Nobel Trading Co. Ltd, Nile Perch Ltd & Victor Otieno Nyakiir v Peter Odhiambo Marega [2022] KEHC 1983 (KLR) | Stay Of Execution | Esheria

Nobel Trading Co. Ltd, Nile Perch Ltd & Victor Otieno Nyakiir v Peter Odhiambo Marega [2022] KEHC 1983 (KLR)

Full Case Text

REPUBLIC OF KENYA

IN THE HIGH COURT OF KENYA

AT NAKURU

CIVIL APPEAL NO. 45 OF 2020

NOBEL TRADING CO. LTD...................................................1ST APPELLANT/APPLICANT

NILE PERCH LTD...................................................................2ND APPELLANT/APPLICANT

VICTOR OTIENO NYAKIIR.................................................3RD APPELLANT/APPLICANT

VERSUS

PETER ODHIAMBO MAREGA..........................................................................RESPONDENT

RULING

1. In their Notice of Motiondated6th November 2020 the applicants pray for orders that there be stay of execution of the judgement delivered on 27th February 2020 by the lower court namely Molo CMCC no. 388 of 2018pending the hearing and determination of the main appeal.

2. The application is based on the grounds thereof and the affidavit of Pauline Nyambura a Claims Officer at Direct Line Assurance Company Limited sworn on the same date. She deposed that the appellants were dissatisfied with the judgement of the trial court which awarded the respondent a principal sum of Kshs. 4,954,773/=.

3. She deposed further that the appellants attempt to seek stay at the trial court was dismissed hence this application. She stated that the appeal herein raised triable issues with high chances of success. That unless the order of Stay of execution is granted, the respondent will commence execution of the said judgment entered on 27th February 2020 and the appellants will suffer irreparable loss and damage. She further deposed that they were willing to offer bank guarantee as security for stay of execution pending appeal and that the respondent will not be prejudiced in any way if the application is allowed.

4. The respondent through his replying affidavit sworn on 17th September 2021 has vehemently opposed the application. He deposed that the appellants’ advocates entered appearance for the applicants and further entered into a consent on liability with his advocates on record on 20th June, 2019 in the ratio of 95:5 in his favor. That thereafter, the matter proceeded to full hearing and judgment was delivered on 27th February 2020 in his favor. That after judgment was delivered the applicants were granted 30 days stay of execution and they failed to comply. That further, the applicants herein being dissatisfied with the terms of the judgment filed this appeal and went ahead to file an application dated 17th June, 2020 in the trial court seeking stay of execution of the said judgment pending appeal.

5. He deposed that the trial court in a ruling granted the applicants stay on condition that they do pay him a sum of Kshs. 1,000,000/= for medication and to deposit the balance of the decretal sum amounting to Kshs. 4,000,000/ in a joint interest earning account within 21 days. That the applicants failed to comply with the stay conditions above and as such he paid further court fees and the process of execution commenced.

6. He deposed further that he would not leave the appellate court empty handed as the appeal being on quantum, he was therefore entitled to the decretal sum awarded to him in his judgment and the claim of inability to refund does not suffice.  He said that the bank guarantee was not a proper way of offering security as the same will bog him down and will not realize the fruits of judgment and that he needed the money for his medication.

7. The appellants in response to the respondent’s reply affidavit filed a supplementary affidavit dated 17th September 2021 sworn by Kevin Ngure who is the Deputy Claims Manager at Direct Line Assurance Co. Ltd. He said that the court should accept the bank guarantee pending the determination of the pending appeal.

8. When the matter came up for hearing the court directed that the same be determined by way of written submissions which all parties have complied.

Applicants Submission

9. The applicants submitted that they had met the conditions required  for stay to be granted in line with Order 51 rule 1 and Order 42 rule  6 of the Civil Procedure Rules. The applicants submitted further  that they have a meritorious and arguable appeal with high chances  of success and if the orders sought are not granted, they are  apprehensive that the respondent may levy execution against them  rendering the appeal nugatory. That as a result, they will suffer  substantial loss. That furthermore, the judgment was of substantial  amount (Kshs. 4,954,773/=) and the applicants were apprehensive  that if the respondent is paid he may deal with the same in a manner  prejudicial to them and if the appeal is successful, the applicants  might not be able to recover the same from the respondent. He  placed reliance on the case of Amal Hauliers Limited v  Abdulnasir Abukar Hassan [2017] eKLR.

