Rafiki Microfinance Bank Limited v Omonde t/a Dimonde Agencies and Auctioneers & another [2023] KEHC 23909 (KLR)

Rafiki Microfinance Bank Limited v Omonde t/a Dimonde Agencies and Auctioneers & another (Miscellaneous Civil Application E046 of 2023) [2023] KEHC 23909 (KLR) (19 October 2023) (Ruling)

Neutral citation: [2023] KEHC 23909 (KLR)

Republic of Kenya

In the High Court at Bungoma

Miscellaneous Civil Application E046 of 2023

DK Kemei, J

October 19, 2023

Between

Rafiki Microfinance Bank Limited

Appellant

and

Dickson Omonde T/A Dimonde Agencies And Auctioneers

1st Respondent

Gabriel Nyabande Ogolla T/A Marken Hauliers

2nd Respondent

Ruling

1. The Applicant filed a notice of motion application dated 20th day of July, 2023 pursuant to section 1A,1B,3A,75,78,79G & 95 of the Civil Procedure Act, Order 42 Rules 1 &6, Order 43 Rules 1 &6, Order 43 Rule 1, Order 50 rule 6, Order 51 Rule 1 of the Civil Procedure Rules 2010, Article 50 of the Constitution of Kenya, 2010, the inherent jurisdiction of this Honourable Court and all other enabling provisions of the law seeking orders that:a.Spent.b.That the honourable court be pleased to grant leave to the Applicant herein to file its appeal out of time against the ruling delivered by the Honourable Charles Soi Mutai ( SPM ) on 16th June, 2023 in Bungoma Magistrate’s Court Civil Miscellaneous Application No. E287 of 2022- Dickson Omonde T/A Dimonde Agencies & Auctioneers -Vs- Rafiki Microfinance Bank Limited & Anotherc.Spent.d.That this Honourable court be pleased to grant an order of stay of execution of the ruling delivered on 17th May, 2023 in Bungoma Magistrate’s Court Civil Miscellaneous Application No. E287 of 2022- Dickson Omonde T/A Dimonde Agencies & Auctioneers -Vs Rafiki Microfinance Bank Limited & Another pending lodging , hearing and determination of the intended Appeal.e.That if prayer (b) above is granted, the Memorandum of Appeal attached herewith to the upporting affidavit be deemed to have been duly filed and served upon the respondents herein.f.That the costs of and incidental to this application be in the cause.

2. The application is based on the grounds on the body of the notice of motion and the supporting affidavit sworn by Daniel Ogolla, the current Assistant Manager Debt Recovery of the applicant sworn on even date. The applicant’s case is inter alia; that on the 16th June, 2023 the Honourable court allowed the 1st Respondent’s Notice of Motion Application dated 11th October , 2022 in Bungoma Magistrate’s Court Civil Miscellaneous Application No. E287 of 2022 – Dickson Omonde T/a Dimonde Agencies & Auctioneers -Vs- Rafiki Microfinance Bank Limited & Another in terms of Prayers 1 & 2 of the said Application for the sum of Kenya shillings three hundred and seventy- eight Thousand, six hundred only ( Kshs.378,600. 00); that the Applicant is reasonably apprehensive that the 1st Respondent might proceed to execute as against the Applicant if the same is not certified urgent and the orders sought granted as the Applicant will suffer substantial loss; that on 12th October, 2022 the 1st Respondent in Bungoma Magistrate’s Court Civil Miscellaneous Application No. E287 of 2022 – Dickson Omonde T/A Dimonde Agencies Auctioneers -vs- Rafiki Microfinance Bank Limited & Another filed a Notice of Motion Application dated 11th October, 2022 seeking inter alia that the Honourable court does direct the Applicant herein to meet/pay the auctioneers’ fees, storage charges and expenses arising from execution done by the 1st Respondent; that the Applicant vide its replying affidavit sworn by Jane Warau on 18th January, 2023 opposed the 1st Respondent’s subject application on the grounds that there was no contractual relationship between the Applicant and the 1st Respondent herein with respect to the Trailer registration number ZE 8739 whose charges the 1st Respondent sought in its Bill of Costs dated 11th October 2022; that the Honourable court on 6th April 2022 directed that parties do file and exchange written submissions and that the matter be scheduled for ruling on notice on account of the fact that Hon. Charles Soi Mutai ( SPM), who had conduct of the matter hereof, was going on transfer to Homa Bay Law Courts; that in a strange turn of events the Honourable Charles Soi Mutai ( SPM ) delivered the impugned ruling on 16th June, 2023 without notice to either the parties herein or their respective counsel on record; that it was not until 14th July, 2023 when the Applicant became aware of the said ruling after being served by the 1st Respondent with warrants of attachment and a proclamation notice dated 12th July 2023 and 14th July, 2023 respectively demanding for payment of the cumulative sum of Kenya shillings Five Hundred and Four Thousand One hundred and Eleven and seventy- eighty cents only ( Kshs. 504,111/78-) payable within seven (7) days from 14th July, 2023; that the ruling delivered on 16th June, 2023 by Honourable Charles Soi Mutai (SPM) without notice to either the parties herein or their respective Counsel on record whimsically allowing the 1st Respondent’s notice of motion application dated 11th October, 2022 for the sum of Kshs. 378,600. 00/- is a serious breach of procedure amounting to a denial of the right to be heard as is enshrined under Article 50 of the Constitution of Kenya, 2010; that the Respondent has taken reasonable steps to execute a decree that had been issued by the trial court and therefore if the Ruling delivered on 16th June, 2023 is not stayed pending the hearing and determination of the intend Appeal, the Applicant will suffer irreparable loss; that the foregoing has occasioned the applicant to seek leave to file an Appeal out of time, and unless the Application is heard and determined expeditiously, the Applicant shall suffer great prejudice that cannot be remedied; that such extreme and highly prejudicial consequences before the hearing and determination of the appeal would subvert the ends of justice and render the Appeal nugatory; that the intended appeal raises serious triable issues with high chances of success which necessitate this Honourable court to grant an order of stay of execution to enable the Appeal be determined on merit lest it be rendered nugatory; that the applicant has the right to be heard on appeal as envisioned under Article 50 of the Constitution of Kenya, 2010 and pursuant to the rules of natural justice; that the Applicant is in the process of procuring copies of the proceedings to enable preparation and lodgment of the Record of Appeal; that the Applicant has moved diligently and expeditiously in bringing this application; that it is therefore in the interest of justice and fairness that the prayers sought in the application filed herewith be granted

