Kariua Farmers Cooperative Society Limited v Mumathi Staff Cooperative Society Limited [2022] KEHC 11073 (KLR)

Kariua Farmers Cooperative Society Limited v Mumathi Staff Cooperative Society Limited (Miscellaneous Civil Application E025 of 2021) [2022] KEHC 11073 (KLR) (2 June 2022) (Ruling)

Neutral citation: [2022] KEHC 11073 (KLR)

Republic of Kenya

In the High Court at Murang'a

Miscellaneous Civil Application E025 of 2021

K Kimondo, J

June 2, 2022

Between

Kariua Farmers Cooperative Society Limited

Applicant

and

Mumathi Staff Cooperative Society Limited

Respondent

Ruling

1. The applicant’s notice of motion dated May 18, 2021 seeks two reliefs: firstly, that the time for filing of the appeal be enlarged; and, secondly, for stay of execution of the decree pending the determination of the intended appeal.

2. The envisioned appeal is against the judgment dated March 25,2021 by the Cooperative Tribunal in Tribunal CTC 557 of 2014. The respondent has commenced execution of the decree of kshs 9,574,971 or thereabouts by a garnishee order issued on May 7, 2021.

3. The disputants are registered cooperative societies. The decree is for special damages arising out of non-remittance by the applicant of employees’ check-off deductions to the respondent.

4. The essence of the motion is that the intended appeal is arguable; and, that unless leave is granted, the appeal will be lost. Those matters are set out at length in a deposition sworn by George Macharia. At paragraphs 7 to 10, he avers that the judgment was delivered without notice to the applicant’s counsel. He deposes that on the date of the judgment, his lawyers could not access the virtual court. He avers that judgment was originally slated for January 21, 2021 but was deferred to February 25, 2021. It was still not ready and counsel was informed that a new date would be communicated by the tribunal’s registry. This was not to be and counsel only became aware of the decree on March 26, 2021.

5. He also lays blame on the scaling down of court operations due to the Covid-19 pandemic and limited access to court precincts by the public. In a nut shell he points fingers at the tribunal’s registry for poor communication on the date of judgment. A string of emails marked KFC 1 - 5 are annexed to prove the point. I should add that the emails were not copied to the respondent and the latter challenges their authenticity.

6. The motion is opposed through grounds of opposition dated June 24, 2021 and a replying affidavit of Rufus Karanja sworn on even date. The deponent avers that the judgment date was communicated to both parties on November 17, 2020. He states that there has been undue and unexplained delay of three months. He deposes that the intended appeal is hopeless and an abuse of court process.

7. To buttress that argument, he avers that the applicant had filed other proceedings at the Murang’a High Court in Judicial Review 49 of 2018 which were struck out. Despite receiving income from coffee, the applicant has not met the decree as promised. The motion is also attacked for failure to offer security for due performance of the decree.

8. The respondent contends further that there is no evidence of substantial loss and that no sufficient grounds have been laid to warrant the stay. In its view, the present motion is an abuse of court process and a stratagem to deny the decree-holder its fruits.

9. The applicant and respondent filed written submissions on July 28, 2021 and July 13, 2021 respectively. On March 23, 2022, I heard further arguments from learned counsel for both disputants.

10. I will commence with the prayer for extension of time. The legal parameters are well settled: This court has wide and unfettered discretion to extend time. The discretion must however be exercised judiciously. Some of the factors to be considered include the length of delay, the reasons for the delay, the nature of the intended appeal and whether the respondent will suffer prejudice if the court extends the time. See Leo Sila Mutiso v Rose Mwangi, Court of Appeal, Nairobi, Civil Application 251 of 1997 (unreported), Nicholas Salat v IEBC & 7 others, Supreme Court, Application 16 of 2014 [2014] eKLR.

11. I agree with the respondent that there was substantial delay between March 26, 2021 (the date when the applicants counsel became aware of the decree) and the presentation of this motion on May 19, 2021. The explanation is that there were delays in getting copies of the judgment and proceedings. Although there is a request dated March 26, 2021 to the registry, I note from the email correspondence marked KFC6(b) that payment of kshs 660 for supply of the proceedings was not made until May 6, 2021.

12. I have reached the conclusion that the delay is not well explained. The test was well explained in Ivita v Kyumbu [1984] KLR 441: If the delay is prolonged and ill-explained it is inexcusable. I thus hold that the application was presented with unreasonable delay.

13. Granted those circumstances, I am disinclined to exercise my discretion in favour of the applicant. Prayer 2 of the notice of motion is accordingly dismissed.

14. I will now turn to the prayer for stay of execution. The present motion is largely predicated upon order 42 rules 6 of the Civil Procedure Rules. The court may grant a stay if substantial loss may occur; that the application has been made without delay; and, that the applicant furnishes security for the due performance of the decree that may ultimately be binding on him.

15. The guiding principles in an application of this nature were explained in Wilson v Church (No 2) 12 Ch D [1879] 454 at 459 and Butt v Rent Restriction Tribunal [1982] KLR 417. In addition, the court must pay heed to the overriding objective to do justice to the parties. See Harit Sheth Advocate v Shamas Charania Nairobi, Court of Appeal, Civil Appeal 68 of 2008 [2010] eKLR.

16. I have already found that there was lengthy and ill-explained delay in presenting the motion. The draft memorandum of appeal (annexture KFC7) attacks the judgment for finding that there was breach of the agreement dated February 6, 2007; for disregarding section 35 of the Cooperative Societies Act; for failing to find that the mode of settlement of the debt was adhered to; and, lastly, for failing to explain how the award of kshs 5,290,436 was arrived at.

17. In her submissions, learned counsel for the applicant, Ms Gakii, wondered how the sums ballooned from kshs 5,290,436 to kshs 9,574,971 in the decree. True, the principal sum awarded by the tribunal was kshs 5,290,436 together with interest and costs. As noted in the judgment, under section 35 of the Cooperative Societies Act, failure to remit deductions attracted compound interest of not less than 5% per month. The impugned judgment at pages 5 to 8 has detailed the nature of the breach of the agreement of February 6, 2007 and the available remedies.

18. Granted the conclusions by the tribunal, I cannot state with confidence that the intended appeal is arguable.

19. From the materials before the court, I am also not satisfied that the applicant has demonstrated that it will suffer substantial loss. I remain alive that as a general proposition, the execution of a money decree does not constitute substantial loss. Kenya Shell v Benjamin Karuga [1982-88] 1 KLR 1018.

20. Lastly, learned counsel for the applicant freely conceded that no offer was made in the motion or affidavit for security for due performance of the decree that may ultimately be binding on it. To be fair to counsel, she offered from the bar to provide such security.

21. In the end, I am not satisfied that the applicant has met the conditions for grant of stay outlined in order 42 rules 6 of the Civil Procedure Rules. It must follow as a corollary that the prayer for stay pending the intended appeal lacks merit and is dismissed.

22. The upshot is that the applicant’s notice of motion dated May 18, 2022 is hereby dismissed.

23. Costs follow the event and are at the discretion of the court. In view of the predicament that has befallen the applicant; and, in the interests of justice, I order that each party shall bear its own costs.

It is so ordered.

DATED, SIGNED AND DELIVERED AT MURANG’A THIS 2ND DAY OF JUNE 2022. KANYI KIMONDOJUDGERuling read in open court in the presence of:Ms Gakii Nyamu holding brief for Mr Gachau for the for the applicant instructed by Daniel Henry & Company Advocates.Ms Murila holding brief Mr Gitonga for the respondent instructed by Gitonga Muriuki & Company Advocates.Ms Susan Waiganjo, court assistant.