Mehboob Ali Khan v Filmico Agencies Ltd [2022] KEHC 1280 (KLR)

REPUBLIC OF KENYA

IN THE HIGH COURT OF KENYA

AT NAIROBI

MILIMANI LAW COURTS

CIVIL APPEAL NO.E016 OF 2022

MEHBOOB ALI KHAN..........................................APPELLANT/APPLICANT

VERSUS

FILMICOAGENCIESLTD........................................................RESPONDENT

R U L I N G

1.  This court has been asked to determine an application seeking for stay of execution pending hearing and determination of the appeal herein. The application is a Notice of Motiondated 14th January, 2022 and filed by the Appellant/ Applicant specifically seeking for an order to stay the execution of the entire Judgmentand Decree issued in Milimani CMCC No.8037 of 2016. The Applicant also seeks for the Applicant to be awarded costs for the application.

2.  The grounds supporting the application and which are also reiterated in the affidavit of the Applicant sworn on the 14th January, 2022 are that; the Respondent had instituted a suit against the Appellant for the sum of Kshs.977,440/= allegedly being the cost of goods the Respondent averred  he had supplied to the Applicant,  which he denied.  According to the Applicant, he was never served with summons and, that the only time he knew of the case is when he was served with the Notice to Show Cause asking him to pay the sum of Kshs.1,410,202. 00. That orders for arrest and his committal to jail were subsequently granted and the Plaintiff is apprehensive that unless stay is granted, the said orders may be executed. Further, that the Plaintiff has averred that he had sought to set aside the ex-parte Judgment but the trial court declined the same vide a Ruling dated 17th December, 2021 which now forms the basis of the instant appeal. Finally, the Appellant/Applicant avers that the appeal is arguable and the Respondent would not be prejudiced at all if the stay is granted pending the appeal.

3.  The Respondent opposed the application through a Replying Affidavit sworn by its Director on 3rd February, 2022. He accused the Appellant for failing to properly invoke the jurisdiction of the court and satisfy the legal requirements for seeking the orders of stay of execution. The Appellant is further accused for falsely denying knowledge of the case before the lower when there is not only a Demand Letter and an Affidavit of Service affirming the service but also a letter dated 14th April, 2016 by the appellant acknowledging the debt of Kshs.880,000/= which he had promised to pay in monthly instalments of Kshs.50,000/=. Nonetheless, the Appellant issued a cheque for Kshs.892,990/= in purported settlement of the amounts due, which cheque was dishonored upon presentation. It is also averred that since the delivery of the Judgment, the Appellant has awaited for over two (2) years before seeking the stay orders and no explanation has been offered for the delay.

4.  The application was canvassed by way of oral submissions on 7th March, 2022 by counsels on record for the parties. M/S Wambua for the Applicant submitted that the Appellant was willing to provide a logbook of a motor vehicle as security to the Application for stay.

5.  On the other hand, Mr. Masese, counsel for the Respondent submitted that the Appellant had previously been directed by the court to deposit security as condition for the stay and he believed that what the court envisaged is security that can be deposited in a joint interest earning account in the names of the advocate for the parties. He opposed the proposal to deposit a logbook as security on the basis that there was no proof of the alleged motor vehicle and the same would even be inadequate security.

6.  In a quick rejoinder, M/S Wambua submitted that the Honourable Judge Sergon on 15th February, 2022 directed the Applicant to confirm the security he would wish to produce in court and it does not necessarily mean that the security be the decretal sum that is deposited in a joint interest-earning account. She added that the motor vehicle intended to be offered as security is worth over Kshs.2,000,000/= and that even taking into account the factor of depreciation, it cannot depreciate below the sum of Kshs.1,400,000/=.

Analysis and Determination

7.  The above submissions are the respective parties’ perspective with respect to the application under consideration.  In addition, I have carefully gone through the affidavits sworn in support and in rebuttal of the application.   In my view the issues this court should address are;-

a) Whether or not an order for stay of execution can be granted,

b) Who bears the costs of the application.

8.  However, I wish to address some preliminary issues that have been raised by the parties.  Firstly, whether there were any directions by the court with regard to depositing of security in a joint interest-earning account. On this issue, the Respondent’s counsel has argued that the Honorable Judge had directed the Applicant to deposit security while the Applicant avers that the Judge had only asked him to come up with a proposed security. Conversely, the court record shows the contrary.

