Mastermind Tobacco (K) Ltd v Elias Kinoti M’tuanto, Peter Kinyua Mwongo, Moses Fredrick Kiri, Moses Mugambi, Ruth Kangai Kirunga, David Muthomi Mwongo, Elias Mwende Mwongo, Polly Kathure Thiau, Ruth Kathure Kaluma, Rhoda Mukuba, Samson Kirinya & Miriam Kangai Karimi [2022] KEHC 26930 (KLR)

REPUBLIC OF KENYA

IN THE HIGH COURT OF KENYA AT NAIROBI

CIVIL DIVISION

CIVIL APPEAL NO. E602 OF 2021

MASTERMIND TOBACCO (K) LTD..............................APPLICANT

-VERSUS-

ELIAS KINOTI M’TUANTO................................1ST RESPONDENT

PETER KINYUA MWONGO...............................2ND RESPONDENT

MOSES FREDRICK KIRI....................................3RD RESPONDENT

MOSES MUGAMBI...............................................4TH RESPONDENT

RUTH KANGAI KIRUNGA.................................5TH RESPONDENT

DAVID MUTHOMI MWONGO...........................6TH RESPONDENT

ELIAS MWENDE MWONGO.............................7TH RESPONDENT

POLLY KATHURE THIAU.................................8TH RESPONDENT

RUTH KATHURE KALUMA.............................9TH RESPONDENT

RHODA MUKUBA.............................................10TH RESPONDENT

SAMSON KIRINYA...........................................11TH RESPONDENT

MIRIAM KANGAI KARIMI............................12TH RESPONDENT

RULING

1. The motion dated 21st September, 2021 by Mastermind Tobacco (K) Ltd (hereafter the Applicant) seeks inter alia that pending hearing and determination of the appeal herein, there be orders to stay execution of the judgment and decree in Milimani Commercial Cause No. E856 of 2021 issued in favour of Elias Kinoti M’Tuanto, Peter Kinyua Mwongo, Moses Fredrick Kiri, Moses Mugambi, Ruth Kangai Thirunga, David Muthomi Mwongo, Elias Mwende Mwongo, Polly Kathure Thiau, Ruth Kathure Kaluma, Rhoda Mukuba, Samson Kirinya and Miriam Kangai Karimi (hereafter the Respondents), and to stay proceedings in Milimani Commercial Cause No. E856 of 2021pending hearing and determination of the appeal herein.

2. The motion is expressed to be brought under Section 1A, 1B & 3A of the Civil Procedure Act and Order 42 Rule 6 of the Civil Procedure Rules inter alia. On grounds, among others that, being dissatisfied with the ruling of the subordinate court delivered on 15th September 2021, the Applicants have preferred an appeal and that if the proceedings in the subordinate court together with the default judgment entered in favour of the Respondents are not stayed pending the hearing and determination of the appeal filed herein, the whole purpose of the appeal will be defeated.

3. The motion is supported by the supporting and supplementary affidavits of Robert M. Mutuma, who describes himself as the Company Secretary of the Applicant familiar with the facts leading to the matter hence competent to swear the affidavit. The gist of his affidavits is that judgment in default entered in favour of the Respondents was upheld by the ruling of the court delivered on 15th September, 2021; that if an order of stay of execution of the default judgment and decree is not granted, the appeal herein will be rendered nugatory. He states that the motion ought to be allowed as prayed without condition on security as the suit subject to the instant appeal has not been heard on merit.

4. Peter Kinyua Mwongo, the 2nd Respondent swore the replying affidavit on behalf of his co- Respondents. To the effect that following discussions on the motion the said co-Respondents have taken the same stance concerning the motion. He goes on to aver that the Applicant does not have an arguable appeal with a probability of success and is only intent on frustrating the Respondents’ pursuit of their just dues through protracted litigation; that the Applicant has not offered any security for due performance of the decree; and that if the court is inclined to allow the motion, an order for provision of security ought to be made.

5. On 17th November, 2011 parties took directions to canvass the motion by way of written submissions. Counsel for the Respondents indicated that he would rely entirely on the contents of the affidavit in opposition to the motion and would not be filing submissions.

6. For the Applicant, submissions opened by setting out the applicable principles for granting stay pending appeal under the provisions of Order 42 Rule 6 of the Civil Procedure Rules. Counsel submitted that the motion was filed timeously, only eight days since the delivery of the ruling appealed from. Placing reliance on the decision in Wananchi Group (K) Limited v Tec Institute of Management Limited [2020] eKLR counsel asserted that in determining an application for stay the court is not required to interrogate the merits or otherwise of the appeal. Concerning substantial loss, he cited James Wangalwa & Another v Agnes Naliaka Cheseto [2012] eKLR to assert that if stay of execution and proceedings is not granted, the purpose of the appeal will be defeated. Lastly, relying on Butt v Rent Restriction Tribunal (1979) eKLR and HGE v SM [2020] eKLR counsel argued that the requirement for provision of security is discretionary and that since the suit before the subordinate court is yet to be heard on merit, the court should exercise its discretion in the Applicant’s favour.

