Fidelity Shield Insurance Co. Ltd v Machini [2022] KEHC 10039 (KLR)

Fidelity Shield Insurance Co. Ltd v Machini (Miscellaneous Application E316 of 2022) [2022] KEHC 10039 (KLR) (Civ) (15 July 2022) (Ruling)

Neutral citation: [2022] KEHC 10039 (KLR)

Republic of Kenya

In the High Court at Nairobi (Milimani Law Courts)

Civil

Miscellaneous Application E316 of 2022

JK Sergon, J

July 15, 2022

Between

Fidelity Shield Insurance Co. Ltd

Applicant

and

Cyrus Ombuna Machini

Respondent

Ruling

1. This ruling is predicated on the Notice of Motion dated 2nd June, 2022 taken out by the appellant/applicant and supported by the grounds set out on its body and the facts stated in the affidavit of Mr. Sammy Kamau Wanjiku the Claims Manager of the applicant. The applicant sought for an order for leave to appeal out of time against the judgment and decree delivered on April 1, 2022 in Milimani CMCC No. 7584 of 2019 and a further order for a stay of execution of the aforementioned judgment pending the hearing and determination of the intended appeal.

2. In opposing the said Motion, the respondent filed the replying affidavit dated 10th June 2022, to which Sammy Kamau Wanjiku rejoined with his supplementary affidavit sworn on June 23, 2022 followed by the further affidavit sworn by the respondent on June 13, 2022.

3. The respondent further put in Ground of Opposition dated June 10, 2022in which he raised a total of (9) nine grounds.

4. The instant Motion was canvassed through oral arguments whereby the parties’ respective advocates chose to rely on the relevant documents filed.

5. Before I delve into the merits of the Motion, I will address my mind to one issue which, though raised in the respondent’s oral arguments, is crucial.

6. In brief, the respondent argues that the applicant purported to file the supplementary affidavit of Sammy Kamau Wanjiku without leave of the court and that the same sought to introduce new evidence which the applicant has not had the opportunity to respond to. On the part of the applicant, it is submitted that the Supplementary affidavit does not cause any prejudice as it basically attached the leave form.

7. From my perusal of contents of the supplementary affidavit mentioned hereinabove, I note that the applicant essentially states that the issues raise in the replying affidavit are matters touching on the intended appeal and also attached an application for leave form duly authorized in respect to their in house legal officer.

8. In my opinion, there was nothing much for the respondent to respond to in the said affidavit as it was only a leave form attached showing that indeed the legal officer was on leave thus the delay in filing of the appeal.

9. In the premises, I am convinced that it would be fair and in the interest of justice to have the supplementary affidavit of Sammy Kamau Wanjiku to be admitted in this court.

10. It is evident that the Motion is seeking twin orders, the first being for the enlargement of time to appeal and for leave to appeal out of time against the impugned judgment of April 1, 2022, which I shall now address.

11. Section 79G of the Civil Procedure Act sets the timelines for lodging an appeal against the decision of a subordinate court as 30 days from the date of the decree or the order being appealed against. The provision goes on to express that an appeal may be admitted out of time where sufficient cause has been shown.

12. Furthermore, under the provisions of Section 95 of the Civil Procedure Act and Order 50, Rule 5 of the Civil Procedure Rules, the courts have power to enlarge the time required for the performance of any act under the Rules even where such time has expired.

13. The guiding principles to be satisfied in an application seeking leave of the court to file an appeal out of time/for the extension of time were the laid out in the case of Thuita Mwangi v Kenya Airways Limited [2003] eKLR and were reaffirmed in the case of Growth Africa (K) Limited & another v Charles Muange Milu [2019] eKLR.

14. Under the first condition touching on length of delay, while it is apparent from the record that no copy of the impugned ruling was availed to this court, the parties are in agreement that the impugned judgment was delivered on April 1, 2022 which is close to two (2) months prior to the filing of the Motion. In my mind, while there has clearly been a delay in filing the Motion, I do not find the delay to be inordinate.

15. Concerning the reason(s) for the delay, Sammy Kamau Wanjiku in his supporting affidavit to the Motion explains that the delay was occasioned by the absence from the legal officer who was on leave One Christopher Mukhovi and who reported back to the office on 27th of April, 2022.

16. On the hand the respondent stated that the reasons for the delay in filing the intended appeal has not been satisfactorily explained to the court and that they are unreasonable even though the respondent further stated that the mistakes of counsel should not be visited on a client.