9.  The matter was first presented in court on 24th January, 2022 and interim orders for stay were granted pending hearing of the application on 16th February, 2022. The record does not indicate what transpired on 16th February, 2022 nor does it show any directions issued by the court in relation to deposit of security. Consequently, for that reason I disregard those submissions by the parties as being mere arguments.

10. As regards the first issue, this court has occasionally held that the power to grant an application for stay of execution pending appeal is a discretionary one based on sufficient cause being shown, to wit, it is where the Applicant may suffer substantial loss; the application is made without unreasonable delay and on provision of such security as the court may impose.  In addition to that, in exercise of its discretion on deciding whether to grant or refuse an application for stay of execution pending appeal, the court has to balance the interests of the Applicant with those of the Respondent. Those are the conditions precipitate to granting any orders for stay of execution as envisaged under Order 42 Rule 6(1) & (2) of the Civil Procedure Rules.

11.  In this application, the Appellant/Applicant avers that warrants of arrest have been issued against him and is likely to be arrested if stay is not granted. According to him, the arrest will occasion him substantial loss since he believes the matter proceeded without his knowledge. He has also proposed to offer a motor vehicle which in his advocate’s description is valued over Kshs.2,000,000/=. However, no prove of the existence of such motor vehicle has been presented.

12.  In considering those facts as summarized above alongside the preconditions required for stay, I will first consider whether the Applicant has shown the possibility of suffering substantial loss if the stay sought is not granted. In the case of Silverstein –vs- Chesoni [2002]1 KLR 867, the Court observed that substantial loss entails what has to be prevented by preserving the status quo because such loss would render the appeal nugatory. In addition, the court in the case of James Wangalwa & Another –vs- Agnes Naliaka Cheseto [2012]eKLR,added that execution does not amount to substantial loss since execution is a lawful exercise.

13. Similarly, in my view, it would not suffice for the Applicant to merely allege that he/she is likely to suffer substantial loss but he should give cogent material evidence on the real loss he is likely to suffer that may not be compensated with costs.

14. In this case, the Respondent has employed the remedy for committal to civil jail as part of execution of Judgment made in his favour. It cannot be disputed that there is a Judgment against the Appellant which remains valid unless otherwise set aside.  Execution by committal to civil jail cannot be said to be a source of substantial loss and likewise cannot be said to render the appeal nugatory. The Appellant has therefore not shown the substantial loss he is likely to suffer.

15.  Turning to the issue of delay, the respondent has argued that since the Judgment was delivered, the Applicant waited for about two (2) years before filing the instant application. The Appellant has not responded to the issue of delay.  In view of the evidence presented before me, I am agreeable with the Respondent that the Applicant did not aptly moved the court at the earliest opportunity available and neither has be explained the delay exhibited.

16. Lastly with regard to the offer of security pending appeal, I wish to first mention that  the Applicant must show and meet the condition of payment of security for due performance of the decree. Under this condition, a party who seeks the right of appeal from a money decree of the lower court for an order of stay, must satisfy this condition on security.  This is therefore to provide a situation for the court that if the Appellant fails to succeed on appeal there could be no return to status quo on the part of the Plaintiff to initiate execution proceedings where the Judgement involves a money decree. The court would order for the release of the deposited decretal amount to the Respondent in the appeal. Therefore, the rule does not envisage just any security. It must be one which shall achieve due performance of the decree which might ultimately be binding on the Applicant. The alleged logbook suggested to be offered as security would thus not be appropriate security in a money decree as the one at hand.

17.   In the upshot, I am not satisfied that the Appellant/Applicant has met thethreshold for granting a stay of execution under Order 42 Rule 6(2) of the Civil Procedure Rules.

18. Consequently the application dated 14th January, 2022 is declined and is hereby dismissed with costs.

It is hereby so ordered.

RULING DELIVERED VIRTUALLY, DATED AND SIGNED AT NAIROBI ON THIS 9TH DAY OF MARCH 2022.

D. O. CHEPKWONY

JUDGE

IN THE PRESENCE OF:

M/S WAMBUA COUNSEL HOLDING BRIEF FOR MR. KURIA COUNSEL FOR APPLICANT

MR. MASESE COUNSEL FOR RESPONDENT

COURT ASSISTANT - ADIKA