Kenya Power and Lighting Company v Manson Hart Kenya Limited [2022] KEHC 13712 (KLR)

Kenya Power and Lighting Company v Manson Hart Kenya Limited (Civil Case E706 of 2021) [2022] KEHC 13712 (KLR) (Civ) (5 October 2022) (Ruling)

Neutral citation: [2022] KEHC 13712 (KLR)

Republic of Kenya

In the High Court at Nairobi (Milimani Law Courts)

Civil

Civil Case E706 of 2021

JK Sergon, J

October 5, 2022

Between

Kenya Power and Lighting Company

Applicant

and

Manson Hart Kenya Limited

Respondent

Ruling

1. This ruling relates to the Applicant’s Notice of Motion dated October 16, 2021 seeking the following orders;i.Spent.ii.Spent.iii.Thatthis Honourable court be pleased to grant leave to the Applicant to appeal out of time against the judgment of the Honourable Magistrate AM Obura delivered on the August 27, 2021 and that the memorandum of appeal dated October 16, 2021 be deemed to be duly filed and served.iv.Pending the hearing and determination of the appeal this Honourable Court be pleased to issue a stay of execution of the judgment and order of the Honourable AM Obura (Mrs) given on the August 27, 2021 and any other subsequent proceedings arising therefrom.v.Thatthe costs of this application be provided for.

2. The application is premised on the grounds on its face and the supporting affidavit of Justus Ododa, sworn on October 16, 2021. The applicant’s case is that it wishes to appeal against the judgement/decree ruling of Hon AM Obura (Mrs) delivered on August 27, 2021 in Milimani Commercial Court Case No 6992 of 2014;Manson Hart Kenya Limited vs Kenya Power and Lighting Company Limited. However, the time to file appeal lapsed before it could file its appeal. The applicant states that the delay in filing the appeal was not intentional but was caused by the delay by the registry in typing the said judgment. Further, that the respondent now seeks to execute against it the sum of Kshs 7,465,925. 82, which amount the respondent is unlikely to repay in the event the appeal succeeds. The applicant contends that should the court decline to grant stay of execution, it will not only suffer substantial loss but the appeal will be rendered nugatory.

3. In its submissions, the applicant contends that it has satisfied the pre-requisite conditions to enable this Honourable Court exercise its discretion in its favour in enlarging time to file the appeal. The applicant has made reference to the case of Patrick Maina MwangivWaweru Peter[2015] eKLR and the case of Mwangi vKenya Airways Ltd[2003] KLR, where the principles for extension of time were outlined. These are the length of the delay, reasons for the delay, chances of the appeal succeeding if the application is granted and the degree of prejudice to the respondent if the application is granted.

4. On the length of delay, the applicant submits that the delay was not inordinate since it filed its Memorandum of Appeal on October 27, 2021, one month after the deadline for filing the appeal. Reference was made to the case ofSolutions Ltd v Paretto Printing Works Limited[2021] EKLR where the Court held that a seven (7) weeks delay was not inordinate. The applicant further submitted that the delay was occasioned by the failure by the registry to avail a typed judgment on time. Reference has been made to the case ofStanley Kahoro Mwangi & 2 Others v Kanyamwi Trading Company Ltd[2015] eKLR where the court held that a plausible and satisfactory explanation for delay is the key that unlocks the court’s flow of discretionary favour.

5. While making reference to the case ofJoseph Schmadererv Serah Njeri Ngene[2021] eKLR, the applicant contends that the respondent has not shown how granting this application will be prejudicial to it. The applicant submits that the court ought to weigh the prejudice to be occasioned to the Applicant vis a vis that of the respondent and apply its discretion in its favour. Lastly, the applicant maintains that the appeal is not frivolous and it discloses chances of success.

6. On the second limp of the application, the applicant has relied on the case of HGE vSM[2020] eKLR,Butt v Rent Restriction Tribunal[1979] eKLR and the provision of Order 42 Rule 6 of the Civil Procedure Rules which sets out the conditions to be met for grant of stay of execution. These include proof of substantial loss if stay is not granted, security for due performance of any decree and that the application was brought without undue delay. The applicant submitted that it will suffer substantial loss should the stay order not be granted especially since the decretal amount is substantial.

7. Additionally, it contends that it is unlikely that the respondent will be able to pay back the decretal sum should the appeal succeeds. The applicant’s submission is that it is willing to comply with the court’s order on security for due performance, further that the application has been made timeously and without unreasonable delay and that the appeal is not frivolous but it rather raises grounds worth ventilating before the court. It has relied on the case of Boniface Ngure Ndungu v Bestlady Cosmetics Shop Limited[2021] eKLR and the case of Equity Bank Ltd v Taiga Adams Company Ltd[2006] eKLR.

