[2024] KEELRC 1968 (KLR)

Wachira v East African Portland Cement Company Limited (Employment and Labour Relations Cause 339 of 2019) [2024] KEELRC 1968 (KLR) (26 July 2024) (Ruling)

Neutral citation: [2024] KEELRC 1968 (KLR)

Republic of Kenya

In the Employment and Labour Relations Court at Nairobi

Employment and Labour Relations Cause 339 of 2019

AN Mwaure, J

July 26, 2024

Between

Peter Waigwa Wachira

Claimant

and

The East African Portland Cement Company Limited

Respondent

Ruling

1. The Respondent filed a Notice of Motion dated 19th March 2024 seeking the following orders THAT: -1. spent2. pending inter-parties hearing of this Application, this Honourable Court be pleased to issue an interim order of stay of execution of the Judgment delivered on 23rd February 2024 and the resultant decree herein.3. pending hearing and determination of this Application, this Honourable Court be pleased to issue an interim order of stay of execution of the Judgment delivered on 23rd February 2024 and the resultant decree herein.4. pending the hearing and final determination of the intended Appeal, this Honourable Court be pleased to issue an order of stay of execution of the Judgment delivered on 23rd February 2024 and the resultant decree herein.5. the Applicant be at liberty to apply for further orders and/or directions as this Honourable Court may deem fit and just to grant.6. the costs of this application do abide the outcome of the appeal.

Respondent/Applicant Case 2. The Respondent avers that vide the judgment delivered on 23/02/2024, the court awarded the Claimant a sum of Kshs 2,125,200 together with costs and interest until payment in full.

3. The Respondent avers that it is aggrieved with the whole judgment and intends to appeal. The 30 day stay granted to the Applicant on 23/03/2024 is about to lapse hence paving way for execution of the judgment and decree.

4. The Respondent avers that if stay of execution is not granted substantial loss may result to the Respondent once the said money is paid to the Claimant, it may not be recoverable.

5. The Respondent aver that the intended appeal has reasonable chance of success and if execution is carried out it will be rendered nugatory.

6. It’s the Respondent’s case that the application has not been brought with delay and it is willing to abide by any conditions the court may impose.

Claimant/ Respondent’s Case 7. In opposition to the application, the Claimant/Respondent filed a replying affidavit dated 2nd April 2024.

8. The Claimant avers that the application is in breach of Rule 77(1) of the Court of Appeal Rules as to date the Respondent is yet to serve him with the Notice of Appeal. There being no competent appeal, there no basis to grant the orders sought.

9. The Claimant avers that the application has been brought with ordinate delay and the Respondent has not explained the delay of close to a month.

10. It is the Claimant’s case that the Respondent has failed to sufficiently demonstrate what substantial loss it will suffer if the stay is not granted.

11. The Claimant avers that the Respondent’s belief that he will not be able to repay the decretal sum solely based on lack of knowledge as to his financial capability does not give rise to the presumption that he will be unable to repay the decretal sum.

12. The Claimant avers that the appeal cannot be rendered nugatory by a money decree being satisfied by payment where substantial loss has not been demonstrated.

13. The Claimant avers that the Respondent has not met the threshold for grant of stay.

14. It’s the Claimant’s case that since there is no evidence of substantial loss, the decree is a money decree, the Respondent should pay atleast half of the decretal amount and the balance to be held in an interest earning savings account held in joint names of both advocates on record.

Respondent/Applicant’s Submissions 15. The Respondent submitted that the appeal challenges the decision of this court delivered on 23/02/2024 which mandated the payment of Kshs. 2,125,200 to the Claimant coupled with interest until payment in full. The objective of the stay of execution proceedings is to prevent the Appellant from being left with a mere paper judgment should the appeal succeed.

16. The Respondent submitted that it has filed a draft memorandum of appeal, revealing the arguability of the appeal and its high chances of success. Without intervention of the court to halt the intended execution, the appeal risks being rendered nugatory.

17. The Respondent submitted that it anticipates that disbursing the decretal sum to the Claimant/Respondent might lead to inability to refund should the appeal succeed; which would expose it to significant hardship and jeopardize the essence of the Appeal.

