Momentum Credit Limited v Oduor [2022] KEHC 16305 (KLR)

Momentum Credit Limited v Oduor (Miscellaneous Civil Application E028 of 2022) [2022] KEHC 16305 (KLR) (13 December 2022) (Ruling)

Neutral citation: [2022] KEHC 16305 (KLR)

Republic of Kenya

In the High Court at Siaya

Miscellaneous Civil Application E028 of 2022

RE Aburili, J

December 13, 2022

Between

Momentum Credit Limited

Applicant

and

William Evance Oduor

Respondent

Ruling

1. This ruling determines the applicant’s application dated 5/10/2022 seeking orders for stay of execution of decree/order from judgment delivered on 26/7/2022 in Ukwala PMCC No 154/2018 William Evance Oduor v Momentum Credit Ltd pending the hearing and determination of this application and the intended appeal and for leave to file an appeal out of time from the judgment delivered on 26/7/2022 by Hon CI Agutu, SRM in Ukwala CMCC 154/2018.

2. The application is supported by the affidavit sworn on October 5, 2022 by Sheila Imali, Legal Officer for the applicant Momentum Credit.

3. The application is predicated on the grounds which are replicated in the supporting affidavit.

4. The applicant’s case is that the above suit proceeded for hearing and was scheduled for judgment on November 23, 2021 when the court indicated that judgment was not ready and would be delivered on Notice but that it was never served with any Notice for delivery of judgment which it learnt, on 12/9/2022 that it was delivered on 26/9/2022 when it was served with extract orders dated 31/8/2022 by which time the time for lodging of the appeal had already lapsed.

5. The applicant asserts that it is aggrieved by the judgment in question and hence, the prayer for leave to appeal out of time and that unless stay of execution of decree is granted, the appeal as intended shall be rendered nugatory and that it stands to suffer substantial loss since some of the orders granted by the lower court have been overtaken by events as the subject Motor vehicle Registration Numbers KBQ 453X and KCJ 579K and the applicant’s security for the loan advanced have since been sold leaving a balance of Kshs 428,331 and Kshs 785,697.

6. It is averred that the applicant has a good and arguable appeal with high chances of success and that the application was made timeously without unnecessary delay. In the supporting affidavit, the deponent annexes an email dated November 23, 2021 showing that their advocates notified it of the directions given by the court on 23/11/2021 when the judgment was to be delivered by Hon CI Agutu, SRM. They have also annexed an order extracted on 31/8/2022 and a draft Memorandum of Appeal as well as the agreements between the applicant and the Respondent for a loan facility and returns for sale of the 2 motor vehicles.

7. Opposing the application, the Respondent swore a replying affidavit on 11/9/2022 contending that the application is misconceived, frivolous, bad in law and a waste of this court’s precious time.

8. That although judgment was delivered in the absence of both parties, that did not in any way affect the reasoning of the Magistrate.

9. That this application is informed by malice, as the applicants intend to further delay the Respondent from enjoying the fruit of his hard-earned successful litigation in the lower court, which case has been pending since 2018 hence the applicant intends to frustrate the cause of justice.

10. That despite the applicant receiving a Notice of judgment on 12/9/2022, this application filed on 5/10/2022 is a clear indication that it is an afterthought.

11. That the applicant must have known the outcome of the case but deliberately ignored taking any steps.

12. That despite the order restraining the applicant from selling the subject motor vehicles, the applicants sold the same in contempt of court orders and a deliberate action to defeat the cause of justice hence, the applicant is before this court with unclean hands and therefore undeserving of the discretion of this court.

13. That in any event, the Respondent should have been notified of the date of the intended sale and that there is no evidence of the alleged sale as there is no evidence that the sale was advertised for sale.

14. That the said motor vehicles were bought at Kshs 2,400,000 for KBQ 453X and 1,350,000 for KCJ 579K and that they had not operated before the applicant took possession hence the Respondent has suffered substantial loss.

