Ayubu v I & M Bank Limited & another; Kipkorir (Interested Party) [2022] KEHC 17240 (KLR)

Ayubu v I & M Bank Limited & another; Kipkorir (Interested Party) (Civil Suit 24 of 2018) [2022] KEHC 17240 (KLR) (7 November 2022) (Ruling)

Neutral citation: [2022] KEHC 17240 (KLR)

Republic of Kenya

In the High Court at Kajiado

Civil Suit 24 of 2018

SN Mutuku, J

November 7, 2022

Between

David Isoe Ayubu

Plaintiff

and

I & M Bank Limited

1st Defendant

Joseph Gikonyo t/a Garam Investment Auctioneers

2nd Defendant

and

Kipsosion Rerimoi Kipkorir

Interested Party

Ruling

1. The Plaintiff (Applicant) obtained a financial facility from the 1st Defendant on September 26, 2011 and executed a charge over his property Ngong/Ngong/9895 (the suit property) as security. Following default in repayments, the 1st Defendant sold the property to the Interested Party through the 2nd Defendant in a public auction. The Plaintiff filed a suit seeking an order, inter alia, to restrain any dealings with the suit property. The suit was dismissed with costs in a judgment delivered on December 2, 2020.

2. The Plaintiff filed a Notice of Motion dated December 9, 2020 seeking stay of execution pending the hearing and determination of an intended appeal, which application was dismissed in a Ruling delivered on July 9, 2021. Following this dismissal of the Plaintiff’s Notice of Motion, the 1st and 2nd Defendants brought an application (Notice of Motion) dated November 16, 2021 seeking orders to compel the Land Registrar at Kajiado North District Land Registry to remove an existing restriction dated November 6, 2018 on the suit property and to register the suit property in the name of the Interested Party herein.

3. In a Ruling delivered on June 21, 2022, this court allowed the Application and granted the prayers sought in it.

4. It is as a result of the orders of the court contained in that ruling that has necessitated the filing of the current application dated July 22, 2022.

Notice of Motion 5. The Application is brought under Order 51 Rule 1, Order 42 Rule 6 of the Civil Procedure Rules, Section 1A, 1B, 3A and 63E of the Civil procedure Act, Article 159(2)(d) of the Constitution and seeks orders that:i.Spent.ii.Spent.iii.That pending the hearing and determination of this application, this honourable court be pleased to grant an injunction restraining the Defendants by themselves, agents, legal representatives or whosoever from transferring the Plaintiff’s property known as Title No Ngong/Ngong/9895 situated at Ongata Rongai in Kajiado County to the Interested Party.iv.That this Honourable Court be pleased to grant an injunction restraining the Defendants by themselves, servants, agents, legal representatives or whosoever from transferring the Plaintiff’s property known as Title No Ngong/Ngong/9895 situated at Ongata Rongai in Kajiado County to the Interested Party pending the hearing and determination of the Plaintiff’s intended appeal in the Court of Appeal.v.That this Honourable Court be pleased to stay the order made on June 21, 2022 and/or any consequential orders transferring the property known as Title No Ngong/Ngong/9895 pending hearing and determination of the appeal at the Court of Appeal.

6. In support of this application is an Affidavit sworn by the Applicant on July 22, 2022 in which he has deposed that on June 21, 2022 a ruling was delivered ordering the Land Registrar at Kajiado North District Land Registry to remove the suit property known as Title No Ngong/Ngong/9895 the existing restriction dated November 6, 2018 and thereafter to register the suit property in the name of the interested party. He has deposed that he is dissatisfied with the said orders and has lodged an appeal at the Court of Appeal.

7. It is his deposition that this application has been made timely and that the intended appeal has high chances of success. He contends that if an injunction is not granted then the intended appeal will be rendered nugatory. He has deposed that the Defendants and the Interested Party will not suffer any prejudice for the reason that the Interested Party is already in possession of the suit property and collecting rent from his tenants.

8. The Application is opposed by the Respondent through a Replying Affidavit dated August 2, 2022 sworn by Boniface Abuya. He has deposed that he is from the firm of advocates handling the transaction on behalf of the 1st Defendant to have the suit property registered in the name of the Interested Party; that on advice of his counsel, the application for injunction pending appeal lacks merit and that the if the order of injunction is granted, the said order will inflict greater hardship on the 1st Defendant for the reason that the Bank will suffer irreparable loss as it will be unable to recover the entire debt which is dependent on the property being sold and transferred to the new purchaser. It is his averment that if the property is transferred, the plaintiff will not suffer any irreparable loss that cannot be compensated by damages by the 1st Defendant in the event the intended appeal succeeds.

Submissions 9. The matter was canvassed by way of oral submissions. In his submissions through his counsel, the Plaintiff/Applicant sought to have the Respondent’s Replying affidavit expunged from court record for reasons that the deponent is not an employee of the 1st Defendant, nor is he from the firm of advocates on record for the Defendants and therefore he lacks legal capacity to swear the affidavit.

10. It was submitted that the court made a finding that the property was not advertised for sale and that this is the main ground for the appeal. That the said property is in the possession of the Interested Party and the only thing remaining is the transfer of the same and therefore that there is no prejudice occasioned to the Respondents as they can wait for the appeal to be concluded.

