Nzoia Sugar Company Limited v R.M Patel & Partners Limited [2022] KEHC 13402 (KLR)

Nzoia Sugar Company Limited v R.M Patel & Partners Limited (Civil Appeal 96 of 2022) [2022] KEHC 13402 (KLR) (6 October 2022) (Ruling)

Neutral citation: [2022] KEHC 13402 (KLR)

Republic of Kenya

In the High Court at Eldoret

Civil Appeal 96 of 2022

EKO Ogola, J

October 6, 2022

Between

Nzoia Sugar Company Limited

Applicant

and

R.M Patel & Partners Limited

Respondent

((Appeal originating from Eldoret CM CC No.140 of 2020))

Ruling

1. The applicant approached this court vide a notice of motion dated July 20, 2022 seeking the following orders;1. That the honourable court be pleased to certify this application as urgent and service be dispensed with in the first instance.2. That the honourable court be pleased to grant a stay of execution in Eldoret MCCC No 140 of 2020 pending the hearing and determination of this application.3. That the honourable court be pleased to grant a stay of execution in Eldoret MCCC No 140 of 2020 pending hearing and determination of the appeal.4. The costs of this application be in the cause.

2. The application is based on the grounds set out therein and the affidavit sworn in support of the same.

3. The brief facts underlying the case are that the appellant was the defendant in Eldoret Chief Magistrates’ Civil Suit No 140 of 2020 wherein the court delivered judgment on June 16, 2022 giving an award of Kshs 7,989,746. 85/- together with costs and interests in favour of the respondent. The appellant being dissatisfied with the decision of the trial court filed the present appeal.

4. The appellant’s case is that there is a pending appeal and during the pendency and determination of the appeal, the respondent herein is likely to execute the decree at any time unless the court orders a stay of execution; that the appeal has a reasonable chance of success and if the orders sought are not granted the appeal shall be rendered nugatory. The appellant is ready to provide a bank guarantee as security. It maintained that it is in the interests of justice that the orders sought be granted.

5. The respondents opposed the application vide a replying affidavit dated July 26, 2022. The respondent’s case is that the said application is bad in law, abuse of the court process and fatally defective and the same should be dismissed in limine. The appellant through their amended Defence acknowledged being indebted to the respondent to a sum of Kshs 5,972,751. 17/=. A copy of the amended defence was annexed as annexure SWW2. The same position was maintained by the appellant’s witness on their statement dated March 29, 2022.

6. Upon considering the pleadings, I have identified the issue for determination as;Whether stay of execution should be grantedOrder 42 rule 6(1) and (2) of the Civil Procedure Rules provides as follows:“(1) No appeal or second appeal shall operate as a stay of execution or proceeding under a decree or order appealed from except 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 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.”

7. The upshot of the foregoing is that an applicant for stay of execution of a decree or order pending appeal is required to satisfy the conditions set out in order 42 rule 6 (2), aforementioned being;(a)that substantial loss may result to the applicant unless the order is made,(b)that the application has been made without unreasonable delay, and(c)that such security as the court orders for the due performance of such decree or order as may ultimately be binding on the applicant has been given

Substantial Loss 8. It was held inJames Wangalwa & another v Agnes Naliaka Cheseto [2012] eKLR, 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.”

9. In the present application, the applicant avers that the award is worth Kshs 7,989,746. 85/- together with costs and interest. Whereas I acknowledge that this is a colossal sum, I take note that the applicant has not stated how it will suffer substantial loss if the stay is not granted. The applicant has only stated that the money will not be recoverable.

Whether the application has been made without undue delay 10. The Judgment from which the orders the applicant seeks to stay emanated was delivered on June 16, 2022. The present application was filed on July 27, 2022. It is my view that the application was filed timeously.

Security 11. Whereas the applicant has not provided any security, it has agreed to abide to any conditions on security imposed by the court. The purpose of security was discussed inArun C Sharma v Ashana Raukundalia t/a Rairundalia & Co Advocates & 2 others [2014] eKLR, where the court stated:……The purpose of the security needed under order 42 is to guarantee the due performance of such decree or order as may ultimately be binding on the applicant. It is not to punish the judgment debtor……. civil process is quite different because in civil process the judgment is like a debt hence the applicants become and are judgment debtors in relation to the respondent. That is why any security given under order 42 rule 6 of the Civil Procedure Rules acts as security for due performance of such decree or order as may ultimately be binding on the applicants. I presume the security must be one which can serve that purpose.”

12. It does not escape the attention of the court that the appellant has admitted in its defence and in the witness statement of Maxwell Munyao that it owes the respondent Kshs 5,972,751. 17. That being so, it is my view that the appeal will not be dealing with admitted debt. If so, then this admitted debt should be paid. I therefore allow the application on the condition that Kshs 5,972,751. 17 admittedly owed to the respondent is paid within thirty (30) days from the date hereof failure to which the respondent is at liberty to execute. costs in the cause.

Dated, signed and delivered at Eldoret this 6th of October 2022. E. K. OGOLAJUDGE