[2020] KEHC 595 (KLR)

REPUBLIC OF KENYA

IN THE HIGH COURT OF KENYA AT NAKURU

CIVIL CASE NO. 2 OF 2017 (O.S)

IN THE MATTER OF AN APPLICATION FOR ORDERSSEEKING THE DELIVERY OF A CASH ACCOUNT

WANYORORO FARMERS CO. LTD...................................PLAINTIFF/RESPONDENT

VERSUS

EZEKIEL EVANS WAFULA SIMIYU T/AWAFULA,

WASHIKE & ASSOCIATES ADVOCATES..........................DEFENDANT/APPLICANT

RULING

1. The Applicant filed an application under certificate of urgency dated 28th May 2020 seeking for orders: -

a. spent

b. spent

c. spent

d. That pending the hearing and determination of this application inter-parties the honourable court be pleased to order a stay of execution of its orders to its judgment dated 30th April 2020 and delivered via electronic means (e-mail) on 1st May 2020;

e. That pending the hearing and determination of this application the honourable court be pleased to order 60 days stay of execution of its orders to its judgment dated 30th April 2020 and delivered via electronic means (e-mail) on 1st May 2020;

f. That the costs of this application abide in the cause.

2. The application is supported by an affidavit sworn by Ezekiel Wafula, the applicant herein. Grounds on the face of the application are that judgement was delivered on 1st May 2020 in favour of the Plaintiff/Respondent against the Defendant/Applicant for Kshs. 84,196,042. 15/=, interest at Court’s rate from the date of filing the suit and costs of the suit.

3. The Defendant/Applicant being aggrieved by the orders and decree of the Court intends to appeal against it and has filed a Notice of Appeal in the Court of Appeal; that the appellant has requested for typed proceeding but due to Covid 19 pandemic the same has not been made possible.

4. That the Plaintiff/Respondent may proceed to execute if the order is not granted and the Defendant/Applicant may suffer prejudice and the appeal filed be rendered nugatory if the same is successful; that the Defendant have an arguable appeal and the application was brought without unreasonable delay.

5. The Defendant seeks stay of execution for 60 days to allow him an opportunity to file an appropriate application for stay in the Court of Appeal as at the time of filing the application the Court of Appeal registry was closed. The Defendant is apprehensive if the Plaintiff executes, he will not be able to reinstate the Defendant/Applicant if the appeal succeeds.

6. The applicant states that the judgment was sent via their email without any notice that the judgment was to be delivered which they term it was against the practice’s rules, they requested for the matter to be mentioned in order to make an application for stay to no avail thus prompting the current application.

7. In response, the respondent filed a replying affidavit sworn by Eliud Ndung’u Thuo on 22nd June 2020, a director and a secretary of the Plaintiff. He stated that their advocate is yet to be served with the Notice of Appeal filed by the Defendant/Applicant. He averred that they were served with the letter requesting for the certified copies of the proceedings and they wrote to the Defendant/Applicant demanding for the settlement of the decretal sum but they are yet to receive a reply.

8. The Respondent opposed grant of stay and stated that the amount the Defendant is being ordered to pay, is the Plaintiff/ Respondent property being a decretal sum awarded to them in a suit. He averred that the Plaintiff/Respondent is a limited liability company with over 4000 shareholders and therefore have enough resources to pay the Defendant/Applicant in the event his appeal is successful.

9. Further the Respondent aver that the Defendant/Applicant has not offered security for due performance of the decree of the Court as required by law and in any event should the Court be inclined to grant stay of execution, the same should be on condition that the entire decretal sum be deposited in a joint interest earning account or alternatively the entire decretal sum be deposited in Court.

DEFENDANT/APPLICANT’S SUBMISSIONS

10. The Appellant submitted that the delay was occasioned while trying to electronically file a Notice of Appeal in the Court of Appeal and after several follow up on the same decided to file a hardcopy of the same though it is yet to be sealed by the deputy registrar.

11. The Applicant relied on the case of Butt v Rent Restriction Tribunalwhere the Court held that the power to grant or refuse to grant a stay is purely based on the discretion of the Court which should be exercised in a way not to prevent or render an appeal nugatory; that each case should be considered on its special circumstances and unique requirements and finally, a Court can order security on its own motion.

12. The applicant further submits that the case involves a huge amount of money Kshs. 84,196,042. 15/= where if the Applicant is required to pay up the full amount, as an advocate, he will find himself in a very tight situation. He submitted that if the Plaintiff is allowed to execute, the applicant will be adjudicated bankrupt and this may lead to revocation of his practicing license and suspension of his career as an advocate; this will tarnish his name and reputation.

PLAINTIFF/RESPONDENT’S SUBMISSIONS

13. The Respondent submitted that conditions for stay pending appeal are set out in order 42 Rule 2 and Rule 6(1) of the Civil Procedure Rules as follows: -

a. That unless the stay of execution is granted, he will suffer substantial loss;

b. That the application was filed without unreasonable delay; and

c. Willingness to offer security.

