Mass Energy Kenya Ltd v Milton Mwakale Kiwoi [2020] KEHC 2119 (KLR)

REPUBLIC OF KENYA

IN THE HIGH COURT OF KENYA AT MOMBASA

CIVIL APPEAL NO. 54 OF 2020

MASS ENERGY KENYA LTD...................APPELLANT/APPLICATION

VERSUS

MILTON MWAKALE KIWOI.........................................RESPONDENT

(Being an Appeal from the Judgment delivered by  Hon. Lesootia A. Saitabau(PM) on the 30th April 2020 in Mombasa CMCC No.1237 of 2019)

RULING

1.  The application for determination before the Court is the Notice of Motion Application dated 6th July, 2020 and filed on 7th July, 2020 by the Appellant/Applicant herein. The same has been brought under the provisions of Order 42 Rule 6andOrder 51 rule 1 both of Civil Procedure Rules, 2010and Sections 1A, 1B, 3, 3A and 63 (e) all of the Civil Procedure Act, Cap 21 laws of Kenya. The application seeks for the following orders:-

a) Spent.

b) Spent.

c)  That this Honourable court be pleased to Stay Execution of the Judgment delivered on 30th April, 2020 in Mombasa CMCC No. 1237 of 2019 and subsequent execution proceedings thereto, together with all consequential orders pending hearing and determination of the intended appeal.

d) That the costs of this application be provided for.

2.   The application is premised on among other grounds, the averment that the Chief Magistrate’s Court delivered a Judgmentin respect ofMombasa CMCC. No.1237 of 2019 on 30th April, 2020 in favour of the Respondent for a net sum of Kshs.2,530,000/=. The Applicant avers that the Respondent served him with a 15 days Notice of Entry of Judgment, thus threatening the execution of the subsequent Decree. That the Applicant intends to appeal against the Judgment of 30th April, 2020 having filed a Memorandum of Appeal. Thus if Stay of Execution is not granted, the instant application and the Intended Appeal will be rendered nugatory and the subsequent proceedings rendered moot.

3.  The Applicant further reiterated that the right of Appeal is a constitutional right that actualizes the right to access justice, protection and benefit of the law.  It will be impinged if the Appeal is rendered nugatory.  Finally that the Applicant is willing to abide with conditions of this court and that the application has been brought without unreasonable delay and if the orders for Stay are not granted, the Applicant is likely to suffer irreparable harm and/or loss.

4.  The application is further supported by an Affidavit sworn by David N.Mbithi who described himself as the Appellant’s Supervisor. The deponent explicates the grounds in the application and further states that the Intended Appeal raises arguable grounds.

5. The Respondent filed a Replying Affidavit dated 13th July, 2020 inopposition of the application. His core contention was that the application is meant to frustrate and deprive him the right to enjoy the fruits of his Judgment.

6.  The application was canvassed by way of written submissions. The Appellant filed its submissions on 7th August, 2020 whilst the Respondent filed his submissions on 8th September, 2020.

7.  The Appellant/Applicant in its submissions identifies the only issue for determination as being whether the application under consideration meets the threshold of the mandatory provisions of Order 42 Rule 6of theCivil Procedure Rules, 2010.  In that regard, the Applicant must satisfy the court that substantial loss may result to the Applicant unless the Order is made; the application has been made without unreasonable delay; and finally, that the Appellant is willing to offer security in performance of the Decree.

8.  On whether substantial loss will be occasioned, the Applicant submits that the Respondent does not have the financial muscle to refund the amount of Kshs.2,530,000/= since he (the Appellant), stated that he is only a welder. If Stay is not granted in the circumstances, the Respondent may proceed with execution which will have an end result of not only occasioning the Appellant injustice, but also rendering the Intended Appeal a mere academic exercise.

9.   The Appellant/Applicant further submits that the application has been made without undue delay, the Judgment having been delivered on 30th April, 2020 and the Appeal filed on 26th May, 2020 while the instant application was filed on 6th July, 2020.  Lastly, with regard to the issue of security, it is the Applicant’s submission that it is willing to provide any security that this court may deem reasonable.

10. The Respondent on the other hand submitted that the court should consider Order 42 Rule 6 of the Civil Procedure Rules which governs the grant of Orders for Stay. According to him the Appellant/Applicant has not demonstrated any substantial loss it is likely to suffer, the Decree under question being a monetary one. Be that as it may, it has not been proved than the Respondent is unable to refund the decretal sum if the same is paid to him or that the execution in itself will ruin the Appellant’s business. The position is buttressed by reliance on the case of Stephen Wanjohi..Vs…Central Glass Industry Limited, Nairobi HCCC. No.6726 of 1991.

11.   It was further submitted that execution alone cannot amount to substantial loss since it is a lawful process any in the event that the court is inclined to have to grant Stay as sought then the Appellant/Applicant should be ordered to furnish a security of Kshs.2,666,600/= in a joint interest-earning account in the name of both the Respondent’s and

Appellant’s Advocate.

Analysis and Determination

12.   I have considered the application and the affidavits both in support of and in opposition to the application. I have also considered the submissions made on behalf of the parties as well as the authorities that have been relied upon.   The issue which arises is whether the court should order Stay of Execution.

13.   Stay of Execution is provided for under Order 42 Rule 6(2) of theCivil Procedure Rules which provides:-

“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.”

