MAINA................................................................................RESPONDENT
RULING
1. PETER MAINA NDUNGU (Peter), being aggrieved by the judgment delivered on 7th July, 2021 in Limuru Magistrate’s Court Civil Case No. 48 of 2018 filed this appeal. By the chamber summons application dated 16th August, 2021, Peter sought to stay execution of that Limuru Magistrate’s court’s judgment pending the hearing and determination of this appeal. Peter, by his affidavit in support of the application, prayed that the court do accept as security for stay of execution a bank guarantee by Diamond Trust Bankto be issued to Peter’s insurance, Directline Assurance Company Limited.
2. DAMARIS WANJIKU MAINA (Damari) does not oppose the application for stay of execution of the judgment of Limuru Court but prays that the court do order that the condition for that stay of execution be that Peter does provide the decretal sum to be deposited in a joint interest earning account.
3. Since parties were unable to agree on what the terms of stay of execution should be issued, they requested this Court to determine that one issue, that is, what ought to be the condition for stay of execution.
ANALYSIS
4. I have perused the letter written by Diamond Trust Bank to Directline Assurance Company Limited and dated 6th November, 2020. What is significant to note is that the undertaking to issue a Bank guarantee, in that letter, is an undertaking to guarantee Directline Assurance Company Limited. Directline, however is not a party to the action for which stay of execution is sought. It follows therefore that, even if the guarantee is issued, it would only cover the liability of Directline and not liability of Peter, hereof.
5. Further, and perhaps more importantly, is that the proposed guarantee to Directline is valid for 12 month from 6th November, 2020. It follows that such a guarantee will be invalid up to 5th November, 2021, that is tomorrow.
6. It is because of the above finding that I will order Peter to provide an alternative security for the due performance of the decree of the Limuru Magistrate’s Court.
DISPOSITION
7. In respect to the issue left by the parties to the court to determine in respect to the chamber summons dated 16th August, 2021, I make the following orders:-
(a) There shall be stay of execution of the SPMCC Limuru No. 48 of 2018 on condition that the appellant does provide the decretal sum within 30 days from today to be deposited into an interest earning account in the joint names of both law firms of the parties hereof.
(b) The costs of the chamber summons dated 16th August, 2021 shall abide with the outcome of this appeal.
RULING DATED and DELIVERED at KIAMBU this 4th day of NOVEMBER, 2021.
MARY KASANGO
JUDGE
Coram:
Court Assistant: Nancy
For the Appellant: No appearance
For the Respondent: Mr. Mwangi
COURT
Ruling delivered virtually.
MARY KASANGO
JUDGE