Panij Automobiles (K) Ltd v Munguti (Suing as legal representative of the Estate of Kelvin Maingi Leonard & another; IBM Bank (Garnishee) [2022] KEHC 13386 (KLR)

Panij Automobiles (K) Ltd v Munguti (Suing as legal representative of the Estate of Kelvin Maingi Leonard & another; IBM Bank (Garnishee) (Civil Appeal E054 of 2022) [2022] KEHC 13386 (KLR) (5 October 2022) (Ruling)

Neutral citation: [2022] KEHC 13386 (KLR)

Republic of Kenya

In the High Court at Machakos

Civil Appeal E054 of 2022

GV Odunga, J

October 5, 2022

Between

Panij Automobiles (K) Ltd

Appellant

and

Catherine Nduku Munguti (Suing as legal representative of the Estate of Kelvin Maingi Leonard

1st Respondent

Trinity Transporters Services Ltd

2nd Respondent

and

IBM Bank

Garnishee

Ruling

1. There are two applications the subject of this ruling. The first application is dated June 10, 2022 brought by the appellant seeking the following orders:1. That the application be certified as urgent.2. That this honourable court be pleased to stay the execution of judgment of October 22, 2019 arising from Machakos CMCC 462 of 2018 and also stay the whole of the proceedings in Machakos CMCC 462 of 2018 Catherine Nduku Munguti suing as legal representative of Kelvin Maingi v Panij Automobiles and Trinity Transporters Ltd pending hearing and determination of this application.3. That this honourable court be pleased to stay the execution of judgment of October 22, 2019 arising from Machakos CMCC 462 of 2018 and also stay the whole of the proceedings in Machakos CMCC 462 of 2018 Catherine Nduku Munguti suing as legal representative of Kelvin Maingi v Panij Automobiles and Trinity Transporters Ltd pending hearing and determination of this appeal.4. That costs of this application be provided for.**

2. According to the applicant, on October 22, 2019 a consent judgement was entered in Machakos CMCC No 462 of 2018 by which the firm of Kairu & Mc court now Kimondo Gachoka & Co Advocates, acting on its behalf subjected it to a liability in excess of Kshs 8,000,000/= notwithstanding that it was never made aware of the suit and had not instructed the said firm to act for it.

3. As a result, the appellant filled an application dated January 17, 2022 which was on April 24,2022 dismissed paving way for execution by way of garnishee proceedings. Upon hearing of the garnishee application, the appellant was apprehensive that the orders sought therein would be granted since the garnishee was its bank account and the judgment was entered against him. It was its case that the lower court proceedings posed an imminent danger to its well being and accounts unless this court granted the orders sought herein.

4. The appellant explained that all along its prayers have been that it be given an opportunity to defend its case in the lower court, an opportunity it was never afforded as it has never been served with any documents and it never instructed the firm of Kairu & Mc.Court nor KImondo Gachoka & Co Advocates but only became aware of the suit in January 2022 through the garnishee when they were served with orders freezing the appellant’s bank accounts.

5. According to the appellant, its appeal has high chances of success in that a party cannot be condemned unheard, and a recognized agent cannot appear without instructions to act for a party. It lamented the fact that the court declined to summon the firm of Kairu & Mc.Court now KImondo Gachoka & Co Advocates to explain how they got my instructions to act for it. It was also contended that the Appellant had never been served with notice of entry of judgment or any proceedings in this suit.

6. The appellant disclosed that though at some point it owned motor vehicle KCH 587W, suit motor vehicle in Machakos CMCC462 of 2018, it is a motor vehicle dealer/seller and is not engaged in ferrying passengers or doing motor-vehicle business for hire and reward. However, upon selling the motor-vehicle to one Mr Joel Ndunda Kimilu trading as Trinity Transporters, it relinquished all its rights and claims regarding, driving and operation of the said motor-vehicle on July 28, 2016. Notwithstanding that, the firm of Kairu & Mc Court recorded a consent for and on its behalf for 90:10 against it, holding the appellant liable for an accident which it was never aware of or involved and without its instructions hence the current application.

7. The appellant lamented that unless its accounts are unfrozen, it would not be able to operate its business, pay its business tax which falls due on the 19th of every month and be liable to penalty.

8. It was further contended that no warrants of attachment have ever been served upon the appellant by craterview auctioneers or any other auctioneer in Machakos CMCC462 of 2018 and that upon perusal of the court file in Machakos CMCC462 of 2018 the appellant’s advocates established that no documents were ever served upon the appellant. The appellant lamented that in the absence of proof of service upon it the proceedings before the trial court were irregular and it stood to suffer irreparably if the garnishee proceedings were heard and determined in 1st respondent’s favour or if at all any execution proceeded against the appellant.

