AAR Insurance Kenya Limited v Paul Mutinda Musembi & [2018] KEHC 8308 (KLR)

REPUBLIC OF KENYA

IN THE HIGH COURT OF KENYA

AT NAIROBI

CIVIL APPEAL NO. 481 OF 2017

AAR INSURANCE KENYA LIMITED..........................APPELLANT

VERSUS

PAUL MUTINDA MUSEMBI......................................RESPODNENT

COUNTY GOVERNEMT OF MAKUENI ....INTERESTED PARTY

Being an application for a stay of orders of the Chief Magistrate pending the lodging,

hearing and determination of an intended Appeal from the ruling of the

Hon. ChiefMagistrate Mrs. E.A. Nyaloti delivered on the 30th Day

of August, 2017 in CMCC N. 3722 of 2016 at Nairobi_

RULING

There is a pending suit in the lower court wherein that court delivered a ruling on 30th August, 2017 which aggrieved the appellant herein.  Following that ruling, the appellant filed this application dated 13th September, 2017 seeking orders that there be  a stay of execution pending the hearing of the appeal and that there be a stay of all further proceedings in the lower court.  The application is brought under Section 3A of the Civil Procedure Act, Order 51 Rule 1 and Order 42 Rule 6 of the Civil Procedure Rules.  The reasons therefor are set out on the face of the application and the annexed affidavit of Caroline Munene the General Manager of the applicant.

On presentation of this application this court granted a stay of execution of the lower court order which has been extended from time to time.  The application is opposed and there is a replying affidavit filed on behalf of the respondent.  Parties have also filed submissions to address the application.

I must point out from the outset that some of the submissions advanced by the parties delve into triable issues in the main suit still pending before the lower court.  Caution must therefore be exercised while addressing this application so as not to prejudice the rights of the parties in the event the suit is eventually heard.

Having said so, the applicant submits, by the ruling of 30th August, 2017 the lower court virtually concluded the matter by acceding to the respondent’s claim without hearing the parties.

The lower court ruling followed an application by the respondent by way of Notice of Motion under Order 40 Rule 2 of the Civil Procedure rules and Section 3A of The Civil Procedure Act, prayer 4 of which sought a deposit of a sum of Kshs. 18,776,184/= into a joint interest earning account in the names of advocates for the parties.

The grounds upon which that application was premised are in fact the triable issues in the main suit going by the pleadings.  For the lower court to make an order such as appears in the ruling cited above, is to presume that the respondent has established his case against the appellant.

Further to the foregoing, the principles upon which an order for injunction may be granted are well established.  The respondent was required to present a prima facie case with a probability of success and persuade the court that an award of damages will not be sufficient in the event the application is not allowed.  If the court is in doubt it would decide the matter on a balance of convenience.

The learned trial magistrate correctly observed that,

“The issues raised by the parties in their affidavits and application can only be conclusively determined through the hearing of the main suit.”

That notwithstanding, she went ahead and allowed the respondent’s application.  I have related the application to the pleadings and also the position of the interested party herein.  The genesis of the dispute is a medical cover procured by the interested party for the benefit of its workers to be provided by the appellant herein.

If the sum ordered to be deposited as directed by the court, and is not released or utilised for the intended purpose, then more prejudice would be occasioned to the appellant and the interested party yet it has not been shown that the appellant will not be able to meet any decree that may be issued against it.

With respect, there was no prima facie proof on a balance of probability to lead to the said orders.  In fact, the substratum of the respondent’s claim it would appear has already been addressed.

Several authorities have been cited by the parties herein but I do not consider it necessary to set them out save to observe that, the appellant has shown substantial loss may result if a stay is not granted. In the circumstances, I allow the application and order a stay of execution of the lower court ruling and also proceedings in the lower court until such time that this appeal is heard and determined.

I note that the appeal record has been filed and in the event the same has not been served, this shall be done within the next 14 days from the date of this ruling.  The lower court file shall now be availed to be part of the record of appeal so that directions may be given, and appeal listed for hearing expeditiously to determine the rights of the parties herein.

Dated, signed and delivered at Nairobi this 21st Day of February, 2018.

A. MBOGHOLI MSAGHA

JUDGE