Nairobi City County v Iris Properties Ltd & another [2022] KEHC 13777 (KLR)

Nairobi City County v Iris Properties Ltd & another (Civil Appeal E234 of 2021) [2022] KEHC 13777 (KLR) (Civ) (5 October 2022) (Ruling)

Neutral citation: [2022] KEHC 13777 (KLR)

Republic of Kenya

In the High Court at Nairobi (Milimani Law Courts)

Civil

Civil Appeal E234 of 2021

JK Sergon, J

October 5, 2022

Between

Nairobi City County

Appellant

and

Iris Properties Ltd

1st Respondent

Proland Limited

2nd Respondent

(Arising from the ruling and order of Hon CA Muchoki (Senior Deputy Registrar) given at Nairobi on the April 7, 2021 in Nairobi High Court Judicial Review Case No 433 of 2009 Iris Properties Ltd & anor v The City Council of Nairobi Judicial Review Miscellaneous Application 433 of 2009 )

Ruling

1. The appellant filed a Notice of motion dated May 13, 2021 seeking the following ordersi.Spentii.Spentiii.That pending the hearing and determination of this appeal there be a temporary stay of execution of the ruling and order of Hon CA Muchoki (Senior Deputy Registrar) given at Nairobi on the April 7, 2021 and the warrants of arrest issued on December 15, 2017 in Nairobi High Court Judicial Review Case No 433 of 2009 Iris Properties Ltd & anor v The City Council of Nairobi.iv.That the appellant/applicant be exempted from furnishing security for costs.v.That the costs of this application and the interest thereon be provided for.vi.Any other and further relief that this honorable court may deem fit and just to grant in the circumstances.

2. The application was based on the grounds on it and on the supporting affidavit of Eric Abwao. The appellant indicated that this matter is attributable to a judgement rendered by Lady Justice Jeane Gacheche in Nairobi High Court Judicial Review Case No 433 of 2009 Iris Properties Ltd & anor v The City Council of Nairobi. In the said judgement, the learned judge ordered that the appellant herein to pay the respondents a principle sum of Kshs 35,000,000 plus accrued compound interest at the rate of 12% per annum from September 25, 2002. On December 15, 2017 the respondents obtained warrants of arrest as a way of enforcing the decretal sum. This prompted the appellant to file a multiplicity of applications seeking stay of execution and that the matter be referred to the deputy registrar.

3. In a ruling dated December 11, 2020 Justice Pauline Nyamweya ordered the Deputy Registrar to compute the sums if any of the decretal sum and interest that remained unpaid to the respondents. The registrar was unable to complete her computations within 60 days and on February 15, 2021 Lady Justice Pauline Nyamweya stayed the warrants of arrest.

4. By a ruling dated April 17, 2021 the Senior Deputy Registrar Hon CA Muchoki found that the appellant owes the respondent Kshs 7,638,778. The appellant has so far paid the respondents a sum of Kshs 178,083,794 against the principle sum of Kshs 35,000,000 plus accrued compound interest at the rate of 12% per annum from September 25, 2002. The appellant alleges that it has overpaid the respondent to the tune of Kshs 22,841,619. 90 which amount continues to attract compound interest.

5. The appellant stands to suffer substantial loss if the stay orders are not granted as it will have overpaid the respondents out of public money which the respondents ought not have been paid in the first instance. The appellant has approached this court at the earliest opportune moment without any delays and if the stay orders are not granted it would render the appeal nugatory. The appellant has a prima facie case with an overwhelming chance of success.

6. The appellants argued that the ruling being appealed against was delivered on April 7, 2021 and the memorandum of appeal was filed on May 5, 2021 which was within the 30 days required by section 79G of the Civil Procedure Act. That this application was filed on May 13, 2021 and therefore it was filed timeously and without unreasonable delay.

7. On security the appellant argued that they should be exempted from furnishing security of costs. Reliance was placed on Order 42 rule 8 which provides;“No such security as is mentioned in rules 6 and 7 shall be required from the Government or where the Government has undertaken the defence of the suit or from any public officer sued in respect of an act alleged to be done by him in his official capacity.”