8. In opposition, the respondent filed a Replying Affidavit sworn on November 19, 2021 by Patrick Mugambi, a Director at the respondent’s company. While acknowledging that indeed judgment was delivered on August 27, 2021 he avers that the intended appeal is an afterthought made in bad faith hence an abuse of the court process. The respondent has rebutted the applicant’s assertion that it might not be able to refund the decretal sum incase its appeal succeeds and stated that it is a solvent entity. Further the respondent averred that having already filed its Memorandum of Appeal without the benefit of reading through the lower court’s judgment, then the reason for delay does not hold.

9. It was submitted on behalf of the respondent that the applicant has failed to place cogent evidence before the court demonstrating the substantial loss it is likely to suffer if the order for stay is not granted. As a consequence, the respondent submits that the vital limb of Order 42 rule 6 of theCivil Procedure Rules is yet to be satisfied. The respondent maintains that it is a solvent entity and it is more than capable to pay back the decretal amount if so required in the unlikely event the appeal succeeds. Reference has been made to the case of Kenya Shell Limited v Benjamin Karuga Kibiru & another[1986] eKLR and the case of Winfred Nyawaira Maina v Peterson Onyiego Gichana[2015] eKLR.

10. The respondent further submitted that the two months delay in filing the application and the reason thereof shows that the intended appeal is an afterthought, made in bad faith and therefore constitutes an abuse of the court process. The respondent has pointed out that the applicant has been indolent and has only moved to court after receiving its letter indicating an intention to initiate execution of the decree. It has relied on the case of Re Estate of M’rutere M’mugikwa Alias Rutere Andrew (deceased)[2017] eKLR where the court held that a delay of two months was inordinate.

11. It is the respondent’s further submission that the applicant has no genuine or reasonable excuse for not filing the Appeal within the requisite statutory period and therefore the court ought not to extend its discretion to extend time. In support, reliance has been placed on the case of County Executive of Kisumu v County Government of Kisumu & 8 others[2017] eKLR where the Supreme Court held that delay in getting proceedings is not a prima facie panacea for a case of delay whenever it is pleaded. Further that each case should be determined on its own merit and all relevant circumstances should be considered. The respondent made reference to the case of Peter Wambugu Kariuki& 16 others vsKenya Agricultural Research Institute[2018] eKLR where the court of appeal cited with approval the case of SmithvsClay[1967], ENG R 55, [1767] 3 Bro CC 646, [1767] S29 ER 743 where Lord Camdem LC while discussing the doctrine of laches stated;“A court of Equity has always refused its aid to stale demands where a party has slept upon his right and acquiesced for a great length of time. Nothing can call forth this court into activity, but conscience, good faith and reasonable diligence; where these are wanting, the Court is passive, and does nothing.”

12. The respondent contends that it will suffer prejudice; time mental anguish and the costs of sustaining a suit for long, if the application is allowed. The respondent while relying on the equitable maxim of he who comes to equity must come with clean hands and the maxim of equity aids the vigilant not the indolent, has urged the court to dismiss the application in its entirety.

Analysis and determination; 13. Section 79G of the Civil Procedure Act is the operative part in answering the question whether the prayer to enlarge time to file the appeal is merited. Section 79G of the Civil Procedure Act provides that:

14. Every appeal from a subordinate court to the High Court shall be filed within a period of thirty days from the date of the decree or order appealed against, excluding from such period any time which the lower court may certify as having been requisite for the preparation and delivery to the appellant of a copy of the decree or order:

15. Provided that an appeal may be admitted out of time if the appellant satisfies the court that he had good and sufficient cause for not filing the appeal in time.

16. From the provision above, it is noteworthy that the phrase used is “an appeal may be admitted out of time” this therefore means that an appeal may indeed be admitted out of town, however, the intended appeal ought to have already been filed before or together with an application seeking leave to extend time for filing an appeal. This was the position taken by Emukule, J in Gerald M’limbineCase(Supra) and in Mugo& others v Wanjiru & anor[1970] EA 482 where it was held that:“Clearly, as a general rule the filing and service of the notice of appeal ought to be regularised before or at least at the same time as an application is made to extend the time for filing the record and the fact that this has not been done might be a reason for refusing the application or only allowing one on terms as to costs. But it does not mean that such an application must be refused.”

