Frank Mbete Aluda & Kingsley Kyere (both trading as Frank Creative) v Carlvo Technology Co. Ltd [2017] KEHC 2494 (KLR)

REPUBLIC OF KENYA

IN THE HIGH COURT OF KENYAAT NAIROBI

CIVIL APPEAL NO. 42 OF 2017

FRANK MBETE ALUDA &

KINGSLEY KYERE (BOTH TRADING AS

FRANK CREATIVE).................................................................................APPELLANTS

VERSUS

CARLVO TECHNOLOGY CO. LTD........................................................RESPONDENT

RULING

The Appellants filed a Notice of Motion dated 3rd August, 2017 under the provisions of Order 42 Rule 6(1) and Order 51 rules (1) and (3) of the Civil Procedure Rules seeking stay of execution orders. Although the orders sought are ambiguous in that they do not disclose what is to be stayed, it is discernable from the grounds in support of the application that, they are seeking to stay the execution of the judgment of the trial court delivered on 24th January, 2017. Be that as it may, I have to caution litigants that they should be keen and specific in their drafting, it is not the duty of the court to filter pleadings in order to construe what is in their mind.

The Application is premised on the grounds on the body of the same and its supported by the Supporting Affidavit of FRANK MBETE ALUDA.  The grounds in support of the application are that, the Respondent had initially commenced execution proceedings and may proceed with the same causing substantial loss to the applicants, that there is an arguable appeal which may be rendered nugatory, the appellant is willing to offer security and that the application has been brought without delay. A similar application for stay was filed in the lower court which was dismissed on 27th July, 2017.

The Respondent filed a Replying Affidavit dated 7th September, 2017 and sworn by LI JUN, a director of the Respondent. It is averred that they filed a claim against the Appellants in the lower court seeking USD 29,798. 50 being the outstanding sum owed on account of sold mobile phone merchandise. The Respondent opposes the Application on the grounds that the Application does not meet the principles for granting a stay of execution and in that case, the Respondent avers that the application was brought after unreasonable delay, the appellants have not demonstrated what substantial loss they are likely to suffer if the application is not granted, since the subject decree is a monetary one and that the Appellants have not offered any security.

The Application was canvassed by way of oral submissions which I have considered, together with the Affidavits by the respective parties.  Although no authorities were cited, I have gone further to consider a number of them which are applicable in this case. Order 42 Rule 6 of the Civil Procedure Rules provides the conditions for granting an order of stay of execution which are;

(a) That the application has been made without unreasonable delay;

(b) That security for costs has been given; and

(c)That substantial loss may result to the Applicant unless the order for stay is made.

The said guidelines were outlined by the Court of Appeal in the case of Housing Finance Company of Kenya v Sharok Kher Mohamed Ali Hirji & another [2015] eKLRwhere the Court held that,

“We cannot over emphasize that at this stage we are not required to go to the merits of the case as tempting as it may be or consider whether the issues will be successful in favour of the appellant, lest we embarrass the trial judge. We therefore find that the applicant has discharged this requirement on the balance of probabilities. We are further guided by this court’s decision in CARTER & SONS LTD. V. DEPOSIT PROTECTION FUND BOARD & TWO OTHERS – Civil Appeal No. 291 of 1997, at Page 4 as follows:

“. . . the mere fact that there are strong grounds of appeal would not, in itself, justify an order for stay. . .the applicant must establish a sufficient cause; secondly the court must be satisfied that substantial loss would ensue from a refusal to grant a stay; and thirdly the applicant must furnish security, and the application must, of course, be made without unreasonable delay.”

What constitutes unreasonable delay varies with the circumstances of each case.  The instant application was filed on 3rd August, 2017 whereas the Judgment sought to be stayed was delivered on 24th January, 2017.  The question of unreasonable delay was dwelt with in the case of JaberMohsen Ali & another v Priscillah Boit& another E&L NO. 200 OF 2012[2014] eKLRwhere it was stated:

“The question that arises is whether this application has been filed after unreasonable delay. What is unreasonable delay is dependent on the surrounding circumstances of each case. Even one day after judgment could be unreasonable delay depending on the judgment of the court and any order given thereafter.