15. That the applicant failed to register the two motor vehicles in joint names with the Respondent as per the express term of the financing agreement hence he does not understand how the two motor vehicles could have been disposed of.

16. That there is no way the applicant can ask for stay of execution and at the same time claim that the orders of the lower court were overtaken by events.

17. That the applicant should be ordered to deposit at least half of the prices for both motor vehicles to the Respondent’s account as security before it can be allowed to file an appeal since it made it practically impossible for the Respondent to honour the terms of the contract.

18. That the Memorandum of appeal does not raise any new issues.

19. The application was argued orally on November 15, 2022 with Mr Kariuki Advocate submitting for the applicant while Mr Odhiambo submitted on behalf of the Respondent. Mr Kariuki reiterated the grounds and affidavit in support and highlighted that the orders issued by the lower court had been overtaken by events as the 2 motor vehicles subject of the suit had since been disposed of during the pendence of the suit and that there was still a deficit and that leave to appeal was necessary for the applicant to ventilate their grievances.

20. Opposing the application, Mr Odhiambo counsel for the Respondent submitted extensively relying on his client’s sworn affidavit and highlighting that the applicant had been indolent in failing to check whether judgment had been delivered and that the Respondent though self-represented, he went and checked the court record and found that judgment had been delivered.

21. That the applicant had taken nearly a month from the date of learning of the existence of the judgment and the date of filing of this application.

22. That the he had lost income and that sake of the said motor vehicles is not a matter for appeal but review of judgment if the orders made by the trial court were overtaken by events.

23. That to allow this application is to allow the intended appeal.

24. The rest of the oral submissions reiterate what is contained in the detailed replying affidavit.

25. In a rejoinder, Mr Kariuki submitted that there were no orders stopping the sale of the subject motor vehicles during the pendence of the lower court case.

26. That it is the applicant who suffers because the loan advanced to the Respondent was never serviced.

27. On security, it was submitted that the Respondent cannot benefit from the loan facility and again ask for proceeds of sale of the said motor vehicles. That the applicant is a reputable institution and can settle the decretal sum if the appeal fails but that the Respondent’s means are unknown.

28. That the Memorandum of appeal raised triable issues and that the application should be allowed otherwise the Respondent will be unjustly enriched from the non-repayment of the loan advanced to him by the non-repayment thereof.

Determination 29. I have considered the application seeking orders for stay of execution of decree pending the filing, hearing and determination of the intended appeal from the judgment and decree in Ukwala PMCC 154/2018 on 26/7/2022 and for leave to file an appeal out of time from the said judgment and decree.

30. I have considered the grounds in support, the depositions thereto and the grounds in opposition and depositions by the Respondent’s counsel.

31. I have given equal consideration to the rival submissions made by the respective party’s counsel.

32. The issues for determination are mainly two: -1. whether the applicant is deserving of the orders for leave to file the intended appeal out of time.2. Whether stay of execution as sought is merited.

33. According to the applicant’s counsel, judgment in the lower court was delivered on 26/7/2022 in the absence of both parties on a date that was not communicated to the parties despite the court having informed the parties that it would deliver judgment on notice, having failed to deliver the same on November 23, 2021,a date that the judgment was scheduled, on account that judgment was not ready. Further, that the applicant herein only knew of the delivered judgment when its counsel was served by the respondent with extracted orders dated August 31, 2022 on September 12, 2022 by which time the 30 days period for filing of an appeal were already over.

34. The applicant in opposing the application for leave to appeal out of time accuses the applicant of indolence and wonders why the applicant did not check with the court file, the way he did personally and discovered that judgment had been delivered. He then delves deep into the merits or demerits of the intended appeal and accuses the applicant of breach of contract and failure to register the motor vehicles in joint names with the respondent and selling the two motor vehicles contrary to the existing court orders during the pendency of the suit before the magistrate’s court. In his view, the applicant has no arguable appeal hence it should not be granted leave to appeal.

