Pentagon Interior Limited v Brian Mwangangi Nzomo & Matru Enterprises Limited [2017] KEHC 1261 (KLR) | Stay Of Execution | Esheria

Pentagon Interior Limited v Brian Mwangangi Nzomo & Matru Enterprises Limited [2017] KEHC 1261 (KLR)

Full Case Text

REPUBLIC OF KENYA

IN THE HIGH COURT OF KENYA AT MACHAKOS

CIVIL APPEAL NO. 54OF 2017

PENTAGON INTERIOR LIMITED…..….......………..…….APPELLANT

VERSUS

BRIAN MWANGANGI NZOMO….………..……….1ST RESPONDENT

MATRU ENTERPRISES LIMITED.……………..…2ND RESPONDENT

RULING

The  Application

The application before the court for ruling is a Notice of Motion dated 28th April 2017 which has been filed by the Appellant, seeking orders that there be a stay of execution of the judgment and decree issued by the Principal Magistrate’s Court at Mavoko on 29th March 2017 pending the hearing and determination of the Appellant’s appeal filed herein. The said judgment was delivered in Mavoko PMCC No 597 of 2014 which was filed by the 1st Respondent against the Appellant.

The Appellant’s grounds are set out on the face of the Notice of Motion and in a supporting affidavit sworn on 28th April 2017 by Jignesh Chhaya, the Appellant’s Managing Director. The main ground is that the Appellant  has an arguable appeal with a high chance of success, and if the decree of the lower court is executed it will render the appeal nugatory and the Appellant will suffer irreparable damage.

Further, that in the event of execution, the Appellant will most likely be attached and will be forced to take out a bank loan to pay the judgment sum of over Kshs one (1) million to the 1st Respondent, and it will be impossible to recover the said sum from the 1st Respondent whose means and place of abode are unknown., The Appellant stated that it is ready and willing to abide by the conditions in terms of security that may be set by the Court.

The Appellant’s counsel. Namada & Company Advocates filed written submissions on the application dated 26th July 2017, wherein reliance was placed on Order 42 Rule 6 of the Civil Procedure Rules, and the Court of Appeal decision in Kenya Shell Limited vs Kibiru & Another (1986) KLR 410 for the position that the Appellant had demonstrated that if stay is not granted it will suffer substantial loss; the application was filed without undue delay; and that it is willing to abide by any conditions as to provision of security. The decision in Nduhiu Gitahi vs Warugongo (1988) KLR 621 was also cited for the position that  the purpose and manner of security given should ensure that the appeal is not prejudiced and that the decretal sum is available when required.

The Advocates for the 1st Respondent, Kibunja Nyambura & Company  Advocates opposed the Defendants’ application in Grounds of Opposition dated 10th May 2017, that they filed on the same date. It was stated therein that that the Appellants’ application is frivolous, vexatious and an abuse of the process of court. Further, that it lacked sound basis in fact and law and also lacked merit. Lastly, that the application is intended to deny the 1st Respondent of the fruits of a judgment lawfully obtained. The 1st Respondent did not file any written submissions on the application despite being given opportunity to do so.

The Issues and Determination

I have read and carefully considered the pleadings filed. The issue that is before the Court for determination is whether the ruling and judgment entered in the Respondent’s favour on 29th March 2017 in Mavoko PMCC No 597 of 2014,  and subsequent decree should be stayed pending the hearing of and determination of the Appellant’s appeal.

Stay of execution pending appeal is governed by the provisions of Order 42 Rule 6 of the Civil Procedure Rules, which provides as follows:

“6. (1) No appeal or second appeal shall operate as a stay of execution or proceedings 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.”

For a stay of execution to be granted, an applicant must satisfy the conditions stated in Order 42 rule 6 (2) to the effect that:

(a) the application for stay must be made without unreasonable  delay from the date of the decree or order to be stayed;

(b) the applicant must show that he will suffer substantial loss if the  orders of stay is not granted, and

(c)  the applicant offers such security as the court may order to bind  him to satisfy any ultimate orders the court may make binding  upon him.

The essence of an application for stay pending appeal is to preserve the subject matter of litigation, to avoid a situation where a successful appellant only gets a paper judgment, while at the same time balancing the rights of the parties.

In the present application, this Court notes that the impugned  judgment were delivered in the lower court on 29th March 2017, and the Memorandum of Appeal and this application were filed herein on 2nd May  2017. There was therefore no inordinate delay in filing the application.

On the fulfillment of the second condition, an applicant needs to show what specific loss or prejudice he will suffer if stay is not granted, over and above payment of the decretal sum. I note in this regard that the decretal sum sought by the 1st Respondent’s lawyers, in their letter dated 30th March 2017 addressed to the Appellant’s lawyer (which was attached as Annexure “JC3” to the Appellant’s supporting affidavit), is Kshs 1,007, 328/=.   The Appellant has in this respect stated that it does not have the funds to pay the said decretal sum, and will be attached or needs to take out a loan to pay the same.

The Appellant also stated that the 11st Respondent may not be able to refund the decretal sum in the event that its appeal succeeds. The 1st Respondent on the other hand did not indicate the means at his disposal that he will use to refund the decretal sum in the event the appeal succeeds.

This Appellant’s averments are in my view sufficient and specific enough as to the substantial loss that it will suffer if the application for stay is not granted. I am in this regard guided by the position as stated by the Court of Appeal in National Industrial Credit Bank Ltd vs Aquinas Francis Wasike, Nrb CA Civil Application No 238 of 2005 where it was held as follows:

“The court has said before and it would bear repeating that while the legal duty is on an applicant 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 an applicant to know in detail the resources owned by a respondent or the lack of them. Once an Applicant 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 Cap 80 Laws of Kenya.”

Lastly, on the third condition, the Appellant has indicated that he is willing to furnish security of any nature.

Accordingly, the orders that commend themselves to me arising from the foregoing, are that the Appellant’s Notice of Motion dated 28th April 2017 is allowed on the following terms:

1. There shall be a stay of execution of the ruling and judgment delivered on 29th March 2017 in Mavoko PMCC No 597 of 2014 and of the subsequent decree pending the hearing and determination of the appeal filed herein, on condition that the Appellant secures the decretal sum with a Bank Guarantee in the sum of Kshs One Million (Kshs 1,000,000/=) from  a reputable Bank within forty five (45) days of the date of this ruling. In default of compliance the stay orders herein shall stand vacated and the 1st Respondent shall be at liberty to execute.

2. The costs of the Notice of Motion shall follow the Appeal.

Orders accordingly.

Dated, signed and delivered in open court at Machakos this 31st  day of  October, 2017.

P. NYAMWEYA

JUDGE