Teq Systems Limited v Sister N Sister Enterprises [2023] KEHC 25141 (KLR)

Teq Systems Limited v Sister N Sister Enterprises (Commercial Appeal E210 of 2022) [2023] KEHC 25141 (KLR) (Commercial and Tax) (10 November 2023) (Ruling)

Neutral citation: [2023] KEHC 25141 (KLR)

Republic of Kenya

In the High Court at Nairobi (Milimani Commercial Courts Commercial and Tax Division)

Commercial and Tax

Commercial Appeal E210 of 2022

FG Mugambi, J

November 10, 2023

Between

Teq Systems Limited

Applicant

and

Sister N Sister Enterprises

Respondent

Ruling

1. This ruling determines the application dated December 23, 2022, which was brought under article 50 and 159(2) of the Constitution, 2010, sections 1A, 1B, 3A and 65 of the Civil Procedure Act, 2010, order 21 rule 7 and 8(2) and (5), order 42 rule 6 and order 51 rules 1 of the Civil Procedure Rules.

2. The application seeks to stay the execution of the judgment and decree of the Chief Magistrates Court delivered on December 1, 2022 pending the hearing and determination of the appeal lodged in this Court. It also seeks to stay and set aside the process of releasing the security deposited in this Court. The application was premised on the grounds on the face of it and supported by the Affidavit sworn by Rose Wangui Macharia on December 23, 2022. The applicant’s Written Submissions are dated April 18, 2023.

3. The applicant states that the appeal has overwhelming chances of success and as such, the applicant stands to suffer substantial loss which is irreversible if stay is not granted.The applicant further stated that the respondent had already initiated the process of the release of the security deposited from Court and if the appeal succeeds will be difficult to recover from the respondent whose financial status is not known to the applicant.

4. The application was opposed vide a replying affidavit sworn by Alison Ntinyari Muriithi on February 27, 2023. The respondent denies that the appeal raises any triable issues and also that there is no substantial loss to be suffered by the applicant. The respondent avers that it carries out a successful business and is in a position to meet any obligations should the applicant be successful by way of an appeal. The respondent also filed Written Submissions dated May 22, 2023.

Analysis 5. In determining whether the applicant has made out a case for grant of orders of stay of execution, I am guided by the provisions of order 42, rule 6(2) which provides that:“No order for stay of execution shall be made under sub-rule (1) unless:i.The Court is satisfied that substantial loss may result to the appellant unless the order is made and;ii.That the application has been made without unreasonable delay; andiii.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 appellant.”

6. The Court of Appeal in the case of ButtvRent Restriction Tribunal, (1982) KLR 417 further enunciated the considerations that a Court ought to consider in exercising discretion in an application for stay of execution and held that:i.“The power of the Court to grant or refuse an application for a stay of execution is a discretionary power. The discretion should be exercised in such a way as not to prevent an appeal.ii.The general principle in granting or refusing a stay is; if there is no other overwhelming hindrance, a stay must be granted so that an appeal may not be rendered nugatory should that appeal Court reverse the Judge’s discretion.iii.A Judge should not refuse a stay if there are good grounds for granting it merely because in his opinion, a better remedy may become available to the applicant at the end of the proceedings.iv.The Court in exercising its discretion whether to grant [or] refuse an application for stay will consider the special circumstances of the case and unique requirements. The special circumstances in this case were that there was a large amount of rent in dispute and the appellant had an undoubted right of appeal.v.The Court in exercising its powers under order XLI rule 4 (2) (b) of the Civil Procedure Rules, can order security upon application by either party or on its own motion. Failure to put security for costs as ordered will cause the order for stay of execution to lapse.”

7. I am also alive to the objective of an application for stay of execution being the preservation of the subject matter in dispute. This ensures 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. This position was espoused in RWWvEKW, [2019] eKLR.

8. Against this background the applicant states that it has an arguable appeal and takes issue with the circumstances under which the judgment was delivered, in the absence of counsel for the applicant. More specifically the applicant states at paragraph 3 of its written statement that the Court without notice to the plaintiff delivered its judgment on November 25, 2022, a day in which the matter was not cause-listed for judgment on the days cause list. No response has been given by the respondent concerning this averment and particularly that the respondent was aware of the date but did not inform the applicant of the same.

9. As to whether this may have caused any prejudice on the applicant is a matter that the Court can only determine upon interrogation on the intended appeal.

10. The applicant has also annexed a copy of the Memorandum of Appeal, with the grounds of appeal. While the impugned decision has not been provided for this Court’s benefit, I note that the applicant raises issue with the trial court for rewriting the contract between the parties amongst other things. I am alive to the need for this Court to facilitate the applicant to exercise its undoubted right of appeal.

11. The applicant further states that the said appeal shall be rendered nugatory such that even if the appeal is successful, the it may not be able to recover the loss suffered. I note that there is already security deposited in court which the applicant prays that this Court stays the release of. The applicant otherwise confirms that it is ready and willing to abide by reasonable conditions that the Honorable Court may impose on them in order to stay the execution of the judgment of December 1, 2022.

12. From the totality of the law and the authorities that I have cited, I would allow the application dated December 23, 2022 but on the following conditions:i.That the security already held by the court be maintained pending the hearing and determination of this appeal.ii.The Record of Appeal shall be filed and served within the next 30 days of this ruling. Thereafter parties shall appear before the court on a date to be agreed upon, for purposes of taking directions on the disposal of the appeal.iii.The costs of the application shall follow the appeal.

DATED, SIGNED AND DELIVERED IN NAIROBI THIS 10TH DAY OF NOVEMBER 2023. F. MUGAMBIJUDGE