7. The court has considered the material canvassed in respect of the motion. First, it is pertinent to state that at this stage, the Court is not concerned with the merits of the appeal. It is trite that the power of the court to grant stay of execution of a decree or proceedings pending appeal is discretionary, however the discretion should be exercised judiciously. See Butt v Rent Restriction Tribunal [1982] KLR 417.

8. The Applicants prayers for stay of execution of the judgment and proceedings in the lower court pending appeal, is brought under Order 42 Rule 6 of the Civil Procedure Rules which provides that:

“(1) No appeal or second appeal shall operate as a stay of execution or proceedings under a decree or order appealed from except appeal case of 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”.

9. The above provisions envisage an appeal from a subsisting judgment or order in the lower court suit. The appeal herein is in respect of the order of the lower court dismissing the Applicant’s motion in the lower court, dated 12th July 2021, that sought inter alia to set aside the default judgment said to have been entered on 14th July 2021. The present motion before this court seeks to stay execution of the said default judgment. The original lower Court file and certified proceedings in Milimani Commercial Cause No. E856 of 2021were submitted to this Court by the CM’s Court at Milimani vide the letter dated 7. 10. 2021. Although the letter purports to forward inter alia the “original case file”, this Court did not find the plaint or summons to enter appearance, or filings related to the application that was the subject of the lower Court ruling of 15th September 2021 in the said file. That said, the forwarding letter is endorsed as received by this Court’s registry on 2nd November 2021.

10. While preparing this ruling, this Court had occasion to peruse the original and typed proceedings as well as the ruling dated 15th September 2021 as contained in the original record. Before this Court and the subordinate Court, the parties herein have asserted the existence of a default judgment entered on 14th July 2021 against the Applicant. The truth is that a perusal of the lower court record reveals that no such judgment was entered as alleged, or at all.

11. According to the record, what apparently happened is that the Respondents had through their request dated 12th July 2021 sought entry of judgment in default of appearance and defence against the Applicant, based on the affidavit of service sworn by one Caroline Mweni Mbithi, a process server. As is the practice, a memorandum for entry of default judgment was apparently prepared by the registry by way of endorsing a stamp impression of the anticipated order on the file. The said impression bears an endorsement in hand that reads, “Checked 14/7/2021”, to signify checking by the registry on 14. 7.2021. However, the memorandum of entry of judgment does not bear any signature or endorsement by a magistrate as is the requirement and practice, to formalize the entry of the default judgment.

12. The said unsigned memorandum is replete with serious errors that cast doubt on its authenticity as a court stamp impression. It reads as follows:

“Defendant MASTERMIND TOBACCO (K) LTD having been on

(sic)served and having failed to enter appearance    {Checked}

File Defence  {14/7/21}

and on the application of the plaintiff’s advice(sic)

I enter judgement on prayed(sic).

Dated …. This…..Day of…..20…..

.............................

Magistrate “.

13. The next step in the matter, recorded on the same page as the impression above in the original proceedings was on 28. 07. 2021 by which date the application to set aside the supposed default judgment was placed before Kagoni, P.M and on which date, directions were given for parties to exchange submissions on the application. It is surprising that such directions were issued considering the unsigned memorandum of entry of judgement which, until signed remained a mere endorsement that does not carry the force of a Court order. In the circumstances, there was no judgment existing then before the lower Court and now before this Court.

14. This is a grave lapse of process, and this Court cannot proceed to act in vain by considering an application whose subject matter is non-existent. The proceedings before this court and the lower Court respecting the purported default judgment were held in vacuo. The Court cannot shut its eyes to or allow an imbroglio of this nature to persist. This is the kind of situation that lends itself to the suo motu invocation of the Court’s inherent powers as donated by section 3A of the Civil Procedure Act for the purpose of meeting the ends of justice and preventing abuse of the process of the Court. Similarly, under section 1B (1)b and c of the said Act, the Court is under a duty to further the overriding objective in section 1A by handling matters before it for the purpose inter alia of attaining the efficient disposal of the business of the Court and the efficient use of the available judicial and administrative resources.

15. In the circumstances, the following orders commend themselves:

a. The memorandum of appeal and motion dated 21st September 2021 and affidavits sworn in opposition thereto are hereby struck out;

b. The proceedings taken before the subordinate Court and before this Court regarding the purported default judgment are hereby set aside in toto;

c. The parties will each bear their own costs;

d. The lower Court file is to be immediately remitted back to the CM’s Court at Milimani;

e. Considering the blunders identified, and possible administrative delay in complying with (d) above, no default judgment or adverse order may be entered against the Applicant in the lower court suit before the expiry of 21 days hereof;

f. In order that justice may be done and be seen to be done, any further proceedings in the lower court suit are to be taken before any competent magistrate in the C. M’s Court other than Kagoni, PM.

g. It is so ordered.

DELIVERED AND SIGNED ELECTRONICALLY ON THIS 10TH DAY OF FEBRUARY 2022.

C.MEOLI

JUDGE

In the presence of:

For the Applicant: Mr Migele

For the Respondents: Mr Ng’ang’a

C/A: Carol