Phineahs Waguma Machiro v George Anyiko K’ouma t/a Wotatech Services [2022] KEHC 1621 (KLR)

REPUBLIC OF KENYA

IN THE HIGH COURT OF KENYA

AT MIGORI

MISCELLANEOUS CIVIL APPLICATION NO. 17 OF 2020

PHINEAHS WAGUMA MACHIRO.........................................................................RESPONDENT

-VERSUS-

GEORGE ANYIKO K’OUMA T/A WOTATECH SERVICES........APPELLANT/APPLICANT

RULING

The application for consideration is the one dated 4/8/2020. The applicant is George Anyiko K’Ouma T/A Wotatech Services who  seeks the following orders:-

a. Spent.

b. Spent.

c. The court be pleased to grant an order of stay of execution of the judgement delivered on the 14th day of May 2020 in civil case no. 75 of 2019 pending the hearing and determination of the application herein.

d. This court be pleased to set aside the order of dismissal of the application dated 30th June 2020 and reinstate the same pending the hearing and determination of the intended appeal.

e. Costs be provided for.

The applicant was represented by Mr. Obach Advocate while the     Respondent was represented by Ms. Opondo Advocate.

The grounds upon which the application is premised are found in the body of application and the supporting affidavit of George Anyiko K’Ouma. The applicant deponed that judgement in Civil Case no. 75 of 2019 was delivered on 14/5/2020 without notice to his then advocate and he only came to learn of the judgement upon being served with the execution notice; that his then advocate requested for a typed copy of the judgement but the same took long; that he then instructed his then advocate to file application for stay on 30/6/2020 at a time when the country was already facing the COVID - 19 pandemic; that the same was not filed since there were new practice directions on e-filing; that when the application was filed, the court granted stay of execution for 30 days; that said application was however dismissed for want of prosecution as his then advocates, Osiemo Wanyonyi & Co. Advocates failed to attend court and he came to know about this when execution proceedings commenced; that his then advocate did not communicate to him the dismissal and the new practice directions; being aggrieved by the dismissal, the applicant then appointed the current firm of advocates M/S H. Obach & Partners to take over this matter and file an application to set aside the dismissal order.

The applicant deponed that the current advocates filed an application dated 6/10/2020 for reinstatement of the application dated 30/6/2020 that had been dismissed in Migori Chief Magistrate’s court vide Civil Suit No. 75 of 2019 whereas the correct position is that the dismissed application was filed before this court in Misc. Civil Case No. 17 of 2020; that the previous firm did not give the current firm adequate information thus leading to the confusion and delay on where the application for  reinstatement  was to be filed; that Hon. J. Munguti delivered a ruling on 25/2/2021 on the said application in the absence of all parties and the applicant came to know of it later after being served with warrants of attachment; that the applicant has a prima facie arguable appeal with chances of success and if the said stay is not issued, the appeal shall be rendered nugatory.

The application was opposed. The Respondent was represented by Ms Opondo. The respondent filed a replying affidavit sworn by Phineahs Waguma Machiro,the respondent herein, dated 19/8/2021. The respondent deponed that the applicant has been indolent and only rushes to court when execution proceedings have commenced; that the applicant has approached this court with unclean hands; that the substantive motion of this application was served upon the respondent after complaints on 18/8/2021; that the application dated 5/10/2020 was dismissed on 25/2/2021 and therefore the present application is res judicata; that the applicant’s excuse that the present application was erroneously filed before the subordinate court is not true as the parties prosecuted the same before the Magistrate’s court culminating in its dismissal; that even if the application before the Magistrate court via Civil Suit No. 75 of 2019 was a mistake, the applicant has not explained the delay in not taking steps from 25/2/2021 when the ruling was delivered to August 2021 when they were served with a notice to show cause; that the applicant has not demonstrated the substantial or irreparable loss that he will suffer which is the  cornerstone of an application for stay; that the applicant has not complied with the mandatory terms as stipulated under Order 42 (6) (2) in so far as he is unwilling to deposit the entire decretal sum in a fixed deposit account; that the amount should be deposited in a fixed interest earning account in the event the applicant is granted stay since the applicant received cash in the amount of Kshs. 3,400,000/= and he has held the amount since 2017 without rendering the services which was the basis of payment; that the applicant is intended to keep the respondent from enjoying the fruits of his judgement and it is in the  interest of justice that the application be dismissed.

On 22/9/2021, the court directed that the application be canvassed by way of written submissions. Both parties complied.

Having settled prayer 2 of the application on the firm of H. Obach & Partners coming on record, the following are the issues for determination:-

i. Whether the applicant should be granted orders of stay of execution of judgement delivered on 14/5/2020 pending appeal.

ii. Whether the application dated 30/6/2020 should be re-instated.