9. The second application is dated July 15, 2022 and it is related to the first application. It seeks stay of the garnishee order issued in the same case on December 14, 2021 and for the appellant to be allowed to operate its bank account held with the garnishee pending the hearing and determination of this appeal. According to the appellant, upon the issuance by this court of an order staying execution of the judgement and the proceedings in the lower court, it served the said order on the bank but the bank manager declined to unfreeze the accounts based on the existing garnishee order. Despite its efforts to have the accounts operational, the bank insisted that the appellant obtains an express order to that effect from this court.

10. Based on the order of stay granted by this court, the appellant opined that tis court ought to issue an order allowing him to operate the said account.

11. In response, the garnishee Bank explained that following the issuance of the garnishee order nisi dated December 14, 2021 which order was served upon the bank, pursuant to order 23 rule 2 of the Civil Procedure Rules and in compliance with the said order, the bank froze the appellant’s account and filed a replying affidavit showing that it does not hold any money on the appellants’ behalf and that in fact the appellant’s account has a debit balance. However, during the pendency of the garnishee application the appellants filed a notice of motion application dated January 17, 2022 inCMCCNo 462 of 2018 seeking stay of the garnishee order nisi issued on December 14, 2021 freezing the its accounts with the bank; stay of execution of the Judgement delivered by the lower court on October 22, 2019; and setting aside the Judgement and the decree dated September 25, 2020. That application was however, dismissed by a ruling dated April 21, 2022, for lack of merit. Dissatisfied with the ruling of April 21, 2022, the appellant lodged the present appeal together with the present notice of motion application.

12. The bank contended that it was not a party to the notice of motion application dated January 17, 2022 that gave rise to the ruling dated April 21, 2022 subject matter of the present appeal and that it was only joined in the lower court proceedings pursuant to the garnishee application dated October 28, 2021. Its position was that it has no interest in the merits of the substantive appeal or present application which seeks to stay execution of the lower court judgement and that as a garnishee, it has no locus to respond to the merits of the application and the appeal as it was not a party to the proceedings that resulted in the Judgement dated October 22, 2019 which the appellant seeks to set aside. Its role, in the execution proceedings before the lower court, it contended, is confined to confirming whether the garnisheed account is in funds and whether the bank has a claim over such funds pursuant to the provisions of order 23 of the Civil Procedure Rules. It lamented that it continues to incur costs in the present proceedings yet it is not a necessary party. It therefore sought to be discharged from the present proceedings.

13. As regards the prayers seeking the unfreezing of the appellant’s Account, The Bank maintained that the ex parte interim order issued by the High Court on June 13, 2022 does not set aside the ruling of the High Court and that an order to set aside or vary the ruling of the lower court can only be issued upon hearing of the substantive appeal. Accordingly, the appellant’s request to unfreeze and lift operations of its accounts is untenable as the bank would be risking contempt of court proceedings. The Bank averred that the application falls short on the doctrine of res-subjudice as there is a pending application dated June 10, 2022 which seeks to stay execution proceedings of the lower court judgement and that the present application is an abuse of the court process since both the application dated June 10, 2022 and the present application seek a stay of execution.

14. The Bank maintained that having been joined as a garnishee in CMCC462 of 2019, and having filed a replying affidavit showing that it does not any funds on behalf of the judgement debtor, it has no interest in the substantive appeal before this court and should be discharged from the present proceedings. It however undertook to be guided by the court’s orders and directions and to comply with such orders as shall be issued by court.

15. On their part the respondents relied on the replying affidavit sworn by Catherine Nduku Munguti, the 1st respondent herein in which she averred that on October 22, 2019, a judgment was entered against the applicant in the sum of Kshs. 6,404, 450/- with costs and interest less 10% contributory negligence recorded by consent. Consequently, a decree was issued on 25/9/2020 in the sum of Kshs. 7,505,443/- but todate the applicant has refused to satisfy the decree. Instead, the applicant filed Misc. application number 546/2019 seeking stay of execution and leave to appeal out of time. On 27/1/2020, the applicant was granted a conditional stay but refused to comply with the conditions of the Court.

