Eldoret Grains Ltd v National Cereals & Produce Board [2014] KEHC 7442 (KLR)

REPUBLIC OF KENYA

IN THE HIGH COURT OF KENYA AT ELDORET

HCC NO. 103 OF 2009

ELDORET GRAINS LTD  :::::::::::::::::::::::::::::::::::::::::::::    PLAINTIFF

=VERSUS=

NATIONAL CEREALS & PRODUCE BOARD  ::::::::::::::::::::    DEFENDANT

RULING

On 8th May, 2012, Hon. Mr. Justice J.R. Karanjadelivered a Judgment in this case.  He  held that the Defendant was  liable to replace 2108 bags of contaminated white maize which the Plaintiff had purchased from the Defendant.  In  the alternative, the learned Judge ordered the Defendant to pay to the Plaintiff the sum of Kshs 3,689,000/= which was the equivalent monetary value of the 2108 bags of maize.

The Defendant was also ordered to pay the costs of the suit.

Being dissatisfied with the Judgment, the defendant filed a Notice of Appeal on 17th May, 2012.

The  Defendant has now come to this court, asking for a stay of execution pending the hearing and determination of the appeal.

It is the Defendant's contention that its appeal was arguable.  And because the sums involved are substantial, the defendant submitted that if the Plaintiff was allowed to carry on with the process of execution of the Decree, the appeal would thereafter be rendered nugatory.

According to the Defendant, it cannot fail to meet the decretal amount if it was  eventually held by the court that the sums set out in the Judgment should be paid to the Plaintiff.

As  a sign of its bona fides, the Defendant told this court that it was ready to have the decretal  amount deposited in an interest-earning joint account, pending the appeal.

In answer to the application, the Plaintiff submitted that there had been inordinate delay in bringing the application.  It was  pointed out that whilst the Judgment was delivered on 8th May, 2012, the Defendant  waited until July, 2013 before  it brought  the application.

Secondly, the Plaintiff  holds the view that the payment of the decretal amount could not cause any prejudice to the Defendant, as the Plaintiff could easily repay the money if the Defendant's appeal succeeded.

The Plaintiff pointed out that it had originally paid Kshs 35 million to the Defendant, for the purchase of  some 20,000 bags of white maize.  Thereafter, 2108 bags of maize, which the Plaintiff had collected from the Defendant, were found to be contaminated and  unfit for human  consumption.  That  was the genesis of the case herein.

In  those circumstances, the Plaintiff invited this court to find that it had financial ability to repay the money to the Defendant,  if the appeal was successful.

In reply to the submissions made by Mr. Kitiwa, the learned Advocate for the  Plaintiff, the Defendant's lawyer, Mr. Akenga,  emphasized that the application was not an afterthought.  He pointed out that the Notice of Appeal was filed seven (7)  days after  the Judgment was delivered.

Mr. Akenga also informed the court that any delay in filing the application was attributable to the administrative issues which   confronted the Defendant,  resulting in the absence of any person who could  swear the affidavit in support of the application.

Finally, the Defendant asserted that the Plaintiff may have been richer yesterday, but poorer today.

Considering that the appeal is from a decision of this court, it would be  completely  out of place for me, to purport to assess the strength or weakness of  the said appeal.  I so hold because any assessment by me could be construed as an attempt to sit on  an appeal over a decision of another Judge of concurrent jurisdiction.

However, I note that the Plaintiff did not appear to challenge the Defendant's  contention, that the appeal was arguable.  I therefore  presume that the Plaintiff  conceded, that the appeal was arguable.

But  why did the Defendant wait for more than 12 months before  seeking an order for stay of execution?  By  waiting  for that long, was the Defendant guilty of inordinate delay?

The record shows that the Judgment was delivered on 8th May, 2012, before the High Court  at Kitale.  On that date, the Defendant  was represented, whilst  the Plaintiff was absent.

After the Judgment was delivered, the Defendant sought and was granted an order for stay of execution for a period of 30 days.

On 17th May, 2012, the Defendant lodged a Notice of Appeal.

Thereafter, on 21st May, 2012, the Defendant wrote to the learned Deputy Registrar, asking for certified copes of the proceedings  and of the Judgment, to enable  it compile the Record of Appeal to the  Court of Appeal.  The  letter asking for the certified proceedings and Judgment  was  copied to the Advocates for the Plaintiff.

On 17th April, 2013, the Plaintiff changed its advocates, from Chemitei & Company  Advocates  to Gicheru & Company Advocates.

The  Plaintiff's new lawyers  filed the Bill of Costs in court on 24th April, 2013.  The Bill of Costs was taxed on 14th May, 2013, when the learned taxing master set the 28th of May, 2013 as the date when the Ruling on costs would be made.

However, the Ruling was  ultimately delivered on 24th June, 2013.  During the delivery of the Ruling, the Defendant's  advocate was absent.

It is after the Defendant became aware of  the Ruling on taxation that the application for stay of execution was  filed, on 15th July, 2013.

In my considered view, the period to be taken into account when determining whether or not there had been inordinate delay is the period from when the Defendant  became aware  of the Ruling  on taxation.

The reason for that is that although the Judgment  was delivered on 8th May, 2012, execution could not  issue immediately thereafter.  Execution of a Decree can only proceed after the Bill of costs had been taxed or after  the Decree-Holder has obtained the leave of the court to proceed with execution prior to taxation.

Therefore, had the Defendant sought an order for stay of execution prior to the issuance of the Certificate of Taxation, it could have been premature.

In the circumstances, there was no inordinate delay by the Defendant, in seeking the order for  stay of execution.

If the execution is not stayed, would the Defendant suffer irreparable loss?

The Defendant appears to admit that at the time the parties herein entered into their contract, the Plaintiff  was a company of financial means.  Of course, the Plaintiff demonstrated its  financial  ability by paying Kshs 35 million to the Defendant.

On its part, the Defendant  was able to refund to the Plaintiff  over Kshs  15 million, after  the plaintiff asked for it.  That  implies that the Defendant had  not simply “eaten away” the money which the Plaintiff had paid over to it.   In effect, the Defendant was  also a Company with a demonstrable financial ability.

But  the said abilities  of both companies  was as at the year 2008.  Neither of the two companies has  provided this court with materials to demonstrate their current financial muscles.

Having taken into account all the issues raised, I have come to the conclusion that the Justice of the case calls for an order for stay of execution, coupled with adequate security.

I therefore order that there shall issue forthwith an order for stay of execution pending the  hearing  and determination of the appeal.  The stay shall be conditional upon the defendant providing the decretal amount, including the taxed costs, within the next 30 days.  The  said sums will then be held in a joint interest-earning account, to which  the advocates for the two parties will be signatory.

As  regards the costs of the Application,  I order that the same shall abide  the outcome of the appeal.  If the appeal succeeds, the Defendant will have the costs.  But  if the appeal fails, the costs of this application shall be paid by the Defendant.

Finally, the Defendant will pay the Court Brokers charges for the execution process which has now been stayed.  The said costs are to be taxed, unless the same is agreed upon between  the Defendant and the Court broker.

DATED, SIGNED AND DELIVERED AT ELDORET,

THIS   17TH  DAY OF  JANUARY,  2014.

FRED A. OCHIENG

JUDGE.