17. Upon considering the explanation given by the applicant, I find the same to be reasonable in the circumstances.

18. As relates to the condition on whether or not an arguable appeal exists, it is the applicants’ assertion on the one hand that the intended appeal is highly meritorious with high chances of success. The respondent on the other hand contends that the applicant has failed to demonstrate to this court that there exists an arguable appeal with high chances of success.

19. Upon my perusal of the grounds of appeal raised in the draft memorandum of appeal annexed to the Motion, I find that the appeal is primarily against the decision of the trial court to decline to set aside the ex parte judgment already in place. Taking these factors into account, I am satisfied that the applicant has established arguable points of law and fact in its draft memorandum of appeal.

20. In addressing the final condition on prejudice, the applicant asserts that the respondent does not stand to be prejudiced that cannot be adequately compensated by way of costs. The respondent on the other hand stated that the application is intended to cause prejudice, embarrassment and loss to them.

21. It is not in dispute that an ex parte judgment was entered in favour of the respondent. It is therefore only natural for the respondent to be lawfully entitled to enjoy the fruits of his judgment. Nevertheless, it would not be in the interest of justice to lock out the applicant who is aggrieved by the ruling of the trial court declining to set aside the ex parte judgment. I therefore find it reasonable for the applicant to be given the opportunity of challenging the subordinate court’s decision on appeal.

22. I associate myself with the finding by the court in the case of Blue Nile E. A. Ltd v Lydia Gode Yusuf & another [2018] eKLR cited in the applicant’s submissions, where the court held thus:“The right to be heard is a Constitutional right provided for under Article 48 of the Constitution of Kenya, and in all circumstances it will be in the interest of all parties to hear a matter on merit. The only consideration the Court ought to take into account is to balance the rights of both parties. I am therefore inclined to grant the Applicants an opportunity to file their Appeal out of time so that the same can be heard on merit.”

23. The second order sought is for stay of execution of the ex parte judgment pending the hearing and determination of the appeal.

24. The guiding provision is Order 42, Rule 6(2) of the Civil Procedure Rules which sets out the following conditions in determining an application for stay.

25. The first condition is that the application must have been made without unreasonable delay. I am satisfied that this condition was sufficiently addressed hereinabove.

26. Under the second condition, the applicant is required to show to this court’s satisfaction the substantial loss it would likely suffer if the order for stay is denied.

27. From the Motion and affidavits to back it, it is apparent that the applicant is anxious that the respondent, whose financial means are unknown, will not be able to refund the decretal sum if the same is paid to him and the appeal succeeds, further considering that the decretal amount is substantial in nature.

28. On his part, the respondent is of the view that the applicant should show the damages it would suffer if the order for stay is not granted and that it is not sufficient to merely state that the decretal sum is a lot of money and that the applicant would suffer loss if the money is paid.

29. The courts have time and time again discussed the question on who has the burden of proof on the issue of refund of the decretal sum. I am both guided and bound by the Court of Appeal’s analysis in the case of National Industrial Credit Bank Ltd v Aquinas Francis Wasike & another [2006] eKLR where it held thus:“Once an applicant expresses a reasonable fear that a respondent would be unable to pay back the decretal sum, the evidential burden must then shift to the respondent to show what resources he has since that is a matter which is peculiarly within his knowledge…”

30. In the absence of anything to indicate or ascertain the respondent’s financial capacity therefore, I am satisfied that the applicant has reasonably demonstrated the manner in which it stands to suffer substantial loss.

31. In respect to the final condition on the provision of security for the due performance of such decree or order, the applicant on the one hand indicates its readiness and willingness to comply with any conditions that will be set by this court on the provision of security, which position was reiterated by their advocate during oral submissions. On the other hand, the respondent is of the view that should an order for a stay of execution be granted, then the applicant should be ordered to deposit the half the decretal sum in a joint interest earning account and the other half paid to the respondent.

32. In the end, the Motion dated June 2, 2022 is found to be meritorious and it is allowed, therefore giving rise to a grant of the following orders:i.The applicant is granted leave of 14 days from today’s date to file an appeal out of time.ii.There shall be a stay of execution of the ex parte judgment delivered on November 26, 2021 on the condition that the applicant deposits the half the decretal sum in an interest earning account to be held in the joint names of the parties’ advocates/firm of advocates within 45 days from today, failing which the order for stay shall automatically lapse.iii.Costs of the application to abide the outcome of the appeal.

DATED, SIGNED AND DELIVERED ONLINE VIA MICROSOFT TEAMS AT NAIROBI THIS 15TH DAY OF JULY, 2022. ………….…………….J. K. SERGONJUDGEIn the presence of:……………………………. for the Appellant/Applicant……………………………. for the Respondent