https://new.kenyalaw.org/akn/ke/judgment/keca/2026/1069

Texas Alarms (K) Ltd v BOS Shipping (East Africa) Limited & another (Civil Application E094 of 2025) [2026] KECA 1069 (KLR) (29 May 2026) (Ruling) Neutral citation: [2026] KECA 1069 (KLR) Republic of Kenya In the Court of Appeal at Mombasa Civil Application E094 of 2025 AK Murgor, KI Laibuta & GW Ngenye-Macharia, JJA May 29, 2026 Between Texas Alarms (K) Limited Applicant and BOS Shipping (East Africa) Limited 1st Respondent Abdullah Abdul Rehmen 2nd Respondent (An application for stay of execution pending lodging, hearing and determination of an intended appeal from the Judgement of the Environment and Land Court at Mombasa (Kibunja, J.) delivered on 2nd July 2025 in ELC Case No. 121 of 2019) Ruling 1.The 1st respondent, BOS Shipping (East Africa) Limited filed suit before the Environment and Land Court (the ELC) at Mombasa, being ELC Case No. 121 of 2019, alleging to be the registered proprietor of MN/1/890 CR No. 9291/1 (the suit property). The 1st respondent’s case was that the applicant, Texas Alarms (K) Limited, posted security guards on the suit property under the instructions of the 2nd respondent, Abdullah Abdul Rehmen, alleging that the property belonged to it. 2.The 1st respondent prayed for: a declaration that the suit property stands on the correct and lawful position; a mandatory injunction compelling the removal and/or eviction of the applicant and the 2nd respondent from the suit property; a mandatory and permanent injunction restraining the applicant and the 2nd respondent, whether by themselves, servants and/or agents whatsoever, from interfering with the 1st respondent’s property and/or access to the suit property; special and general damages; costs of the suit; and any other relief the court deemed fit to grant. 3.In a joint Statement of Defence dated 28th October 2019, the 2nd respondent stated that he acquired the suit property by way of adverse possession; that the applicant was in lawful occupation thereof; and that it (the applicant) was providing security on his instructions. 4.By a judgement delivered on 22nd November 2022, the learned Judge (Kibunja, J.) held that the 1st respondent proved its case on a balance of probabilities and granted the declaratory and injunctive orders sought in the plaint; general damages for trespass of Kshs.1,000,000; and costs of the suit at court rates until payment in full. 5.In a bid to recover the costs awarded, the 1st respondent filed a Party & Party Bill of Costs dated 24th April 2024 seeking payment of costs of Kshs.24,186,183.33. Part of the documents it produced to support the item on instruction fee was a valuation report dated 4th May 2017. The Taxing Master (Hon. Nyariki - DR) relied on the valuation report in making a finding as regards the value of the suit property, and consequently taxed the Bill at Kshs.4,108,666.67, and a Certificate of Taxation dated 21st June 2024 was accordingly issued. 6.Aggrieved, the applicant filed a reference through an Amended Chamber Summons dated 25th June 2024 and a Notice of Motion dated 17th July 2024 seeking orders: to nullify, set aside and expunge from record the Certificate of Costs issued on 21st June 2024; stay of approval of the decree, signing of the warrants and enforcement warrants of attachment and sale of the applicant’s movable properties, as well as stay of execution of the purported decree pending determination of the objection to the taxation of the Bill of Costs by the applicant; that the ELC do hear and determine the applicant’s objection to the decision and ruling of the Taxing Officer on the taxation of the 1st respondent’s Party & Party Bill of Costs dated 24th April 2024; a fresh assessment of the applicant’s Party & Party Bill of Costs dated 24th April 2024; and that the 1st respondent be ordered to pay costs of the reference. 7.The learned Judge found the applicant’s Amended Chamber Summons to be devoid of merit and dismissed it with costs. The learned Judge observed that the applicant had failed to adhere to the orders issued on 26th June 2024 requiring it to deposit the decretal sum in a joint interest earning account pending determination of the reference. Conversely, the 1st respondent’s Notice of Motion seeking to set aside the stay of execution orders of 26th June 2024 was allowed as prayed. 8.The applicant is now before this Court with a Notice of Motion dated 3rd November 2025 brought under rule 5 (2) (b) of this Court’s Rules for orders:“i.That this Court be pleased to issue an order of stay of execution of the taxed costs in ELC Case No. 121 of 2019, Mombasa contained in the Certificate of Costs issued on the 21st June 2024, together with interest accruing thereon pending the lodging, hearing and determination of an intended appeal from the ruling delivered by the Superior Court on the 2nd July 2025 in Environment and Land Case No. 121 of 2019, Mombasa.ii.That costs of this application be provided for.” 9.The application is premised on the grounds on its face, and by an undated affidavit sworn by Bernard Odhiambo Aduda, the applicant’s Group Human Resource Manager, and a supplementary affidavit also sworn by Bernard Odhiambo Aduda on 15th November 2025. In the supporting affidavit, it was deposed that the taxed costs of Kshs.4,108,667 was deposited in a joint interest earning account in the names of the advocates for the applicant and the 1st respondent at the Bank of Baroda, Nyali Branch, which the applicant is willing to offer as security pending determination of the intended appeal; that the decretal sum of Kshs.1,000,000 was settled using two separate cheques dated 29th June 2024 in the amounts of Kshs.535,000 each; that the only issue pending in appeal is the taxed costs; and that failure to grant the stay orders sought will occasion substantial loss and render the intended appeal nugatory. 10.The 1st respondent opposed the application vide a replying affidavit sworn on 8th November 2025 by Willis Oluga, its counsel in conduct of the matter on its behalf. Counsel deposed that the intended appeal is not arguable and will not be rendered nugatory since the 1st respondent is capable of refunding the amount of taxed costs should the appeal be successful. Mr. Oluga challenged the assertion that there is a subsisting fixed interest earning account for the reason that it (the account) matured on 28th June 2025 and, as such, there is no interest earned after due maturity date; that, on this front, the Court cannot exercise its discretion in favour of the applicant; and that, while the taxed costs continued to accrue interest, then standing at a total of Kshs.4,731,157.81 as at 7th August 2025, the amount in the joint account remained static. Counsel urged us to dismiss the application with costs. 11.In the rejoinder supplementary affidavit, the applicant stated that, contrary to the assertion by the 1st respondent’s counsel, the money in the joint account continued to earn interest as its maturity date was 25th November 2025 and that, as at the date of the rejoinder, the current balance stood at Kshs. 4,692,081.35; that, while the 1st respondent claimed to be an active company rendering engineering and construction services, no statement of accounts had been produced to support the existence of the alleged business or as to its soundness. 12.In a further rebuttal, the 1st respondent filed a further affidavit dated 11th December 2025 also sworn by learned counsel Mr. Oluga. He deposed that the applicant filed an application dated 10th November 2025 in the ELC seeking: to stay the warrant of attachment and sale of its properties; and that the said warrants be declared illegal and unlawful and, as a consequence, be discharged and/or set aside; that the applicant hinged its application on assertion that the 1st respondent did not obtain a Notice to Show Cause as required under Order 22 rule 18 of the Civil Procedure Rules, one year having lapsed after the decree was issued; and that the application was placed before the Hon. Deputy Registrar, Hon. Yalwala who, after hearing the parties, issued interim orders of stay against execution proceedings pending delivery of ruling on 17th December 2025. It is noteworthy that the said ruling had not been delivered as at the date of the further affidavit. 13.At the hearing of this application on 16th December 2025, learned counsel Mr. Tindika appeared for the applicant while learned counsel Mr. Oluga was present for the 1st respondent. There was no appearance by the 2nd respondent who the Court was informed had not been participating in the proceedings. The Court was nonetheless satisfied that he was properly served with a hearing notice. On application by counsel for the applicant, the Motion against the 2nd respondent was marked as withdrawn. Both counsel highlighted their respective parties’ written submissions, which we have duly considered but shall summarise the salient points as hereunder. 14.The applicant’s written submissions are dated 17th November 2025. As to whether the intended appeal is arguable, counsel highlighted that one of the arguable grounds included the question as to whether it was proper for the valuation report to be introduced at the taxation stage while it was neither pleaded nor produced in evidence, and that it was also not subject to the issues for determination in the judgment; and that, in any event, the ELC never determined the value of the subject matter to warrant the Taxing Master to premise the taxed costs on the value of the suit property. In support of this limb, reliance was placed on the decision of the Supreme Court in Airports Authority vs. Otieno Ragot & Co. Advocates (Petition E011 of 2023) (2024) KESC 44 (KLR); and of this Court in Kamunyori & Company Advocates vs. Development Bank of Kenya Limited (2015) KECA 595 (KLR) for the proposition that the subject matter in a suit has to be ascertained in a dispute. 15.As to whether the appeal will be rendered nugatory absent stay, it was submitted that the taxed costs were already deposited in a joint account which the 1st respondent’s counsel wants released to him; that if the order of stay is not granted, it will be difficult to recover the money from the 1st respondent’s counsel who is not a party to these proceedings; that the suit property in question was charged to the bank 9 years ago to secure a facility of Kshs.150,000,000, and that it had not been demonstrated that the sum has been paid; that, therefore, the proposed security is not viable; and that the matter of the appeal can only be preserved if the taxed costs already deposited in the joint account remain in the bank pending determination of the appeal. To support this argument, the applicant referred to the decision of this Court in Housing Finance Company of Kenya vs. Sharok Kher Mohamed Ali Hirji & Another (2015) KECA 447 (KLR) where this Court held that, where a money decree is involved, a stay of execution should be granted if it is demonstrated that undue hardship will be caused to an applicant. 16.On behalf of the respondents, Mr. Oluga highlighted the submissions dated 11th December 2025. He first pointed out that the affidavit in support of the application offends the provisions of Section 5 of the Oaths and Statutory Declarations Act, Cap 15, which makes it mandatory that the Commissioner for Oaths indicates on an affidavit the date when the oath was taken; that the affidavit was rendered fatally defective; and that, on account of the defect, the motion should be deemed as unsupported by evidence. To buttress this argument, counsel made reference to the persuasive decision of the Employment and Labour Relations Court in Charles Muturi Mwangi vs. Invesco Assurance (2015) KEELRC 832 (KLR) in urging us not to consider the contents of the supporting affidavit. 17.As to whether the intended appeal is arguable, counsel submitted that this is a second appeal, and that, from the draft memorandum of appeal and the facts pleaded in the application, the gravamen issue is that taxation was based on an erroneous value of the subject matter of the suit property; and that this ground constitutes a question of fact and not of law, and yet, on second appeal, this Court is only obligated to determine matters of law only. The decision of this Court in Rael Mwonjia Gichunge & Another vs. Faud Mohammed Abdulla (2014) KECA 754 (KLR) was relied upon for the submission that, on the basis that no issue of law falls for consideration, the intended appeal is not arguable. 18.On the second limb, being that the intended appeal will be rendered nugatory absent stay, counsel refuted the allegations that his client was impecunious, and that it would be unable to refund the money deposited as security if the appeal were to be successful; that the valuation report indicated that the suit property was worth Kshs.200,000,000, and that it continued to appreciate in value against the taxed costs of Kshs.4,000,000; that the suit property was currently leased out at a monthly rent of Kshs.125,000; and that, as such, his client was not a man of straw and was capable of refunding the money. The decision in Kenya Shell Limited vs. Benjamin Karuga Kibiru & Another (1986) KECA 94 (KLR) was cited where it was held that an applicant seeking stay of execution is obligated to demonstrate the damage he/she would suffer if stay orders are not granted; and that, in this instance, the applicant had failed to satisfy this principle. 19.It was also submitted that there was no positive order capable of being stayed since the orders in issue dismissed the applicant’s application and vacated the order of stay of execution. 20.Mr. Oluga brought to our attention the fact that there were separate proceedings ongoing before the ELC on the same subject of execution, and that, should the ruling in those proceedings favour the applicant, there is a possibility that execution proceedings will begin afresh; and that, therefore, should this Court grant stay, it will prejudice the proceedings before the ELC. We were urged to dismiss the application with costs. 21.We have considered the Notice of Motion, the supporting affidavit, the replying affidavit, submissions of both parties and the law. The application before us is hinged on rule 5(2)(b) of this Court’s Rules, which provides that:Subject to sub-rule (1), the institution of an appeal shall not operate to suspend any sentence or to stay execution, but the court may:-(a)……;(b)in any civil proceedings, where a notice of appeal has been lodged in accordance with rule 77, order a stay of execution, an injunction or a stay of any further proceedings on such terms as the Court may think just. 22.In our view, this being a rule 5(2)(b) application, the application will turn upon consideration of the issues as established by this Court in the case of Stanley Kangethe Kinyanjui vs. Tony Ketter & 5 Others [2013] eKLR. Firstly, an applicant has to satisfy that he/she has an arguable appeal. However, this is not to say that it must be one that will necessarily succeed, but suffice to state that it is an appeal that is not frivolous. Secondly, an applicant has to demonstrate that, unless an order of stay is granted, the appeal or intended appeal would be rendered nugatory. See also Githunguri vs. Jimba Credit Corporation Ltd. (No. 2) (1988) KLR 838. 23.On the first limb, the threshold for determining whether an appeal is arguable is low since a single bona fide ground of appeal worthy of consideration by a full bench is sufficient to conclude that an appeal is arguable. Our perusal of the draft memorandum of appeal reveals that the applicant intends to challenge the fact that the subject matter of the suit property was ascertained only for the purposes of taxation, and the fact that the valuation report which was neither pleaded nor produced in evidence was presented for the first time in the taxation proceedings, which deprived the applicant of the opportunity to challenge it. To us, this is an arguable ground worthy of consideration by a full bench of this Court. We therefore find and hold that the intended appeal is arguable. 24.As to whether the appeal will be rendered nugatory absent stay, we take to mind that the issue in contention is a money decree. This Court in National Industrial Credit Bank Ltd vs. Aquinas Francis Wasike & Another (2006) KECA 333 (KLR) had this to say where a money decree is involved:“This Court has said before and it would bear repeating that while the legal duty is on an applicant to prove the allegation that an appeal would be rendered nugatory because a respondent would be unable to pay back the decretal sum, it is unreasonable to expect such an applicant to know in detail the resources owned by a respondent or the lack of them. Once an applicant expresses a reasonable fear that a respondent would be unable to pay back the decretal sum, the evidential burden must then shift to the respondent to show what resources he has since that is a matter which is peculiarly within his knowledge — see for example section 112 the Evidence Act, Chapter 80 Laws of Kenya.” 25.The applicant already demonstrated that it has the financial capacity to satisfy the decree. The 1st respondent, on the other hand, stated that it has the financial capacity to refund the money by deposing to the fact that it receives rent from the suit property; and that the value of the suit property is currently over Kshs.200,000,000. In good faith, the applicant, in fulfilling the stay conditions granted in the ELC, caused the taxed costs of Kshs.4, 650,040.35 to be deposited in a joint interest earning account in the names of both counsel. This substantially satisfied the conditions that were given by the ELC for the stay to issue. 26.Balancing the interests of justice as well as the prejudice likely to be occasioned to either party, the scales of justice tilt towards having the monies remain in the escrow account until the appeal is heard and determined. Also to bear in mind is the fact that the execution proceedings are still ongoing in the ELC, and on the ground that the monies are held elsewhere, issuing a stay serves the interests of both parties as the money will remain in the joint account pending determination of the intended appeal. 27.In conclusion, and in view of the foregoing, we find that the applicant’s Notice of Motion dated 3rd November 2025 is meritorious and, accordingly, issue the following orders:a.That stay of execution be and is hereby issued in respect of the taxed costs contained in the Certificate of Costs issued on the 21st June 2024, together with interest accruing thereon pending the hearing and determination of the intended appeal against the ruling delivered by Kibunja, J. on 2nd July 2025 in ELC Case No. 121 of 2019.b.That the taxed costs shall continue to remain in the escrow account.c.Costs shall abide the outcome of the appeal. DATED AND DELIVERED AT MOMBASA THIS 29TH DAY OF MAY, 2026.A. K. MURGOR.................................JUDGE OF APPEALDR. K. I. LAIBUTA CArb, FCIArb..................................JUDGE OF APPEALG. W. NGENYE-MACHARIA.................................JUDGE OF APPEALI certify that this is the true copy of the originalSignedDEPUTY REGISTRAR