11. The Respondent submitted that Boniface Abuya, the deponent of the Replying Affidavit, had all the authority and competence to swear the affidavit because he was from the firm of advocates handling the transfer of the suit property and that the said firm of advocates is acting on instructions of the 1st Defendant. It was submitted that Boniface has been the main deponent in the application which is the subject of the Ruling dated November 16, 2022 now being challenged by the Plaintiff.

12. It is their submission that the Plaintiff has concentrated on the judgement the subject of the appeal instead of the ruling. It is their submission that the Plaintiff has not demonstrated how he will suffer substantial loss if injunction is denied and that the appeal cannot be rendered nugatory for the reasons that if the appeal succeeds, the Plaintiff can be compensated by way of damages. The Respondent further argued that the Plaintiff has not offered any security as required under Order 42 Rule 6 of theCivil Procedure Rules.

13. The Plaintiff further argued that he is not required to provide security as the property is valued over 40 million. He argued that he will suffer loss as a result of not being able to collect rent. He further stated that he is not interested in damages but in the property as there is sentimental attachment to it. That the sale of the property was irregular and illegal.

Determination 14. Before addressing the merits of the application, I turn my attention to the issue raised by the Plaintiff asking this court to expunge the Replying Affidavit sworn by Boniface Abuya for reasons that the deponent lacks capacity to swear the affidavit. I agree with counsel for the Respondent that this argument is an afterthought. I note from the court record that Boniface Abuya has been the one swearing affidavits on behalf of the Bank. It is clear from the record that the Plaintiff has never raised this issue before and has even gone on to respond to applications where the same deponent swore supporting affidavits. The application to expunge the said affidavit from the court record is declined.

15. Turning on the mains issue in the application, the law under Order 42 Rule 6 of the Civil Procedure Rules provides that: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 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.

16. What this court should determine therefore is whether the applicant has met the threshold for grant of stay of execution pending appeal. On whether the application was filed timeously, I have noted that this honourable court delivered its ruling on June 21, 2022 and the application herein was filed on July 26, 2022, about a month and 4 days after the ruling. While I am alive to the fact that what amounts to unreasonable delay depends on the circumstances of each case and the orders granted therein, it is my view that one month and 4 days within which the applicant filed the application is not undue delay in the circumstances of this case.

17. InJaber Mohsen Ali & another v Priscillah Boit& another E&L NO 200 OF 2012[2014] eKLR the court stated that:'The question that arises is whether this application has been filed after unreasonable delay. What is unreasonable delay is dependent on the surrounding circumstances of each case. Even one day after judgment could be unreasonable delay depending on the judgment of the court and any order given thereafter. In the case of Christopher Kendagor v Christopher Kipkorir, Eldoret ELC 919 of 2012 the applicant had been given 14 days to vacate the suit land. He filed an application one day after the 14 days. The application was denied, the court holding that, the application ought to have come before expiry of the period given to vacate the land.'

18. On the issue of substantial loss, which is a cornerstone of applications for stay of execution, the applicant must demonstrate that he will suffer loss if the orders sought are not granted. What constitutes substantial loss has been addressed in many authorities.

19. In the case of Mukuma v Abuoga (1988) KLR 645 the court stated that;'Substantial loss is what has to be prevented by preserving the status quo because such loss would render the appeal nugatory.'

20. Similarly, inKenya Shell Limited vs Kibiru [1986] KLR 410, it was held 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'.

21. Further in the case ofCharles Wahome Gethi vs Angela Wairimu Gethi [2008] eKLR , the Court of Appeal held that; -''It is not enough for the Applicants to say that they live or reside on the suit land and that they will suffer substantial loss. The Applicants must go further and show the substantial loss that the Applicants stand to suffer if the Respondent execute the decree in this suit against them.'

22. The Applicant herein has stated that he will suffer substantial loss if the orders sought are not granted. Further that if the orders sought are not granted the appeal will be rendered nugatory. The Applicant while arguing his case in court stated that the specifics of substantial loss is that the suit property is sentimental to him and that the loss is also due to the rent which he used to collect from the tenants of the suit property. The Respondent on the other hand argued that if the loss is monetary the same can be compensated through damages in the circumstance that the appeal succeeds and that the bank is a reputable one capable of compensating him.

23. To argue that the property has sentimental value, in my view, is not sufficient to amount to substantial loss. I am persuaded that the Applicant has not demonstrated that he will suffer substantial loss.

24. The issue of security was raised by the Respondent who has argued that the Applicant has not offered any security. The Applicant has argued that he is required to furnish security as the property is valued over 40 million. In Masisi Mwita v Damaris Wanjiku Njeri (2016) eKLR, the Court held that: -'The application must meet a criteria set out in precedents and the criteria is best captured in the case of Halal & Another Vs Thornton & Turpin Ltd, where the Court of Appeal (Gicheru JA, Chesoni and Cockar Ag JA) held that:-'The High Court’s discretion to order stay of execution of its Order or Decree is fettered by three conditions, namely:- Sufficient Cause, substantial loss would ensue from a refusal to grant stay, the Applicant must furnish security, the application must be made without unreasonable delay.'

25. Furnishing security is a condition that should be met by a party who seeks court’s discretion on orders for stay. From the forgoing it is my view that the Applicants did not meet the requirements set under Order 42 rule 6 of the Civil Procedure Rules on conditions for granting stay. Consequently, this application fails and is hereby dismissed with costs to the Respondent.

26. Orders shall issue accordingly.

Dated, signed and delivered this 7thNovember, 2022. S. N. MUTUKUJUDGE3| Ruling in Kajiado Civil Case No. 24 of 2018