Ng'arua Lines Cooperative Savings and Credit Society Limited v Kangara [2023] KECPT 744 (KLR)

Ng'arua Lines Cooperative Savings and Credit Society Limited v Kangara (Tribunal Case 52 of 2021) [2023] KECPT 744 (KLR) (31 August 2023) (Ruling)

Neutral citation: [2023] KECPT 744 (KLR)

Republic of Kenya

In the Cooperative Tribunal

Tribunal Case 52 of 2021

BM Kimemia, Chair, J. Mwatsama, Vice Chair, B Sawe, F Lotuiya, P. Gichuki, M Chesikaw & PO Aol, Members

August 31, 2023

Between

Ng'arua Lines Cooperative Savings and Credit Society Limited

Claimant

and

George Githigia Kangara

Respondent

Ruling

Claimant’s Case 1. The Claimant moved to this court on 15th January, 2021 seeking judgment against the Respondent for a loan amount of Kshs. 1,600,000/= with accrued interest and penalties of Kshs. 249,191/=.

2. On 25th May, 2021, this court entered judgment in default of appearance against the Respondent with decree and certificate of costs awarded on 28th May, 2021.

3. The Claimant later filed Notice to Show Cause proceedings, upon the Respondent failing to satisfy the decree with this court issuing Warrant of Arrest dated 4th July, 2022 to the OCS Nyahururu.

4. On 28th July, 2022, the Respondent filed under Certificate of Urgency an application seeking orders of stay of execution of the judgment issued on 25th May, 2021 and the subsequent Decree issued by this court on 28th May, 2021 and the lifting of the Warrants of Arrest dated 4th July, 2022.

Issues for Determination 5. i.Whether the Respondent has satisfied the grounds for Stay of Execution.ii.Whether the circumstances of the case warrant the court to invoke the overriding objective of Section 1A & 3A of the Civil Procedure Act and Article 159 of the Constitution.

Whether the Respondent has satisfied the grounds for Stay of Execution 6. Order 42 Rules 4 and 6 of the Civil Procedure Rules provide for the ambit of stay of execution and among others, require that the party applying for stay must first demonstrate the substantial loss that may result if the orders sought are not granted, second that the Application has been made without unreasonable delay, and third that such security as the court orders for the due performance of the Decree has been given by the Applicant.

7. In James Wangalwa & Another v Agnes Naliaka Cheseto in Misc Appl No. 42 of 2011 [2012] eKLR Gikonyo J. stated 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 the CPR. 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.”

8. In Kenya Shell Ltd v Kibiru & Another [1986] the Court of Appeal said:“2. In considering an application for stay, the Court doing so must address its collective mind to the question of whether to refuse it would render the appeal nugatory.3. In applications for stay, the Court should balance two parallel propositions, first that a litigant, if successful should not be deprived of the fruits of a judgment in his favour without just cause and secondly that execution would render the proposed appeal nugatory.”

9. The High Court in Charles Irungu v Elizabeth Kalunda Wakano [2021] eKLR quoted the case of Kenya Shell Ltd v Kibiru & Another [supra] with authority and stated:“The decision of Platt Ag JA, in the Shell case, in my humble view set out two different circumstances when substantial loss could arise, and therefore giving context to the 4th holding above. The Ag JA (as he then was) stated inter alia that:“The appeal is to be taken against a judgment in which it was held that the present Respondents were entitled to claim damages…..It is a money Decree. An intended appeal does not operate as a stay. The application for stay made in the High Court failed because the gist of the conditions set out in Order XLI Rule 4 (now Order 42 Rule 6 (2)) of the Civil Procedure Rules was not met. There was no evidence of substantial loss to the Applicant, either in the matter of paying the damages which would cause difficulty to the Applicant itself, or because it would lose its money, if payment was made, since the Respondents would be unable to repay the decretal sum plus costs in the two courts ...(emphasis added)”

10. The Tribunal has considered provisions of Order 42 Rules 4 and 6, Pleadings and the Authorities submitted by parties in this proceeding and finds that the Respondent has not identified:i.The substantial loss he would suffer if the stay he is seeking is not granted.ii.That the Respondent did not file any Appeal; he is not seeking any substantive orders,iii.That he did not file the Application without undue delay.

