APA INSURANCE LIMITED V DAVID OKIKI AMAYO [2012] KEHC 2290 (KLR)

REPUBLIC OF KENYA

IN THE HIGH COURT OF KENYA AT KISII

Civil Appeal 182 of 2011

APA INSURANCE LIMITED …………………………….……… APPELLANT

-VERSUS-

DAVID OKIKI AMAYO ……………………………………….. RESPONDENT

(Being an appeal from the judgment of the Hon. Mr. Wandera SPM delivered

on 9th August 2011 in Kisii CMCC No. 563 of 2007)

RULING

1. The memorandum of appeal in this matter was filed on 6th September, 2011 setting out 8 grounds against the judgment of Hon. Mr. Wandera, SPM delivered on 9th August, 2011. On the 9th November, 2011, the trial magistrate dismissed an application brought by the applicant seeking stay of execution pending appeal. This application has been brought before this court as a result of that dismissal. The Notice of Motion dated 12th November, 2011 is brought under sections 1A, 1B and 3A of the Civil Procedure Act, Order 42 rule 6 of the Civil Procedure Rules and all other enabling provisions of the law. The application seeks to stayexecution of the judgment in Kisii CMCC No. 563 of 2007 pending the hearing and determination of the appeal herein. The applicant contends that unless the order sought is granted it will suffer irreparable loss and further that the appeal has high chances of success apart from the fact that the respondent/decree holder is a man of straw and that if the decretal amount, which is a substantial sum, is paid out to him, the intended appeal will be rendered nugatory as it will be nigh impossible to recover such an amount from the respondent should the appeal succeed. The decretal amount in this case is kshs. 169,425/= exclusive of costs and interest.

2. The application is supported by 7 grounds which are set out on the face thereof and by the affidavit sworn by the applicant on 12th November, 2011 together with the annextures thereto. The application is opposed vide the grounds of opposition dated 3rd January, 2012 and filed in court on 10th January, 2012. The respondent contends that:-

The appellant has not shown the substantial loss that may result if the order sought is not granted.

The supporting affidavit contains facts not within the knowledge of the deponent and therefore fatally defective.

The application is defective having been supported by a fatally defectiveaffidavit.

The application lacks merits.

3. The parties agreed to and did file written submissions. I have carefully read through the 2 sets of submissions together with the annexed authorities. I have also carefully read through the pleadings of the parties. The issue that arises for determination is whether the applicant has met the conditions set out by order 41 rule 6(2) of the Civil Procedure Rules, 2010 for the granting of the order of stay of execution. The applicant in this case is obligated to establish the following to the satisfaction of the court:-

a.That substantial loss may result to it unless the order is made and

b.That the application has been made without unreasonable delay and

c.That 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

4. The applicant must not just satisfy one but all the three conditions above stated. In the determining the above issues, I am guided by the words of Madan JA in the case of Butt –vs- Rent Restriction Tribunal (1982) KLR 417 where his Lordship stated thus at page 419:-

“It is in the discretion of the court to grant or refuse a stay but what has to be judged in every case is whether there are or not particular circumstances in the case to make an order staying execution. It has been said that the court as a general rule ought to exercise its best discretion in a way so as not to prevent the appeal if successful being nugatory per Brett L. J in Wilson –vs- Church (No. 2) 12 chD (1879) 454 at p. 459. In the same case, Cotton L.J said at p. 458 “I will state my opinion that when a party is appealing, exercising his undoubted right of appeal, this court ought to see that the appeal, if successful, is not nugatory”.

5. In this appeal what is at stake is a money decree, and the applicant contends that the respondent, who from the evidence on record is a man of straw, is unlikely to be able to refund the decretal sum should the appeal succeed. In the case of Singh –vs- Runda Estates Ltd (1960) EA 263, the court held that it is not normal for a court to grant stay of execution in monetary decrees except where there are special features as the issue of the regularity of the judgment, the fact that the amount payable under the decree being substantial and the fact that the plaintiff has no known assets within the jurisdiction from which the applicant can recoup in the event that the appeal is successful. Also see Madhupaper –vs- Crescent Construction, Court of Appeal at Nairobi, Civil Application Number Nai 60 of 1990for the general principle that it is not normal for the court to grant a stay of execution in monetary decrees. The court thus has the discretion to grant the orders sought on such terms as it thinks fit provided that the procedure for instituting an appeal from a subordinate court or tribunal has been complied with. In this case, the applicant has already filed a memorandum of appeal which raises 8 grounds of appeal.

6. After carefully considering all the submissions and the law I am of the humble view that the applicant has met the threshold required of it for the granting of the order of stay of execution. In the first place, I find and hold that this application was filed without unreasonable delay. The application seeking stay of execution in the lower court was dismissed on 9th November, 2011. The instant application was filed on 14th November, 2011 which in my view was done timeously.

7. As regards the question of substantial loss, the applicant has contended and there is no factual rebuttal of the same, that the respondent/plaintiff is a man of straw and that if the decretal sum is released to him, it will not be easy for the applicant to recoup the said amount from him should the appeal succeed. This fact is a special circumstance or constitutes sufficient cause or substantial loss within the meaning of order 42 rule 6 (2) of the Civil Procedure Rules. See Kenya Shell Ltd –vs- Benjamin Karuga Kibiru & Another (1982-88) 1 KAR 1018 to the effect that substantial loss in its various forms is the cornerstone of both the High Court and the Court of Appeal jurisdictions for granting stay.

8. The final issue to be determined is one of costs. The applicant has stated in the affidavit in support that the applicant is ready and willing to comply with any conditions that would be imposed by this honourable court for the grant of the stay order. In the circumstances, I would grant the order of stay on condition that the applicant deposits the entire sum of kshs. 318,064/= into an interest earning account to be to be opened at a mutually agreed bank and operated by the advocates of the two parties. The deposit shall be made within the next 30 (thirty) days from the date of this ruling. The costs of this application shall abide the outcome of the appeal.

9. Lastly, the delay in delivering this ruling/judgment is very much regretted. At the time it was due, I was engaged in hearing and determining the more than 125 boundary dispute cases against the Independent Electoral and Boundaries Commission. Judgment in the said cases was delivered by the 5-Judge Bench on 9th July 2012.

10. It is ordered.

Ruling datedand delivered at Kisii this 7th day of September, 2012.

RUTH NEKOYE SITATI

JUDGE

In the presence of

M/s L.G. Menezes (absent) for appellant/applicant

Mr.Nyamurongi for Ochillo for respondent

Mr. Bibu - Court clerk

RUTH NEKOYE SITATI

JUDGE