Directline Assurance Company Limited v Nkaabu [2022] KEHC 12369 (KLR)

Directline Assurance Company Limited v Nkaabu (Civil Appeal E209 of 2021) [2022] KEHC 12369 (KLR) (16 June 2022) (Ruling)

Neutral citation: [2022] KEHC 12369 (KLR)

Republic of Kenya

In the High Court at Kiambu

Civil Appeal E209 of 2021

RB Ngetich, J

June 16, 2022

Between

Directline Assurance Company Limited

Appellant

and

Kevin Mwenda Nkaabu

Respondent

Ruling

1. This is a ruling on notice of motion dated 1st November 2021 seeking stay of execution of the judgment in Kiambu CMCC No. 266 of 2020 pending the hearing and determination of this appeal.

2. The application is supported by affidavit sworn on 2nd December 2021 by Kevin Ngure. The Applicant averred that judgment was delivered by the trial magistrate on 4th October 2021 where judgment was entered of the respondent against the applicant for a sum of Kshs. 5,072,441/= plus costs and interest. The applicant’s defence was dismissed and his argument is that, he was condemned unheard; he averred that the Respondents have commenced execution proceedings whereas the appeal herein has high chances of success.

3. The Applicant further averred that he will suffer irreparable damages if the Respondent proceeds to execute, as the Applicant will not be able to recover from the Respondent and unless the orders are granted, the appeal will be rendered nugatory.

4. In opposing the application, the Respondent filed a replying Affidavit sworn on 10th February 2022, in which he deposed that the intended appeal does not raise any issues warranting any consideration on appeal. The application is made in bad faith. The Applicant/Appellant failed to defend the declaratory suit in the trial court in Kiambu Suit No. 226 of 2019 in which they were dully served, the Applicant entered appearance but failed to file the defence in time and further failed to comply with the trial court orders of paying throw away costs of Kshs. 15,000/=

5. According to the Respondent the Applicants have filed a similar application seeking stay of execution of the judgment in Kiambu Suit No. 226 of 2019.

6. In his view there is need for litigation to come to an end. The current application is merely to delay the fair trial of the suit, and obstruct justice.

7. According to the Respondent the intended appeal is improperly before the court as it was filed outside the stipulated time line and no leave was sought to appeal out of time. Further the Applicant has not demonstrated to the court how they intend to liquidate the Decretal sum, neither has security been provided by the Applicant.

Appellant’s Submissions 8. The Appellant submitted the law on stay of execution is contained in Order 42 Rule 6 of the Civil Procedure Rules 2010 and the Applicants have met the threshold for grant of stay of execution and further submitted that if the Respondent is allowed to execute the sum of Kshs. 5,072,441/= plus costs and interest by attaching the Applicant’s properties, the Applicant will suffer irreparable damage. The Applicant averred it deals with the transport sector and execution will cripple its day to day activities.

9. The Appellant further submitted that the Respondent has not proved to be a person of means nor demonstrate how he will refund the decretal sum if the appeal succeeds.

10. The Applicant submitted that the appeal has been made without undue delay as the ruling subject of the appeal was delivered on 4th October 2021 and the current application was filed on 2nd November 2021; that the delay of 29 days is not inordinate and the Memorandum of appeal was filed within the 30 days’ period stipulated under Section 79G of the Civil Procedure Act.

11. On the issue of costs, the Applicant averred being ready to abide by the terms of conditions set by the court; that the appeal has high chances of success and the Respondent will not be prejudiced in any way if the orders of stay are granted. The Applicant urged this court to allow the application as prayed.

Respondent’s Submissions 12. In opposing the application, the Respondent submitted that the appeal does not raise serious issues for consideration before this court as the award is within the range awarded by most courts hence the appeal is a waste of time. The Respondent further submitted that a successful litigant should not be denied the fruits of his judgment as the applicants have not demonstrated that the Respondent will not be in a position to refund the decretal amount if the same is paid to him.

13. The Applicant urged this court to consider the overriding objectives as the Applicant has not demonstrated the prejudice to be suffered if the orders are not granted and no security has been offered by the Applicant; and has not therefore met the threshold for grant of stay of execution pending appeal and urged this court to dismiss the application.

Analysis and Determination 14. I have considered averments by parties and the submissions filed by parties herein and wish to consider the prerequisites for grant of stay of execution pending appeal have been met.

15. The legal basis for grant of stay pending appeal is Order 42 Rule 6 of the Civil Procedure Rules, 2010. Basically, the Defendant/Applicant is required to demonstrate that:“Substantial loss may result unless the order is made; the application has been made without unreasonable delay; such security as the court orders for the due performance of the decree has been given before the Applicant”

16. In the case of Mohammed Salim T/a Choice Butchery –vs- Nasserpuria Memon Jamat (2013) eKLR, the court upheld the decision of M/S POrtreitz Maternity –vs- James Karanga KabiaCivil Appeal No. 63 of 1997 and stated that:“That right of appeal must be balanced against an equally weighty right that of the plaintiff to enjoy the fruits of the judgment delivered in his favor. There must be a just cause for depriving the plaintiff of that right …”

17. The Applicant is obligated to satisfy the conditions set out in Order 42 rule 6(2). In the case of Butt vs. Rent Restriction Tribunal[1979], the Court of Appeal stated as follows: -“what ought to be considered in determining whether to grant or refuse stay of execution pending appeal. The court said that the power of the court to grant or refuse an application for a stay of execution is a discretionary, and 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. The Applicant contends it will suffer irreparable loss as its core business is transport and thus execution will prejudice its affairs. The Respondent on the other hand argue that the Applicant has not established the prejudice to be suffered and it is entitled to his fruits of his judgment.

19. The granting or refusing to grant the stay of execution pending appeal is a discretionary, the court should balance between the interests of the Appellant with those of the Respondent. The Respondent contends litigation must come to an end as the Applicants failed to show interest in prosecuting the suit in the trial court.

20. From the record the decretal amount is subject to a ruling delivered in Kiambu Cmcc Suit No. 226 of 2019, the Applicant contends the decretal amount is high and above the statutory amount payable by the Applicant and thus the Applicant will stand to be prejudiced if the orders are not granted. The Decretal amount is the subject of appeal.

21. On whether the appeal was filed within stipulated time, the Respondent argued that the appeal is filed outside the stipulated time and thus improper before the court. I note that the trial court delivered judgment on 4th October 2021 and the Memorandum of Appeal filed on 2nd November 2021; though they have explained the reason of delay being time taken to receive advice from their Advocate.

22. I note it is 29 days since the ruling was delivered. The reasons for the delay have been explained by the Applicants. The issue is whether there was inordinate delay.

23. On whether the trial court rightfully dismissed the Applicant’s defence for being sham, I will leave this issue for determination in the main appeal on merit. The Applicant being aggrieved by a decision of the trial court has a right to appeal.

24. On the issue of security, the Applicants submitted that they are willing to abide by the terms and conditions issued by this court as security. It will be in the interest of justice; I am inclined to grant stay of execution pending appeal with conditions.

25. Final Orders:-

1. Stay of execution pending appeal do issue on condition that half the decretal amount is paid to the Respondent and the other half to be deposited in a joint interest earning account in the names of both advocates within 30 days from the date of this ruling.2. The costs of this application to abide by the outcome of the appeal.

RULING DELIVERED, DATED AND SIGNED VIRTUALLY AT KIAMBU THIS 16TH DAY OF JUNE, 2022. ...........................RACHEL NGETICHJUDGEIn the Presence of:Kinyua – Court ClerkMs. Kahiti for ApplicantMr. Njuguna for Respondent