14. The Respondent submitted that the judgment that the Applicant seeks to stay was delivered on 30th April 2020 and sent to parties on 1st May 2020; and the Applicant’s application seeking for stay of execution is dated 28th May 2020, it was filed 27 days later without any explanation on the delay. The Respondent submitted that the delay was unreasonable.

15. The Respondent submitted that Defendant/Applicant did not state the kind of loss and suffering he would undergo if the order of stay was not granted. On the submission that the Applicant has filed an appeal, the Respondent submitted that the mere intention of the Applicant that he wants to appeal is not a basis for granting stay. The Respondent submitted that Applicant has not deponed on his ability to pay the decretal sum but only stated that the Respondent will not be able to refund the sum in the event his appeal is successful; and submitted the Court should order the decretal sum be deposited in a joint interest earning account or deposited in Court.

16. The Respondent further submitted that the applicant did not offer any security as security is a mark of good faith that the application for stay is just meant to deny the Respondent the fruits of his judgment. The Respondent further submitted that any stay should not prejudice the right of a party upon whom judgment has been entered in his/her favour; that the Plaintiff/Respondent should not be curtailed to enjoy the fruits of his judgment. They urged the Court to dismiss the application.

ANALYSIS AND DETERMINATION

17. This is an application that invokes the discretion of the Court, which discretion must be exercised judiciously. The main objective of stay of execution is to preserve the subject matter in the suit and give the parties an equal playing field in the appellant court.

18. Order 42 Rule 6(1) of the Civil Procedure Rules, 2010 empowers this Court to stay execution, either of its judgement or that of a Court whose decision is being appealed from, pending appeal. The conditions to be met before stay is granted are provided by Rule 6(2) as follows:

“No order for stay of execution shall be made under subrule (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.”

19. The Court of Appeal in Butt v Rent Restriction Tribunal [1982] KLR 417 gave guidance on how a court should exercise discretion and held that: -

“1. 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.

2. 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.

3. 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.

4. 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.

5. 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.”

20. The above analysis captures the applicable principles in deciding whether or not to grant a stay of execution pending appeal.

21. In the Court of Appeal decision in the case of National Industrial Credit Bank Limited vAquinas Francis Wasike & another (UR) as cited by the High Court in Stanley Karanja Wainaina & another v Ridon Anyangu Mutubwa [2016] eKLR it was held 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 an applicant to know in detail the resources owned by a respondent or lack of them. Once an applicant expresses 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.”

22. In the case at hand, the Respondent has not disclosed any source of income that they would use to refund the Applicant the decretal amount should the appeal succeed. The Respondent stated that they are over 4000 shareholders in the company and would raise the money however they did not show how the same would be raised. The Applicant submits that the amount at hand is a huge sum of money which would cause him to be declared bankrupt if the Respondent was to execute, this would substantially cause him to loss his professional career.

23. It is thus my opinion that the Applicant has thus established that they will suffer substantial loss if the intended execution is not stayed. It also follows that if the Respondent executes the judgement and the Applicant’s appeal succeeds, then not only will the Applicant suffer substantial loss but the appeal will also be rendered nugatory.

24. On unreasonable delay, the application was filed on 28th May 2020 when the judgment was delivered and sent to the parties on 30th April 2020 and 1st May 2020. The applicant went on to file a Notice of Appeal in the Court of Appeal, he only filled the present application for stay of execution when the Respondent demanded for payment of the decretal sum. It is my view that the Applicant was ready to and willing to pursue the appeal as he was dissatisfied with the judgement delivered by the Court. It is therefore my finding that the application was filed without unreasonable delay since it was filed 27 days after delivery of judgement.

25. The applicant did not furnish the Court with the grounds he intends to appeal on so that the Court can determine if the applicant has raised any arguable appeal that would warrant a stay of execution.

26. The Applicant did not indicate any readiness to furnish security for the due performance of the decree. However, the Court has the powers to order the said security to be deposited. The Respondent submits if the Court is inclined to stay the execution it should grant on condition that the security should be either deposited in Court or in a joint interest earning account.

27. I am aware that the judgment involves a huge amount and taking into account this was money paid to the Applicant for onward transmission to the Respondent it is prudent that part of the decretal sum be deposited in a joint interest earning account held by the Applicant and Respondent’s advocates.

28. FINAL ORDERS

1. Stay of execution do issue on condition that half the decretal amount is deposited in a joint interest earning account in the names of bot Advocates herein

2. Deposit within 45 days from the date of this ruling

3. Costs of this application to abide by the outcome of the appeal

Ruling dated, signed and delivered via zoom at Nakuru

This 3rd day of December, 2020

……………………

RACHEL NGETICH

JUDGE

In the presence of:

Jenifer - Court Assistant

Mr. Washika counsel for Plaintiff/Respondent

Ms. Wangare counsel for Defendant/Applicant