Ali v Lochab Brothers Limited [2023] KEHC 24668 (KLR)

Ali v Lochab Brothers Limited (Civil Appeal E008 of 2023) [2023] KEHC 24668 (KLR) (3 November 2023) (Ruling)

Neutral citation: [2023] KEHC 24668 (KLR)

Republic of Kenya

In the High Court at Kakamega

Civil Appeal E008 of 2023

JRA Wananda, J

November 3, 2023

Between

Iddah Maulindini Ali

Appellant

and

Lochab Brothers Limited

Respondent

Ruling

1. The Application before the Court is the Chamber Summons dated 30/01/2023 and filed by the Appellant in this Appeal on 31/01/2023. The same seeks the following orders:i.[………..] Spentii.[………..] Spentiii.That a stay of Judgment execution be granted pending the hearing and determination of this Appeal.iv.The costs of the application be provided for.v.Any other order that meets the ends of justice.

2. The Application is filed through Messrs Chanzu Peter & Co. Advocates and is stated to be brought under section 3A, 75, 78, 79G of the Civil Procedure Act and order XLII rule 1(3) of the Civil Procedure Rules and “all enabling provisions of the law”. The grounds of the Application are as set out on the face thereon and it is supported by the Affidavit sworn by the Appellant.

3. In the Affidavit, the Appellant deponed that Small Claims Court Cause No. SCCMM/E315 was concluded on 9/12/2022, immediately thereafter, he instructed her Advocate to Appeal, the Notice of Appeal dated 19/12/2022 was then filed at the trial Court, and Memorandum of Appeal was filed in this Court on 9/01/2023, the Advocate is still waiting for the certified proceedings to enable him file the Record of Appeal, she also swears the Affidavit in support of her Application that the leave operates as a stay as she is apprehensive that the Respondent will proceed with execution which would render her intended Appeal nugatory.

Respondent’s Replying Affidavit 4. The Respondent opposed the Application vide the Replying Affidavit filed through Messrs Kariuki Mwaniki & Co. Advocates and sworn by one Nganda Lloyd Timona who described himself as the Respondent’s Property Manager. He deponed that the Appeal has no chance of success, the reason that the Applicant is apprehensive that the Respondent might execute cannot be a basis for grant of the prayers, it is not clear what is meant by “judgment execution” as sought by the Applicant, the Applicant has not shown what substantial loss she will suffer, the Appellant has not offered any security for due performance of the decree, the Respondent has a right to the fruits of the Judgment and is a person of means capable of refunding any amount paid in satisfaction of the Judgment in the event the Appeal succeeds.

Appellant’s Further Affidavit 5. With leave of the Court, the Appellant filed a Further Affidavit in which she deponed that one of the reasons or grounds of her Appeal is that her Notice of Preliminary Objection dated 17/08/2022 was not determined, she does not know why the trial Court proceeded to determine an undated Claim without determining the question of jurisdiction, her rights were therefore limited by the Court, she did land improvements and construction of structures after entering into a verbal agreement with the Respondent after expiry of the written Agreement, she is aggrieved by the fact that the trial Court allowed an undated claim on the basis of a tenancy contract which had expired, she was not given a fair hearing and the Respondent is now at liberty to execute the Decree obtained as a result of limitation of her rights to a fair hearing and that the Respondents will not be prejudiced if stay orders are granted.

Respondent’s Further Affidavit 6. The Respondent, also with leave of the Court, filed a Further Affidavit sworn by the same one Nganda Lloyd Timona who deponed that what is before the Court is whether to stay execution pending Appeal, merits and demerits of the Appeal are to be determined at a later stage, the Appellant is required to offer security as a condition for stay of which she has not thereby making her Application defective, the Respondent will be greatly prejudiced if the stay of execution is granted as he has the right to be paid what is owed to him by the Appellant.

Hearing of the Application 7. Pursuant to the directions given, the Application was canvassed by way of written submissions. The Appellant filed her Submissions on 5/07/2023 while the Respondent had filed hers earlier on 30/06/2023.

Appellant’s Submissions 8. Counsel for the Appellant began by citing the case of Rebecca Chumo v Christina Chumo [2021] eKLR and submitted that in that case, the Court ruled on the question of jurisdiction as referred to in the case of Owners of the Motor Vessel “Lilian S”. He also referred to the case of Boniface Waweru Mbviyu v Mary Njeri &another [2005] eKLR and submitted that the question of jurisdiction is fundamental. According to Counsel, the Court erred in entering Judgment before determining the question of jurisdiction. He then cited section 3A of the Civil Procedure Act on the Court’s inherent powers and also the case of RWW v EKW [2019] eKLR on stay of execution and submitted that the Appellant has demonstrated that the prayers sought satisfy the requirement of stay of execution pending Appeal. On depositing of security, Counsel argued that it will amount to rewarding limitation of unfair hearing, a right which should not be limited as per the Constitution, the Court should therefore grant stay orders without the condition of depositing security.

Respondent’s Submissions 9. Counsel for the Respondent submitted that the threshold for an Application for stay of execution pending Appeal is provided in order 42 rule 6(2) Civil Procedure Rules, the Application fails to meet the conditions of stay as envisaged in the above provision, the Applicant fails to demonstrate what substantial loss she is bound to suffer and also fails to offer security for due performance, she has instead purported to argue the merits of the Appeal which this Court cannot consider at the moment, the principles applicable were enunciated in Butt v Rent Restriction Tribunal (1979), the Decree appealed against is a money decree and the Appellant has not demonstrated what substantial loss she is bound to suffer if she settles the decretal amount. He also cited the case of Shell v Kibiru andanother (1986) KLR 410.

