[2023] KEHC 25155 (KLR)

Platinum Credit Limited & another v Kariuki (Commercial Appeal E140 of 2022) [2023] KEHC 25155 (KLR) (Commercial and Tax) (10 November 2023) (Ruling)

Neutral citation: [2023] KEHC 25155 (KLR)

Republic of Kenya

In the High Court at Nairobi (Milimani Commercial Courts Commercial and Tax Division)

Commercial and Tax

Commercial Appeal E140 of 2022

FG Mugambi, J

November 10, 2023

Between

Platinum Credit Limited

1st Appellant

Antique Auctions Agencies

2nd Appellant

and

Martin Ndegwa Kariuki

Respondent

Ruling

Background 1. This ruling determines the application dated 17th October, 2022 which seeks orders for stay of execution of the default judgement entered by the Honourable Resident Magistrate/Adjudicator B.J. Ofisi (RM) in Milimani SCCC No. E673 of 2022 pending the hearing and determination of this appeal. It also seeks to set aside the default judgement entered on 20th July 2022. The application was premised on the grounds on the face of it and supported by the affidavit sworn by Richard Simbala, the Legal Officer of the 1st appellant on 17th October 2022. The applicants also filed written submissions dated 21st April 2023.

2. The applicant states that in the default judgment delivered on 20th July 2022, the court issued a permanent injunction to the respondent against the applicants from interfering, alienating, selling, impounding, transferring the respondent’s motor vehicle registration number KCA 993C (the vehicle). The Court further ordered the release of the logbook fully to the respondent.

3. According to the applicant, the respondent is in arrears of Kshs. 165,633. 43 and if the log book being the collateral of the loan is released to the respondent, he shall sell the motor vehicle rendering the appeal nugatory. The applicants confirm that they are willing to abide by any condition the court shall impose for the due performance of the decree.

4. It is not clear whether the respondent filed any replying affidavit as none is available on the CTS neither have I come across the same on the court file. The respondent did however file written submissions dated 22nd February 2023.

5. On the effect of this, I take queue from the case of Gideon Konchellah V Julius Lekakeny Ole Sunkuli & 2 Others, [2018] eKLR where the Supreme Court expressed that:“A Replying Affidavit is the principal document wherein a respondent’s reply is set and the basis of any submissions and/or List of Authorities that may be subsequently filed. Absence this foundational pleading, the Replying Affidavit, it follows that even the Written Submissions purportedly filed by the 1st Respondent on 17th August, 2018 are of no effect…”

6. The Court however clarified that:“It is not automatic that for any unopposed application, the Court will as a matter of cause grant the sought orders. It behooves the Court to be satisfied that prima facie, with no objection, the application is meritorious and the prayers may be granted. The Court is under a duty to look at the application and without making any inferences on facts point out any points of law, such as any jurisdictional impediment, which might render the application a non-starter.”

Analysis 7. I must in the circumstances consider the merits of the application before me. For the court to grant an application for stay of execution, it must be satisfied under Order 42 Rule 6 (2) of the Civil Procedure Rules that:“(i)Substantial loss may result if stay is not granted;(ii)That the application for stay was made without unreasonable delay; and(iii)That 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.”

8. On substantial loss, the applicant avers that unless stay of execution is granted, they stand to suffer substantial loss since the respondent’s source of income is unknown. The applicant further avers that the respondent is likely to sell the motor vehicle once he gets its logbook. Since the suit motor vehicle is the only collateral that the 1st appellant has against the loan it granted to the respondent, I am convinced that any such sale would render the appeal nugatory should the appeal succeed.

9. The applicants have attached to the application, a Memorandum of Appeal dated 30th October 2022 which sets out the grounds of the intended appeal. I find that the applicant has established prima facie grounds which require further interrogation as to whether there is an amount that is due and owing from the respondent. I say so particularly noting that the bank statement furnished by the applicant indicates that an amount of Kshs. 102,751/= was paid leaving a balance of Ksh. 165,000/=. This is against a SWIFT transfer confirmation produced by the respondent upon which he relies on to assert that the said loan was fully paid up.

10. On the second limb, the ruling dismissing the application to set aside default was delivered on 29th September 2022. The applicants lodged the appeal on 3rd October 2022 and file the present application on 17th October 2022. I am therefore satisfied that there has not been any delay by the applicants in filing the present application.

11. Finally, the applicants aver that they are ready, able and willing to provide such security for the due performance of such decree or order as may ultimately be binding on it as this Honourable Court may order, for the due performance of such decree or order as may ultimately be binding on it upon conclusion of the appeal.

Determination 12. The upshot of this is that the application dated 17th October, 2022 is allowed, on the following conditions:i.That the applicant shall deposit in Court the amount of Kshs. 50,000/= by way of security for costs, in the next 7 days in default of which the stay orders shall be deemed to have been automatically vacated and the respondent shall be at liberty to have the motor vehicle logbook released to them.ii.The Record of Appeal shall be filed and served within the next 7 days and the appeal shall be canvassed by way of skeleton submissions limited to 5 pages each.iii.Parties shall appear before the court on a date appointed, for further directions on the expedient determination of the appeal.

DATED, SIGNED AND DELIVERED IN NAIROBI THIS 10TH DAY OF NOVEMBER 2023. F. MUGAMBIJUDGE