Norman & 2 others v Naipa Supermarket Limited [2022] KEHC 13755 (KLR)

Norman & 2 others v Naipa Supermarket Limited (Civil Appeal E001 of 2022) [2022] KEHC 13755 (KLR) (13 October 2022) (Ruling)

Neutral citation: [2022] KEHC 13755 (KLR)

Republic of Kenya

In the High Court at Lodwar

Civil Appeal E001 of 2022

JK Sergon, J

October 13, 2022

Between

Ekidor Norman

1st Appellant

Eunice Ateyo Ekidor

2nd Appellant

Ekidor Moureen

3rd Appellant

and

Naipa Supermarket Limited

Respondent

Ruling

1. By a notice of motion dated April 6, 2022, together with a supporting affidavit sworn by Ms Eunice Ateyo, evenly dated; the applicants sought for, inter alia, the following orders:i.Spent.ii.This honourable court be pleased to grant a stay of execution of the judgment and order of the honourable MK Mwangi (CM) issued on the March 10, 2022 granting the respondent access into the suit property to remove, interfere with and/ or confiscate the impugned stock pending the hearing and determination of this application.iii.This honourable court be pleased to appoint an independent inspector; to inspect and assess the status of the premises, value and status of the stock and file a report to the honourable court within 14 days;iv.That each party be at liberty to file and serve its own report from the report so ordered by the court.v.This honourable court be pleased to grant a stay of execution of the judgment of the honourable MK Mwangi (CM) delivered on the March 10, 2022 pending the hearing and determination of the appeal against the said decision, judgement and decree.vi.Costs of this application be provided for.

2. The application is opposed.

3. From the applicants’ pleadings, the application was on the grounds, inter alia, that the trial court allowed the plaintiff to: Unilaterally valuing the stock in the suit premises; Access the suit property and collect the said stock and business merchandise before ascertaining the true value and state of the stock; Also that, whereas the trial court inspected the suit property, the findings from the inspection were not factored in the judgment.

4. Additional grounds are that the appeal filed is arguable which challenges the basis and validity for apportioning value on the stock, and basis for lost profit assessment. That for a true state of affairs, there be an independent inspection of the suit premises, stocks and business surroundings that lead to the dispute, by an independent inspector.

5. The applicants did not file any submissions.

6. The respondent opposed the application by a way of replying affidavit dated May 7, 2022, and sworn by Antony Kibetu Munene, managing director of the plaintiff/respondent. In opposition to the application, the respondent deponed, inter alia, that the application dated April 6, 2022 does not meet the threshold for stay of execution of the judgment pending appeal as provided under order 42 rule 6(2) of the Civil Procedure Rules 2010.

7. Additionally, that regarding the prayer for appointment of an independent inspector to make a report to court, that it’s an attempt by the applicants to introduce new and additional evidence at an appeal stage.

8. That it was the appellants who invited the court to visit the suit premises for its independent evaluation, and parties made their submission thereto. The courts independent evaluation was conducted and factored in the trials court’s judgment. That, if the applicants wanted an independent inspector to conduct the evaluation, they ought to have applied during the trials court process, and not at appeal stage.

9. Further, the respondent asserted that the application fails to meet the threshold for adducing additional evidence during appeal and for stay of execution pending appeal and ought to be dismissed with cost.

10. In advancing their opposition to the application, the respondent in their written submission elected to submit on two specific issues: (a) the appointment of an independent inspector, and (b) on stay of execution of the decree.

11. On the issue (a), the respondent averred that the court cannot no deal with new issues but only those raised during the trial. That appointing an independent inspector who will prepare his report, would be allowing new evidence to be adduced at appeal stage, as the same was not considered before the subordinate court. That admitting such new report as evidence would prejudice the respondent, since it does not qualify to be exempted circumstances that allows for introduction of new evidence at appeal stage.

12. The respondent asserted that the trial court visited the site and the premises for its evaluation as a result of an application from the applicants/appellants. That the trial court judgment appreciated its observations of the site visit, which observation and assessment were not challenged by the applicants/ appellants at the trial court.

13. That this prayer, together with the prayer for each parties to file their own report, from the report so ordered by the court, should fail.

