Prime Bank Limited v Mwaringa & another [2023] KEHC 25779 (KLR)

Prime Bank Limited v Mwaringa & another (Civil Appeal 36 of 2023) [2023] KEHC 25779 (KLR) (15 November 2023) (Ruling)

Neutral citation: [2023] KEHC 25779 (KLR)

Republic of Kenya

In the High Court at Malindi

Civil Appeal 36 of 2023

SM Githinji, J

November 15, 2023

Between

Prime Bank Limited

Appellant

and

Katana Kea Mwaringa

1st Respondent

Xplico Insurance Company Limited

2nd Respondent

Ruling

CORAM:Hon. Justice S. M. GithinjiMr Mania holding brief for Mr Mutua for the AppellantMr Kilonzo Advocate for the Respondent 1. For determination before the court is the Appellant’s Notice of Motion dated 13th April 2023 seeking the following orders;1. Spent.

2. That pending the hearing and determination of this application inter

3. partes, there be an order for stay of execution of the Garnishee Order absolute dated 21/02/2023 issued against the Appellant/Applicant in Kilifi SPMCC No. E130 of 2021, Katana Kea Mwaringa v Xplico Insurance Company limited & Prime Bank Limited.

4. That there be a stay of execution of the Garnishee Order absolute dated 21/02/2023 issued against the Appellant/Applicant in Kilifi SPMCC No. E130 of 2021, Katana Kea Mwaringa v Xplico Insurance Company limited & Prime Bank Limited pending the hearing and determination of the appeal.

5. That the costs of this application be provided for.

2. The application is premised on the supporting affidavit of George W. Mathui the Senior Manager- Legal at Prime Bank Limited who deponed that the appeal herein challenges the decision in Kilifi SPMCC No. E130 of 2021 in terms of which the 1st respondent’s application seeking garnishee orders in respect of funds standing in credit in a bank account number 3000019157 belonging to the 2nd respondent and held with the appellant was allowed. He stated that he swore a replying affidavit on behalf of the appellant dated 24/10/2022 and exhibited the statement of account wherein the balance stood at Kshs. 367,682. 05 and that the said credit balance was not available to the account holder. Further, that the ruling delivered on 21/02/2023 allowing the garnishee application as prayed made the appellant liable to satisfy the decree made against the 2nd respondent in the principal sum of Kshs. 1,265,491. It was additionally deponed that the stay of execution that was granted in the lower court lapsed thus the appellant is exposed to a real and imminent threat of execution of the garnishee order absolute which is the subject of the appeal.

3. The 1st respondent filed a replying affidavit sworn by Geoffrey Kilonzo advocate in conduct of the matter stating that the appellant’s application lacks merit, is meant to deny the respondent from enjoying the fruits of litigation, is brought in bad faith, is bad in law and incompetent, the appeal has no likelihood of success and is an abuse of the court process. Moreover, that the applicant has not satisfied the conditions set out for grant of stay of execution.

Disposition 4. The application was disposed of by way of written submissions which I have taken into account as well as the authorities relied upon. The issue for determination is whether the order sought for stay is merited.

5. On stay of execution, order 42 rule 6(2) of the Civil Procedure Rulesprovides:“(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.”

6. In Vishram Ravji Halai vs. 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 42 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. The application must be made without unreasonable delay. In addition, stay may be granted for sufficient cause and that the court in deciding whether or not to grant stay must be guided by the overriding objectives enshrined under section 1A and 1B of the Civil Procedure Act.

7. The present application arises from the Garnishee absolute issued by the lower court on 21/02/23. The application for stay was filed on 13/04/2023. In as much as the 45 days stay of execution had lapsed, I find that the same being 5 days late is negligible to count as inordinate delay.

8. On the issue of substantial loss, the appellant states that it is required vide the Garnishee absolute to satisfy the decretal sum of Kshs. 1,265,491 whereas it holds Kshs. 367,682. 05 in the 2nd Respondent’s account and thus cannot exceed the amount held in its account. On the principle of substantial loss, Platt, Ag.JA (as he then was) in Kenya Shell Limited vs. 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”.

9. On the part of 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.”

10. On this facet, I am convinced that the appellant has demonstrated the likelihood to suffer substantial loss.

11. Regarding the issue for security of costs, it is trite that a court is not bound by the type of security offered by an applicant. It can make appropriate orders which serve the interest of justice taking into account the fact that money depreciates unless it is kept in an interest earning account for the period of the appeal. The appellant does not deny that it holds the sum of Kshs. 367,682. 05. There is no reason advanced as to why the said amount cannot be released as security for costs pending the hearing and determination of the appeal.

12. In the end, I allow the application for stay of execution on condition that sum of Kshs. 367,682. 05 held by the appellant for the 2nd respondent be released to the 1st respondent forthwith. The costs of the application shall abide by the outcome of the appeal.

RULING READ, SIGNED AND DELIVERED VIRTUALLY AT MALINDI THIS 15TH DAY OF NOVEMBER, 2023. ...................................S.M. GITHINJIJUDGEIn the Presence of; -1. Mr Manda holding brief for Mr Mutua for the Applicant2. Mr Kilonzo for the RespondentParties be notified.Mr Manda holding brief for Mr Mutua; -We can have a date for appeal directions.Court; - Mention for directions on appeal 8/2/2024 before Court No.2. ...................................S.M. GITHINJIJUDGE15/11/2023