3. In response to the application, the 1st Respondent filed a replying affidavit sworn on 25th day of July, 2023. According to the Respondent, the reasons advanced by the Appellant/applicant in seeking to enlarge time in which to file their appeal is flimsy in substance and was intended to delay his enjoyment of the fruits of the ruling; that on 16. 4.2023, when the court gave direction that it will deliver the ruling on notice and that on the 16. 6.2023 when the ruling was delivred is mathematically 60 days from 16. 4. 2023; that from the date of the stated ruling and 14. 7.2023, when the Appellant/.Applicant is purported to have become aware of the said ruling after being served with the warrants of attachment, is mathematically 30 days which makes it almost 90 days overall; that equity aids the vigilant and that the court registry being open on working days, it was easy for the Appellant/applicant to make inquiries on the proceedings of the court file; that the respondent had a benefit to be explained to the application and the supporting affidavit by the Appellant/applicant and that there is no paragraph therein demonstrating as to whether the appellant/applicant ever made efforts to follow up and know the proceedings of the court file within 90 days as calculated above; that the Appellant/applicant is ready to blame anybody and everyone other than themselves for not being vigilant with the proceedings of the matter in court whereof they are now caught up with time in filing of the appeal; that the amount stipulated in the ruling is a debt owing by the Appellant /applicant which has not been settled to me and the Appellant/applicant should not use this court to deny the respondent the fruits of the ruling; the Appellant/applicant has not committed in their application or the supporting affidavit on how they are ready to make good the settlement of the same; that the respondent verily believes that a party seeking for stay of execution should be ready to deposit security for costs; that without any commitment on the part of the Appellant/applicant on the security, the orders for stay should be struck out with costs to the Respondent ; that the application be dismissed with costs to the Respondent .