17. I have perused the file and noted that the applicant did file his Memorandum of Appeal together with the present application dated October 16, 2021 and filed on the October 27, 2021. The decision whether or not to grant leave to appeal out of time or to admit an appeal out of time is an exercise of discretion. Some of the factors that aid Courts in exercising the discretion whether to extend time to file an appeal out of time were suggested by the Court of Appeal in Thuita Mwangi v Kenya Airways Ltd [2003] eKLR. They include the following:i.The period of delay;ii.The reason for the delay;iii.The arguability of the appeal;iv.The degree of prejudice which could be suffered by the if Respondent the extension is granted;v.The importance of compliance with time limits to the particular litigation or issue; andvi.The effect if any on the administration of justice or public interest if any is involved.

18. The judgment was delivered on August 27, 2021 while the present application was filed on October 27, 2021, two (2) months later. The appellant has submitted that the delay was occasioned by the delay in receiving the typed judgment of the court. The applicant stated that it followed up with the executive officer on the certified judgment and has produced a letter dated September 2, 2021 to the Executive Officer. The respondent argued that since the letter does not indicate when it was filed, the same ought to be disregarded. Further that since the applicant already drafted its Memorandum of Appeal without the certified judgment it follows then that the reason given is not sufficient. I am of the view that where delay is occasioned by the court registry to provide any documents the delay is excusable especially where the applicant has shown that it was not indolent and made follow ups. Consequently, I am inclined to allow the applicant leave to file his intended appeal noting that two (2) months delay is not inordinate.

19. Its an application for stay invokes the discretionary powers of the court under Order 42 Rule 6(1) of the Civil Procedure Rules, 2010which empowers this court to stay execution, either of its judgement or that of a court whose decision is being appealed from, pending appeal. The conditions to be met before stay is granted are provided for under Rule 6(2) of Order 42 and states as follows:-“No order for stay of execution shall be made under subrule (1) unless–a.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; andb.such security as the court orders for the due performance of such decree or order as may ultimately be binding on him has been given by the applicant.”

20. The Court of Appeal in Butt v Rent Restriction Tribunal [1982] KLR 417 gave guidance on how a court should exercise discretion and held that:“1. The power of the court to grant or refuse an application for a stay of execution is a discretionary power. The discretion should be exercised in such a way as not to prevent an appeal.2. The general principle in granting or refusing a stay is; if there is no other overwhelming hindrance, a stay must be granted so that an appeal may not be rendered nugatory should that appeal court reverse the judge’s discretion.3. A judge should not refuse a stay if there are good grounds for granting it merely because in his opinion, a better remedy may become available to the applicant at the end of the proceedings.4. The court in exercising its discretion whether to grant [or] refuse an application for stay will consider the special circumstances of the case and unique requirements. The special circumstances in this case were that there was a large amount of rent in dispute and the appellant had an undoubted right of appeal.5. The court in exercising its powers under Order XLI rule 4(2)(b) of theCivil Procedure Rules, can order security upon application by either party or on its own motion. Failure to put security for costs as ordered will cause the order for stay of execution to lapse.”

21. Substantial loss is a factual issue which must be raised in the supporting affidavit and further supported by evidence. The applicant has not demonstrated the substantial loss he will suffer should the court disallow the prayer for stay. In the case of Macharia T/a Macharia & Co Advocates Vs East Africa Standard[2002] eKLR Kuloba J. ae then was held that an applicant’s ground for substantial loss must be specific and detailed as it is not enough merely stating that substantial loss will result or that if the appeal is successful it will be rendered nugatory. The applicant has provided proof of the respondent’s intention to execute, which intention has not been disputed, and therefore I am inclined to allow the prayer for stay of execution. This will however be subject to the applicant depositing the decretal amount in their respective advocates joint account within 45 days hereof.

22. In the end, the application dated October 16, 2021 is allowed giving rise to issuance of the following orders:-

i.Leave is granted to the applicant to file and serve its Memorandum of Appeal within 14 days hereof.ii.Execution of the judgment and order delivered on August 27, 2021 in Milimani CMCC No 6992 of 2014 is hereby stayed pending the hearing and determination of the appeal.iii.The appellant to deposit the entire decretal sum in a joint interest earning account of both advocates within 45 days hereof.iv.In default of order three (3) above, the respondent shall be at liberty to execute.v.Costs shall abide the outcome of the appeal.

DATED, SIGNED AND DELIVERED ONLINE VIA MICROSOFT TEAMS AT NAIROBI THIS 5TH DAY OF OCTOBER, 2022. .........................J. K. SERGONJUDGEIn the presence of:................... for the Applicant.................. for the Respondent