In the case of Christopher Kendagor v Christopher Kipkorir, Eldoret ELC 919 of 2012 the applicant had been given 14 days to vacate the suit land. He filed an application one day after the 14 days. The application was denied, the court holding that, the application ought to have come before expiry of the period given to vacate the land.”

The Respondent submits that the application was brought after unreasonable delay, however, I find that the circumstances of this case are peculiar in that the Appellants had earlier on sought stay orders in the lower Court and the application was dismissed on 27th July, 2017 in which case it cannot be said that the Appellants are guilty of delay in seeking stay orders in the instant application

On substantial loss, the Appellant states that the Respondent had commenced execution proceedings and may proceed thus causing substantial loss.  The Respondent is a valid decree holder and therefore entitled to execution.  The allegation that the Respondent may proceed with execution is not a legal ground to constitute substantial loss. The Respondent is rightfully entitled to execute the decree and execution is a lawful process which the Respondent is entitled to.  In the case of Timsales Limited Vs. Hiram Gichohi Mwangi, Civil Appeal Number 94 of 2008 (2013) eKLR the court held that the mere fact that the process of execution has commenced or is likely to commence does not amount to substantial loss for the reason that execution is a legal process and that the Appellant must establish other factors. What constitutes substantial loss was further discussed in the case of JAMES WANGALWA & ANOTHER V AGNES NALIAKA MISC APPLICATION No 42 of 2011 [2012] eKLR (Gikonyo Jstated that:

No doubt, in law, the fact that the process of execution has been put in motion, or is likely to be put in motion, by itself, does not amount to substantial loss. Even when execution has been levied and completed, that is to say, the attached properties have been sold, as is the case here, does not in itself amount to substantial loss under Order 42 Rule 6 of the CPR. This is so because execution is a lawful process.

The applicant must establish other factors which show that the execution will create a state of affairs that will irreparably affect or negate the very essential core of the Applicant as the successful party in the appeal.  This is what substantial loss would entail,a question that was aptly discussed in the case of Silverstein Vs .Chesoni [2002] 1KLR 867,andalso in the case of Mukuma Vs .Abuoga quoted above. The last case, referring to the exercise of discretion by the High Court and the Court of Appeal in the granting stay of execution, under Order 42 of the CPR and Rule 5(2)

(b) of the Court of Appeal Rules, respectively, emphasized the centrality of substantial loss thus:

“…the issue of substantial loss is the cornerstone of both jurisdictions. Substantial loss is what has to be prevented by preserving the status quo because such loss would render the appeal nugatory.”

In the Replying Affidavit, the Respondent has averred that they are financially stable and capable of reimbursing the Appellants the decretal sum in case the Appeal is successful and has annexed to the Affidavit, Respondent’s dollar and shilling account statement.  Even though the account statement was contested by the appellants in their submissions on the basis that they refer to the deponent’s/director’s personal account rather than the Respondent company which is a distinct legal entity from the deponent, I find that the Appellants have not satisfied this court on the substantial loss they are likely to suffer. As I have already stated, execution is a legal process and the fact that the Respondent had commenced execution that in itself is not prove of substantial loss.

The third tenet for granting an order of stay of execution is that the Applicant must provide security for the due performance of the decree.  The Appellants have generally stated that they are willing to offer security without elaborating the nature of security they are willing to offer.  The Applicants have not offered any security terms that they are ready to commit for the performance of the decree and I find that they are not committal in providing a security.  For the above reasons, the Appellants have not established sufficient cause why the orders sought should be granted.

The upshot of the above is that the application dated 3rd August, 2017 is hereby dismissed with costs.

It is so ordered.

Dated, Signed and Delivered at Nairobi this 3rdDay of November, 2017.

…………………………….

L. NJUGUNA

JUDGE

In the Presence of

…………………………. For the Applicant

…………………………. For the Respondent