18. It is the Respondent’s submission that it faces palpable risk of irreparable loss and prejudice if execution is allowed to proceed. The financial magnitude of Kshs. 2,125,200 inclusive of costs and interest is not a nominal figure but a substantial amount that once lost cannot be easily recovered.

19. The Respondent submitted that the Claimant has not provided substantive evidence regarding his ability to refund the decretal sum. The nature of decree being monetary amplifies the gravity of the situation. Granting the stay aligns with overarching principles of justice and equity ensuring that the appeal process remains meaningful.

20. It’s the Respondent’s submission that the chronology of events to the expeditious nature of the Application. Following the delivery of the judgment on 23/02/2024, it swiftly filed the application for stay orders on 19/03/2024 accompanied by a Certificate of Urgency filed on the same day. Further, the Notice of Appeal dated 01/03/2024 was filed and served.

21. The Respondent submitted that in the pursuit of an order for stay of execution, the Applicant is obligated to provide a deposit as directed by the court, which is discretional. In light of the prevailing circumstances in this case, the Applicant has demonstrated willingness to furnish security by depositing 50% of the principal amount in court.

Claimant/Respondent’s Submissions 22. The Claimant submitted that there is no competent appeal to warrant exercise of the jurisdiction under Order 41 Rule 6 (2) of the Civil Procedure Rules. The Respondent/Applicant failed to comply with the mandatory procedure of instituting an appeal before the Court of Appeal.

23. It’s the Claimant’s submission that he and/or his advocates have not been served with the notice of appeal; although the Respondent/Applicant deposed that the notice was served via a email on 04/03/2024, it did not avail any evidence of such service. Since the Claimant disputed service, it is incumbent upon the Respondent to demonstrate such service.

24. The Claimant submitted that there being no evidence of service, it is clear that the notice of appeal was not served

25. The Claimant submitted that the Respondent/Applicant’s explanation of delay that the application was filed within the initial stay of execution window the court had granted. This explanation is not sufficient as it was not reasonable to wait for the lapse of the stay period granted since it was clear it was aggrieved by the judgment.

26. The Claimant submitted that the Respondent/Applicant has not sufficiently shown the substantial loss that will result if the stay is not granted. It is not clear how the Respondent/Applicant knows that the Claimant/Respondent cannot refund the decretal sum without disclosing the source and/or basis of the information. Further, the burden of proving the ability to refund cannot shift to the Claimant as the Respondent failed to establish reasonable facts to shift the burden.

27. The Claimant submitted that the Applicant is required to furnish security for due performance of the decree which the Respondent/Applicant has offered to deposit 50% of the decretal sum.

Analysis and Determination 28. The main issue for this court’s determination is the Applicant’s application for stay of execution pending the hearing and determination of the appeal.

29. In the case of Francis K. Chabari & anotherv Mwarania Gaichura Kairubi [2022] eKLR the court held:“Stay of execution pending appeal is a discretionary power bestowed upon this court by the law. The Court of Appeal in the case of Butt –vs- Rent Restriction Tribunal {1982} KLR 417 gave guidance on how a court should exercise the said discretion and h“ The power of the Court to grant or refuse an application for a stay of execution is a discretionary power. The discretion should be exercised in such a way as not to prevent an appeal.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 that appeal Court reverse the Judge’s discretion.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.The Court in exercising its discretion whether to grant [or] refuse an application for stay will consider the special circumstances of the case and unique requirements. The special circumstances in this case were that there was a large amount of rent in dispute and the appellant had an undoubted right of appeal.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 for costs as ordered will cause the order for stay of execution to lapse.”The principles upon which stay of execution pending appeal can be allowed are now well settled from the authorities from this court and from the superior courts. Generally, stay of execution is provided for under Order 42 Rule 6 of the Civil Procedure Rules. Sub-rule 1 gives the court discretionary powers to stay execution and provides as follows:“6. (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 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 undue 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.As such, for an applicant to move the court into exercising the said discretion in his favour, the applicant must satisfy the court that substantial loss may result to him unless the stay is granted, that the application has been made without undue delay and that the applicant has given security or is ready to give security for due performance of the decree.”

