Shabaa Supply Solution Building & Engineering Construction Limited & 2 others v SMP Capital Ltd [2023] KEHC 26589 (KLR)

Shabaa Supply Solution Building & Engineering Construction Limited & 2 others v SMP Capital Ltd (Civil Appeal E059 of 2022) [2023] KEHC 26589 (KLR) (Commercial and Tax) (15 December 2023) (Ruling)

Neutral citation: [2023] KEHC 26589 (KLR)

Republic of Kenya

In the High Court at Nairobi (Milimani Commercial Courts)

Commercial and Tax

Civil Appeal E059 of 2022

DO Chepkwony, J

December 15, 2023

Between

Shabaa Supply Solution Building & Engineering Construction Limited

1st Appellant

Justus Amoni Ewoi

2nd Appellant

Cecilia Asiyen Ngitit

3rd Appellant

and

SMP Capital Ltd

Respondent

(Being an appeal from the Judgment of the Honourable P M Ms. E. Wanjala delivered on 14th April 2022 in Milimani CMCC E3784 of 2020, SMP Capital Limited –vs- Shabaa Supply Solution Building & Engineering Construction Limited & 2 Others)

Ruling

1. Before the court for determination is notice of motion application dated February 9, 2023 filed under article 25 (c) 48 and 159 (2) (d) of the Constitution of Kenya , section 1A, 1B, 3A, 63 (e) and 99 of the Civil Procedure Act and orders 42 (6), 45 (1) and 51(1) of the Civil Procedure Rules seeking the following orders:a.Spent.b.That the court be pleased to enlarge time and extend the orders of stay issued on January 26, 2023 pending the hearing and determination of this application.c.Thāt the order issued in terms of prayer 3 of the notice of motion dated May 20, 2022 by the honourable court on January 26, 2023 be varied.d.That leave be granted to the Appellants to deposit the original logbook in respect to M/V KCD 366Q Ashok Leyland valued at Kshs 6,500. 000. 00 as a substitute of the decretal sought in the suit of Kshs 5,200,706. 00 or any other reasonable security on such basis of granting a conditional stay pending the hearing and determination of the appeal as ordered by Court on the January 26, 2023. e.That the honourable court be pleased to vary the order of depositing the entire decretal sum as security of cost by substituting the same with the deposit of log book or any other reasonable securityf.That the honourable court be pleased to issue orders of stay bereft of monetary conditions until this appeal is heard and determined.g.That the costs of this application be in the cause.

2. The application is based on the grounds set out on the face of it and the supporting affidavit of Justus Amoni Ewoi sworn on February 9, 2023 on his own behalf and on behalf of the other appellants/applicants.

3. The applicants state that they filed an application dated May 20, 2022 seeking stay of execution of a judgment that had been delivered April 14, 2022. The court allowed the application in a ruling delivered on January 26, 2023 and ordered the applicants to deposit the entire decretal sum in an interest earning account as security.

4. The applicants contend that they were aggrieved by this ruling and have now filed the present application seeking to review and/or vary the court orders on the basis that they cannot afford to deposit the entire decretal sum. The applicants wish to be allowed to substitute it with the original log book of Motor Vehicle Registration Number KCD 366Q Ashok Leyland valued at Kshs 6,500,000 against the decretal sum of Kshs 5,200,706/= or other reasonable security. The applicants urge the court to exercise its discretion and extend the time limit of the stay for a further 30days to enable them comply with the orders of the court. It is their further case that they will suffer irreparable loss of the court orders are not reviewed and or varied.

5. The applicants filed supplementary affidavit sworn by Justus Amoni Ewoi on February 16, 2023 attaching the original logbook and the valuation report for motor vehicle registration number KCD 366Q Ashok Leyland.

6. The respondent filed replying affidavit sworn by its director Mehul Shah on February 17, 2023 opposing the application. It argues that the applicants have not shown sufficient reasons to justify the variation of the court orders of January 26, 2023.

7. The respondents argues that it is opposed to the request for substitution of the decretal sum with Original logbook of motor vehicle registration number KCD 366Q Ashok Leyland for the reasons that the Applicants have not proved the financial constraints through either its books of accounts or other documentary evidence.

8. The respondent further disputes the valuation report attached by the applicants for the reason that it was prepared by a Motor vehicle mechanic from the Ministry of Transport and Infrastructure and not a registered practicing valuer as required under section of the Valuers Act and therefore the valuation report is not viable before the court.

9. Further the respondent holds that even if the court was to admit the said original logbook as security by the time the appeal is heard and determined if may not be of the same value, the vehicle which is in possession of the Applicants may be wasted, it can get into an accident and be completely damaged and incase of any of the scenarios arise and the appeal fails, it will not have any security to fall back to.

10. The respondent holds that it is equally affected by the harsh economic times just like the Applicants and other businesses and therefore the Applicants should not use it as an excuse to keep it from enjoying the fruits of the judgment. The Respondent holds that in absence of proof of the inability to deposit the entire decretal sum, the court should dismiss the application in its entirety.