4. The Applicant filed a further affidavit sworn on 8th August, 2023 wherein he reiterated the contents of his supporting affidavit sworn on 20th July, 2023 wherein he averred inter alia; that it is trite under the provisions of section 79G of the Civil Procedure Act,Cap 21 of the Laws of Kenya that 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; that further to the contents of paragraph 4 hereinabove, he reiterated the contents of paragraph 7 of the supporting affidavit sworn by himself on 20th July, 2023 and further state that the applicant’s window for lodging any appeal if aggrieved by the decision of the trial court was to lapse on 16th July, 2023 and therefore it was only prudent that leave be sought to file and or lodge an appeal out of time; that the application filed herewith and dated 20th July 2023 had been brought under the provisions of, among others, Section 95 of the Civil Procedure Act, Cap 21 of the Laws of Kenya as well as Order 50 Rule 6 of the Civil Procedure Rules, 2010; that in response to contents of paragraph 6 of the 1st Respondent’s Replying affidavit , he reiterate the contents of paragraph 11 of his supporting affidavit sworn on 20th July, 2023 and further state that the Applicant’s window for lodging any appeal if aggrieved by the decision of the trial court was to lapse on 16th July, 2023 and therefore it was only prudent that leave be sought to file and or lodge an appeal out of time; that the application filed herewith and dated 20th July, 2023 has been brought under the provisions of section 95 of the Civil Procedure Act, Cap 21 of the Laws of Kenya as well as Order 50 Rule 6 of the Civil Procedure Rules, 2010 among others; that contents of paragraph 6 of the 1st Respondent’s replying affidavit, that he reiterates the contents of paragraph 11 of his supporting affidavit sworn on 20th July, 2023.

5. The application was canvassed by way of written submissions. The applicants filed their submissions dated 4th day of September, 2023 while the 1st Respondent did not file any submissions. The Applicant’s submissions are a reiteration of the averments in the application.

6. I have given due consideration to the application, rival affidavits and submissions. I find the issues necessary for determination are firstly; whether the court should grant the applicant leave to lodge appeal out of time and secondly; whether the court should grant an order of stay of execution of decree pending the determination of the intended appeal.

7. As regards the first issue, section 79G of the Civil Procedure Act provides that:‘’Every appeal from a subordinate court to the High Court shall be filed within a period of thirty days from the date of the decree or order appealed against excluding from such period any time which the court may certify as having been requisite for the preparation and delivery to the appellant of a copy of 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 on time.’’Therefore, an applicant seeking enlargement of time to file an appeal or admission of an already filed appeal must show that he has a good cause for doing so since as was held in Feroz Begum Qureshi and Another V. Maganbhai Patel and Others [1964] EA 633 that there is no difference between the words ‘’sufficient cause’’ and ‘’good cause’’. In the case of Daphne Parry V. Murray Alexander Carson [1968] EA 546 it was held that though the provision for extension of time requiring ‘’sufficient reason’’ should receive liberal construction so as to advance substantial justice when no negligence, nor inaction nor want of bonafides is imputed to the appellant, its interpretation must be in accordance with judicial principles. If the appellant had a good case on the merits but is out of time and has no valid excuse for the delay, the court must guard itself against the danger of being led away by sympathy and the appeal should be dismissed as time barred, even if at the risk of injustice and hardship to the appellant.

10. As the principles to be considered in exercising the discretion whether or not to enlarge time, the court in the case of First American Bank of Kenya Ltd V. Gulab P. Shah & 2 Others [2112] 1 EA 65 the court set out the factors to be considered in deciding whether or not to grant such an application and these are i) the explanation if any for the delay; ii) the merits of the contemplated action; whether the matter is arguable one deserving a day in court or whether it is a frivolous one which would only result in the delay of the cause of justice; (iii) whether or not the respondent can adequately be compensated in costs for any prejudice that her may suffer as a result of a favourable exercise of discretion in favour of the applicant.

11. In the present case, the applicant’s draft memorandum of appeal is annexed to the supporting affidavit sworn on 20/7/2023 while the impugned ruling was delivered on 16/6/2023. Hence, it is clear that the period of appeal had elapsed by about four days. The 1st Respondent has maintained that the applicant had been aware of the dates for the ruling and ought to have been vigilant since the trial court had indicated that the ruling would be delivered on notice and thus the applicant has no excuse for the delay to lodge an appeal on time. In an application for extension of time, where the court is being asked to exercise discretion, there must be some material before the court to enable its discretion to be exercised. Once there is noncompliance, the burden is upon the party seeking indulgence to satisfy the court why the discretion should nevertheless be exercised in his favour and the rule is that where there is no explanation, there shall be no indulgence. See Ratman V. Cumarasamy [1964] 3 ALL ER 933; Savil V. Southern Health Authority [1995] 1 WLR 1254.