On whether stay of execution should issue, Order 42 Rule 6 (1) and (2)of the Civil Procedure Rules codifies the circumstances under which stay pending appeal can be granted as follows:-

(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 undersubrule (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 ultimate be binding on him has been given by the applicant.”

For a stay of execution to issue, the applicant should establish the following:-

a. He shall suffer substantial loss if stay is not granted;

b. That the application has been filed without unreasonable delay;

c. The applicant is willing to furnish security for the due performance of the decree;

d. The applicant has an arguable appeal.

On whether the applicant will suffer substantial loss, the applicant submitted that the respondent has already started execution process which if it proceeds, will occasion the applicant’s appeal to be rendered nugatory. The respondent deponed that the applicant had not sufficiently demonstrated the substantial loss he is likely to suffer.

In case of Silverstein v Chesoni (2002) 1 KLR 867 cited in Superior Homes (Kenya) Limited vs Musango Kithome (2018) eKLR the Court of Appeal held as follows:-

“…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”

According to the respondent, the amount in dispute is Kshs. 3,400,000/= which he paid the applicant to render services, but  which he did not fulfil. This is the amount which he seeks to recover from the applicant as evidenced in exhibit no. GAK-6 being the application for execution of decree attached to the applicant’s application.

In Kenya Shell Limited -vs- Benjamin Karuga Kibiru & another (1986) eKLR Platt Ag JA held:-

“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 the two courts…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 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).

Warsame, J (as he then was) in Samvir Trustee Limited -vs- Guardian Bank Limited Nairobi (2007) eKLRexpressed himself as hereunder:

“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 facieentitled 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.” (Emphasis added).

The applicant has not made any allegation  that the respondent does not have the financial ability to refund the decretal amount should execution proceed neither has it demonstrated how it stands to suffer substantial loss beyond stating that it stands to suffer great prejudice and the appeal shall be rendered nugatory  the orders sought are not granted. The applicant makes mention on how he shall suffer substantial loss in his submissions. It is trite law that submissions do not form part of pleadings.

The duty to substantiate loss lies with the applicant in the first instance. By failing to depose on this claim, the applicant denied the respondent a chance to respond on that ground  and possibly demonstrate on their financial ability to repay the decretal sum should the appeal succeed.

While this court has the unfettered discretion to issue stay orders, it is also important to balance the interests of both litigants. The court should consider the twin principles of proportionality and equality of arms which are aimed at  placing both parties on an equal footing always opting for the lower rather than the higher risk of injustice.

In J.P. Machira T/A Machira & Co. Advocates -vs- East Africa Standard Limited (2001) eKLR Kuloba J held as follows: -

“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.”

I am not convinced that the applicant has demonstrated what substantial loss they are likely to suffer if the decretal amount is to be paid. On the other hand, the respondent did not attempt to address the court on its financial ability to repay the money in the event the appeal succeeds, as speculative as it was. This is a case of the plague has fallen on both houses.

On whether the application has been filed without unreasonable delay, the applicant submitted that there was confusion on where the dismissed application dated 30/6/2020 was filed thus occasioning the confusion which led to the delay. The respondent submitted that the applicant has been using such delaying tactics and there is no explanation why the application sought to be reinstated which was dismissed on 30/6/2020 is being litigated 1 year 4 months later.

I have perused the court record and note that the application dated 30/6/2020 was filed in this court and on 2/7/2020. Mrima J ordered that the application be heard interparties on 28/7/2020. Counsel for the applicant did not attend court and subsequently, the application was dismissed for non-attendance. The applicant deponed that upon being informed of an intended execution, he came to learn about the dismissed application and instructed the firm of H. Obach & Partners to file an application to set aside the dismissal order. The application was erroneously filed before the Magistrate’s court and by a ruling delivered on 25/2/2021 the learned Magistrate Hon. Munguti (SPM) rightly observed that there being no such application filed before his court, there was nothing to reinstate/stay. Admittedly, the ruling was delivered in the absence of all parties and the registry was directed to inform the parties.

The applicant then proceeded to file this application on 6/8/2021 a period of about 7 months after Hon. Munguti delivered the ruling. I further note that the instant application was filed after a notice to show cause application dated 22/7/2021 on why execution should not proceed was served upon the applicant. The applicant, it would seem to me, is one who slumbers and only reacts when threatened with execution.

While it is an acceptable explanation that filing the application on the wrong forum led to the delay, the applicant has not properly explained to this court, knowing that there was a pending ruling which by all means was in his best interest,  he did not follow up to know whether the court delivered the same. There is a letter by the applicant addressed to the Executive Officer dated 12/4/2021 asking for the status of the ruling (Annexure “GAK-7”). The letter does not bear the receiving stamp of the Magistrate’s Court registry to indicate when it was received. It seems to me the letter was just recently drafted and back dated to mislead and hoodwink this court into believing that the applicant was actively following up on the proceedings. I find that the applicant is guilty of laches and the unreasonable delay in bringing the present application has not been satisfactorily explained.