35. Section 79G of the Civil Procedure Act allows time for filing an appeal from judgment of the subordinate court to the High court in 30 days. In this case, the judgment sought to be challenged was rendered on 26/7/2022. There is no dispute that that judgment ought to have been delivered way back on November 23, 2021 which was over eight months back and no reasons were given by the court which was not on leave or on sick leave for over eight months, for not delivering judgment within either the statutory sixty days from the date of hearing or within reasonable time as is expected of all judicial officers, Judges and Kadhis. I say so because this court supervises the Ukwala Magistrates Court and it has not been brought to the attention of this court that any of the sitting magistrates in that court station and within that period was so incapacitated that they could not render their judgments within reasonable time such that judgment had to be delivered eight months after the hearing date and without notice to the parties. Even after the judgment was delivered, no notice was given to the parties to the effect that the long-awaited judgment had been delivered. It therefore speaks volumes when such matters come to the attention of a supervising court by parties through these kinds of proceedings.

36. It is not in doubt therefore that any appeal challenging that decision ought to have been filed on or before 26/8/2022. The applicant’s counsel only learnt of the delivery of judgment on 12/9/2022 when they were served with an order, not even a decree, extracted by the respondent on 31/8/2022. By that time, again, it is not in contest that the time for filing of any appeal to this court was already expired and therefore if the applicant wanted to challenge the judgment and decree of the lower court, the only way to do so would be by way of an application of this type, seeking leave of court to appeal out of time.

37. The Respondent’s counsel viciously opposed the application and the grounds of opposition are contained in the replying affidavit and oral submissions as reproduced above. This application though dated 5/10/2022 and received in court with a court stamp of 11/9/2022, I observe that the payment receipt shows that the application was paid for on October 11, 2022 which is the correct date for filing of the application. This was about one month less one day from the date when the respondent served the applicant with the extract order from the judgment which was delivered on 26/7/2022.

38. In Charles Karanja Kiiru v Charles Githinji Muigwa [2017]eKLR where the Respondent had delayed for 41 days before filing an appeal and where the High court enlarged time to enable the respondent file an appeal out of time, the appellant was aggrieved by the order enlarging time claiming that the learned Judge erred in law and fact by exercising his discretion and extending time for filing an appeal out of time yet no sufficient reason had been offered to justify the same, the Court of Appeal cited this court’s decision in Wanjiru Mwangi & Another [2015]eKLR and APA Insurance Co. Ltd Vs Michael Kinyanjui Muturi[2016]e KLR in dismissing the appeal.

39. I will therefore entirely rely on the above binding Court of Appeal decision in determining the merits of this application which is two pronged namely: whether the prayer for extension of time for filing the appeal is merited and whether the prayer for stay of execution of decree pending appeal is merited.

40. I will start by reproducing the provisions of Section 79G of the Civil Procedure Act which stipulates that:“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 orderProvided that an appeal may be admitted out of time if the appellant satisfies the court that he had a good and sufficient cause for not filing the appeal in time.”[Emphasis added].

41. The Court of Appeal in the above cited case guided that whenever an application for extension of time is before a court, the court ought to take into account several factors as observed by Odek JJA in Edith Gichungu Koine v Stephen Njagi Thoithi[2014]eKLR as follows:“Nevertheless, it ought to be guided by consideration of factors stated in many previous decision of this court including, but no limited to, the period of delay, the reasons for the delay, the degree of prejudice to Respondent if the application is granted, and whether the matter raises issues of public importance, amongst others.”

42. The Court of Appeal further guided that there is also a duty imposed on courts to ensure that the factors considered are consonant with the overriding objective of civil proceedings litigation, that is to say, the just, expeditious, proportionate and affordable resolution of disputes before the court.

43. As earlier stated, it is obvious that the time for filing of an appeal from the judgment of the lower court lapsed on 26/8/2022 and that this application is necessitated by the expiry of the 30 days stipulated in Section 79G of the Civil Procedure Act.