12. Section 79G of the Civil Procedure Act requires that before the court enlarges time for appealing, the applicant must satisfy the court that he had sufficient cause for not filing in time. The applicant’s Assistant Manager Debt recovery has averred that they only learnt of the matter after they were served with warrants of attachment and proclamation by an auctioneer on 14/7/2023 and it is when they made enquiries and learnt that the trial magistrate had delivered the ruling on 16/6/2023 in which they had no notice thereof. As the trial court had directed that the ruling would be delivered on notice, then if the same did not reach the applicant, such a scenario would be excusable in the circumstances. It is my view that the period of delay is not that inordinate as to warrant a denial. Article 48 of the Constitution guarantees every person access to justice and that Article 50 (1) of the constitution guarantees every person a right to have any dispute that can be resolved by application of law and decided in a fair and impartial public hearing before a court, or if appropriate, another independent and impartial tribunal or body. It follows therefore that no person who has approached the court seeking an opportunity to ventilate their grievances fully should not be locked out. In the instant case, the applicant has approached the court about one month and four days after the delivery of the impugned ruling by the trial court. I find the said delay is not inordinate or unreasonable. It is not in dispute that the discretion of this court to enlarge time for filing of a late appeal is unfettered. It is noted that as soon as the applicant became aware of the matter, it filed the present application. This is clear evidence that the applicant is desirous of pursuing an appeal. The respondent will not suffer any prejudice if the applicant is allowed to lodge its appeal out of time. I find that it is fair and just to allow the applicant an opportunity to ventilate its appeal. The 1st Respondent will not suffer any prejudice as the court will direct that the applicant furnishes security for the due performance of the decree. Hence, I find the applicant’s request for enlargement of time to file an appeal merited. The court will give timelines within which to comply.

13. As regards the second issue, Order 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 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; andb)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.’’

14. On the issue whether the application has been made without unreasonable delay, it is noted that the applicant has surmounted the same in that the same was filed four days after the lapse of the statutory period of appeal (30). The impugned ruling was delivered on 16/6/2023 while the application was filed on the 20/7/2023 and hence it was only four days late. As noted vide issue one above, the applicant was late by four days. I find this was not inordinate.

15. On the issue of substantial loss, the applicant has averred that it will suffer substantial and financial loss if it is ordered to pay up the decretal sums to a stranger who had no contractual relationship with the applicant. In Bungoma High Court Misc Application Number 42 of 2011 James Wangalwa & Another V. Agnes Naliaka Cheseto the court held that an applicant must establish other factors which show that the execution will create a state of affairs that will affect or negate the very essential core of the applicant as the successful party in the appeal as this is what substantial loss would entail. Again, in the case of Kenya Shell Ltd V. Kibiru [1986] KLR 410 the court held as follows:‘’…substantial loss in its various forms is the cornerstone of both jurisdictions for granting a stay. That is what has to be prevented…’’It is noted that the applicant has sought for an order for stay pending the determination of the intended appeal. On the other hand, the 1st Respondent being the decree holder is entitled not to be kept from the fruits of his judgement. The court has to balance the competing interests of the parties by ensuring that the decree holder’s interest is taken care of as well as those of the applicant whose appeal could be rendered nugatory in the end. The prejudice suffered by the parties herein will be taken care of by an order of security for costs pending determination of the intended appeal. I find that the applicant has surmounted the above condition that it is likely to suffer substantial loss if an order of stay is not granted.

16. Finally, on the issue of security, he applicant in its affidavits has averred that it is ready to abide by conditions to be imposed by the court. Indeed, the provision of security for due performance of the decree is a prerequisite for one to be granted an order of stay of execution. In the case of Mwaura Karuga T/A Limit Enterprises V. Kenya Bus Services Ltd & 4 Others [2015] Eklr the court held as follows:‘’…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 judgement sum unless the latter two were not granted which is seldom. The security to be given is measured on that yardstick.’’From the aforesaid decision, an order for deposit of security by the applicant pending determination of the intended appeal will be appropriate in the circumstances. The said deposit could be put into a joint interest earning account in the names of the advocates for the parties and which is expected to continue earning interest as the parties litigate in the intended appeal.

17. In view of the foregoing observations, it is my finding that the applicant’s application dated 20/7/2023 has merit. The same is allowed in the following terms:a)The applicant is granted leave to file and serve its Memorandum of Appeal within ten (10) days from the date hereof.b)An order of stay of execution of the decree in Bungoma CMCC No. E287 of 2022 is hereby granted pending the determination of the intended appeal upon the Applicant depositing the entire decretal sums into a joint interest earning account in the names of both advocates for the applicant and 1st Respondent within thirty (30) days from the date hereof failing which the stay shall lapse.c)The costs of the application shall abide in the intended appeal.

DATED AND DELIVERED AT BUNGOMA THIS 19THDAY OF OCTOBER 2023D.KEMEIJUDGEIn the presence of :Macharia for ApplicantNekesa for Shikhu for 1st RespondentOmusula Court Assistant