16. It was averred that the 1st respondent in order to realise the decretal sum filed garnishee proceedings and on December 15, 2021 the court issued garnishee order. However, the applicant instead of dealing with the garnishee proceedings, applied to set aside the judgment the subject of the garnishee proceedings and stay of execution on January 18, 2022 which application was dismissed. It was then that the applicant appealed in the present suit and obtained stay of proceedings in CMCCNo 462/2018 where the garnishee proceedings are filed. It was averred that while the matter was pending for submissions on September 21, 2022, and the applicant instead of filing its submissions is back with another application. Based on legal advice, the respondents averred that the prayer for stay res judicata and applicant is using all tactics and going behind the back of the court to get stay; that the applicant is the one who sought for stay of proceedings in this appeal and now wants the court to review its orders in a bad way; that the orders sought by the applicant will be prejudicial to the respondent who has a judgment and cannot enjoy it after the applicant judgment debtor failed to pay; that the frozen account is a security for the 1st respondent since it’s judgment is not satisfied; that the time the court granted stay of proceedings, the garnishee order was in place but did not set aside that order; that removing the garnishee order now will amount to hearing the garnishee proceedings in the lower court and dismissing the same; and that the applicant should comply with the conditional stay granted earlier by a court of competent jurisdiction.

Determination 17. I have considered the two applications, the affidavits in support thereof and in opposition thereto and the submissions filed.

18. As regards the application dated July 15, 2022, it is important to understand the tenor and effect of the order issued by this court on June 13, 2022. On that date the court issued a temporary ex parte order staying the proceedings in Machakos CMCCNo 462 of 2018 including the judgement therein pending the hearing of the application inter partes. The applicant seems to be of the view that by that order, the court set aside the garnishee order nisi that was in place by then. With due respect to the applicant that cannot have been the intention otherwise the court would not have directed that the application be served and heard inter partes as there would then have been nothing to hear inter partes. This was the position adopted by Dyson, LJ in R (H) v Ashworth Hospital Authority[2003] WLR 127 at 138 where the Lord Justice held that:“The purpose of a stay in a judicial review is clear. It is to suspend the “proceedings” that are under challenge pending the determination of the challenge. It preserves the status quo. This will aid the judicial review process and make it more effective. It will ensure, so far as possible, that, if a party is ultimately successful in his challenge, he will not be denied the full benefit of his success. In Avon, Glidewell, LJ said that the phrase “stay of proceedings” must be given wide interpretation so as to enhance the effectiveness of the judicial review jurisdiction. A narrow interpretation, such as that which appealed to the privy council in vehicle and supplies, would appear to deny jurisdiction even in case A. That would indeed be regrettable and, if correct, would expose a serious shortcoming in the armoury of powers available to the court when granting permission to apply for judicial review…Thus it is common ground that “proceedings” includes not only the process leading up to the making of the decision but the decision itself. The administrative court routinely grants a stay to prevent the implementation of a decision that has been made but not yet carried into effect, or fully carried into effect.”

19. Whereas this court appreciates that in certain cases a stay may be granted even where its effect may be to temporarily reverse the decision, that remedy may only be resorted to in exceptional cases and the onus is upon the applicant to prove that such exceptional circumstances exist.

20. In this case there were no exceptional circumstances disclosed and the appellant cannot seek mandatory orders under the guise of stay pending appeal. Accordingly, that application is dismissed with costs.

21. As regards the application dated June 10, 2022, the respondents contend that the same is res judicata since the applicant had sought similar orders vide Miscellaneous Application No 546 of 2019 which were granted on condition.

22. Section 7 of the Civil Procedure Act, 2010 provides as hereunder:“No court shall try any suit or issue in which the matter directly and substantially in issue has been directly and substantially in issue in a former suit between the same parties, or between parties under whom they or any of them claim, litigating under the same title, in a court competent to try such subsequent suit or the suit in which such issue has been subsequently raised, and has been heard and finally decided by such court.”

23. As regards the rationale of the doctrine of res judicata, reliance was placed on the decision of the Court of Appeal inIndependent Electoral & Boundaries Commission v Maina Kiai & 5others (2017) eKLR.“The rule or doctrine of res judicata serves the salutary aim of bringing finality to litigation and affords parties closure and respite from the spectre of being vexed, haunted and hounded by issues and suits that have already been determined by a competent court. It is designed as a pragmatic and common-sensical protection against wastage of time and resources in an endless round of litigation at the behest of intrepid pleaders hoping, by a multiplicity of suits and fora, to obtain at last, outcomes favourable to themselves. Without it, there would be no end to litigation, and the judicial process would be rendered a noisome nuisance and brought to disrepute and calumny. The foundations of res judicata thus rest in the public interest for swift, sure and certain justice.”

