Trans-Mara Sugar Company Limited v Daniel Nyabuto Momanyi [2017] KEHC 3929 (KLR)

REPUBLIC OF KENYA

IN THE HIGH COURT OF KENYA

AT KISII

CIVIL APPEAL NO. 36 OF 2013

TRANS-MARA SUGAR COMPANY LIMITED.........................APPELLANT

VERSUS

DANIEL NYABUTO MOMANYI..............................................RESPONDENT

(An appeal from the judgment and decree of Hon. A.K. MOKOROSS

(Resident Magistrate) dated and delivered on the 8th dayof

March,2013in the Original Kilgoris PMCC No. 37 of 2010)

RULING

1. In the application dated 9th October 2015, the applicant herein seeks orders for stay of execution of the decree issued in respect of a judgment entered herein on 29th September 2015 pending appeal. The applicant also seeks cost of the application.

2. The application is based on the ground that the applicant has filed an arguable appeal with high chances of success which appeal it fears, could be rendered nugatory or superfluous if the orders sought are not granted as the respondent is likely to execute the decree. The applicant also states that he stands to suffer irreparable loss if the orders sought are not granted and that he has filed the instant application without unreasonable delay.

3. The application was supported by the affidavit of the applicant’s advocate, Ronald N. Oyagi, who avers that the impugned judgment was for the sum of Kshs. 900,000/= with costs and that being aggrieved and dissatisfied with the said judgment, the applicant opted to file an appeal.

4. He further deposes that respondent has no known source of income or employment and that it would therefore, be very difficult to recover the decretal sum if the same is paid to him from him should the appeal succeed, thereby defeating the interests of justice.

5. The respondent opposed application through his replying affidavit dated 2nd November 2015 in which he deposes that the application lacks merit and is fatally defective as the decree of the court made on 29th September 2015 sought to be stayed was negative in nature in view of the fact that it made orders dismissing the appellant’s appeal with costs and that such an order was not capable of being executed or being stayed.

6. The respondent further states that he stands to be prejudiced greatly if the orders of stay of execution are granted as he shall be kept away from receiving the fruits of his judgment without any justifiable cause while the applicant engages in endless litigation.

7. Parties then filed their respective written submissions to the application which I have perused and considered. I note that the main issue for determination is whether the application meets the threshold for the grant of orders of stay of execution as envisaged by order 42 Rule 6 of Civil Procedure Rules (CPR) which stipulates as follows:

“[Order 42, rule 6. ] Stay in case of appeal.

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

(3) Notwithstanding anything contained in sub-rule (2), the court shall have power, without formal application made, to order upon such terms as it may deem fit a stay of execution pending the hearing of a formal application.

(4) For the purposes of this rule an appeal to the Court of Appeal shall be deemed to have been filed when under the Rules of that Court notice of appeal has been given.

(5) An application for stay of execution may be made informally immediately following the delivery of judgment or ruling.

(6) Notwithstanding anything contained in sub-rule (1) of this rule the High Court shall have power in the exercise of its appellate jurisdiction to grant a temporary injunction on such terms as it thinks just provided the procedure for instituting an appeal from a subordinate court or tribunal has been complied with.”

8. In the instant case, I note that the applicant had on 12th October 2015 filed a Notice of appeal to the Court of Appeal and thus in law, it has already filed an appeal.

9. On whether the instant application has been filed without undue delay, I note that the impugned judgment was delivered on 29th September 2015 and the application filed on 9th October 2015 less than 2 weeks later. I am therefore satisfied that the application was filed without unreasonable delay.

10. On the issue of substantial loss, courts have on several occasions held that substantial loss does not represent any particular amount or size and should not be quantified or calculated by any particular mathematical formula but is a concept which refers to any loss, great or small that is of real worth or value as opposed to loss without value or a loss that is merely nominal. See Quest Resources Ltd vs Japan Port Consultants Ltd [2015] eKLR.

11. The applicant’s case was that the respondent did not have the financial muscle or capability to refund the decretal sum should the same be paid to him only for the appeal to subsequently succeed. The respondent, on his part, did not address the issue of his capability to refund the decretal sum should the appeal succeed, but instead only zeroed in on the issue of the judgment of the court appealed from being a negative judgment in the sense that it ordered the dismissal of the appellant’s appeal to the High Court. Looking at the judgment that is the subject to the appeal to the Court of Appeal, however, one notices that it cannot be said to be a negative judgment in strict sense as the subject of the appeal was an award to the respondent by the lower court of the sum of Kshs. 900,000/= special damages together with costs which award, by the dismissal of the appeal by the High Court, stands upheld and therefore capable of being executed if the stay of execution orders sought are not granted.