8. The appellant further referred to the case of Republic v Attorney General & another ex-parte Stephen Wanyee Roki [2016] eKLR where the court stated:-“Although the provisions of the Government Proceedings Act do not expressly refer to County Governments, section 7 of the sixth schedule to theConstitution (Transitional And Consequential Provisions) provides that:All law in force immediately before the effective date continues in force and shall be construed with the alterations, adaptations, qualifications and exceptions necessary to bring it into conformity with this Constitution.It follows that the provisions of the Government Proceedings Act, a legal instrument enacted before the effective date must be construed with the alterations, adaptations, qualifications and exceptions necessary to bring it into conformity with theConstitution. One such construction would be the reality that Government is now at two levels and article 189(1)(a) of theConstitution requires that the constitutional status and institutions of government at both the National and County levels be respected. In my view such respect cannot be achieved unless both levels of Government are treated equally and one such area would be with respect to execution proceedings.”

9. The application was opposed by the replying affidavit of Fredrick K Mungai. The respondent indicated that vide a ruling dated December 11, 2020 the Hon P Nyamwea directed the Deputy Registrar to compute the debt outstanding from the appellant pursuant to the judgement and decree of the court delivered on March 17, 2011 in Judicial Review No 433 of 2009.

10. The failure by the appellant to honor in full the aforesaid judgement resulted in the court issuing a warrant of arrest against the county secretary and finance secretary of the appellant which was thereafter stayed. Eventually, the deputy registrar in her ruling dated April 7, 2021 found the appellant was indebted to the respondents in the sum of Kshs 7,638,778. 75.

11. The respondents maintained that it is trite law that litigation must come to an end. That this matter commenced by way of a commercial suit in 1999 before the JR No 433 of 2009 was filed in 2009 to execute the decree that ensued from the said commercial suit. That it has been 21 years since this matter commenced and it is not fair to prolong it further through a vexatious and frivolous proceedings. The appellant has not demonstrated that the respondents will not be able to refund the said sum should their said appeal succeed. In any event an order if stay of execution being sought herein is tantamount to an appeal against the orders of Hon P Nyamweya made on December 11, 2020 and reiterated on February 15, 2021. This court cannot therefore orders a stay of execution of a warrant of arrest issued by a court of concurrent jurisdiction when the said warrant remains alive and valid before the said court.

12. The application herein is for a stay of execution pending the hearing and determination of this appeal. The conditions to be considered by the court in an application seeking orders for stay of execution pending appeal are now well settled. In the case of Halai & another v Thornton & Turpin (1963) LTD [1990] KLR 365, the Court of Appeal held:-"The High Court's discretion to order a stay of execution of its order or decree is fettered by three conditions. Firstly, the applicant must establish a sufficient cause, secondly the court must be satisfied that substantial loss would ensue from a refusal to grant a stay and thirdly the applicant must furnish security. The application must of course be made without unreasonable delay.An application for stay of execution is made to Court of Appeal under rule 5(2) (b) of the Court of Appeal Rules and that court's discretion under that rule is unfettered."

13. In the case of Butt v Rent Restrictions Tribunal [1982] KLR 417 the court stated the principles to be considered in such an application and states as follows:-“1. 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.2. 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 should that appeal court reverse the judge’s discretion.3. 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.4. 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.5. 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.”

14. The background of this matter is that the appellants on May 5, 2021 filed this appeal against the decision of CA Muchoki dated April 7, 2021. On July 12, 2021 however this court by consent granted the stay of execution on condition that the appellant deposits the decretal sum in court within 60 days. Since then the appellant has deposited some of the money and has asked this court severally to grant them an extension to meet their obligation.

15. The appellants have failed to meet their obligation. Since the appellant was granted stay execution provided that a certain amount be deposited in court. Counsel for the appellant did confirm that the appellant was granted conditional stay lasting sixty (60) days. On September 23, 2021 this court granted the appellant an extra twenty one (21) days to deposit the money in court.

16. The court cannot keep issuing orders for stay of execution to a party who fails to comply with the conditions imposed by the court. I do find that the application dated May 13, 2021 lacks merit. The same is hereby dismissed with costs.

DATED, SIGNED AND DELIVERED ONLINE VIA MICROSOFT TEAMS AT NAIROBI THIS 5TH DAY OF OCTOBER, 2022. ……………………….JK SERGONJUDGEIn the presence of:………………………………. for the appellant/applicant.………………………………. for the 1st respondent.……………………………… for the 2nd respondent.