24. In the Maina Kiai case (supra), the court quoted with approval the Indian Supreme Court in the case of Lal Chand v Radha Kishan, AIR 1977 SC 789 where it was stated;“The principle of res judicata is conceived in the larger public interest which requires that all litigation must, sooner than later, come to an end. The principle is also founded in equity, justice and good conscience which require that a party which has once succeeded on an issue should not be permitted to be harassed by a multiplicity of proceedings involving determination of the same issue. The practical effect of the res judicata doctrine is that it is a complete estoppel against any suit that runs afoul of it, and there is no way of going around it – not even by consent of the parties – because it is the court itself that is debarred by a jurisdictional injunct, from entertaining such suit.”

25. In Lotta v Tanaki [2003] 2 EA 556 it was held as follows:“The doctrine of res judicata is provided for in order 9 of the Civil Procedure Code of 1966 and its object is to bar multiplicity of suits and guarantee finality to litigation. It makes conclusive a final judgement between the same parties or their privies on the same issue by a court of competent jurisdiction in the subject matter of the suit. The scheme of section 9 therefore contemplates five conditions which, when co-existent, will bar a subsequent suit. The conditions are: (i) the matter directly and substantially in issue in the subsequent suit must have been directly and substantially in issue in the former suit; (ii) the former suit must have been between the same parties or privies claiming under them; (iii) the parties must have litigated under the same title in the former suit; (iv) the court which decided the former suit must have been competent to try the subsequent suit; and (v) the matter in issue must have been heard and finally decided in the former suit.”

26. In Gurbachan Singh Kalsi v Yowani EkoriCivil Appeal No 62 of 1958 the former East African Court of Appeal stated as follows:“Where a given matter becomes the subject of litigation in, and of adjudication by a court of competent jurisdiction, the court requires the parties to that litigation to bring forward their whole case, and will not, except under special circumstances, permit the same parties to open the same subject of litigation in respect of a matter which might have been brought forward as part of the subject in contest, but which was not brought forward, only because they have, from negligence, inadvertence, or even accident, omitted part of their case. The plea of res judicata applies, except in special cases, not only to points upon which the court was actually required by the parties to form an opinion and pronounce a judgement, but to every point which properly belonged to the subject of litigation, and which the parties exercising reasonable diligence, might have brought forward at the time…No more actions than one can be brought for the same cause of action and the principle is that where there is but one cause of action, damages must be assessed once and for all…A cause of action is every fact which it would be necessary for the plaintiff to prove, if traversed, in order to support his right to the judgement of the court. It does not comprise every piece of evidence which is necessary to prove each fact, but every fact which is necessary to be proved.”

27. In Apondi v Canuald Metal Packaging [2005] 1 EA 12 Waki, JA stated as follows:“A party is at liberty to choose a forum which has the jurisdiction to adjudicate his claim, or choose to forego part of his claim and he cannot be heard to complain about that choice after the event and it would be otherwise oppressive and prejudicial to other parties and an abuse of the court process to allow litigation by instalments.”

28. However, it is trite that the mere addition of parties in a subsequent suit does not necessarily render the doctrine of res judicata inapplicable since a party cannot escape the said doctrine by simply undertaking a cosmetic surgery to his pleadings. If the added parties peg their claim under the same title as the parties in the earlier suit, the doctrine will still be invoked since the addition of the party would in that case be for the sole purpose of decoration and dressing and nothing else. Under explanation 6 to section 7 of the Civil Procedure Act, where persons litigate bona fide in respect of a public right claimed in common by themselves and others, all persons interested in such right shall, for the purposes of the section, be deemed to claim under the persons so litigating.

29. In the cases of Mburu Kinyua v Gachini Tuti [1978] KLR 69; [1976-80] 1 KLR 790 andChuranji Lal & Co v Bhaijee (1932) 14 KLR 28 it was held that:“However, caution must be taken to distinguish between discovery of new facts and fresh happenings. The former may not necessarily escape the application of the doctrine since parties cannot by face-lifting the pleadings evade the said doctrine. In the case of Siri Ram Kaura v M J E Morgan Civil Application No 71 of 1960 [1961] EA 462 the then East African Court of Appeal stated as follows:“The general principle is that a party cannot in a subsequent proceeding raise a ground of claim or defence which has been decided or which, upon the pleadings or the form of issue, was open to him in a former proceeding between the same parties. The mere discovery of fresh evidence (as distinguished from the development of fresh circumstances) on matters which have been open for controversy in the earlier proceedings is no answer to a defence of res judicata...The law with regard to res judicata is that it is not the case, and it would be intolerable if it were the case, that a party who has been unsuccessful in a litigation can be allowed to re-open that litigation merely by saying, that since the former litigation there is another fact going exactly in the same direction with the facts stated before, leading up to the same relief which I asked for before, but it being in addition to the facts which I have mentioned, it ought now to be allowed to be the foundation of a new litigation, and I should be allowed to commence a new litigation merely upon the allegation of this additional fact. The only way in which that could possibly be admitted would be if the litigant were prepared to say, I will show you that this is a fact which entirely changes the aspect of the case, and I will show you further that it was not, and could not by reasonable diligence have been ascertained by me before...The point is not whether the respondent was badly advised in bringing the first application prematurely; but whether he has since discovered a fact which entirely changes the aspect of the case and which could not have been discovered with reasonable diligence when he made his first application.”

