Daudi Kiptugen v Commissioner of Lands, Chief Land Registrar, Nairobi, Attorney General, Heldo Food Stuff Limited, County Land Registrar, Uasin Gishu, Haron Chepkilot Kipsang t/a Heldo Food Stuff & Silas Kiptui Kipchilat (Acting as the personal representative of the estate of the late Leah Jelagat Kipchilat, Deceased) [2021] KEELC 1931 (KLR)

REPUBLIC OF KENYA

IN THE ENVIRONMENT AND LAND COURT OF KENYA

AT ELDORET

E & L CASE 787 OF 2012

[FORMERLY ELDORET HCCC NO. 213 OF 2011]

DAUDI KIPTUGEN.......................................................................................PLAINTIFF

-VERSUS-

COMMISSIONER OF LANDS...........................................................1ST DEFENDANT

CHIEF LAND REGISTRAR, NAIROBI............................................2ND DEFENDANT

THE ATTORNEY GENERAL............................................................3RD DEFENDANT

HELDO FOOD STUFF LIMITED......................................................4TH DEFENDANT

COUNTY LAND REGISTRAR, UASIN GISHU...............................5TH DEFENDANT

HARON CHEPKILOT KIPSANG T/A HELDO FOOD STUFF......6TH DEFENDANT

SILAS KIPTUI KIPCHILAT (Acting as the personal representative of the

estateof the late LEAH JELAGAT KIPCHILAT, DECEASED).........7TH DEFENDANT

RULING

[NOTICE OF MOTION DATED 4TH FEBRUARY 2021]

1. The application subject of this ruling has been brought by the 7th Defendant vide a Notice of Motion dated 4th February, 2021under the provisions of Order 42 Rule 6 of the Civil Procedure Rules, 2010 and Section 3A of the Civil Procedure Act, seeking for the following orders;

(a) THATthe service of this application be dispensed with in the first instance.

(b) THATa stay of execution of the judgment/decree dated 27th January, 2021do issue, pending the hearing and determination of this application in the firstinstance.

(c)THATa stay of execution of the judgment/decree of this Honourable Courtdated the 27th January, 2021 do issue pending the hearing anddetermination of the intended appeal to the Court of Appeal.

(d)THAT an injunction do issue pending the hearing and determination of thisapplication restraining the plaintiff from selling, transferring, charging and/ordealing with the land parcel known as ELDORET MUNICIPALITY/BLOCK 7/ 154in the first instance and thereafter pending the hearing anddetermination of an intended appeal to the Court of Appeal.

(e)THAT the costs of this application be provided for.

The application is based on the four (4) grounds on its face and supported by the affidavit sworn by Silas Kiptui Kipchillat, the 7th defendant and personal representative of the estate of Jelagat Kipchillat, on the 4th February, 2021.  It is the 7th defendant’s case that the application was filed without undue delay and substantial loss would ensue if the orders sought are not granted.  That the 7th defendant is aggrieved by the decree and has lodged an appeal and applied for certified proceedings.  The 7th defendant depones that he shall suffer substantial loss as the estate of the deceased held a registered leasehold interest in the suit property whose value is over Kshs.100,000,000. 00.  That should the appeal succeed, the plaintiff, who is a clerical officer as per page 15 of the judgement will be unable to refund the said colossal sum, thereby rendering the appeal an academic exercise.  That the 7th defendant is ready to offer such security as would be ultimately binding for the due performance of the decree.

2. That Daudi Kiptugen, the plaintiff, opposed the application through his replying affidavit filed on the 10th February, 2021.  That it is his case that the application is incompetent, incurably defective and an abuse of the court process. That the matter has been pending for over 10 years and it is in public interest that litigation ought to come to an end so that he can enjoy the fruits of his judgment.  He further deponed that the 7th defendant has not satisfied the conditions for grant of stay of decree pending appeal as there is no established substantial loss that he is likely to suffer if the orders sought are not granted.  He stated that he has been the registered owner of EldoretMunicipality Block 7/154, suit property, at all material times, having been registered on 22nd January 2001 and has been in exclusive occupation and control. That the 7th defendant will not suffer any substantial loss in the event that the orders sought are not issued. That the court having declared the 7th defendant's lease have been issued fraudulently, the granting of stay orders would be against public interest.  That the orders issued were declaratory in nature, and as such are not positive orders that require any party to do or refrain from doing anything.  That the rules do not envisage an order of injunction after judgement.  That the plaintiff has made arrangements to have the decree effected at the Lands Office and the same has since been executed by cancelling the 7th defendant's registration.  That the application has been overtaken by events and granting of the orders would create uncertainty and confusion. That in case the court is inclined to grant the orders sought, the 7th defendant should deposit security for due performance commensurate to the value of the subject matter, which is worth Kshs.120 Million, to be deposited in a fixed deposit interest earning account.  The plaintiff urged the Court to consider that the interest that would accrue for 4 years that the appeal would take to be decided, were the Kshs.120 Millionto be invested in treasury bonds or fixed deposit interest earning account at the prevailing interest rates.  That most banks offer 7% annually for fixed deposits, meaning the Kshs.120 Million would earn up to 37 million as interest in the four years he thinks the appeal would take before it is finally heard and determined before the Court of Appeal.  That the 7th defendant should therefore deposits the security for due performance of the decree to the court or in a joint interest earning account in a bank that will be agreed upon within 30 days failing which the stay orders to lapse.

