Sasini Tea and Coffee Limited (Ruiru Mills Limited) v Beatrice Mutune Mbuluo [2017] KEHC 238 (KLR)

REPUBLIC OF KENYA

IN THE HIGH COURT OF KENYA AT KIAMBU

MISC. CIVIL APPLICATION NO. 23 OF 2017

SASINI TEA & COFFEE LIMITED

(RUIRU MILLS LIMITED)………….......................................... APPLICANT

VERSUS

BEATRICE MUTUNE MBULUO….……..……..…………...RESPONDENT

RULING

1. The Applicant seeks orders for enlargement of time to file Memorandum of Appeal out of time as well as a stay of execution of the judgment rendered between the parties in the lower Court.  The intended appeal is from a judgment delivered in Gatundu SPMCC No. 113 of 2013 on 13/12/2016.  The Application is supported by a Supporting Affidavit by Paul Kariba, a Legal Officer at APA Insurance Limited, the insurer of the Applicant.

2. The Application is opposed.  In opposition, the Respondent has sworn a Replying Affidavit.

3. The facts are as follows.  Judgment in the lower court matter was delivered on 13/12/16.  The Applicant’s Advocates do not deny knowing about the judgment date.  The Court granted a stay of execution for 30 days.  The Applicant says that the period of festivities affected the normal operations and decision-making such that by the time the insurer had read the judgment and decided to appeal, time to appeal had already run out.  They, therefore, filed the present Application on 08/02/17 seeking for extension of time and stay of execution.

4. The two issues for determination is whether the Applicant is entitled to an extension of time and an order for stay of execution.

5. Section 79G of the Civil Procedure Act is the operative part in answering the question whether the prayer to enlarge time to file the appeal is merited.  The section provides as follows:

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 lower 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 in time.

6.  Our case law has now provided guidelines on what will be considered “good cause” for purposes of permitting a party who is aggrieved by a lower court judgment or ruling to file an appeal out of time.  The most important consideration is for the Court to advert its mind to the fact that the power to grant leave extending the period of filing an appeal out of the statutory period is discretionary and must be granted on a case by case basis.  While not a right, it must be exercised judiciously and only after a party seeking the exercise of the discretion places before the Court sufficient material to persuade the Court that the discretion should be exercised on its behalf and in their favour.

7.  Our case law has developed a number of factors which aid our Courts in exercising the discretion whether to extend time to file an appeal out of time.  Some of these factors were suggested by the Court of Appeal in Mwangi v Kenya Airways Ltd [2003] KLR.  They include the following:

a. The period of delay;

b. The reason for the delay;

c. The arguability of the appeal;

d. The degree of prejudice which could be suffered by the Respondent is the extension is granted;

e. The importance of compliance with time limits to the particular litigation or issue; and

f.  The effect if any on the administration of justice or public interest if any is involved.

8. Consequently, these are the factors upon which I will construct the crucible against which the Applicants’ prayer for extension of time will be measured.

9. The Respondent complains that this Application is an abuse of the Court process and that the Applicant has simply been waiting for time to run out before rushing to court for orders.  They see this as an attempt by the Applicant to prevent the Respondent from enjoying the fruits of her judgment.

10. The Respondent argues that the Applicant cannot demonstrate that its intended appeal is arguable since it has not annexed any Memorandum of Appeal to its application.  In summary, the Respondent says that it will be prejudicial to the Respondent if the Applicants are granted leave yet they have not shown sufficient ground to warrant equitable remedies at the discretion of the Court.

11. I would readily agree that the Court always tries to determine disputes on their merits.  Indeed, the Applicant may as well have cited the Ugandan Supreme Court in Banco Arabe Espanol  V Bank of Uganda [1999] 2 EA 22 where it remarked that:

The administration of justice should  normally  require that the substance  of all disputes should  be investigated  and decided  on their  merits  and that errors, lapses  should not  necessarily debar  a litigant  from the pursuant  of his  rights  and unless lack of  adherence  to rules renders the  appeal process  difficult  and inoperative.  It should seem that the main purpose of litigation, namely, the hearing and determination of disputes should be fostered rather than hindered.

12. However, adhering to this salutary policy in the administration of justice does not at all mean that parties will be granted leave for extension of time automatically and in spite of their conduct in the litigation and the effect their inattention to the rules of the game would have on the other party to the suit.