30. InNancy Mwangi T/A Worthlin Marketers v Airtel Networks (K) Ltd (Formerly Celtel Kenya Ltd) & 2 others [2014] eKLR the Court quoted the case of ET v Attorney General &another (2012) eKLR wherein the court noted thus:“The courts must always be vigilant to guard litigants evading the doctrine of res judicata by introducing new causes of action so as to seek the same remedy before the court. The test is whether the plaintiff in the second suit is trying to bring before the court in another way and in a form of a new cause of action which has been resolved by a court of competent jurisdiction. In the case of Omondi v National Bank of Kenya Limited and Others (2001) EA 177 the court held that, ‘parties cannot evade the doctrine of res judicata by merely adding other parties or causes of action in a subsequent suit.’ In that case the court quoted Kuloba J, in the case of Njangu vWambugu and another Nairobi HCCC No2340 of 1991 (unreported) where he stated, ‘If parties were allowed to go on litigating forever over the same issue with the same opponent before courts of competent jurisdiction merely because he gives his case some cosmetic fact lift on every occasion he comes to curt, then I do not see the use of the doctrine of res judicata…..”

31. It is therefore clear that parties are not to evade the application of res judicata by simply conjuring up parties or issues with a view to giving the case a different complexion from the one that was given to the former suit. However, where it is shown that the subsequent matter is based on a cause of action that is diametrically opposed to the first cause and could not possibly have been brought in the earlier matter, a plea of res judicata would not succeed. In this case, the Miscellaneous Cause was an application seeking stay of execution of the judgement pending an appeal thereat. This application however arises, not from the judgement but from a decision declining to set aside the judgement on the ground that the appellant was not represented at the hearing and was not aware of the circumstances under which the consent judgement against it was entered. In my view, these two positions are totally divergent and therefore the plea of res judicata cannot succeed.

32. Regarding stay of execution pending appeal, the principles guiding the grant there of a are well settled. These principles are provided under order 42 rule 6(2) of the Civil Procedure Rules as follows: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.

33. In Vishram Ravji Halai v Thornton & Turpin Civil Application No Nai 15 of 1990 [1990] KLR 365, the Court of Appeal held that whereas the Court of Appeal’s power to grant a stay pending appeal is unfettered, the High Court’s jurisdiction to do so under Order 41 rule 6 of the Civil Procedure Rules is fettered by three conditions namely, establishment of a sufficient cause, satisfaction of substantial loss and the furnishing of security. Further the application must be made without unreasonable delay. To the foregoing I would add that the stay may only be granted for sufficient cause and that the court in deciding whether or not to grant the stay and that in light of the overriding objective stipulated in sections 1A and 1B of the Civil Procedure Act, the court is nolonger restricted to the foregoing provisions. The courts are now enjoined to give effect to the overriding objective in the exercise of its powers under the Civil Procedure Act or in the interpretation of any of its provisions. According to section 1A(2) of the Civil Procedure Act “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” while under section 1B some of the aims of the said objective are; the just determination of the proceedings; the efficient disposal of the business of the court; the efficient use of the available judicial and administrative resources; and the timely disposal of the proceedings, and all other proceedings in the court, at a cost affordable by the respective parties.