14. On issue (b), the respondent submitted that stay of execution of the decree is provided for under order 42 rule 6(2) of the Civil Procedure Rules. The respondent asserted that the instant application cannot be granted since it fails to satisfy the two key conditions under order 42 of the Civil Procedure Rules.

15. The first condition being that the applicants must demonstrate that they will suffer substantial loss unless stay is granted, which they have failed to do in this instant case. The cases of Rhoda MukumavJohn Abuoga[1988] eKLR; Tarbo Transporters LtdvAbsolom Doya Lumbasi, HCCA No 37 of 2012; Tabro Transporters LtdvAbsalom Dova Lumbasi [2012] eKLR;James Wangalwa andanother vAgnes Naliaka Cheseto, Bungoma HC Misc Application No 42 of 2011 were relied upon.

16. Also, it was the respondent’s submission that a valid money decree of the court can only be stayed under very special circumstance, and by the exercise of the court’s discretion. Reliance was placed on the cases ofSuleiman v Amboseli Resort Limited [2004) 2 KLR 589; Michael Ntouthi Mitheu v Ahrahzmn Kivondo Musau [2021] eKLR; Samvir Trustee Limited v Guardian Bank LimitedNairobi (Milimani) HCCC 795 of 1997; Michael Ntouthi Mitheu v Abraham Kivondo Musau (2021) eKLR;Kenya Shell Limitedv. Kibiru [1986] KLR410.

17. Further, the respondent posited that where a money decree is sought to be stayed, in considering whether the applicant will suffer substantial loss, the financial position of the applicant and that of the respondent becomes a crucial issue. That it is not sufficient to merely state that the decretal sum is a lot of money and the Applicant would suffer loss if the money is paid. The case of Michael Ntouthi Mitheu v Abraham Kivondo Musau [2021] eKLR is relied on.

18. The respondent further averred that an applicant should show the damage it would suffer if the order for stay is not granted; since by granting stay would be denying a successful litigant of the fruits of his judgement. They relied on the cases of Kenya Shell Ltd v. Benjamin Karuga Kibiru andanother [1986] KLR 410; Michael Ntouthi Mitheu v Abraham Kivondo Musau [2021] eKLR; Bungoma High Court Misc. Application No 42 of 2011 James Wangalwa &anotherv. Agnes Naliaka Cheseto.

19. Additionally, it was submitted that the applicants have not demonstrated that the respondent will not pay back the decretal amount should the appeal succeed, and where there are such allegations, the burden of proof is on the applicant. The case of Caneland Ltd & 2othersv Delphis Bank Ltd. Civil Application No Nai 344 of 1999, was relied upon.

20. The second condition being that the applicants should pay security for the due performance of such decree, and that in this instant case they have not done so. That this is despite the law and principle on security of costs being that the respondent who has a decree in his favour should not find it difficult or impossible to realize the decree - where the applicant were eventually to be unsuccessful in its intended appeal. Reliance was placed on the cases of Mwaura Karuga t/a Limit EnterprisesvKenya Bus Services Ltd & 4others (2015) eKLR; Gianfranco Manenthi & anothervAfrica Merchant Assurance Company Ltd (2019) eKLR; Nduhiu Gitahi v Warugongo [1988] KLR621; 1 KAR 100; [1988-92] 2 KAR100; Machira T/A Machira & Co Advocatesv. East African Standard (No2) [2002] KLR 63.

21. Notably, the respondent prayed that the stay of execution of the decree, if granted, then the same be on condition that the applicants pay to the respondent half of the decretal sum, and give a bankers guarantee to pay the remaining half together with costs and accruing interests from a reputable financial institution specific to this appeal for the whole duration of the appeal. That in the alternative, the respondent prayed that the court orders the applicants to deposit the entire decretal amount in an interest earning account in a reputable bank in the joint names of the advocates for the appellants and the respondent. Also that the said conditions to be met within 30 days from the date of the ruling and in default the application be deemed to have been dismissed with costs and the respondent be at liberty to execute.

22. After considering the parties’ materials on record, the following issues for determination arise:a.Whether an appointment of an independent inspector to provide an evaluation report, further from the court’s visit inspection report amounts to introducing new and additional evidence in appeal?b.Whether the application merits granting a stay of execution pending appeal, if so, under which conditions?