11. However, the Respondent has also submitted before this court his willingness to fully pay the decretal sum and has also indicated that the Claimant holds as security title deed for Laikipia / Marmanet / Ext / 1116 and has asked for the court consideration necessitating the court to consider whether the circumstances warrants the court to invoke the overriding objective of Section 1A & 3A of the Civil Procedure Act (oxygen rule) and Article 159 of the Constitution to facilitate the just and expeditious resolution of this dispute.

Whether the circumstances warrants the court to invoke the overriding objective of Section 1A & 3A of the Civil Procedure Act (oxygen rule) and Article 159 of the Constitution 12. Section 1A of the Civil Procedure Act provides for the overriding objective and states as follows:1. The overriding objective of this Act and the rules made hereunder is to facilitate the just, expeditious, proportionate and affordable resolution of the civil disputes governed by the Act.2. 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 specified in subsection (1).3. A party to civil proceedings or an advocate for such a party is under a duty to assist the Court to further the overriding objective of the Act and, to that effect, to participate in the processes of the Court and to comply with the directions and orders of the Court.

13. Section 3A of the Civil Procedure Act provides that nothing in the Act shall limit or otherwise affect the inherent power of the court to make such orders as may be necessary for the ends of justice or to prevent abuse of the process of the Court.

14. The Court in the case of Judicial Review 2 of 2017 Republic v National Government Constituency Development Fund Board & another (2017) eKLR stated as follows:“Considering the above provisions which introduced the oxygen principle, the court in Kamani v Kenya Anti-Corruption Commission drew comparisons to the Wolf reforms which introduced similar provisions in England in 1998 by way of the Civil Procedure Rules and further considered the English case of Bigizi v Bank Leisure in which Lord Wolf himself talked about the concept of overriding principle objective as follows:“Under the (Civil Procedure Rules) the position is fundamentally different. As rule 1. 1 makes clear the (rules) is a new procedural code with the overriding objective of enabling the court to deal with cases justly.”

14. In the case of Lord Wolf in Swain v Hillman [2001] 1 AII ER 91 at pp 94 and 95 as quoted with authority in the case of Madison Insurance Company Limited v David Wambua; Jackson Mulinge Maingi & another (Interested Parties) [2021] the Court in analyzing the Overriding objective of the Court stated as follows:“It saves expense; it achieves expedition; it avoids the court’s resources being used up on cases where this serves no purpose, and, I would add, generally, that it is in the interests of justice.”

15. In Hunker Trading Company Limited v Elf Oil Kenya Limited(2010) eKLR the Court held:“The overriding principle will no doubt serve us well but if it is improperly invoked, the “O2 principle” could easily become an unruly horse and therefore while the enactment of the “double O” principle is a reflection of the central importance the court must attach to case management in the administration of justice, in exercising the power to give effect to the principle, it must do so judicially and with proper and explicable factual foundation important to point out that it is not going to be a panacea for all ills and in every situation. A foundation for its application must be properly laid and the benefits of its application judicially ascertained.”

16. Article 159 (2) (d) of the Constitution mandates this court to determine this case without undue regard to technicalities to facilitate just and expeditious resolution of the dispute. This court has considered all competing interests that must be considered and orders as follows:i.We grant stay for 30 days to enable the Respondent forward his proposal, a reasonable proposal, to settling the decretal amount, or to enable the parties reach a settlement.ii.Warrant of Arrest is lifted for that period.iii.The Respondent to pay the cost of the suit.

RULING SIGNED, DATED AND DELIVERED VIRTUALLY AT NAIROBI THIS 31ST DAY OF AUGUST, 2023. HON. BEATRICE KIMEMIA - CHAIRPERSON - SIGNED 31. 08. 2023HON. J. MWATSAMA - DEPUTY CHAIRPERSON - SIGNED 31. 08. 2023HON. BEATRICE SAWE - MEMBER - SIGNED 31. 08. 2023HON. FRIDAH LOTUIYA - MEMBER - SIGNED 31. 08. 2023HON. PHILIP GICHUKI - MEMBER - SIGNED 31. 08. 2023HON. MICHAEL CHESIKAW - MEMBER - SIGNED 31. 08. 2023HON. PAUL AOL - MEMBER - SIGNED 31. 08. 2023Tribunal Clerk - JemimahRuling delivered in the absence of partiesHON. J. MWATSAMA - DEPUTY CHAIRPERSON - SIGNED 31. 8. 2023