34. It therefore follows that all the pre-overriding objective decisions must now be looked at in the light of the said provisions. This does not necessarily imply that all precedents are ignored but that the same must be interpreted in a manner that gives effect to the said objective. What is expected of the court is to ensure that the aims and intendment of the overriding objective as stipulated in section 1A as read with section 1B of the Civil Procedure Act are attained. It is therefore important that the court takes into consideration the likely effect of granting the stay on the proceedings in question. in other words, the court ought to weigh the likely consequences of granting the stay or not doing so and lean towards a determination which is unlikely to lead to an undesirable or absurd outcome. What the court ought to do when confronted with such circumstances is to consider the twin overriding principles of proportionality and equality of arms which are aimed at placing the parties before the court on equal footing and see where the scales of justice lie considering the fact that it is the business of the court, so far as possible, to secure that any transitional motions before the court do not render nugatory the ultimate end of justice. The court, in exercising its discretion, should therefore always opt for the lower rather than the higher risk of injustice. See Suleiman v Amboseli Resort Limited [2004] 2 KLR 589. This was the position of Warsame, J (as he then was) in Samvir Trustee Limited v Guardian Bank Limited Nairobi (Milimani) HCCC 795 of 1997 where he expressed himself as hereunder:“Every party aggrieved with a decision of the High Court has a natural and undoubted right to seek the intervention of the Court of Appeal and the court should not put unnecessary hindrance to the enjoyment and exercise of that right by the defendant. A stay would be overwhelming hindrance to the exercise of the discretionary powers of the court…The court in considering whether to grant or refuse an application for stay is empowered to see whether there exist any special circumstances which can sway the discretion of the court in a particular manner. But the yardstick is for the court to balance or weigh the scales of justice by ensuring that an appeal is not rendered nugatory while at the same time ensuring that a successful party is not impeded from the enjoyment of the fruits of his judgement. It is a fundamental factor to bear in mind that, a successful party is prima facie entitled to the fruits of his judgement; hence the consequence of a judgement is that it has defined the rights of a party with definitive conclusion. The respondent is asserting that matured right against the applicant/defendant…For the applicant to obtain a stay of execution, it must satisfy the court that substantial loss would result if no stay is granted. It is not enough to merely put forward mere assertions of substantial loss, there must be empirical or documentary evidence to support such contention. It means the court will not consider assertions of substantial loss on the face value but the court in exercising its discretion would be guided by adequate and proper evidence of substantial loss…Whereas there is no doubt that the defendant is a bank, allegedly with substantial assets, the court is entitled to weigh the present and future circumstances which can destroy the substratum of the litigation…At the stage of the application for stay of execution pending appeal the court must ensure that parties fight it out on a level playing ground and on equal footing in an attempt to safeguard the rights and interests of both sides. The overriding objective of the court is to ensure the execution of one party’s right should not defeat or derogate the right of the other. The court is therefore empowered to carry out a balancing exercise to ensure justice and fairness thrive within the corridors of the court. Justice requires the court to give an order of stay with certain conditions.”

35. Similar view was adopted in in RWW v EKW [2019] eKLR, where it was held that:“…the court should weigh this right against the success of a litigant who should not be deprived of the fruits of his/her judgment. The court is also called upon to ensure that no party suffers prejudice that cannot be compensated by an award of costs. Indeed to grant or refuse an application for stay of execution pending appeal is discretionary. The court when granting the stay however, must balance the interests of the appellant with those of the respondent.”

36. It was therefore opined in Absalom Dova v Tarbo Transporters [2013] eKLR, that the discretionary relief of stay of execution pending appeal is designed on:“the basis that no one would be worse off by virtue of an order of the court; as such order does not introduce any disadvantage, but administers the justice that the case deserves. This is in recognition that both parties have rights; the appellant to his appeal which includes the prospects that the appeal will not be rendered nugatory; and the decree holder to the decree which includes full benefits under the decree. The court in balancing the two competing rights focuses on their reconciliation…”

37. Therefore, this court must guard against any action or inaction whose effect may remove pith of this litigation and leave only a shell as was appreciated by the Court of Appeal position in Dr Alfred Mutua v Ethics & Anti-corruption Commission &others Civil Application No Nai. 31 of 2016 in which it cited the Nigerian Court of Appeal decision of Olusi &another v Abanobi &others [suit No CA/B/309/2008] that:“It is an affront to the rule of law to… render nugatory an order of court whether real or anticipatory. Furthermore…parties who have submitted themselves to the equitable jurisdiction of courts must act within the dictates of equity.”

38. It is trite that in giving effect to the rights the courts must balance fundamental rights of individual against the public interest in the attainment of justice in the context of the prevailing system of legal administration and the prevailing economic, social and cultural conditions. See Bell v DPP [1988] 2 WLR 73.

39. Apart from that as the Supreme Court appreciated inGitirau Peter Munya v Dickson Mwenda Kithinji & 2others [2014] eKLR, the Court must consider whether or not it is in the public interest that the order of stay be granted and that this condition is dictated by the expanded scope of the Bill of Rights, and the public spiritedness that run through the Constitution.

40. On the first principle, Platt, Ag JA (as he then was) inKenya Shell Limited v Kibiru [1986] KLR 410, at page 416 expressed himself as follows:“It is usually a good rule to see if order XLI Rule 4 of the Civil Procedure Rules can 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 corner stone of both jurisdictions for granting a 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”.