3. That directions on filing and exchanging submissions were issued on the 13th April, 2021.  That the learned counsel for the 7th defendant filed the submissions dated the 2nd June, 2021 in which they reiterated the contents of the application and the affidavit in support thereof.  The counsel submitted that only the plaintiff opposed the application and that the rest of the defendants supports it.  That on substantial loss, the 7th defendant has deposed on oath that the estate stands to suffer substantial loss as the estate of the deceased held a registered leasehold interest in the suit-land which is of immense value of over approximately Kshs.100,000,000, as the plaintiff has expressed an intention to dispose of the land.  That should the appeal be successful, the plaintiff will be unable to refund the colossal amount of money considering also his admission that his only source of income is salary from his employ as a clerical officer.  The counsel cited the case of Mujar v Kunga, (1988) eKLR, where the Court held that;

“The practice of the Court of Appeal in the case of land which is a sensitive issue is that the parties should be allowed to come to court to have the issues involved in their dispute determined by a court of last resort. For the parties to come to this court the court has to consider whether the status quo should be maintained pending the hearing of the appeal failing which the appeal if successful will be rendered nugatory.”

The authority in Consolidated Marine v Nampijja & Another, Civil App. No. 93 of 1989(Nairobi),was also cited where the Court held that;

“The purpose of the application for stay of execution pendingappeal is to preserve the subject matter in dispute so that the right of the appellant who is exercising his undoubted right of appeal are safeguarded and the appeal if successful is not renderednugatory.”

It was also submitted that the order sought to be stayed is a positive one. That it is misleading for the plaintiff to argue that the said order is a negative one, since in the decree, the reliefs in (b) and (f) are positive orders that would be the subject of execution, as they involve an order directed at the 1st and 2nd defendants, requiring that the expunged original records on the title No. ELDORET MUNICIPALITY/BLOCK 7/154,indicating the plaintiff as the original owner to be reinstated, and in default the copies thereto be treated as the originals.  That the party and party costs if taxed will also be the subject of execution. That the plaintiff cannot claim to have executed the decree while the party and party costs are yet to be ascertained, and there is no compliance with section 94 of theCivil Procedure Act, Chapter 21 of Laws of Kenya, which provides that;

"Where the High Court considers it necessary that a decree passedin the exercise of its original civil jurisdiction should be executedbefore the amount of the costs incurred in the suit can beascertained by taxation, the court may order that the decree shallbe executed forthwith, except as to so much thereof as relates tothe costs; and as to so much thereof as relates to the costs that thedecree may be executed as soon as the amount of the costs shall beascertained by taxation".

That the above provision was addressed in Bamburi Portland CementCo. Ltd v Hussein, (1995) LLR 1870 (CAK),where the court stated as follows;

“Section 94 of the Civil Procedure Act requires that for execution of a decree before taxation, leave must be obtained from the HighCourt, such leave may be sought informally at the time Judgment isdelivered but if that is not done then it must be made by way of anotice of motion. The motion must be served on the other party andheard inter parties. Order 21 Rule 7(4) of the Civil Procedure Rules, 2010purports to confer on the registrar and deputy registrar the powerspecifically given to High Court under Section 94 of the Act. Rule7(4)is clearly ultra vires Section 94 of the Act because the sectionreserves that power exclusively to the High Court.”