On whether the applicant is willing to furnish security for due performance, the applicant submitted that he is willing to deposit a sum of Kshs. 1,000,000/= while the respondent submitted that the applicant was ordered to deposit the sum of Kshs. 1,000,000/= as security in court which time was extended but the respondent chose not to comply. The amount in dispute as deponed in paragraph 13 of the respondent’s replying affidavit is Kshs. 3,400,000/= which the respondent claims was the amount paid for drilling a borehole which the applicant failed to do.

The applicant has been given an opportunity, twice, to comply with the order of depositing the  sum of Kshs. 1,000,000/= as security pending the hearing and determination of the appeal but which was squandered. The applicant has not shown good faith in complying with the order. As observed hereinbefore, stay orders are not meant to oppress one litigant at the expense of another. The respondent laments that the applicant has been holding the sum in dispute since the year 2017.

The importance of payment of security was explained in the case of Gianfranco Manenthi & another -vs- Africa Merchant Assurance Company Ltd (2019) eKLR, where 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 decree 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 … This 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.”

The order which I issued on 22/9/2021 was that, should the applicant fail to deposit the amount in a joint interest earning account, the stay orders would lapse automatically. In his submissions, the applicant seems to suggest that he has not yet complied with the order and the respondent confirms by submitting that the applicant had not done the same as of 25/10/2021 when he filed his submissions.

The applicant should understand that court orders are not suggestions which he can cherry pick on what to obey and what not to obey. Courts orders must be obeyed. As was observed by Kuloba J in J.P. Machira T/A Machira & Co. Advocates (supra)in exercising its unfettered judicial discretion in granting stay, the court should be careful not to flirt with one party while shedding crocodile tears with the other.

I find that the applicant is not willing and/or has not attempted to demonstrate his willingness to furnish security for due performance of the decree and is not deserving of stay pending the intended appeal.

From the foregone, it would be an academic exercise to determine whether the applicant has an arguable appeal or not. Besides, there are no draft grounds of appeal which have been filed and/or attached to his application for the court to consider whether there is an arguable appeal or not.

It goes without saying that the fourth issue for consideration also fails by the way.

On whether the application date 30/6/2020 should be reinstated, The appellant prayed that this court do grant stay of execution and also, be granted leave to  enlarge time to appeal against the decision of Hon. Munguti in Migori SRMCC No. 75 of 2019, out of time on terms and conditions to be stated.

Section 79G of the Civil Procedure Act makes provision for filing of appeals in the High Court.   It states:-

“Every appeal from a subordinate court to the High Court shall be filed within a period of thirty (30) days from the date of the decree or order appealed against, excluding from such period any time which the lower court may certify as having been requisite for the preparation and delivery to the appellant of copy f the decree or order.

Provided that an appeal may be admitted out of time if the appellant satisfies the court that he had good and sufficient cause for not filing the appeal in time.”

To grant  leave to appeal out of time, the applicant has to satisfy the court  that he has good and sufficient cause for not filing appeal in time.  In Velji Shamad vs Shamji Bros and Popatlal Karman & Co 1957 EA 438.   The court held:-

“In the interests of the public the court ought to take care that appeals are brought before it in proper time and before the proper court or registry and when a judgement has been pronounced and the time for appeal has elapsed without an appeal the successful party has a vested right to the judgement which ought, except under very special circumstances, to be made effectual. And the Legislature intended that appeals from judgements should be brought within the prescribed time and no extension of time should be granted except under very special circumstances.”

In this case, the applicant has not satisfactorily explained to this court why the delay of over one year.  He has given different excuses of his advocate failing to attend court for hearing on 28/7/2021 following which the application was dismissed.   His other excuse is that when he engaged another counsel, he filed the application in the lower court.  I do not understand how that could happen.  Does it mean counsel never perused the file to determine whether there were orders of dismissal to be set aside.   After Hon. Munguti dismissed the application then there was unexplained inordinate delay.  I find that the applicant has not shown this court sufficient cause for leave to be granted to him to file appeal out of time.  The court may be engaged in many other theatrics that may further delay the Respondent enjoying the fruits of their judgment which is not justified.  Prayer 4 is not merited.

In my view, the orders being asked in the application dated 30/6/2020, are similar to the ones I have determined hereinabove.   I have found that the appellant is not deserving stay pending appeal.

In the end, I find that the application dated 4/8/2020 is without merit and the same is dismissed with costs to the respondent.

DATED, DELIVERED AND SIGNED AT MIGORI THIS  16TH DAY OF MARCH, 2022

R. WENDOH

JUDGE

Ruling delivered in the presence of:-

No appearance for the Applicant

Mr. Odhiambo holding brief for the Respondent

Ms. Emma Court Assistant