30. The court proceeds to analyse the conditions prerequisite to granting of stay Orders as set out by order 42 rule 6 of the Civil Procedure Rules.

Undue delay 31. The application herein was filed timeously as the judgment was delivered on 24th February 2024 whereas the instant application was filed 19th March 2024.

Substantial loss 32. The court in Biiy v Kenya National Union of Nurses (Cause 13 of 2020) [2022] KEELRC 3864 (KLR) (27 July 2022) (Ruling) held:“In the case of National Industrial Credit Bank Ltd v Aquinas Francis Wasike and Another (2006) eKLR the Court of Appeal stated that:“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 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”.The above principle was further stated in ABNAmro Bank v Lemond Foods Limited Civil Application No.15 of 2002 where the Court of Appeal held that:“The legal burden still remains on the applicant, but the evidential burden would then have shifted to the respondent to show that he would be in a position to refund the decretal sum if it is paid out to him and the pending appeal was to succeed. The evidential burden would be very easy for the respondent to discharge. He can simply show what assets he has – such as land, cash in bank and so on.”Guided by the above binding precedents, it is my firm position the Applicant has a legal burden of proving that the claimant herein is a man of straw. The said burden is discharged by alleging that the claimant has no known means of repaying the decretal sum should the appeal succeed. In this case, the applicant has alleged as much and therefore the evidential burden of proof has shifted to the claimant to prove he has the means of refunding the decretal sum if the appeal succeeds after execution of the impugned decree.”

33. The Respondent/Applicant has clearly alleged that Claimant/Respondent is incapable of refunding the decretal sum if the same is released to him, therefore, the burden shifted to the Claimant/Respondent to prove that he has the financial capability to do so.

34. The Claimant/Respondent has not made any effort to prove that he is capable of refunding the decretal sum if the same is released to him and the intended appeal is successful.

35. Further the applicant has annexed a notice of appeal dated 1st March 2024 and so is evident the applicant is diligent in his preparation to appeal.

Security 36. In the case of Arun C Sharma v AshanaRaikundalia T/A Raikundalia& Co. Advocates & 2 Others (2014) eKLR held that: -“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 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.”

37. In the instant application, the Respondent/Applicant has expressed its willingness to furnish security by depositing 50% of the principal amount in court.

38. In view of the foregoing, the Respondent/Applicant has satisfied the conditions precedent for granting of stay of execution pending hearing and determination of the intended appeal and the same is granted as per the applicants application vide notice of motion dated 19th March 2024. In particular prayers 2,3 and 4 are granted.

39. However the court orders the applicant to deposit kshs 1,500,000 in a joint interest earning account in the names of the respective counsels within 45 days from this date and also file their appeal within that period and if the applicants fail to comply with the above two orders this stay of execution will lapse and the respondent will be at liberty to proceed with execution of the judgment.,

40. The costs of this application will be in the intended appeal.

Orders accordingly.

DATED, SIGNED AND DELIVERED VIRTUALLY IN NAIROBI THIS 26TH DAY OF JULY, 2024. ANNA NGIBUINI MWAUREJUDGEORDERIn view of the declaration of measures restricting Court operations due to the COVID-19 pandemic and in light of the directions issued by His Lordship, the Chief Justice on 15th March 2020 and subsequent directions of 21st April 2020 that judgments and rulings shall be delivered through video conferencing or via email. They have waived compliance with Order 21 Rule 1 of the Civil Procedure Rules, which requires that all judgments and rulings be pronounced in open Court. In permitting this course, this Court has been guided by Article 159(2)(d) of the Constitution which requires the Court to eschew undue technicalities in delivering justice, the right of access to justice guaranteed to every person under Article 48 of the Constitution and the provisions of Section 1B of the Procedure Act (Chapter 21 of the Laws of Kenya) which impose on this Court the duty of the Court, inter alia, to use suitable technology to enhance the overriding objective which is to facilitate just, expeditious, proportionate and affordable resolution of civil disputes.A signed copy will be availed to each party upon payment of Court fees.ANNA NGIBUINI MWAUREJUDGE