The counsel further submitted that in view of the grounds of appeal listed, the 7th defendant has demonstrated sufficient cause for grant of the orders sought. They relied on the authority in Hon. Attorney Generalvs The Law Society of Kenya & Another, Civil Appeal (Application) No. 133 of2011 (UR) by Musinga, JA; in which he stated as follows;

“Sufficient cause" or "good cause" in law means:"the burden placed on a litigant (usually by court rule or order) to show why a request should be granted or an action excused.”

And that of Stanley Kang'ethe Kinyanjui v Tony Keter & 5 Others, (2013) eKLR, where the Court of Appeal held that;

“On whether an appeal is arguable, it is sufficient if a single bona fide arguable ground of appeal is raised.  An arguable appeal is not one which must necessarilysucceed, but one which ought to be argued fully before the court;one which is not frivolous.”

The counsel went on to submit that the application was made within one week of delivery of the judgment, and hence without undue delay.  That on security it was submitted that the estate of the deceased is ready to offer such security as would be ultimately binding. Reference was made to the case of Focin Motorcycle Co. Limited v Ann Wambui& Another, (2018) eKLR, where it was stated that;

“Where the applicant proposes to provide security as the Applicant has done, it is a mark of good faith that the application for stay is not just meant to deny the respondent the fruits of judgment. My view is that it is sufficient for the applicant to state that he is ready to provide security or to propose the kind of security but it isthe discretion of the Court to determine the security. TheApplicant has offered to provide security and has thereforesatisfied this ground for stay.”

The 7th defendant therefore urged the court that the security to be offered should not be such as would drive him from the seat of justice.  That further the stay should be granted for the reasons that the plaintiff would proceed to lodge a motion to compel the enforcement of order (b) in the decree.  The Counsel relied on the case of Niazons (Kenya) Ltd v China Road & Bridge Corporation(Kenya) Ltd,Nairobi (Milimani) HCCC No. 126 of 1999, where Onyango-Otieno, J (as he then was) held that,

"Where the appeal may have very serious effects on the entire case so that ifstay of proceedings is not granted the result of theappeal may well render the orders made nugatory and render the exercise futile, stay...should be granted."

That as to whether the court has jurisdiction to grant an injunction pending an intended appeal to the Court of Appeal, it was submitted that the 7th defendant had a counter claim that was dismissed and therefore, the court has the inherent power to grant the order as it is obliged to observe the overriding objective of the Civil Procedure Act, which is primarily the just determination of proceedings.  The Court of Appeal authority in Caltex Oil Ltd v. Evanson Wanjihia, C.A.C.A. Nai 1990 was cited where it was held;

"The powers of this court have recently been enhanced by theincorporation of an overriding objective in sections 3A and 3B ofthe Appellate Jurisdiction Act Cap 9and sections 1A and 1B of theCivil Procedure Act Cap 21following the amendment of the StatuteLaw (Miscellaneous Amendments) Act No. 6 of 2009. The overridingobjective provides that the purpose of the two Acts and the Rules isto facilitate the just, expeditious, proportionate and affordableresolution of civil disputes. Although the overriding objective hasseveral aims, the principal aim is for the court to act justly inevery situation either when interpreting the law or exercising itspower. The court has therefore been given greater latitude toovercome any past technicalities which might hinder theattainment of the overriding objectives".

4. The following are the issues for the court’s determinations;

(a) Whether the 7th defendant has made a reasonable case for stay of execution of the judgement/decree order to issue pending the hearing and determination of the intended appeal.

(b)Whether the 7th defendant has made out a case for injunction order to issue in respect of the suit land pending hearing and determination of the intended appeal.

(c)Who pays the costs of the application?

5. That I have considered the grounds on the application, the affidavit evidence, submissions filed, superior courts decisions cited thereon and come to the following findings;

(a) That the law guiding stay of execution applications pending appeal is under Order 42 Rule 6 of the Civil Procedure Rules, which stipulates as follows:

“ (1) 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.”

That further, section 3A of the Civil Procedure Act provides for the inherent powers of court. It enjoins the courts to make such orders as may be necessary for the ends of justice or to prevent abuse of the process of the court.  The courts are now enjoined to give effect to the overriding objective in the exercise of its powers under the Act, or in the interpretation of any of its provisions.  That in exercising its discretion, the court should therefore always opt for the lower, rather than the higher risk of injustice.  That for the stay of execution order to issue under the forgoing provisions, the applicant must satisfy the set conditions.  In this matter, the 7th defendant has the burden to satisfy this court that;

(i) substantial loss may result to the estate unless stay of execution is ordered;

(ii) the application is brought without undue delay; and

(iii) 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.