23. On the first issue, from the trial court’s records, it shows that it was the applicant/appellants who invited the court to visit the site and the premises for its independent evaluation. The trial court did conduct an inspection and evaluation; and parties made their submissions on the same inspection. In its final judgment, the trial court categorically expressed itself that it had factored in observations of the site and premises and gave an evaluation of the same. This position is also submitted by the respondent.24. Order 42 rule 27 of the Civil Procedure Rules, provides that;“The parties to an appeal shall not be entitled to produce additional evidence, whether oral or documentary, in the court to which the appeal is preferred; but if - (a). The court from whose decree the appeal is preferred has refused to admit evidence which ought to have been admitted; or (b). The court to which the appeal is preferred requires any document to be produced or any witness to be examined to enable it to pronounce judgment, or for any other substantial cause…”

25. In applying and interpreting the above provisions, I find guidance from the case of James Ndirangu Ng'ang'avKanubha Marebha Vaghela[2014] eKLR, where the court observed that,“The court to which the appeal is preferred may allow such evidence or document to be produced, or witness to be examined. I read this rule to be anticipating a scenario where the trial court has refused “to admit evidence which ought to have been admitted” which does not apply in this circumstance. Rule 27 (b) refers to “the appeal court requiring any document to be produced on any witness to be examined to enable it to pronounce judgment.” This appeal is at the stage of taking directions therefore the appellate court is not able to determine whether there will be need to call for additional evidence or not. The submission by the appellant on asking the court to visit the site and have the officers from the land’s department and cross-examined in my view is equivalent to review of the proceedings of the trial magistrate. The Rules referred to a scenario of evidence that was not within the reach of the appellant during the trial of his case and hence the need to bring it up before judgment in the trial court or on appeal. I do find the request for additional evidence as not merited and refuse it.”

26. Further, in Runda Water Limited & another v Timothy John Nicklin & another[2017] eKLR the court stated that,“…A strict reading of the provision will lead to a reasonable conclusion that such evidence can only be entertained during the hearing of the appeal on its merits but not at preliminary stage as this one. The court finds that this application is premature.”“…Where a trial court has conducted a site visit it might not be necessary for an appellate court to conduct a second visit unless there are compelling reasons to do so. This position was observed by the Court of Appeal in Makupa Transit Shade Limited & another v Kenya Ports Authority & another [2015] eKLR thus;“…the trial court did pay a visit to the site and made a finding that the area that the 2nd respondent was permitted to work on was not the same part of the plot destined for the appellants in 2002. This court is bound by this finding of fact and should not interfere unless there are irrelevant facts considered or the relevant facts have been left out. See Peter v Sunday Post Ltd. [1958] EA 424. ”

27. From the evidence on record the appellants/applicants did not oppose the trial court to conduct site inspection for valuation, but actually moved it to do so. Thus, the trial court cannot be said to have refused to admit evidence which ought to have been admitted. Also there being no exceptional circumstances to allow additional evidence at this point in appeal stage, I find that the prayer for appointment of another independent inspector, and or each party to tender their own valuation report at this appeal stage should fail. The prayer is akin to attempting to adduce new evidence, at appeal stage, albeit indirectly and irregularly. To that end, and in view of the fact that the applicant has failed to satisfy the legal threshold under order 42 rule 27 of the Civil Procedure Rules 2010, the first issue is answered in the affirmative.

28. On the second issue, in seeking stay of execution pending hearing and determination of this appeal, the applicants/ appellants averred, amongst other grounds, that they have an arguable appeal that raises extensive bona fide factual and legal issues deserving this court's consideration, and that the respondent has taken steps to execute the trials court decree, which would render the appeal nugatory considering the magnitude of the decretal sum and appellants business economic interests.

29. On its part, the respondent submitted that the threshold for stay of execution of the judgment pending appeal as provided under order 42 rule 6(2) of the Civil Procedure Rules 2010has not been met by the applicant/appellants.

30. This court has considered the parties’ pleadings and submission in regard to the application for stay of execution. At this point, the court is not dealing with the merit of the appeal. The court has discretionary powers to grant stay of execution of a decree pending appeal, however, the discretion should be exercised judicially. The case of Butt v Rent Restriction Tribunal[1982] KLR 417 is relied on.

