Co-op. Insurance Company of Kenya Ltd v Onyambu [2022] KEHC 17230 (KLR)

Co-op. Insurance Company of Kenya Ltd v Onyambu (Civil Appeal E005 of 2022) [2022] KEHC 17230 (KLR) (2 December 2022) (Ruling)

Neutral citation: [2022] KEHC 17230 (KLR)

Republic of Kenya

In the High Court at Kajiado

Civil Appeal E005 of 2022

SN Mutuku, J

December 2, 2022

Between

The Co-op. Insurance Company Of Kenya Ltd

Applicant

and

Stephen Omwenga Onyambu

Respondent

Ruling

1. The Notice of Motion (the Application), subject of this ruling is dated January 20, 2022 and is brought under section 3A of the Civil Procedure Act, Order 42 rule 6 and Order 51 Rules 1 and all other enabling provisions of the law. It seeks the following orders:a.Spent.b.That the Honourable Court be pleased to grant stay of execution and warrants of attachment and sale of movable properties of the Appellant pending hearing and determination of this Application.c.That the Honourable Court be pleased to grant stay of execution of Decree, warrants of attachment and sale of movable properties of the Appellant pending hearing and determination of the Appeal.d.That the costs of the application be provided for.

2. The grounds in support of the application are found on the face of it and in the Supporting Affidavit sworn by Lydia Wairimu on January 20, 2022. She has deposed that the Respondent, through Mbusera auctioneers, has proclaimed the movable properties of the appellant and that the appeal will be rendered nugatory if stay of execution and warrants is not granted. She has also deposed that the applicant is willing to furnish security for the decretal sum in the joint names of the two law firms herein.

3. The application is opposed through a replying affidavit of Stephen Omwenga Onyambu, therespondent, dated February 4, 2022. The Respondent has deposed that the application for stay is incompetent as the same has not been accompanied with a certified copy of the judgement and orders appealed against; that the application is a delaying tactic aimed at denying the Respondent the fruits of his judgement; that the decree whose stay of execution is sought is a monetary decree and his position is not precarious that he is unlikely to refund the decretal sum once it is paid.

4. He has deposed, further, that the appellant has not demonstrated how it stands to suffer substantial loss and that the grounds listed in the memorandum of appeal are unmerited and made up of half-truths and concealment of facts and therefore the appeal has very low chances of success.

5. The appellant filed a supplementary affidavit, undated but filed on July 5, 2022. It is the argument of theappellant that it is not a legal requirement that the application be accompanied by a certified copy of the judgment and or orders appealed against; that the communication with the Respondent’s advocates was not a waiver of the Applicant’s legal right to appeal the judgment in the primary suit, without prejudice as per the letter dated January 20, 2022.

Submissions 6. The application was canvassed by way of submissions.

7. The Applicant filed its submissions on July 5, 2022 wherein it argued that the Applicant has satisfied the requirements of Order 42 Rule 6(1) and (2);i.That the Applicant stands to suffer substantial loss if the order for stay is not granted;ii.That the application was made without unreasonable delay andiii.That the Applicant is willing to deposit security for the due performance of such decree or order as may be binding to him and relied on the case of RWW -vs- EKW[2019] eKLR.

8. The Applicant urged that the application be allowed and orders sought be granted as it is in the interest of justice that the Applicant is afforded ample opportunity to exercise its right of appeal.

9. The Respondents filed his submissions dated July 20, 2022 in which he raised one issue for determination: whether the orders sought should be granted. He argued that the Appellant has not met the requirements under Order 42 rule 6, especially on substantial loss. He submitted that the Applicant has not proved that it will suffer substantial loss and further that all conditions for granting stay must be met for stay to be granted.

10. The Respondent relied on Meteine Ole Kilelu & 19 others v Moses K Nailole [2009] eKLR, where it was held that:“Where the decree appealed against is a money decree, the applicant has to show either that once the execution is done after our refusal of the application, the applicant may never get back that money even if his appeal succeeds or that the decretal amount is so large vis a vis his status, or business that the execution in itself would ruin his business or threaten his very existence.”