14.   I must hasten to add here that the conditions set out in Rule 6(2) (supra) only serve as guidelines which the court can use as beacons in exercising its unfettered discretion in deciding whether or not to grant Stay of Execution pending Appeal depending on the circumstances of each case.  However, the Applicant must satisfy the court that he/she stands to suffer substantial loss if Stay is not granted and that the application had been filed without unreasonable delay. The applicant must also  show that he/she was willing to offer such security as may be ordered by the court. Since the application invokes the discretionary powers of the court, it must be exercised judiciously.  The application must therefore meet the threshold for the grant of the Stay of Execution.

15.  The Court of Appeal in the case of Butt…Vs…Rent Restriction Tribunal (1982) KLR 417, set down the guidelines which the court will consider in exercising discretion to grant stay of execution.  The court held:-

a)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.

b)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.

c)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.

d)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.

e)The court in exercising its powers under Order XLI rule 4(2)(b) of the Civil 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.

16.   Based on these principles the first consideration is whether the Applicant has demonstrated that he will suffer substantial loss.  The Applicant submits that the Respondent stated he is a welder and has not demonstrated the ability to repay the decretal sum if Stay is not ordered and the end result is that the Appeal will be rendered a mere academic exercise. On the other hand, the Respondent submitted that the Applicant has not demonstrated that it will suffer substantial loss and execution does not occasion substantial loss since it is a legal exercise. The Court of Appeal while considering a scenario similar to the issue at hand in the case of   National Industrial Credit Bank Limited…Vs…Aquinas Francis Wasike & Another [2006 eKLR,held as follows:-

“This court has said before and it would bear repeating that while the local duty is on an applicant to prove the allegation that an appeal would be rendered nugatory because a respondent would be unable to pay back the decretal sum, it is unreasonable to expect such an applicant to know in detail the resources owned by a respondent or lack of them.  Once an applicant expresses a respondent would be unable to pay back the decretal sum the evidential burden must then shift to the respondent to show resources he has since that is a matter which is peculiarly within his knowledge.”

17.  The Respondent has not disclosed that he has means to refund the Applicant the decretal sum should the Appeal succeed.  The income of the Respondent has not been disclosed nor has he sworn an affidavit to show that the economic activity he engages in can generate income capable of refunding the decretal sum.

18.   The Applicant has demonstrated the likelihood to suffer substantial loss ifStay is not ordered.   Secondly in the event that the Appeal will be rendered nugatory and an academic exercise since the Respondent will be unable to refund the decretal sum. The Court of Appeal in the case ofKenya Hotel Properties Limited…Vs…Willesden Properties Limited Civil Application Nai 322/2006 reiterated in the case of Housing Finance Company of Kenya…Vs…Sharok Kher Mohamed Ali Hirji & Another (2015)eKLR, and stated that even in an application involving money decree a Stay of Execution pending Appeal may be granted so as to alleviate any undue hardship the applicant would suffer if stay is refused.

19.   The second consideration is whether the Appeal was filed without unreasonable delay.  The decision of the trial Magistrate was delivered on 30th April, 2020.  Under Section 79G of the Civil Procedure Act the Appeal is supposed to be filed within 30 days. The Appeal herein was timeously filed on 26th May, 2020 whilst the instant application was filed on 6th July, 2020. In the circumstances the delay cannot be termed as inordinate.  I find that there was no delay on the part of the Applicant in bringing this application.

20.   Finally the other consideration the issue of security.  The  Applicant in its Grounds in Support of the application at paragraphs (9)and(14) of the Supporting Affidavit has expressed its readiness to furnish security for the due performance of the Decree.  Though the Respondent submits that the Applicant has not offered security, Order 42 rule 6(2)(b) provides that it is the Court which is required to determine the security, as it states:-

“Such security as the court orders for the due performance of such -------------”

21.   This provision implies that once the court grants an Order for stay, it will determine the kind of security that the Applicant will provide.  It is this court’s view that where the Applicant proposes to provide security as the Applicant has done, it is a mark of good faith that the application for Stay is not just meant to deny the Respondent the fruits of his Judgment.

22.   I find that the question as to whether the Appeal is arguable or frivolous is not a ground for consideration when dealing with an application for Stay.  Such a consideration would prejudice the hearing of the actual appeal.

In Conclusion

23.    I hence find the application dated 6th July, 2020 merited. In the interest of Justice, and in a bid to balance the two competing interests of the parties herein,  court the court makes the following orders;-

a)  There be Stay of Execution of the Judgment of the trial Magistrate in Mombasa CMCC No.1237 of 2019 and all consequential Orders pending the hearing and determination of the Appeal.

b)  The Applicant shall provide security by depositing the decretal sum of Kshs.2,530,000/= in an interest earning Bank account in one of the reputable banks in the joint names of the Advocates on record for the parties.

c)  The decretal sum be deposited within Thirty (30) days from the date of this Ruling.

d) The costs of the application to abide by the outcome of the Appeal.

It is so ordered.

DATED, SIGNEDand DELIVEREDat MOMBASAon this28thday ofOCTOBER, 2020.

D. O.  CHEPKWONY

JUDGE

28/10/2020

In view of the declaration of measures restricting court operations due to the COVID-19 pandemic and in light of the directions issued by His Lordship the Chief Justice on 15th March 2020, this Ruling has been delivered to the parties online with their consent.  They have waived compliance with Order 21 Rule 1 of the Civil Procedure Rules which requires that all Judgments and Rulings be pronounced in open Court.

D. O.  CHEPKWONY

JUDGE

28/10/2020