31. Order 42 Rule 6(2) of the Civil Procedure Rules 2010provides that:(2)No order for stay of execution shall be made under sub rule (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.

32. In application of the above provision, in the case ofJessikay Enterprises Ltd v George Kahoto Muiruri[2022] eKLR, the court observed that,“The cornerstone consideration in the exercise of the discretion is whether the Applicants have demonstrated the likelihood of suffering substantial loss if stay is denied. One of the most enduring legal authorities on the issue of substantial loss is the case of Kenya Shell Ltd v Kibiru & another [1986] KLR 410. The principles enunciated in this authority have been applied in countless decisions of superior courts, including those cited by the parties herein. Holdings 2, 3 and 4 of the Shell case are especially pertinent. These are that:“1. …..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.4. In this case, the refusal of a stay of execution would not render the appeal nugatory, as the case involved a money decree capable of being repaid.”9. The decision of Platt Ag JA, in the Shell case (supra), in my humble view set out two different circumstances when substantial loss could arise, and therefore giving context to the 4th holding above. The Platt 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 awarded 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 two courts… (emphasis added)”10. The learned Judge continued to observe that: -“It is usually a good rule to see if order xli rule 4 of the Civil Procedure Rulescan be substantiated. If there is no evidence of substantial loss to the Applicant, it would be a rare case when an appeal would be rendered nugatory by some other event. Substantial loss in its various forms, is the cornerstone of both jurisdictions for granting stay. That is what has to be prevented. Therefore, without this evidence, it is difficult to see why the respondents should be kept out of their money.” (Emphasis added)11. Earlier on, Hancox JA in his ruling observed that“It is true to say that in consideration [sic] 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. This is shown by the following passage of Cotton L J in Wilson -v- Church (No 2) (1879) 12ChD 454 at page 458 where he said: - “I will state my opinion that when a party is appealing, exercising his undoubted right of appeal, this court ought to see that the appeal, if successful, is not rendered nugatory.”As I said, I accept the proposition that if it is shown that execution or enforcement would render a proposed appeal nugatory, then a stay can properly be given. Parallel with that is the equally important proposition that a litigant, if successful, should not be deprived of the fruits of a judgment in his favor without just cause.”

33. Similarly, in this instant matter as was in the Jessikay Enterprises Ltd case(supra), the applicant’s main claim is that unless a stay of execution order pending appeal is granted, the respondent is likely to execute the judgment of the subordinate court thereby rendering the appeal nugatory. On the part of the respondent, in their submissions, maintained that the applicant has not demonstrated specifically how the impending execution will lead to substantial loss, which I find as correct.

34. Further, execution is a legal process and the mere fact that it is carried out is not in its self as evidence of substantial loss. Moreover, execution cannot be stayed, save for a just cause, and with reasonable conditions.

35. The applicant is burdened to demonstrate how substantial loss would arise by illustrating, through affidavit, that the respondent would be unable to refund any monies paid to him under the decree, or that payments in satisfaction of the decree would occasion difficulty to the applicants. This position was well captured inNational Industrial Credit Bank Ltd v Aquinas Francis Wasike & Anor. (2006) eKLR case, where the Court of Appeal held that,“This court has said before and it would bear repeating that while the legal duty is on an applicants to prove the allegation that an appeal would be rendered nugatory because a respondent would be unable to pay back the decretal sum, it is unreasonable to expect such applicants to know in detail the resources owned by a respondent or the lack of them. Once an applicants expresses a reasonable fear that a respondent would be unable to pay back the decretal sum, the evidential burden must then shift to the respondent to show what resources he has since that is a matter which is peculiarly within his knowledge – see for example section 112 of the Evidence Act, chapter 80 Laws of Kenya.”

36. In the absence of evidence of substantial loss, an order for stay of execution cannot be issued.

37. In the end, the notice of motion application dated April 6, 2022 is hereby dismissed, with costs to the respondent.

DATED, SIGNED AND DELIVERED VIRTUALLY THIS 13TH DAY OF OCTOBER, 2022. …………………….J. K. SERGONJUDGEIn the presence of:……………………………. for the 1st Appellant/Applicant……………………………. for the 2nd Appellant/Applicant……………………………. for the 3rd Appellant/Applicant……………………………. for the Respondent