41. On his part, Gachuhi, Ag JA (as he then was) at 417 held:“It is not sufficient by merely stating that the sum of Shs 20,380. 00 is a lot of money and the applicant would suffer loss if the money is paid. What sort of loss would this be? In an application of this nature, the applicant should show the damages it would suffer if the order for stay is not granted. By granting a stay would mean that status quo should remain as it were before judgement. What assurance can there be of appeal succeeding? On the other hand, granting the stay would be denying a successful litigant of the fruits of his judgement.”

42. Dealing with the contention that the fact that the respondent is in need of finances is an indication that he would not be in position to refund the decretal sum, Hancox, JA (as he then was) in the above cited case when he expressed himself as follows:“I therefore think in the circumstances that these comments were unfortunate. Nevertheless, having considered the matter to the full, and with anxious care, there is in my judgement no justification whatsoever for holding that there is a likelihood that the respondents will not repay the decretal sum if the appeal is successful and that the appeal will thereby be rendered nugatory. The first respondent is a man of substance, with a good position and prospects. It is true his house was, in his words, reduced to ashes, but I do not take that against him. Both seem to me to be respectable people and there is no evidence that either will cease to be so, in particular that the first respondent will not remain in his job until pensionable age.”

43. Therefore, the mere fact that the decree holder is not a man of means does not necessarily justify him from benefiting from the fruits of his judgement. On the other hand, the general rule is that the court ought not to deny a successful litigant of the fruits of his judgement save in exceptional circumstances where to decline to do so may well amount to stifling the right of the unsuccessful party to challenge the decision in the higher court. In Machira T/A Machira & Co Advocates v East African Standard (No 2) [2002] KLR 63 it was held that:“to be obsessed with the protection of an appellant or intending appellant in total disregard or flitting mention of the so far successful opposite party is to flirt with one party as crocodile tears are shed for the other, contrary to sound principle for the exercise of a judicial discretion. The ordinary principle is that a successful party is entitled to the fruits of his judgement or of any decision of the court giving him success at any stage. That is trite knowledge and is one of the fundamental procedural values which is acknowledged and normally must be put into effect by the way applications for stay of further proceedings or execution, pending appeal are handled. In the application of that ordinary principle, the court must have its sight firmly fixed on upholding the overriding objective of the rules of procedure for handling civil cases in courts, which is to do justice in accordance with the law and to prevent abuse of the process of the court”.

44. Where the allegation is that the respondent will not be able to refund the decretal sum the burden is upon the applicant to prove that the Respondent will not be able to refund to the applicant any sums paid in satisfaction of the decree. See Caneland Ltd. & 2 Others v Delphis Bank Ltd. Civil Application No Nai 344 of 1999.

45. The law, however appreciates that it may not be possible for the applicant to know the respondent’s financial means. The law is therefore that all an applicant can reasonably be expected to do, is to swear, upon reasonable grounds, that the Respondent will not be in a position to refund the decretal sum if it is paid over to him and the pending appeal was to succeed but is not expected to go into the bank accounts, if any, operated by the Respondent to see if there is any money there. The property a man has is a matter so peculiarly within his knowledge that an applicant may not reasonably be expected to know them. In those circumstances, the legal burden still remains on the applicant, but the evidential burden would then have shifted to the respondent to show that he would be in a position to refund the decretal sum. SeeKenya Posts & Telecommunications Corporation v Paul Gachanga NdaruaCivil Application No Nai 367 of 2001; ABN Amro Bank, NK v Le Monde Foods LimitedCivil Application No 15 of 2002.

46. That position was adopted by the Court of Appeal decision in National Civil Appl No 238 of 2005 -National Industrial Credit Bank Limited v Acquinas Francis Wasike & Anor(UR) where the court stated as follows: -“This court has said before and it would bear repeating that while the legal duty is on an applicant to prove 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 an applicant to know in detail the resources owned by a respondent or lack of them. Once an applicant expresses a respondent would be unable to pay back the decretal sum, the evidential burden must then shift to matter which is peculiarly, within his knowledge.”

47. What amounts to reasonable grounds for believing that the respondent will not be able to refund the decretal sum is a matter of fact which depends on the facts of a particular case. In my view even if it were shown that the respondent is a man of lesser means, that would not necessarily justify a stay of execution as poverty is not a ground for denial of a person’s right to enjoy the fruits of his success. As was held inStephen Wanjohi v Central Glass Industries Ltd. Nairobi HCCC No 6726 of 1991, financial ability of a decree holder solely is not a reason for allowing stay; it is enough that the decree holder is not a dishonourable miscreant without any form of income.

48. However, the mere fact that execution process has been set into motion is not evidence of substantial loss. In the case ofJames Wangalwa &another v Agnes Naliaka Cheseto [2012] eKLR, the Court therefore 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 ... 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.”