44. The reasons given for the delay hence this application are clear and simple. That the magistrate after hearing the suit reserved November 23, 2021 for delivery of judgment but on the latter date, she informed the parties that judgment was not ready and that she would deliver it on notice. Thereafter, there is no evidence that any notice was issued to the parties on when the judgment was to be delivered and even the respondent only learnt that judgment had been delivered in the absence of parties and without any notices to them by the court, when he visited the court to find out about the pending judgment. Even after the judgment was delivered in the absence of parties and without any notice to them, no notice was issued to the parties notifying them, eight months of waiting, that the judgment had now been delivered.

45. In Kamlesh Mansukhalal Damki Patni v Director of Public Prosecution & 3 Others [2015]eKLR, the Court of Appeal pronounced as follows:“It must be realized that courts exist for the purpose of dispensing justice. Judicial officers derive their judicial power from the people, or as we are wont to say in Kenya, from Wanjiku, by dint of Article 159 (1) of the Constitution which succinctly states that “judicial authority is derived from the people and vests in, and shall be exercised by the courts and tribunals established by or under this Constitution.” Judicial officers are also state officers, and consequently, are enjoined by Article 10 of the Constitution to adhere to national values and principles of governance which require them whenever applying or interpreting the Constitution or interpreting the law to ensure, inter alia, that the rule of law, human dignity and human rights and equity, are upheld.For these reasons, decisions of the courts must be redolent of fairness and reflect the best interests of the people whom the law is intended to serve. Such decisions may involve only parties inter se (and hence only parties’ interests) and while others may transcend the interest of the litigants and encompass public interest. In all these decisions, it is incumbent upon the court in exercising its judicial authority to ensure dispensation of justice as this is what lives up to the constitutional expectation and enhances public confidence in the system of justice.” (emphasis added).

46. The Court of Appeal in the above case agreed with the sentiments of the learned Judge of the High Court and equally concur with that:“It suffices to comment that a court of law should be hesitant at closing the door to the corridors of justice prior to a litigant being heard on his complaint. So far the applicant did not have a chance to file a defence. He sought to set aside that default judgment and that application was dismissed on a date he contents the same was not due for hearing and when he had no notice...”

47. Without repeating what the courts have said about the conditions that must be met before leave to appeal out of time can be granted, as that is now in the public domain and of public notoriety, Article 48 of the Constitution guarantees every person access to justice and in addition, under Article 50(1) of the Constitution, every person has the right to have any dispute that can be resolved by the application of law decided in a fair and public hearing before a court or, if appropriate, another independent and impartial tribunal or body.

48. The ultimate goal and purpose of the justice system is to hear and determine disputes fully. It follows that no person who has approached the court seeking an opportunity to ventilate their grievances fully should be locked out.

49. In the instant case, the applicant filed the application nearly thirty days after learning of the judgment which was delivered eight months after the first date that was given for judgment delivery and without any notice from the court. Courts do not exist to make decisions for themselves but for the parties that appear and ventilate their grievances. if a court of law hears a case and delivers a judgment and keeps it under lock without informing the parties that a judgment has been delivered, of what benefit is that judgment to the court or to the parties?

50. The applicant has approached this court about 30 days late from the day it knew of the judgment delivered. It seeks for extension of time as stipulated in the proviso to Section 79G of the Civil Procedure Act. Reasons or no reasons for that delay, it is before the court seeking to be granted a chance to agitate its appeal challenging the judgment of the lower court.

51. There is no evidence that the application before me is an afterthought or how the same is intended to abuse court process. Further, it is not uncommon for clients to instruct their counsel who procrastinate on filing court documents and only wake up when time for such filing has elapsed. Courts have over time excused parties where such delay is not inordinate or is explained to the satisfaction of the court as is in this case and even in cases where there is inordinate delay, depending on the circumstances of each case and reasons for the delay, courts have accorded parties an opportunity to be heard on appeal. Furthermore, there is no evidence to demonstrate what prejudice the Respondent will suffer if the applicant is granted extension of time.

52. Under Article 159 of the Constitution, justice shall be administered without undue delay. In this case, there was delay on the part of the court delivering its judgment and even when it did deliver the judgment, none of the parties were invited to attend court. None of the parties were issued with notice that judgment had been delivered after all that delay and no reasons have been advanced by the trial court for the undue delay.

