Madison Insurance Company Limited v Charo [2023] KEHC 25581 (KLR)

Madison Insurance Company Limited v Charo (Civil Appeal 45 of 2023) [2023] KEHC 25581 (KLR) (20 November 2023) (Ruling)

Neutral citation: [2023] KEHC 25581 (KLR)

Republic of Kenya

In the High Court at Malindi

Civil Appeal 45 of 2023

SM Githinji, J

November 20, 2023

Between

Madison Insurance Company Limited

Appellant

and

Phellister N. Charo

Respondent

(Being an Appeal of the whole decision and Ruling and Order made on the 5th day of April 2023 by Hon James Ong’ondo – in CM’S Malindi CMCC Case No. E248 of 2022)

Ruling

1. By an Amended Notice of Motion dated 25th April, 2023, the Appellant herein substantially seeks stay of execution of the ruling and proceedings in Malindi MCCC No. E248 of 2022 Phellister N Charo v Madison Insurance Company Limited; Malindi CMCC No. 246 of 2022 Ariet Vutage Mukuzi v Madison Insurance Company Limited; CMCC No. 249 of 2022 Euny Viola Seda v Madison Insurance Company Limited; CMCC No. 250 of 2022 Hugh Kombe Junior v Madison Insurance Limited; CMCC No. 252 of 2022 Sheila O. Saja v Madison Insurance Company Limited; and CMCC No. 253 of 2022 Molly Saja v Madison Insurance Co. Limited, pending the hearing and determination of this appeal. 2. The said application is supported by the affidavit sworn by Moses Barasa, the Appellant’s legal officer. According to Moses, on 5th April 2023, a ruling was delivered by Hon J Ong’ondo (SPM) in which he allowed the Respondent’s application dated 9th November 2022 and struck out the Appellant’s statement of defence dated 19th October 2022. The said ruling applied to the other cases aforementioned. Dissatisfied with that ruling, the Appellant preferred the present appeal. The Appellant is apprehensive that the Respondent has commenced the execution process and if stay is not granted their appeal will be rendered nugatory. The appellant avers that they have an arguable appeal and that the Appellant is likely to suffer loss and damage that cannot be compensated by way of damages.

3. In opposing the application, the Respondent relied on a Replying Affidavit sworn by Mr. Geoffrey Kilonzo, counsel for the Respondent, on 9th May 2023. Mr. Kilonzo deposed that following judgment delivered on 27th June 2022, the Respondent filed a declaratory suit CMCC E248 of 2022 where the Respondent successfully sought to have the Appellant’s defence struck out.

4. He added that the Appellant’s allegation that he sought to repudiate liability in a different suit CMCC 132 of 2022, in which the Respondent is a stranger to, though at the appeal stage cannot be used by the Appellant now to hold the Respondent at ransom. According to Mr. Kilonzo, the present application is vexatious and an abuse of the court process, intended to delay the Respondent from enjoying fruits of judgment.

5. I have considered the application, the supporting affidavit, the replying affidavit and the submissions filed as well as the authorities relied upon.

6. Order 42 rule 6(1) and (2) of the Civil Procedure Rules provides as follows:“(1)No appeal or second appeal shall operate as a stay of execution or proceeding under a decree or order appealed from except in so far as the court appealed from may order but, the court appealed from may for sufficient cause order stay of execution of such decree or order, and whether the application for such stay shall have been granted or refused by the court appealed from, the court to which such appeal is preferred shall be at liberty, on application being made, to consider such application and to make such order thereon as may to it seem just, and any person aggrieved by an order of stay made by the court from whose decision the appeal is preferred may apply to the appellate court to have such order set aside.(2)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; and(b)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.

7. In Vishram Ravji Halai vs. Thornton & Turpin Civil Application No. Nai. 15 of 1990 [1990] KLR 365, the Court of Appeal held that whereas the Court of Appeal’s power to grant a stay pending appeal is unfettered, the High Court’s jurisdiction to do so under Order 42 rule 6 of the Civil Procedure Rules is fettered by three conditions namely; - establishment of a sufficient cause, satisfaction of substantial loss and the furnishing of security. The application must be made without unreasonable delay. In addition, stay may be granted for sufficient cause and that the Court in deciding whether or not to grant stay must be guided by the overriding objectives enshrined under section 1A and 1B of the Civil Procedure Act.

8. In the present case, the impugned ruling was delivered on 5th April 2023 and the present application first filed on 20th April 2023 before being amended six days later. This in my view is not unreasonable delay. However, I have carefully perused the notice of motion and supporting affidavit thereof and I do not find how the Appellant has demonstrated likelihood to suffer substantial loss. Such attempt was only made in their submissions. Counsel argued that the decretal amount of Kshs. 2,860,937/- is a substantial amount which if executed will render the appeal nugatory.

9. On this principle, Platt, Ag.JA (as he then was) in Kenya Shell Limited vs. Kibiru [1986] KLR 410, at page 416 expressed himself as follows:“It is usually a good rule to see if Order XLI Rule 4 of the Civil Procedure Rules can be substantiated. 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 other event. Substantial loss in its various forms, is the corner stone of both jurisdictions for granting a stay. That is what has to be prevented. Therefore, without this evidence it is difficult to see why the respondents should be kept out of their money”.

10. On the part of Gachuhi, Ag.JA (as he then was) at 417 held:“It is not sufficient by merely stating that the sum of Shs 20,380. 00 is a lot of money and the applicant would suffer loss if the money is paid. What sort of loss would this be? In an application of this nature, the applicant should show the damages it would suffer if the order for stay is not granted. By granting a stay would mean that status quo should remain as it were before judgement. What assurance can there be of appeal succeeding? On the other hand, granting the stay would be denying a successful litigant of the fruits of his judgement.”

11. In the foregoing, I am not convinced that the grounds advanced by the Appellant sufficiently demonstrate likelihood to suffer substantial loss. Further, it is unfortunate that the Applicant/Appellant clearly stated in their submissions that they should not be required to issue security for costs. I find no sound basis on which this requirement should be waived. Order 42 rule 6 (2) above, is vivid on the requirements to be met before this court can exercise it’s discretion.

12. Having failed to meet the threshold, I find no basis to grant the orders sought. The outcome is that the application dated 25th April 2023 is hereby dismissed with costs to the respondent.

RULING READ, SIGNED AND DELIVERED VIRTUALLY AT MALINDI THIS 20TH DAY OF NOVEMBER, 2023. ...................................S.M. GITHINJIJUDGEIn the Presence of; -1. Mr Kilonzo for the Respondent2. Mokaya for the Applicant/Appellant