11. The court directed the parties to canvass the application by way of written submissions and the applicants filed theirs dated March 1, 2023 while the respondent filed its dated March 6, 2023 all which the court has considered.

Analysis and Determination 12. The main issue for consideration is whether the applicants have met the threshold for the court to consider its application.

13. The Applicants are in essence seeking review of the court orders. The law on review is as follows:-Section 80 of the Civil Procedure Act cap 21 provides as follows: -“Any person who considers himself aggrieved—a.by a decree or order from which an appeal is allowed by this Act, but from which no appeal has been preferred; orb.by a decree or order from which no appeal is allowed by this Act, may apply for a review of judgment to the court which passed the decree or made the order, and the court may make such order thereon as it thinks fit.”Order 45 rule 1 of the Civil Procedure Rules, 2010 provides as follows: -“1. (1)Any person considering himself aggrieved—a.by a decree or order from which an appeal is allowed, but from which no appeal has been preferred; orb.by a decree or order from which no appeal is hereby allowed, and who from the discovery of new and important matter or evidence which, after the exercise of due diligence, was not within his knowledge or could not be produced by him at the time when the decree was passed or the order made, or on account of some mistake or error apparent on the face of the record, or for any other sufficient reason, desires to obtain a review of the decree or order, may apply for a review of judgment to the court which passed the decree or made the order without unreasonable delay.”

14. For an application for review to succeed under order 45 of the Civil Procedure Rules, 2010 the following grounds exist:-(a)There must be discovery of a new and important matter which after the exercise of due diligence, was not within the knowledge of the applicant at the time the decree was passed or the order was made; or(b)There was a mistake or error apparent on the face of the record; or(c)There were other sufficient reasons; and(d)The application must have been made without undue delay.

15. From an overview of the application, there is no element of discovery of new and important matter or a mistake or an error on the face of the record.

16. The next question is whether the financial constraints raised by the applicants can be considered to be ‘sufficient reasons.’ The court agrees with the respondent that the applicants have not substantiated their claim that they are unable to afford to pay the entire decretal sum through documentary evidence, books of accounts, bank statements or any other evidence. The burden of proof lies on the applicants to show the financial constraints which they have failed to discharge.

17. It is trite law that the purpose of an application for stay of execution is to preserve the subject matter but it should not be at the costs of the successful party who is being deprived from enjoying the fruits of its judgment. See the case of RWW v EKW [2019] eKLR, where the court held:“The purpose of an application for stay of execution pending an appeal is to preserve the subject matter in dispute so that the rights of the appellant who is exercising the undoubted right of appeal are safeguarded and the appeal if successful, is not rendered nugatory. However, in doing so, the court should weigh this right against the success of a litigant who should not be deprived of the fruits of his/her judgment. The court is also called upon to ensure that no party suffers prejudice that cannot be compensated by an award of costs.

18. This was also the position in the case of Machira T/A Machira & Co Advocates v East African Standard (No 2)[2002] KLR 63 where the court held:“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 it 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.”

19. It is the court’s view as correctly stated by the respondent that the current status of the motor vehicle is unknown, the valuation report is not viable and that incase of any eventuality of the Motor Vehicle there will be no security which is crucial for the due performance. Consequently, in absence of substantive proof of the financial constraints the court is inclined to dismiss the Applicants’ prayer for substitution.

20. In respect to the prayer for enlargement and extension of time of the stay orders issued on January 26, 2023, the court adopts the principles set out in the case of Nicholas Kiptoo Arap Korir Salat v Independent Electoral and Boundaries Commission & 7others [2014] eKLR where the court outlined the guiding principles in applications for extension of time in this court, as follows:i.Extension of time is not a right of a party. It is an equitable remedy that is only available to a deserving party at the discretion of the court;ii.A party who seeks for extension of time has the burden of laying a basis to the satisfaction of the courtiii.Whether the court should exercise the discretion to extend time, is a consideration to be made on a case to case basis;iv.Whether there is a reasonable reason for the delay. The delay should be explained to the satisfaction of the court;v.Whether there will be any prejudice suffered by the respondents if the extension is granted;vi.Whether the application has been brought without undue delay; andvii.Whether in certain cases, like election petitions, public interest should be a consideration for extending time”

21. The court finds that the although the applicants brought the application without unreasonable delay, the application still lacks merit for the substitution or variation of the court orders. In the end the court finds that the application dated February 9, 2023 lacks merits and it is hereby dismissed with costs to the respondent which shall be in the cause.It is so ordered.

RULING DATED AND SIGNED AT KIAMBU THIS 13 TH DAY OF DECEMBER , 2023. D. O. CHEPKWONYJUDGERuling delivered virtually, dated and signed at Nairobi this 15th day of December, 2023. ALFRED MABEYAJUDGE