10. The applicants went on to submit that they had demonstrated how  they had taken steps since the delivery of the judgment in the lower  court matter to ensure that the appellants are not left exposed to  execution pending the hearing and determination of the appeal  herein. The applicants submitted that the bank guarantee would  ensure that the liabilities of a debtor would be met by the bank if  debtor fails to settle the debt. That it was an unconditional  undertaking given by the bank, on behalf of the customer, to pay  the recipient of the guarantee the amount of the guarantee on  written demand. The court’s attention is drawn to the case of Shanzu  Beach Resort Limited v Crown Marbie & Quartz Ltd [2020]  eKLR.

11. In conclusion, the applicants submitted that the court must  recognize the importance of balancing the rights of a successful  litigant who should not be kept away from his fruits of judgment  against those of an appellant who would face the possibility of not  being able to recover the paid amounts in the event they succeeded  in their appeal. They urged the court to allow the application with  costs in the cause.

Respondent’s Submissions

12. The respondents in his submissions identified two issues for  determination namely; whether the applicant will suffer any  substantial loss if the application herein is allowed and whether the  applicants had given any security.

13. On the first issue, the respondent while quoting Order 42 rule 6(2)  of the Civil Procedure Rules, submitted that applicants had been  enjoying stay of execution for the longest time since judgment was  delivered at his detriment. That the trial court granted the applicant  stay of execution with conditions on security that the applicants do  pay Kshs. 1,000,000/= for medication and to deposit Kshs.  4,000,000/= in a joint interest earning account within 21 days in the  ruling delivered on 20 August, 2020 but the applicant failed to  adhere to those conditions set by the court. The respondent  submitted further that for the applicants to approach this court at the  moment to seek orders for stay of execution is an abuse of the court  process. That the applicant had approached this honourable with  unclean hands and therefore undeserving of any orders sought.

14. The respondent submitted that even if it were to be proved that the  he was of no means, which has not been proved, it would not justify  him being denied the fruits of his judgment.  He said further that the  applicants had not specified the exact loss they will suffer.  He draws  the courts attention to the cases of Kenya Women Microfinance  Ltd v Martha Wangari Kamau [2020] eKLR and Equity Bank  Limited v Taiga Adams Company Limited Civil Appeal No. 722  of 2000as cited in the case of Luxus Woods (K) Limited v Patrick  Amugune Kamandi [2016] eKLR.

15. On the second issue, it is the respondent’s submission that a bank  guarantee was not a proper mode or a mode of security provided  for in road traffic accidents matters. Further, the respondent  submitted that the involvement of a bank in this matter will bog  down the process and add an unnecessary complexity yet the  respondent has been waiting to enjoy the fruits of his judgment.

16. In conclusion, the respondent submitted that the application herein  had not met all the requirements of Order 42 rule 6(2) of the Civil  Procedure Rules and therefore urged the court to dismiss the same  with costs. In addition to this the respondent submitted that in the  event the court allowed the application herein then he prays for a  deposit of three quarters of the decretal award plus costs and the  balance be deposited in court within 14days of allowing the  application for stay of execution.

Analysis and Determination

17. I have considered the pleadings and submissions by the applicants  and in my view the issue arising for determination is whether this  court should grant stay of execution of the judgement in Molo CMCC  No. 388 of 2018 pending hearing and determination of the appeal  herein.

18. Order 42 Rule 6 of the Civil Procedure Ruleswhich provide that:

“(1) No appeal or second appeal shall operate as a stay of execution or proceedings under a decree or order appealed from except appeal case of in so far as the court appealed from may order but, the court appealed from may for sufficient cause order stay of execution of such decree or order, and whether the application for such stay shall have been granted or refused by the court appealed from, the court to which such appeal is preferred shall be at liberty, on application being made, to consider such application and to make such order thereon as may to it seem just, and any person aggrieved by an order of stay made by the court from whose decision the appeal is preferred may apply to the appellate court to have such order set aside.

(2)   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”.