10. Counsel submitted further that in its Replying Affidavit it has deponed that in the event that the Appeal succeeds, the Respondent would be in a financial position to refund the decretal sum, there is no doubt cast by the Appellant on the capability of the Respondent to so refund, the Appellant also failed to offer security which is another requirement for grant of the Application. He cited the cases of Sharma v Ashana Rikundalia t/a Raikundalia & Co. Advocates & 2others [2014] eKLR and High Court Civil Appeal No. E030 of 2021 – Jamii Bora Bank Limited &another v Samuel Wambugu Ndirangu.

Analysis and Determination 11. The issue in this Application is “whether the Appellant ought to be granted stay of execution pending the hearing and determination of this Appeal”.

12. The Court’s power to grant stay of execution pending Appeal is provided under order 42 rule 6(2) of the Civil Procedure Rules 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.

13. Therefore, an Applicant for stay of execution of a decree or order pending Appeal is required to satisfy the conditions set out above, the first one is to demonstrate that substantial loss may result to the Applicant unless the order is made, the second is to demonstrate that the Application has been made without unreasonable delay and the third is to confirm its readiness to deposit security for the due performance of the decree or order.

14. As to what constitutes “substantial loss”, F. Gikonyo J in the case of James Wangalwa &another v Agnes Naliaka Cheseto [2012] eKLR, stated as follows:“11. No doubt, in law, the fact that the process of execution has been put in motion, or is likely to be put in motion, by itself, does not amount to substantial loss. Even when execution has been levied and completed, that is to say, the attached properties have been sold, as is the case here, does not in itself amount to substantial loss under order 42 rule 6 of the CPR. This is so because execution is a lawful process.The applicant must establish other factors which show that the execution will create a state of affairs that will irreparably affect or negate the very essential core of the Applicant as the successful party in the appeal. This is what substantial loss would entail, a question that was aptly discussed in the case of Silverstein N. Chesoni [2002] 1KLR 867, and also in the case of Mukuma v Abuoga quoted above. The last case, referring to the exercise of discretion by the High Court and the Court of Appeal in the granting stay of execution, under order 42 of the CPR and rule 5(2) (b) of the Court of Appeal Rules, respectively, emphasized the centrality of substantial loss thus:“… the issue of substantial loss is the cornerstone of both jurisdictions. Substantial loss is what has to be prevented by preserving the status quo because such loss would render the appeal nugatory.”With this observation, of course, a frivolous appeal cannot in practical terms be rendered nugatory. The only admonition however, is that the High Court should not base the exercise of its discretion under order 42 rule 6 of the CPR only on the chances of the success of the appeal. Much more is needed in accordance with the test I have set out above.”

15. Further, Platt, Ag. JA (as he then was) in Kenya Shell Limited v Kibiru [1986] KLR, expressed himself as follows:“It is usually a good rule to see if order XLI 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 corner stone of both jurisdictions for granting a stay. That is what has to be prevented. Therefore, without this evidence it is difficult to see why the respondents should be kept out of their money”.

16. On his part, Gachuhi, Ag. JA (as he then was) in the same case, stated as follows:“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 judgement. 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 judgement.”

17. A perusal of the Application reveals that the Appellant has completely said nothing on how she will suffer substantial loss were she to pay the decretal sum. She made no effort whatsoever to satisfy the Court on this condition. It is also strange that the Appellant’s Counsel takes the position that she should not be asked to deposit security because she was denied a fair hearing by the trial Court. The Appellant seems to have already concluded that the Appeal will definitely succeed because, in her opinion, it is very strong and that for this reason, the issue of her depositing security should not arise. With due respect, whether the Appeal will succeed or not is to be left to the Court to determine after hearing the parties on merits.

18. At this stage, the Court has not even been supplied with the pleadings and proceedings of the lower Court since the Record of Appeal has not yet been filed. For the Appellant to ground her Application basically on the strength of her Appeal is therefore a misconception. It appears that it is a result of this misconception that the Appellant’s Affidavits and Submissions are premised almost entirely on the strength of the Appeal and comprises of arguments on the merits thereof. Again, with respect, such arguments add very little, if any, at this stage.

19. I note that the Judgment amount is Kshs 400,000/-. The Appellant has done nothing to disprove the Respondent’s assurance that it is financially capable of refunding that amount in the event that the same is paid to the Respondent and subsequently, the Appeal succeeds. In omitting to demonstrate the substantial loss she will suffer should she pay the decree and in disputing its obligation to deposit security, I find no basis to grant an order of stay of execution.

20. Having carefully considered the matter therefore, I am satisfied that the Application does not meet the criteria for grant of stay of execution pending Appeal

Final Orders 21. The upshot of my findings above is that the Application fails. Consequently, I issue the following orders:i.The appellant’s chamber summons dated 30/01/2023 seeking, alia, stay of execution pending appeal, is hereby dismissed.ii.Costs shall be in the cause.iii.The appellant shall now take expeditious steps to prosecute this appeal.

DELIVERED, DATED AND SIGNED AT ELDORET THIS 3RD DAY OF NOVEMBER 2023WANANDA J.R. ANUROJUDGE