Nic Bank Ltd & Purple Royal Investments v Evelyn Kanyua Miriti [2014] KEHC 57 (KLR)

REPUBLIC OF KENYA

IN THE HIGH COURT OF KENYA

AT NAKURU

CIVIL APPEAL NO. 193 OF 2012

NIC BANK LTD................................................1ST APPELLANT

PURPLE ROYAL INVESTMENTS................2ND APPELLANT

VERSUS

EVELYN KANYUA MIRITI...................................RESPONDENT

RULING

The  application dated 27/03/2013 is  made pursuant  to Order 42  Rule 6 and Order 51 Rule 1,  and seeks that orders staying the  ruling from  Nakuru CMCC No.927 of 2011 given  on  26 / 10/2012 do issue and remain in  force pending  hearing  of   the  appeal preferred against  that ruling.

The application is  premised on  grounds on  its face   and supporting  affidavit to   effect   that  the  contested  ruling granted an order for  mandatory injunction to compel the applicants to  release  motor vehicle registration  No. KAW 811B to the   respondent, and an order for temporary injunction to restrain the applicants from  interfering with the respondent's use and possession of  the said  motor vehicle pending the hearing  and determination of the suit. The respondent’s execution of the order is looming and will cause substantial and irreparable harm to the applicants as its effect  will  be   to   render the appeal nugatory.

The appeal is described as having high chances of success.

In opposing the application, the respondent deposes in her replying affidavit that  the  application for stay  was properly  rejected  by   the  magistrate's  court,  and  the present   application  is  not merited   and   should   be dismissed.

In a supplementary  affidavit sworn  by  the  applicant's counsel, it  is  deposed that,  the   effect  of  the contested ruling is  that it  directed the applicants  to  release  the motor vehicle to the respondent without any condition for its availability for  purposes of trial and determination of the suit, yet  the motor vehicle had been repossessed  by virtue of  a hire purchase transaction.  The effect of the ruling, it is signed, results in complete disposal of the suit.

The matter   was disposed   of  by  way  of  written submissions. The background to the matter is that, the applicant had   advanced two  finance facilities to  the  late Ephantus Miriti  Nkanata by  way  of  hire purchase agreement, with regard  to the earlier  mentioned  motor vehicle and  motor vehicle KBB  529X Mitsubishi  FH215 Truck. One   of the   conditions for granting the second facility, was advancing as a collateral, motor vehicle No.KAW 811B which was subsequently registered in the name of the 1st applicant and Ephantus Mirigi  Nkanata.

There was default in repayment of the facility pertaining to motor vehicle KBB 811B.

The 1st applicant's effort to repossess motor vehicle KBB 529X were thwarted by the hirer's lack of co-operation to establish the whereabouts of the subject vehicle. Consequently the 1st applicant invoked the right to set-off and collateral security as provided under Clauses 11 and12 of the Hire Purchase Agreements, and repossessed the subject motor vehicle.

The respondent challenged this repossession by   filing CMCC No.927 of 2011, and she sought inter alia, the mandatory injunction compelling the applicants to release the motor vehicle to her - this was granted.

It   is   submitted  on   behalf  of   the    applicant  that  the purpose of seeking stay, is  so  as to  preserve the subject matter  as  was    enunciated  in    the    case  of   KEZIAH WANJIRU  MBURU V WHITE FARM KENYA LTD [2010] e KLR.   This court is further urged to consider the views expressed by  Wendoh J in  AFRIC  PAK  MOTOR  LTD  V ELIZABETH   WANJIRU   NGATIA  (Nku  Civil  Appeal No.186  of  2012)  when  granting  an  order  for   stay pending appeal as follows:-

"....... As the respondent continues to use the vehicle, it continues to depreciate and the vehicle may be   put beyond the reach of the applicant and there is no guarantee that the vehicle will still be available at   the  time  the case is heard."

It is further argued by counsel for the applicant, that there is a likelihood of substantial loss being suffered by the applicant if the orders issued are not stayed. Counsel points out that, what predisposes the appeal to success is:-

a) The invocation of   Clauses 11 and 12 of the Hire Purchase Agreements by the applicant.

b) The  attempts to recover motor vehicle KBB 529X (which was a collateral). was  to act  under Clause 11  and 12,  then the  only remedy would  be  to  raid  the  hirer's accounts and recover the money.

Mr. Mugambi further   submits    on     behalf    of    the respondent that no likely substantial loss has been demonstrated on behalf of the applicant who is holding the registration documents for the subject motor vehicle, and the respondent cannot dispose of that motor vehicle without those documents.

What the court takes into account in  an application for stay orders is set out  clearly under Order 42  Rule 4 (6) to the effect  that:-

(a) The  court must be  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.

The contested orders were issued on 26th October 2012, and on 5th November, the applicant filed an application seeking stay before the trial.  The trial court delivered its ruling dismissing the application on 22/03/2013 and by 27/03/2013, a span of  only  five  days - that  cannot be described as delay. Infact applicant acted expeditiously.

Has the applicant demonstrated likelihood of substantial loss?

As aptly  submitted   by   the  applicant's  counsel,  the objective of stay  pending  appeal,  is   to   preserve  the subject  matter  yet   the   effect   of  the  mandatory  orders given  is  that the  suit is  as good  as determined.There is also  the fear that as the  respondent continues to use the motor vehicle, it  depreciates even  more,  but  of  greater significance is the   fact   that there is a real risk  of  the  respondent putting  the  motor beyond the applicant's reach, with no  guarantee of  its availability  by  the time  the  appeal is  heard  and  determined.   This  fear is  not  unfounded as attempts to get  the  other motor vehicle are said to  have  been  thwarted  by  respondent,  and  this allegation is not  denied.

This is    further    fortified  by    the   respondent's   own deposition that repossession of motor vehicle registration KBB  529X having failed then  the only recourse open to applicant is invasion  of   its   accounts  - meaning  the respondent is   likely  to   make  every  possible  effort  to ensure the  motor  vehicle in  question  is  unavailable.

There  is  no evidence  offered  to  confirm that  were  the respondent to  make the   motor vehicle unavailable, she has  sufficient funds  in   her  account  to  settle what is owing    to   the    applicant.   This  would  thus   result  in substantial    loss   being   suffered   by the  applicant, especially in  view  of the  contest between the two  parties regarding interpretation of Clause 11  and 12  of the Hire Purchase  Agreements.  In  light of  this, I  am   persuaded that it  is  indeed desirable that the  subject  motor vehicle be  preserved by  ordering stay of the orders issued by the lower    court. This  is   granted  on  condition that  the applicants must not dispose of the motor vehicle either by  sale, auction,  transfer  or   any   other  manner  as  to dispossess the   respondent of  her   interest in  the  motor vehicle,  pending   hearing   and   determination   of   the appeal.

The costs of this application shall be in cause.

Delivered and dated  this 22nd day of September 2014 at Nakuru

H. A. OMONDI

JUDGE