That in the case of Civil Appeal No.107 of 2015, 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.”

That in the case of Stephen Wanjohi v Central Glass Industries Ltd, Nairobi HCC No. 6726 of 1991, the Court held that:-

“For the court to order a stay of execution there must be:-

i.  Sufficient cause

ii.  Substantial loss

iii. No unreasonable delay

iv.Security and the grant of stay is discretionary”.

That in considering this application, I take into account that it is not the practice of the courts to deprive a successful litigant of the fruits of his/her/its judgment.

(b) That the impugned judgement, which the 7th defendant seeks to appeal to the Court of Appeal was delivered on 27th January, 2021. This application was file on the 4th February, 2021 which was about one week later. I am satisfied that there was therefore, no undue delay in moving the court.

(c) That on the second condition of establishing that substantial loss may result unless the stay order is granted, the 7th defendant must demonstrate what kind of substantial loss the estate is likely to suffer if the stay order was not granted in its favour.  The Court of Appeal addressed itself on what amounts to substantial loss in the case of Mukuma V Abuoga (1988) KLR 645,when their Lordships stated that;

“Substantial loss is what has to be prevented by preserving the status quo because such loss would render the appeal nugatory.”

And in the case of Kenya Shell Limited vs. Kibiru [1986] KLR 410, the court 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”.

The Court went further to hold that;

“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.”

That further and in the case of Charles 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.”

(d) The court has to balance the interests of the 7th defendant who is seeking to preserve the status quo pending the hearing of the appeal, and the interests of the plaintiff, who is seeking to enjoy the fruits of his judgment.  That as was stated by Kuloba, J in Machira t/a Machira & Co. Advocates vs East African Standard (No. 2) (2002) KLR 63;

“to be obsessed with the protection of an appellant or intending appellant in total disregard or flitting mention of the so far successful opposite party is to flirt with one party as crocodile tears are shed for the other, contrary to sound principle for the exercise of a judicial discretion. The ordinary principle is that a successful party is entitled to the fruits of his judgment or of any decision of the Court giving him success at any stage. That is trite knowledge and is one of the fundamental procedural values which is acknowledged and normally must be put into effect by the way applications for stay of further proceedings or execution, pending Appeal are handled. In the application of that ordinary principle, the Court must have its sight firmly fixed on upholding the overriding objective of the rules of procedure for handling civil cases in Courts, which is to do justice in accordance with the law and to prevent abuse of the process of the Court”.

That in view of the foregoing, for the 7th defendant to succeed, he must show the damages the estate would suffer if the order of stay is not granted, since granting stay would mean that the status quo should remain as it were before the judgment and that would be denying a successful litigant of the fruits of his judgment.  That should not be done unless the 7th defendant has given to the court sufficient cause to enable it to exercise its discretion in granting the order of stay in his favour.  That what the 7th defendant has based his claim of substantial loss is the fear that the plaintiff may dispose of the suit land whose value he puts at over Kshs.100,000,000. 00, and thereafter be unable to compensate the estate from his earnings as a clerical officer.

(e) That I have perused the affidavit evidence by the 7th defendant and plaintiff and have not seen any evidence to confirm that there is eminent sale of the suit land.  That what I see at paragraphs 19 to 24 of the replying affidavit is the plaintiff giving the suit land a value of Kshs.120,000,000. 00 that it would likely fetch if sold and urging the court to consider that figure for purposes of security for the due performance of the decree.   That as the plaintiff contention that he is the one who has been in occupation and control of the suit land at all material times has not been seriously challenged, I find the 7th defendant has failed to establish that the estate would suffer substantial loss unless the order of stay is granted.  That from the valuations of the suit property put forward by the 7th defendant and the plaintiff, I have no doubts that any loss that may be occasioned if the stay order is not granted can be determined and appropriate award made for compensation. That on whether the 7th defendant has reasonable grounds for believing that the plaintiff will not be able to refund the decretal sum if the appeal is successful, is a matter to be considered. That even where it is shown that the respondent was a person of lesser means, that would not necessarily justify a stay of execution as poverty is not a ground for denial of a person’s right to enjoy the fruits of his or her success.  That in the case of Stephen Wanjohi vs. Central Glass Industries Ltd. Nairobi HCCC No. 6726 of 1991,the court held that financial ability of a decree holder solely is not a reason for allowing stay; it is enough that the decree holder is not a dishonorable miscreant without any form of income.  That in the case at hand, the plaintiff has disclosed that he has a source of income and the 7th defendant has not demonstrated that the former would be unable to refund the estate the value of the suit property was he to sell it and the appeal succeed.  That in my view, even if stay order sought herein is not granted, there is no evidence that the 7th defendant will suffer substantial loss.

