INDUSTRIAL AND COMMERCIAL DEVELOPMENT CORPORATION & ANOTHER v HANNAH MORAA BORUMA & ANOTHER [2007] KEHC 1607 (KLR)

REPUBLIC OF KENYA

IN THE HIGH COURT OF KENYA

AT NAIROBI (NAIROBI LAW COURTS)

Civil Appeal 254 of 2007

1.  INDUSTRIAL AND COMMERCIAL DEVELOPMENT CORPORATION

2.  JOSHUA OMUKANDA(T/a Eshikhony Agency).....…........................................................APPELLANTS

V E R S U S

1.  HANNAH MORAA BORUMA

(suing as the legal representativeof PATRICK BORUMA MARANGA)

2.  RICHARD MIRIERI NYATWANGA …….......................................................................……RESPONDENTS

R U L I N G

This is an application (by notice of motion dated 11th April, 2007) for stay of execution of decree of the lower court pending hearing and determination of the appeal herein.  It is brought under Order 41, rule 4 of the Civil Procedure Rules (the Rules).  The decree was passed on 15th of March, 2007 by the Chief Magistrate’s Court at Kisii; ideally, the appeal should have been filed before the High Court at Kisii.  But that is an issue that can be revisited at a later stage.  It is necessary to dispose off the application now.

The 1st Appellant (1st defendant before the lower court) was a lender while the 2nd Appellant (3rd defendant) was an auctioneer.  The 1st Respondent (plaintiff) was the borrower upon a charge over her land, L.R. NO. CENTRAL KITUTU/NDARANJA MBILI/1916(hereinafter called the “suit land”).  The 1st Appellant, through the 2nd Appellant (an auctioneer), sold the charged landby public auction to the 2nd Respondent who was duly registered as the proprietor thereof.  In its judgement the lower court ordered, first, that the register of the land be rectified to restore the 1st Respondent as proprietor of the property.  Secondly, it ordered that the 2nd respondent be refunded by the Appellants the purchase price he had paid of KShs. 500,000/00 plus interest.  Lastly, the 1st Appellant’s counterclaim of KShs. 1,000,000/00 against the 1st Respondent was dismissed.

The Appellants have argued that they will suffer substantial loss unless stay of execution is granted, in that they may not recover the KShs. 500,000/00 from the 2nd Respondent if the appeal is successful.  The 2nd Respondent has not filed a replying affidavit despite being duly served with the application.  There was no appearance for him at the hearing.   The suit property is currently in his name.  The Appellants are ready to provide security by way of a deposit of the money in an interest-earning account.  It is further argued for the Appellants that it is convenient that the parties do await the outcome of the appeal before further changes to the register of the suit land are made.

For the 1st Respondent it was argued that the application does not satisfy the test in Order 41, rule 4(2).  This being a money decree there is no likelihood of substantial loss; in any case, there is no evidence that the 2nd Respondent will be unable to refund the decretal sum in the event of the appeal succeeding.  Regarding rectification of the register, it was argued for the 1st Respondent that the Appellants will not suffer substantial loss as the 1st Appellant’s charge will still be in place.  It was also argued that there was unreasonable delay of nearly a month in bringing the application.

I have considered the submissions of the learned counsels.  Under rule 4(2) of Order 41, no stay of execution of decree shall be made unless the court is satisfied that substantial loss may result to the applicant unless the order is made, and that the application has been made without unreasonable delay.  The applicant must also give such security as the court may order for the due performance by him of such decree or order as may ultimately be binding on him.

Part of the decree challenged in the appeal is a money decree.  Although the Appellants have asserted that they may have difficulty recovering the money should the appeal succeed, they have not offered any evidence of the 2nd Respondent’s inability to refund the money.  But having said that, the 2nd Respondent himself has not opposed the application; he did not file any papers in response despite being served, and there was no appearance for him at the hearing.  The 1st Respondent cannot oppose the application for him.

Regarding rectification of the register of the suit land, I agree with the Appellant’s learned counsel that it is convenient that no further changes in the register of the land be permitted to occur, pending hearing and determination of the appeal.  Any further changes in the meantime may ultimately occasion the parties substantial loss.  I am also satisfied that the application has been made without unreasonable delay.

The Appellants have offered security by way of deposit of the decretal sum in an interest-earning account.  That will be acceptable security.  I will therefore allow the application and order that there be stay of execution of the decree of the lower court pending disposal of the appeal herein.  The 1st Appellant shall, as a condition for the stay, within twenty-one (21) days of delivery of this ruling deposit the decretal sum of KShs. 500,000/00 in an interest-earning account in a reputable bank or financial institution in the joint names of the Appellants’ advocates and the 2nd Respondent (or his advocates if he has any).

Costs of the application shall be in the appeal.  Those shall be the orders of the court.

DATED AT NAIROBI THIS 1ST DAY OF NOVEMBER, 2007

H. P. G. WAWERU

J U D G E

DELIVERED THIS 2ND DAY OF NOVEMBER, 2007