Heritage Roofing Ltd v Lelo Investments Ltd & another; Dancy Auctioneers (Interested Party) [2022] KEHC 14543 (KLR)

Heritage Roofing Ltd v Lelo Investments Ltd & another; Dancy Auctioneers (Interested Party) (Civil Appeal E323 of 2022) [2022] KEHC 14543 (KLR) (Civ) (13 October 2022) (Ruling)

Neutral citation: [2022] KEHC 14543 (KLR)

Republic of Kenya

In the High Court at Nairobi (Milimani Law Courts)

Civil

Civil Appeal E323 of 2022

JN Mulwa, J

October 13, 2022

Between

Heritage Roofing Ltd

Applicant

and

Lelo Investments Ltd

1st Respondent

Joseph Karuoro

2nd Respondent

and

Dancy Auctioneers

Interested Party

(Judgment by the trial court was delivered on the May 5, 2022. The appellant being dissatisfied with the said judgment lodged an appeal by a memorandum of appeal dated May 19, 2022, stating the grounds of appeal.)

Ruling

1. Judgment by the trial court was delivered on the May 5, 2022. The appellant being dissatisfied with the said judgment lodged an appeal by a memorandum of appeal dated May 19, 2022, stating the grounds of appeal. By an application dated May 20, 2022 the appellant sought orders for stay of execution pending the hearing of the application, which application was assigned a hearing date inter partes for the June 20, 2022.

2. Before the application could be heard, the respondent moved swiftly and proclaimed the applicant’s movable goods. Before then, the trial court had dismissed the applicant’s application dated April 11, 2022 that sought to set aside the exparte judgment against itself necessitating filing of the appeal and the application dated June 16, 2022, now before the court for determination.

3. The application dated June 16, 2022 is premised on provisions of sections 1A, 11B, 3A of the Civil Procedure Act, orders 42, rule 6 of the Rules (CPR), and section 30 of the Small Claims Court Rules. The applicant/appellants seeks orders: -a.Spentb.That pending inter partes hearing of the application dated May 20, 2022, the Hon court be pleased to issue an interim order of stay of execution of the ex-parte judgment in SCCOMME 1090 of 2022. c.That the appellant be at liberty to apply for further orders and/or directions as the court may deem fit and just to grant.The supporting affidavit is sworn by one Jane Kanyi, a director of the appellant.

4. In opposition to the application, a replying affidavit was sworn by a director of the 1st respondent one Christine Wainaina on the June 15, 2022. Parties then proceeded to file written submissions to urge their rival positions. The applicant’s submissions are dated July 21, 2022 and the respondents’ are dated August 14, 2022.

5. I have considered the affidavits, and the written submissions and authorities cited by each party. The only issue for determination, in my view is, whether the applicant has met the threshold for grant of an order for stay of execution pending appeal.

6. Order 42 rule 6 Civil Procedure Ruleslays down the conditions that an applicant must meet for an order of stay pending appeal must meet; thus: -a.Substantial loss may result unless the order is made, and the application has been made without unreasonable delay.b.Such security as the court may order for the due performance of such decree as may ultimately be binding on him has been given by the applicant.

7. As rendered in numerous court decisions, substantial loss is the cornerstone for an order of stay to be granted. The onus of proving such loss lies with the applicant. Further, such orders are at the court’s discretion upon taking into account the interests of both parties.

8. The Court of Appeal in the case Kenya Shell Limited v Kibiru [1986] KLR 410 expressed itself, thus: -“… 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 event. Substantial loss in its various forms, is the cornerstone of both jurisdictions for granting a stay. That is what has to be prevent…”I have considered the parties written submissions and cited authorities. There is no dispute that the application was filed without delay.

9. The exparte judgment sought to be set aside, and subject of the appeal filed hereto, is a money decree in the sum of Kshs 298,378/= as seen from the warrants of attachment taken out by the auctioneers dated August 7, 2022. The applicant has expressed fears that if the said money is paid out to the respondents, there may be difficulty in recovering the same in the event that its appeal succeeds.

10. The 1st respondent on its part avers by its directors replying affidavit that no evidence has been placed before the court of its inability to repay the decretal sum if paid, and the appeal succeeds. It is a general rule that, an appeal arising out of a money decree cannot be rendered nugatory if stay is not granted – Gladwell Wangechi Kibiru v Lord Melvin John Blackburn & 4 others [2015] eKLR. The onus to proof that the respondent may not be able to repay the decretal sum lies with the respondent. I am satisfied that the respondent would have no difficulty in paying the decretal sum should the appeal succeed.

11. Execution of a lawful decree is lawful; and a decree holder ought not be denied enjoyment of its judgment fruits. To that extent then, the applicant must establish other factors which show that execution will create a state of affairs that will irreparably affect or negate the essential core of the successful party – James Wangalwa & another v Agnes Naliaka Cheseeto (supra). The court is mandated to balance the parties’ interests, to ensure that none is disadvantaged, while careful to administer the justice of each case on its peculiar circumstances.

12. The courts in the caseKenya Orient Insurance Co Ltd v Paul Mathene Gichuki & another [2014] eKLR, and National Industrial Credit Bank Ltd v Aquinas Francis Wasike & another [2006] eKLR pronounced themselves that an appeal would be rendered nugatory because a respondent would be unable to pay back the decretal sum, without any sufficient proof is unreasonable, as an applicant may not be able to know in detail the financial resources or lack of it. This is not the position exhibited in this application. Nothing has been placed before this court to show the applicant’s inability to pay the decretal sum if the appeal is successful. Upon consideration of the parties’ arguments in respect of the issue for determination, I am persuaded to allow the application dated June 16, 2022 in terms of prayer No 2.

13. Consequently, there shall be a stay of execution of the Small Claims Court judgment in SCCOMM No E 1090 of 2022 pending hearing and determination of the appeal.

14. The applicant shall pay the costs of the application to the respondent.

15. With regard thereto, the applicant/appellant is directed to file the record of appeal within 60 days from the date of this ruling.

DATED, DELIVERED AND SIGNED IN NAIROBI THIS 13TH DAY OF OCTOBER, 2022JN MULWAJUDGE