49. In this case, the applicant contends that it never instructed the firm that purported to have acted on its behalf to do so as it was not aware of the said proceedings. Whether or not that contention will find favour with the court is another matter. However, the issue cannot be termed as frivolous at this stage.

50. As regards the issue of substantial loss, in the case of Dickson Isabwa Angaluki & 2others v Ukwala Supermarkets Ltd & 2 others [2013] eKLR it was held that:“Substantial loss may be inability to recover, or undue difficulty in recovering, from the respondent the decretal sum in the event that the appeal succeeds, thus rending the appeal nugatory.”

51. As was observed by Kamau, J in Civil Appeal No 634 of 2017 - Magnate Ventures v Simon Mutua Muatha &another [2018] eKLR:-‘…substantial loss does not have to be a colossal amount of money. Its sufficient if an applicant seeking a stay of execution demonstrates that it will go through hardship such as instituting legal proceedings to recover the decretal sum it paid to a respondent in the event his or her appeal was successful. Failure to recover such decretal sum would render his appeal nugatory if he or she was successful.’

52. In any event, in Halai & another v Thornton &Turpin (1963) Limited KLR 1990 the Court of Appeal held that:-“…this court is not prevented from granting a stay of execution where no substantial loss is established and no security is forthcoming if it seems just to the court for such orders to be made upon application.”

53. In this case, the amount in question is clearly huge. That, in my view constitutes a possibility of a substantial being occasioned to the ppellant if the stay is not grated.

54. It however must be appreciated that the respondents are the successful parties before the trial court and until the lower court decision is set aside, the Respondents are entitled to enjoy the fruits of that decision.

55. As regards security, I associate myself with the holding in Mwaura Karuga T/A Limit Enterprises v Kenya Bus Services Ltd & 4others [2015] eKLR, where it was said:“… the security must be one which shall achieve due performance of the decree which might ultimately be binding on the applicant. The rule does not, therefore, envisage just any security. The words ‘’ultimately be binding’ are deliberately used and are useful here, for they refer to the entire decree as will be payable at the time the appeal is lost. That is the presumption of law here. Therefore, the ultimate decree envisaged under order 42 rule 6 (2) (b) of the Civil Procedure Rules includes costs and interest on the judgment sum unless the latter two were not granted-which is seldom. The security to be given is measured on that yardstick.”

56. I also agree with the decision in Gianfranco Manenthi &another v Africa Merchant Assurance Company Ltd [2019] eKLR, in which the court observed:“… the applicant must show and meet the condition of payment of security for due performance of the decree. Under this condition a party who seeks the right of appeal from money decree of the lower court for an order of stay must satisfy this condition on security. In this regard, the security for due performance of the decree under order 42 rule 6(1) of the Civil Procedure Rules, it is trite that the winner of litigation should not be denied the opportunity to execute the degree in order to enjoy the fruits of his judgment in case the appeal fails…Further, order 42 should be seen from the point of view that a debt is already owed and due for payment to the successful litigant in a litigation before a court which has delivered the matter in his favour. This is therefore to provide a situation for the court that if the appellant fails to succeed on appeal there could be no return to status quo on the part of the plaintiff to initiate execution proceedings where the judgement involves a money decree. The court would order for the release of the deposited decretal amount to the respondent in the appeal … Thus the objective of the legal provisions on security was never intended to fetter the right of appeal. It was also put in place to ensure that courts do not assist litigants to delay execution of decrees through filing vexatious and frivolous appeals. In any event, the issue of deposit of security for due performance of decree is not a matter of willingness by the applicant but for the court to determine. Counsel for the applicant submitted that he is ready to provide a bank guarantee as security for due performance of the decree.”

57. In the result the order that commends itself to me and which I hereby grant is that there will be a stay of execution of the judgement appealed from pending the hearing and determination of the appeal on condition that the applicant furnishes security by way of either deposit of Kshs 4,000,000. 00 in a joint interest earning account with Kenya Commercial Bank, Machakos Branch within 30 days from the date of this decision or secures a bank guarantee from a reputable financial institution for the said sum within the same period and in default, the application will be deemed to have been dismissed in which event the Respondents will be at liberty to execute for the full amount.

58. I further discharge the Garnishee, IBM Bank, from this appeal. However, its liability as a garnishee is to be determined in the garnishee proceedings if the same have not yet been determined.

59. The costs of these applications are awarded to the respondents in any event.

It is so ordered.G V ODUNGAJUDGERULING READ, SIGNED AND DELIVERED IN OPEN COURT AT MACHAKOS THIS 5TH DAY OF OCTOBER, 2022M W MUIGAIJUDGEDelivered the presence of: