[2020] KEHC 298 (KLR)

REPUBLIC OF KENYA

IN THE HIGH COURT OF KENYA AT MACHAKOS

Coram: D. K. Kemei - J

CIVIL APPEAL NO. 56 OF 2020

TRANSFLEET LTD..............................................APPLICANT

VERSUS

VASTU COMPANY LTD.................................RESPONDENT

RULING

1. The applicant vide application dated 7. 8.2020 is seeking for the following orders;

a) Spent

b) Spent

c) That pending the hearing and determination of Civil Appeal 56 of 2020 filed in Machakos High Court, there be a stay of execution of the ruling of the Honorable court sitting in Mavoko in CMCC 768/2019 delivered on the 24. 7.2020 together with the decree thereof.

d) That the costs of this application be provided for.

2. The application is brought under Article 163(3) of the Constitution, Order 42 Rule 6, Order 51 Rule 1 of the Civil Procedure Rules and sections 1A, 1B and 3A of the Civil Procedure Act.

3. The application is supported by the affidavit of James Mugoya Isabirye deponed on 7. 8.2020. The grounds upon which the application is premised are contained in the face of the notice of motion as well as the supporting affidavit and are:

a) That applicant filed an application in Mavoko CMCC 768/2019 seeking that the balance of the judgement sum be liquidated by monthly installments of Kshs 200,000/- as opposed to the consented amount of Kshs 1,000,000/-.

b) That the said application was declined vide ruling delivered on 24. 7.2020 and the applicant was aggrieved with the said decision hence filed a memorandum of appeal.

c) That the applicant was granted stay of execution of the 4th decretal amount that fell due on 15. 8.2020 and as such the applicant company is apprehensive that execution may issue.

d) That the memorandum of appeal was filed timeously on 5. 8.2020 and so is the instant application.

e) That unless execution is stayed, the applicant shall suffer irreparably as execution may issue any time.

f) That the applicant is willing to abide by any conditions that this court may impose as security for the appeal.

4. A Copy of the memorandum of appeal was annexed to the affidavit.

5. In the affidavit in reply deponed by Pramodrai Harji Patel dated 4. 9.2020, he averred that the applicant suppressed material facts. It was averred that there were lengthy discussions that culminated in the consent (PHP1) that was filed in court on 2. 12. 2019 in Mavoko CMCC 768/2019 and which was adopted as a court order. It was averred that it was mutually agreed that the applicant would pay amounts as indicated in the consent and that the applicant had only made three payments totaling to Kshs 3,000,000/- since 15. 12. 2019, the last one being paid on 20. 2.2020. It was pointed out that the applicant had not demonstrated inability to make the payments. The deponent averred upon advice from his counsel on record that a consent order could only be varied if proven that the same was obtained by fraud, collision, contrary to public policy, based on insufficient material fact and misapprehension or ignorance of material facts. It was averred that the applicant did not meet the threshold for grant of the orders sought and hence the court was urged to direct that the decretal amount of Kshs 4,600,878/- or any security be deposited by the applicant.

6. The application were canvassed vide submissions. Learned Counsel for the applicant in placing reliance on the case of Kenya Shell Ltd v Benjamin Karuga Kibiru & Others[1982-88] 1 KAR 1018 urged this court to take judicial notice of the fact that the Covid- 19 pandemic had effects on the applicant’s industry. It was submitted that the applicant shall suffer difficulties if it is not granted stay. It was submitted that the application was brought without unreasonable delay and that the applicant is willing to offer reasonable security that it proposed as Kshs 200,000/-.

7. Counsel for the respondent while appreciating the input of Order 42 Rule 6 of the Civil Procedure Rules submitted that the applicant had not demonstrated the substantial loss they would incur if the application is not allowed; that the proposal of Kshs 200,000/- as security was not reasonable in view of the outstanding decretal amount of Kshs 4,600,878/-. It was pointed out that the applicant failed to disclose the financial status of the applicant company so as to allow it not to deposit the decretal amount; reliance was placed on the case of Burken Enterprises Ltd v Paul Ngaru (2015) eKLR. The court was urged to dismiss the application with costs.

8. I have considered the application and the issue for determination is whether the orders sought in the application may be granted. In determining such application, the court will be guided by the following considerations- :

1) Whether the application has been brought without unreasonable delay;

(2) Whether the Court is satisfied that substantial loss would occur unless stay is granted; and

(3) On being convinced that stay is deserved, the court will ask the Applicant to furnish such security as shall be sufficient to satisfy any decree that might ultimately be binding on the Applicant.

9. Order 42 Rule 6 of the Civil Procedure Rules provides for stay of execution pending appeal and it sets out the conditions to be met by an Applicant in order to be entitled to an order for stay are laid out in that Rule in the following terms:

6. (1) No appeal or second appeal shall operate as a stay of execution or proceedings under a decree or order appealed from except appeal case of 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 order 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 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.

10. I have seen the memorandum of appeal and I agree that the applicant has every right to be heard in this court on appeal. The application has been filed timeously and that there are persuasive grounds in favor of the application.

11. On the element of substantial loss I have taken note that there was a monetary decree that was as a result of a consent that was adopted in the court. In the case of Kenya Shell Limited v Benjamin Karuga Kibiru & Ruth Wairimu Karuga (1982-1988) 1 KAR 1018, it was stated that:-

“It is usually a good rule to see if Order 41 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.”

12. In Kakamega Paper Converters Limited v Mohanlal Arora & 4 others [2011] eKLR, Justice Kimondo stated that “The decisions in Ujagar Singh vs Runda Coffee Estates Ltd [1960] E.A 263 and Kenya Shell Ltd vs Benjamin KarugaKibiru & Ruth Wairimu Karuga [1982 – 1988] 1 KAR 1018 are ample authority for the proposition that an appeal will not be rendered nugatory in monetary decree if payment is made.”

13. In the Kenya Shell case, Justice Hancox stated that;

“It is not sufficient by merely stating that the sum of Shs 20,380. 00 is a lot of money and the applicant would suffer loss if the money is paid. What sort of loss would this be? In an application of this nature, the applicant should show the damages it would suffer if the order for stay is not granted. By granting a stay would mean that status quo should remain as it were before judgment. What assurance can there be of appeal succeeding? On the other hand, granting the stay would be denying a successful litigant of the fruits of his judgment. The applicant has not given to court sufficient materials to enable it to exercise its discretion in granting the order of stay.”

14. In the case of Kenya Hotel Properties Limited v Willesden Investments Limited [2007] eKLR,the Learned Justices of Appeal rendered themselves thus;

“Would the success of the intended appeal, if it succeeds, at all be rendered nugatory if this application is refused at this juncture? That is the next matter for us to consider. The decree is a money decree and normally the courts have felt that the success of the appeal would not be rendered nugatory if the decree is a money decree so long as the court ascertains that the respondent is not a “man of straw” but is a person who, on the success of the appeal, would be able to repay the decretal amount plus any interest to the applicant. However, with time, it became necessary to put certain riders to that legal position as it became obvious that in certain cases, undue hardship would be caused to the applicants if stay is refused purely on grounds that the decree is a money decree.”

15. Guided by the above authorities, and considering the evidence on record vide the affidavit in support of the application as well as the replying affidavit I am unable to see what substantial loss the applicant will suffer if the stay order is not granted. In any event the money claimed can be refunded if the appeal is successful; the intended appeal would not be rendered nugatory if the order sought is not granted. There is no evidence that the respondent will not be in a position to refund the money in the event the appeal succeeds. I am not convinced that stay is deserved in view of the fact that no attempt has been made to set aside the consent entered into by the parties. I am also not inclined to consider the invitation to make a finding on security for costs.

16. In view of the foregone, I find no merit in the appellant’s application dated 7. 8.2020. The same is dismissed with costs.

It is so ordered.

Dated and delivered at Machakos this 2nd day of December 2020.

D. K. Kemei

Judge