53. Albeit the Respondent maintained that no sufficient reason was given for the delay, inBelinda Mural & 9 Others Vs Amos Wainaina[1978]eKLR, the Court of Appeal Law JA, citing other cases such as Shah H Bharmal & Brothers Vs Kumar[1961]EA 679 where it was held that:“Mistakes of a legal adviser may however amount to ‘sufficient cause under the East African Rule.”

54. This is not to say that the above parameter is of universal application by the courts but that each case must be considered on its own merits and circumstances. In Hamam Singh & Others Vs Mistri[1971]EA 122 it was held that:“….in relation to applications to this court for leave to appeal out of time, it has been held that mistakes of a legal advisor may amount to sufficient cause but not inordinate delay on his part...”

55. It is not in doubt that the discretion of this court to enlarge time for filing of a late appeal is unfettered. However, that discretion must be exercised judiciously and not capriciously. On the material placed before me and supported by the above decisions, I am satisfied that the 30 days delay is not inordinate or unreasonable and therefore failure to establish sufficient cause or reason is not a reason for this court to fetter its discretion to lock the door of justice to the applicant who, in my view, was inconvenienced by the lower court’s failure to render a decision eight months after the first date that the judgment was to be delivered lapsed. This is not to say that this court would condone or forgive inordinate delays but that it must do whatever is necessary to rectify mistakes where it serves the interests of justice.

56. For all the above reasons, I find and hold that the application for enlargement of time to file an appeal out time of 30 days challenging judgment in Ukwala PMCC No 154 of 2018 is merited. The same is hereby allowed.

57. The second limb of this application is whether the applicant’s prayer for stay of execution of decree pending appeal is merited. The principles guiding the grant of a stay of execution pending appeal are well settled. These principles are provided for under Order 42 rule 6(2) of the Civil Procedure Rules which provides that:“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.

58. Further, courts have held that stay may only be granted for sufficient cause and that the Court in deciding whether or not to grant the stay and in light of the overriding objective stipulated in sections 1A and 1B of the Civil Procedure Act, the Court is no longer limited to the foregoing provisions. The courts are now enjoined to give effect to the overriding objective in the exercise of its powers under the Civil Procedure Act or in the interpretation of any of its provisions.

59. Section 1A(2) of the Civil Procedure Act provides that “the Court shall, in the exercise of its powers under this Act or the interpretation of any of its provisions, seek to give effect to the overriding objective” while under section 1B of the said Act, some of the aims of the said objectives are: “the just determination of the proceedings; the efficient disposal of the business of the Court; the efficient use of the available judicial and administrative resources; and the timely disposal of the proceedings, and all other proceedings in the Court, at a cost affordable by the respective parties.”

60. Therefore, an applicant for stay of execution of a decree or order pending appeal is obliged to satisfy the conditions set out in Order 42 Rule 6(2), aforementioned: namely (a) that substantial loss may result to the applicant unless the order is made, (b) that the application has been made without unreasonable delay, and (c) that such security as the court orders for the due performance of such decree or order as may ultimately be binding on the applicant has been given. SeeAntoine Ndiaye v African Virtual University[2015] eKLR.

61. As to what substantial loss is, it was observed in James Wangalwa & Another v Agnes Naliaka Cheseto [2012] eKLR, that:“No doubt, in law, the fact that the process of execution has been put in motion, or is likely to be put in motion, by itself, does not amount to substantial loss. Even when execution has been levied and completed, that is to say, the attached properties have been sold, as is the case here, does not in itself amount to substantial loss under Order 42 Rule 6 of theCPR. This is so because execution is a lawful process. The applicant must establish other factors which show that the execution will create a state of affairs that will irreparably affect or negate the very essential core of the applicant as the successful party in the appeal ... the issue of substantial loss is the cornerstone of both jurisdictions. Substantial loss is what has to be prevented by preserving the status quo because such loss would render the appeal nugatory.”