(f) That on the third condition as to provision of security for the due performance of the decree, the 7th defendant has at ground 4 of the application and paragraph 13 of the supporting affidavit, indicated the willingness of the estate to furnish security for a grant of the order for stay of execution.  That Order 42 Rule 6 (2) (b) of the Civil Procedure Rules stipulates in mandatory terms that the third condition that an applicant needs to fulfil so as to be granted the stay order pending appeal is to furnish security.  That in the case of Aron C. Sharma vs. Ashana Raikundalia T/A Rairundalia & Co. Advocates the court held that:

“The purpose of the security needed under Order 42 is to guarantee the due performance of such decree or order as may ultimately be binding on the Applicant.  It is not to punish the judgment debtor … Civil process is quite different because in civil process the judgment is like a debt hence the Applicants become and are judgment debtors in relation to the respondent. That is why any security given under Order 42 Rule 6 of the Civil Procedure Rulesacts as security for due performance of such decree or order as may ultimately be binding on the Applicants.  I presume the security must be one which can serve that purpose.”

That the Court of Appeal in the case of Butt v Rent Restriction Tribunal [1982] KLR 417 gave guidance on how the discretion in determining whether or not to grant stay of execution pending appeal should be exercised, as follows:

1. “The power of the court to grant or refuse an application for a stay of execution is a discretionary power. The discretion should be exercised in such a way as not to prevent an appeal.

2. The general principle in granting or refusing a stay is; if there is no other overwhelming hindrance, stay must be granted so that an appeal may not be rendered nugatory should that appeal court reverse the judge's discretion.

3. 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.

4. The court in exercising its discretion whether to grant [or] refuse an application for stay will consider the special circumstances of the case and unique requirements. The special circumstances in this case were that there was a large amount of rent in dispute and the appellant had an undoubted right of appeal.

5. The court in exercising its powers under Order XLI Rule 4(2)(b) of the Civil Procedure Rules, can order security upon application by either party or on its own motion.  Failure to put security for costs as ordered will cause the order for stay of execution to lapse.”

That whereas the 7th defendant has failed to show any kind of substantial loss that the estate is likely to suffer, he has nevertheless satisfied the other two conditions for stay, and I am of the view that considering the protracted litigation that has so far been undertaken over the suit property, and its apparent value, an order of stay of further execution pending the determination of the appeal is deserving and just under the circumstances.

(g) That having found merit on the prayer for stay of execution of the judgement/decree in (f) above, that has the effect of maintaining the obtaining status quo, I am of the view there is no need to consider whether or not to issue the order of injunction sought in prayer 4 of the application dated 4th February, 2021, as its purpose has already been met.

(h) That as the other defendants who attended court during the hearing of the application orally voiced their support to the motion, but without filing any documents, and as the 7th defendant has succeeded in the application, I am of the view that this is an appropriate case for the costs to abide the outcome of the appeal.

6. That flowing from the foregoing, I find merit in the 7th defendant’s notice of motion dated the 4th February, 2021 and order as follows;

(a) That there be a stay of further execution of the judgment/decree dated 27th January, 2021 pending the hearing and determination of the intended appeal before the Court of Appeal subject to the conditions here below being satisfied.

(b) That the 7th defendant deposits a sum of Kshs. One Million (1,000,000. 00) being security for the due performance of the decree, in a joint interest earning account in the names of the law firms acting for the plaintiff and the estate he represents.

(c) That the said deposit be made within forty-five (45) days from the date of delivery of this ruling, failing which the stay order to automatically lapse.

(d) That the costs of the application to abide the outcome of the appeal.

It is so ordered.

DATED AND VIRTUALLY DELIVERED THIS 29TH DAY OF SEPTEMBER, 2021.

S. M. KIBUNJA

ENVIRONMENT AND LAND COURT JUDGE

IN THE PRESENCE OF;

PLAINTIFF: ABSENT

DEFENDANTS: ABSENT

COUNSEL: MR. KANDIE FOR KIGAMWA FOR PLAINTIFF.

M/S ODEYO FOR ODONGO FOR 1ST TO 3RD AND 5TH DEFENDANTS AND M/S TANUI FOR ARUSEI FOR 6TH DEFENDANT.

CHRISTINE: COURT ASSISTANT