12. The applicant did not however furnish any evidence to prove that the respondent did not have the capacity to refund the decretal sum if the appeal succeeds apart from merely stating that the respondent had no known income or employment.

13. In the case of James Wangalwa & another Vs Agnes Naliaka Cheseto, [2012] eKLR the Court stated that:

“The applicant must establish other factors which show that the execution will create a state of affairs that will irreparably affect or negate the very essential core of the applicant as the successful party in the appeal. This is what substantial loss would entail…”

14. The Court in the above case went further to emphasize that, at paragraph 13 of its ruling that: -

“[13] so the applicant must show that he will be totally ruined in relation to the appeal if he pays over the decretal sum to the respondent. In other words, he will be reduced to a mere explorer in the judicial process if he does what the decree commands him to do without any prospects of recovering his money should the appeal succeed. Therefore, in a money decree, like in the case here, substantial loss lies in the ability of the respondent to refund the decretal sum should the appeal succeed. It matters not the amount involved as long as the respondent cannot pay back. The onus of proving substantial loss and in effect that the respondent cannot repay the decretal sum if the appeal is successful lies with the applicant, following after the long age legal adage that he who alleges must prove. Real and cogent evidence must be placed before the Court to show that the respondent is not able to refund the decretal sum should the appeal succeed. It is not therefore enough for a party to just allege as is the case here that the respondent resides out of Kenya and his means is unknown.”

15. In the case of John Gachanja Mundia v Francis Muriira Alias Francis Muthika & another [2016] eKLRGikonyo J. held that stay of execution is a matter of the discretion of the Court, but for the court to postpone the right of the judgment holder to immediate enjoyment of the fruits of his judgment, the Applicant must show that the Respondent cannot make a refund of the decretal sum; as that would certainly reduce a successful appellant to merely a holder of a barren success, thus, a pious explorer in the judicial process. The court added that the onus of proving substantial loss would occur falls on the shoulders of the Applicant who must not throw or shift it to the Respondent to state his financial ability before the Applicant has shown a prima facie case on reasonable facts that there is some financial limitation on the part of the Respondent. It is only after the legal burden is discharged by the Applicant that the Respondent will be called upon to discharge his evidential burden or provide affidavit of means. This subject was further discussed in the case of Winfred Nyawira Maina vs. Peterson Onyiego Gichana [2014] eKLRin which many cases on the subject were analyzed. In the instant case however, the Applicant reversed the legal burden when he submitted that: -

“The burden is on the Respondent to show that he has the financial capability to refund the decretal sum. The respondent has not sworn an affidavit to state his financial resources to refund the amount.’’.

16. From the proceedings taken before the lower court however, I note that the respondent testified that he was a farmer and in fact, the subject matter of the suit before the lower court was a claim of special damages amounting to Kshs. 900,000/= arising from the damage caused to the respondent’s crops by the appellant. Clearly therefore, one cannot say with certainty, that the respondent’s employment or income was unknown.

17. Courts have held time and time again that the legal and evidential burden of proof rests on the applicant to prove that the respondent will not be able to refund the decretal sum should the same be paid to him and the appeal succeeds.

18. I have considered all the arguments made in this application and more so, the fact that the initial judgment in favour of the respondent was delivered by the lower court on 8th March 2013 before the appellant lodged an appeal to this court in which judgment was once again entered in favour of the respondent on 29th September 2015, thereby precipitating an appeal before the Court of Appeal and the instant application.  In effect therefore, the appellant will be staking his hopes on a second appeal to the Court of Appeal while the respondent will be bidding his time and literally holding his breath as he awaits the outcome of the appeal before the Court of Appeal. It is now more four (4) years since the first judgment was entered in favour of the respondent and in my humble view, while he applicant has a right to appeal, the respondent equally has a right to enjoy the fruits of his judgment.

19. The courts’ responsibility in this case is to balance the competing rights of the parties to the dispute. In this case, I note that the trial court had in its ruling delivered on 3rd May 2013, when a similar application for stay of execution pending an appeal to the High Court, granted the said stay orders on condition that the entire decretal sum is deposited in court within 28 days. My view is that the justice of this case demands that I strike a middle ground in so far as the issue of the payment decretal sum is concerned with the result that I make final orders as follows: That there shall be a stay of execution pending an appeal on condition that:

a. That the respondent shall be paid one half of the decretal sum that was paid in court following the order of the trial court made on 3rd May 2013.

b. The other one half of the decretal sum shall be held in court deposit account pending the outcome of the appeal before the Court of Appeal.

c. The cost of this application shall abide the outcome of the appeal before the Court of Appeal.

Dated, signed and delivered in open court this 19thday of July 2017

HON. W. A. OKWANY

JUDGE

In the presence of:

N/A for the Appellant

Miss Nyaega  for the Respondent

Omwoyo court clerk