62. In the instant case, the applicant avers that it stands to be prejudiced and suffer substantial loss especially because some of the orders have been overtaken by events as the subject motor vehicles have been sold leaving a balance unpaid.

63. The applicant further avers that the respondent has not demonstrated that he is able to refund the sums due to the applicant if the appeal succeeds. The applicant has submitted through counsel that it is a reputable company and that it is able to refund the monies if the appeal is not successful and that the appeal has high chances of success.

64. On his part, the respondent has addressed the issue of stay of execution largely by delving deep into the merits of the appeal. He has also lamented that the applicant sold the vehicles while the suit was pending hearing contrary to the orders of the court although he did not annex any order of the court staying the sale of the subject motor vehicles.

65. In RWW v EKW [2019] eKLR, the court considered the purpose of a stay of execution order pending appeal in the following words:“The purpose of an application for stay of execution pending an appeal is to preserve the subject matter in dispute so that the rights of the appellant who is exercising the undoubted right of appeal are safeguarded and the appeal if successful, is not rendered nugatory. However, in doing so, the court should weigh this right against the success of a litigant who should not be deprived of the fruits of his/her judgment. The court is also called upon to ensure that no party suffers prejudice that cannot be compensated by an award of costs.9. Indeed to grant or refuse an application for stay of execution pending appeal is discretionary. The Court when granting the stay however, must balance the interests of the Appellant with those of the Respondent.”

66. In this case, the Respondent has not given any material as to his ability to repay the decretal sum in case the appeal succeeds and in light of the depositions by the applicants’ counsel that they shall suffer substantial loss if stay is not granted and that the appeal shall be rendered nugatory. Although the respondent has claimed that his two motor vehicles were sold and that the applicant should therefore deposit at least half of the sale prices thereof as security, the applicant has urged the court not to order for depositing of security on account that the respondent never repaid any part of the loan advanced to him hence he should not benefit twice. Further, that the applicant is a reputable company of means and therefore should the appeal be unsuccessful, it will be in a position to pay the money.

67. From the above arguments, Iam satisfied that substantial loss would occur if the stay is not granted and that the respondent has not demonstrated that should the appeal be successful, he has the means to refund the monies due on the decree.

68. I am also satisfied that there has been no inordinate delay in bringing the instant application as the judgment and decree being appealed against was delivered on the 26/7/2022 in the absence of parties who were never even notified of the date of delivery of the said judgment and this application was filed a month after being notified of the judgment by the respondent who also stumbled on the said judgment only in August 2022, ten months after the adjournment of the matter on account that the judgment scheduled for delivery on November 23, 2021 was not ready.

69. Taking all the above factors into account and in order not to render the intended appeal nugatory as well as to give effect to the overriding objective of the Civil Procedure Act, I find and hold that the applicants have fulfilled the requirements for grant of stay of execution pending appeal as stipulated under Order 42 Rule 6 of the Civil Procedure Rules.

70. Accordingly, I hereby allow the applicant’s application dated 5/10/2022 and filed in court on October 11, 2022 and grant stay of execution of decree made in Ukwala PM CC No 154 of 2018 William Evance Oduor v Momentum Credit Limited pending hearing and determination of the intended appeal on the following conditions:a.The applicant to file and serve upon the respondent herein a memorandum of appeal within 30 days of the date hereof;b.Simultaneous with the filing of the appeal, the applicant shall deposit into this court a bank guarantee dully issued by a commercial bank of repute as security for the due performance of decree for a sum of Kenya shillings three million Kshs 3,000,000 within thirty (30) days of this rulingc.The memorandum of appeal shall be accompanied by this ruling or order for leave as granted to appeal out of timed.Each party to bear their own costs of this application as the failure to notify the parties of the date of delivery of judgment was on the part of the trial court

71. This file is closed.

72. I so order

DATED, SIGNED AND DELIVERED AT SIAYA THIS 13TH DAY OF DECEMBER, 2022. R.E. ABURILIJUDGE