19. In view of the above, it is clear that the facts to be considered before  granting an application for stay of execution pending appeal entails  that; the applicant must demonstrate substantial loss, the application  has been made without unreasonable delay and the provision of  such security as the court may impose.

20. On whether the appellant will suffer substantial loss in James  Wangalwa & Another v Agnes Naliaka Cheselo [2012] e KLRthe  court held 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. This is what substantial loss would entail, a question that was aptly discussed in the case of Silvester –vs- Chesoni [2002] 1 KLR 887, and also in the case of Mukuma –vs- Abwoga quoted above. The last case, referring to the exercise of discretion by the High Court and the court of Appeal in the granting stay of execution, under Order 42 of the CPR and Rule S (2)(b) of the court by Appeal Rules respectively emphasized the centrality of substantial loss thus: -

“…the issue of substantial loss is the cornerstone of both jurisdictions. Substantial loss of what has to be prevented by preserving the status quo because such loss would render the appeal nugatory?

21. In applying the same principles in this case, the subject matter of  this appeal in my understanding is the judgement by the trial court.  The applicants submitted that they stand to suffer irreparable loss  and prejudice if this application is not allowed and that if the  decretal sum is paid to the respondent he will not be in a position to  refund if the Appeal succeeds as they were unaware of the  respondent’s resources. I note that the applicants applied for stay of  execution on two instances whereby on the first instance stay was  granted with conditions that they deposit Kshs.1 million to the  respondent within 14days and Kshs. 4 million in a joint interest  earning account within 21 days’ failure to which execution issue. On  the second instance after being dissatisfied with the said conditions,  the appellants sought extension of time to comply with said  conditions for stay of execution and for a review of the terms of the  ruling. Their application was however dismissed.

22. The question that this court therefore has to answer is what  substantial loss the appellants will suffer if stay of enforcement of the  judgment of the subordinate court is not made in their favour. It  appears to me that the applicants have not demonstrated how they  will suffer substantial loss and bearing in mind that they had earlier  been granted stay of execution with conditions but they made no  attempt to comply with the said conditions set by the Court.

23.  In the case of James Wangalwa & Another vs. Agnes Naliaka  Cheseto (supra)the court held that:

“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. This is what  substantial loss would entail.’’

24. On the second condition of whether the application had been  brought without unreasonable delay this court notes that from the  date the judgment was issued up to the date of this application, the  period is very reasonable in the circumstances. In addition to this,  the respondent in his submission does not challenged the timelines  in the application had been filed.

25. On the third condition of security, the applicant has offered a bank  guarantee. There is an agreement exhibited between Diamond  Trust Bank and the directors of Directline Assurance Company  Limited who are the insurers of the applicants. The same is for a sum  of Kshs30 million. It is for a period of 12 months and it is expiring on  30th November 2021. This court takes notes of the fact that applicant  is not a party to the said agreement and that there is no evidence  that the said guarantee is for the benefit of this matter specifically.  Moreover, there is no evidence that as at the time of this ruling the  same had been renewed.

26. In the premises I find that the said bank guarantee is not viable for  this matter and it could be available where it specifically stated how  each party is to benefit instead. In essence it is a general bank  guarantee.

27.  Consequently, I do not find the application herein meritorious at all.  The trial courts orders of paying Kshs. 1,000,000 to the respondent  and depositing the balance was reasonable. The fact that the  applicants entered into a consent on liability meant at least if not for  any cause an acknowledgement of the accident. In any case looking  casually at the medical report attached to the affidavits it is clear that  the respondent suffered serious injuries classified at 70%. In other  words, he will continue to require medication even as the appeal  progresses. This court cannot turn a blind eye over the same.

28. The other issue which this court notes are multiplicity of applications  by the applicants. The two are dated 18th November 2020 and 15th  December 2020. As at the time of writing this ruling they are yet to  be prosecuted. This in my view is vexatious and ought to be  discouraged.

29. Needless to state that the application dated 6th November 2020 is hereby dismissed with costs to the respondent. Let the applicant  comply with the lower courts directives which were not onerous or  oppressive to them.

DATED SIGNED AND DELIVERED AT NAKURU VIA VIDEO LINK THIS 3RD DAY OF MARCH 2022.

H K CHEMITEI

JUDGE