13. In this case, the Court is unable to assess the arguability of the appeal when no Memorandum of Appeal has been filed. The Applicant simply says in the Supporting Affidavit and on the face of the Notice of Motion that the appeal is arguable but it provides no basis for the Court to come to that conclusion.  Without the conclusion as to the arguability of the intended appeal, it is difficult for the Court to come to the conclusion that it should exercise its discretion to extend time.  This is not just a formalist argument: the Court can only extend time for good cause and it is the right of the Respondent that the Court be satisfied that there is good cause to extend time. It does not matter whether the “good cause” is contained in an annexed Draft Memorandum of Appeal or not but it must be expressed.  I have not been able to find the “good cause” here.  It is not enough to say that the Applicant is generally aggrieved with the decision of the lower Court.  Such general language, in my view, does not rise to the level of “good cause” demanded by our jurisprudence to exercise discretion on behalf of an Applicant.

14. With the difficulty to justify discretion for extension to appeal out of time, the Applicants’ request for stay of execution would fall by the way side as well. However, if I were to consider the application for stay, it would meet the same fate.  Applications for stay of execution are governed, primarily, by the terms of Order 42 Rule 6 of the Civil Procedure Rules. The conditions to be met by an Applicant in order to be entitled to an order for stay are encapsuled in that Rule in the following terms:

6. (1) No appeal or second appeal shall operate as a stay of execution or proceedings under a decree or order appealed from except appeal case of 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.

15. The law regarding the grant of stay of execution is well established in Kenya.  Among the legion of authoritative cases establishing it, the judges of the Court of Appeal were both concise and emphatic in Rhoda Mukuma v John Abuoga:

It was laid down in M M Butt v The Rent Restriction Tribunal, Civil Application No Nai 6 of 1979, (following Wilson v Church (No 2) (1879) 12 Ch 454 at p 488) that in the case of a party appealing, exercising his undoubted right of appeal, the court ought to see that the appeal is not rendered nugatory. It should therefore preserve the status quo until the appeal is heard.

Granting a stay in the High Court is governed by Order XLI rule 4(2), the questions to be decided being – (a) whether substantial loss may result unless the stay is granted and the application is made without delay; and (b) the applicant has given security.

16.  Hence, under our established jurisprudence, to be successful in an application for stay, an Applicant has to satisfy a four-part test. It must demonstrate that:

a. The appeal it has filed is arguable;

b. It is likely to suffer substantial loss unless the order is made.  Differently put, it must demonstrate that the appeal will be rendered nugatory if the stay is not granted;

c. The application was made without unreasonable delay; and

d. It has given or is willing to give such security as the court may order for the due performance of the decree which may ultimately be binding on him.

17.  In this case, without a Draft Memorandum of Appeal, I am unable to say that the intended appeal is arguable.  I cannot simply believe the Applicants’ word that it is.

18.  Secondly, the Applicants are equally unable to demonstrate what substantial loss they are likely to suffer if the order is not granted. The Applicants simply say that their intended appeal will be rendered nugatory if the stay of execution is not granted.  On this point, our case law is unanimous in the position enunciated in National Industrial Credit Bank Limited v Aquinas Francis Wasike & Another thus:

This Court has said before and it would bear repeating that while the legal duty is on an applicant to prove 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 the respondent to show what resources he has since that is a matter which is peculiarly within his knowledge.

19. In this case, the Applicants did not as much as claim that the Respondent is a woman of straw in their Supporting Affidavit.  They merely asserted that the appeal will be rendered nugatory. They make the claim for the first time in their submissions.  It is true that the legal position in Kenya is that once an Applicant for stay credibly raises the issue of lack of means by a Respondent (judgment-creditor) to refund decretal amounts, the evidential burden is shifted to the Respondent to demonstrate that she has the resources to repay any amounts paid to her.

20.  Here, however, the Applicants did not as much as make the claim in their filed papers. That claim is made, for the first time, in their submissions.  Needless to say, that is not enough. It is not automatic that the Court will assume that a Judgment-Creditor is impecunious once an applicant for stay in a money decree says that his appeal will be rendered nugatory.  Indeed, the opposite is the case as demonstrated in Kenya Hotel Properties Ltd v Willsden Properties LtdCivil Application number NAI 322 of 2006 (UR).

21. It is, therefore, my conclusion that the Applicants have not demonstrated that there will be substantial loss unless stay is granted.  I would, therefore, not have concluded that the Applicants have met the conditions placed by Order 42 Rule 6.

22.   Consequently, the Application dated 07/02/2017 must fail.  The same is dismissed with costs.

23.  Orders accordingly.

Dated and delivered at Kiambu this 5th day of September, 2017.

..........................

JOEL NGUGI

JUDGE