11. He argued that being the successful litigant, he is being denied enjoyment of his judgment; that this case arose in 2016 and the respondent had been denied the use of his motor vehicle for a period of 7 years and has suffered irreparable loss in terms of user of the motor vehicle and that the appellant’s failure to prove loss is enough ground for dismissal of the application. He relied on the case of Congress Rental South Africa v Kenyatta International Convention Centre; Co-operative Bank of Kenya Limited & another (Garnishee) [2019] eKLR, where the court held that:“I am satisfied that the Applicant has failed to prove, as his required by law; and by evidence, that it shall suffer substantial loss, if the lawful Court’s order is enforced and stay of execution denied; therefore, I have found its intended appeal would not be rendered nugatory by declining stay of execution and substantial loss being the cornerstone of the court’s jurisdiction to grant stay having not been established. I find no basis for this court, to proceed to hold that the respondent should be denied the right to enjoy the fruits of its judgment the Respondent should not therefore be kept away from accessing its money.”

12. On the issue of the appeal being rendered nugatory if the prayers sought are not granted, the Respondent submitted that the Appellants ought to adduce specific evidence demonstrating that the Respondent is not able to refund the decretal sum should the appeal succeed. He submitted that the Respondent is a man of means and that in the event the appeal is successful, he has the resources to refund the decretal sum. He argued that the balance tilts in favour of not granting stay and that the Appellant’s application should be dismissed.

Determination 13. Order 42 Rule 6 (2) of the Civil Procedure Rules is clear on the conditions to be met for stay pending appeal to issue as follows:(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.

14. The applicant has to meet the threshold set under the above provisions. I have considered the grounds advanced in seeking stay orders. It is the case for the Applicant that warrants of attachment have issued against the Applicant and that its properties were proclaimed on January 14, 2022. It is its argument that if execution proceeds, it will suffer substantial loss and the appeal would be rendered nugatory if the orders for stay are not granted.

15. As per the Law under Order 42 Rule 6(1) and (2) one of the requirements is that the application be brought without unreasonable delay. The judgement by the trial court was delivered on December 28, 2021 and the application was filed on January 21, 2022. In my view the Appellant brought the application within reasonable time.

16. On the issue of substantial loss, the Respondent has argued that the application should be dismissed as the Appellant has not demonstrated how they would suffer substantial loss. The Respondent argued that he is a man of means and that should the appeal be successful he would be able to refund the decretal sum. He further annexed his bank statements to show this. The appellants argued that the bank statement show that the account is for both Stephen and Dean for the purpose of MSME Bronze Package and therefore not a personal account as purported by the Respondent. In Caneland Ltd & 2 others vs Delphis Bank Ltd. Civil Application No Nai 344 of 1999 it stated that the law is where the allegation is that the respondent will not be able to refund the decretal sum the burden is upon the applicant to prove that the respondent will not be able to refund to the applicant any sums paid in satisfaction of the decree.

17. InButt v Rent Restriction Tribunal [1979] eKLR, the court stated that the power of the court to grant or refuse an application for a stay of execution is a discretionary, and that the discretion should be exercised in such a way as not to prevent an appeal. Secondly, 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 the appeal court reverse the judge’s discretion. Thirdly, 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. Finally, the court in exercising its discretion whether to grant or refuse an application for stay will consider the special circumstances of the case and its unique requirements.

18. Guided by the above authority and having considered the Notice of Motion and the grounds in support, the replying affidavit, the supplementary affidavit and rival submission of the parties, I am satisfied that the Applicant has demonstrated that its appeals will be rendered nugatory if stay is not granted. Though theapplicant has not attached the judgment of the lower court, I note from the Memorandum of Appeal that the appeal seems to have arguable grounds. I will give the applicant a chance to have his day in court.

19. I note that both parties have submitted on the issue of providing of security. Theappellant submitted that it is ready and willing to provide security for the decretal sum in the joint names of the advocates for the parties and the respondent is willing to accept this condition for payment of security by the applicant. I therefore issue the following orders:i.An order is hereby issued staying the execution of Decree and Warrants of attachment and sale of movable properties of the appellant/applicant pending the hearing and determination of the Appeal.ii.The appellant/applicant shall deposit the decretal sum in a joint interest earning account to be held by both advocates within 45 days from today’s date.iii.Theappellant/applicant shall prepare, file and serve Record of Appeal within 60 days from today.iv.This matter shall be mentioned on January 17, 2023 to confirm compliance and give further directions.v.I decline to order payment of costs to the applicant.

20. Orders shall issue accordingly.

Dated, signed and delivered on 2ndDecember, 2022. S. N. MUTUKUJUDGE