Trattoria Limited v Joaninah Wanjiku Maina [2016] KEHC 8594 (KLR)

REPUBLIC OF KENYA

IN THE HIGH COURT OF KENYA AT NAIROBI

MILIMANI LAW COURTS

COMMERCIAL & ADMIRALTY DIVISION

HIGH COURT MISC. CIVIL APPLICATION NO. 431 OF 2013

TRATTORIA LIMITED.......…..…..APPLICANT/RESPONDENT

VERSUS

JOANINAH WANJIKU MAINA....RESPONDENT/APPLICANT

RULING

[1]This Ruling is in respect of the application dated 26 November 2014 for stay or proceedings pending the hearing and determination of an intended appeal from the Ruling delivered herein on 20 December 2013. The application was filed by Kilonzo & Company Advocates for the Respondent/Applicant, Joaninah Wanjiku Maina, pursuant to the provisions of Section 6 of the Civil Procedure Act, Chapter 21 of the Laws of Kenya as well as Order 42 Rule 6 and Order 51 Rule 1 of the Civil Procedure Rules, 2010, on the grounds that:

[a]  The Applicant is aggrieved by the Ruling of 20 December 2013 and has filed a Notice of Appeal in respect thereof dated 10 January 2014.

[b]  That the Applicant had, through a letter dated 9 January 2014 requested for copies of the typed proceedings, but that  the proceedings had not been supplied by the time the application was filed.

[c]   That on 19 June 2014, the Respondent filed a Supplementary Affidavit sworn by Gaettano Ruffo,  seeking to have the Applicant pay costs in the sum of Kshs. 1,002,228/= together with the attendant legal costs;

[d]  That unless stay of proceedings is granted the intended Appeal will be rendered nugatory, and therefore that it is in the interest of justice that the order for stay of proceedings be granted;

[e] That the application has been filed without unreasonable delay and no prejudice will be suffered by the  Respondent which cannot be cured by an award of costs.

The Application is premised on the affidavit annexed thereto, sworn by the Respondent/Applicant on 26 November 2014, in reiteration of the grounds aforementioned.

[2] On behalf of the Applicant/Respondent, a Replying Affidavit was sworn by its Managing Director, Gaettano Ruffo, and filed herein on 22 May 2015, in which it was deponed that there are no proceedings left herein capable of being stayed, and that the application is therefore misguided. It was further averred that the Applicant had not demonstrated any substantial loss that she stood to suffer; and  therefore, that it would only be fair and just that the application be dismissed.

[3]The court has carefully considered the application and the affidavits filed in respect thereof in the light of the proceedings todate. This is a matter that was filed in October of 2013pursuant to section 36 of the Arbitration Act No. 4 of 1995 for the recognition and enforcement of the Arbitral Award delivered by Justice (retired) Aaron Ringera dated 31 January 2013. That application was allowed and the orders prayed for granted on 8 November 2013.

[4] Thereafter, the Applicant/Respondent filed a Notice of Motion dated 6 December 2013seeking specific orders for repair of the suit premises. One of the prayers, namely prayer 3 thereof, was for an order that the expenses and costs to be incurred by the Applicant in repairing the premises together with losses incurred since the damage and destruction of the water storage tanks and the smoke extractor fan be assessed  and be paid by the Respondent/Applicant, and that in default of such payment, the Respondent/Applicant's property be attached in execution. That application was heard ex parteand the orders sought granted after the  court was satisfied that hearing notice had been served. A subsequent application dated 16 December 2013by the Respondent/Applicant for the stay and setting aside of the ex parte order was what led to the Ruling and the ensuing orders of 20 December 2013 that are the subject of the instant application.

[5]  That Ruling followed a visit and inspection of the suit premises and one of the Court's observations was thus:

"This court's role is to proceed with proceedings after the Final Award is recognized by the court as judgment of the  court. Having looked at the Final Award, this court is satisfied that the finding of the Arbitrator was that the Applicant was not  to be interfered with by the Respondent in the possession and  enjoyment of its premises."

Accordingly, the court declined to set aside the orders issued on 11 December 2013 as had been sought by the Respondent/Applicant.

[6]  Thereupon, the Applicant/Respondent filed a Supplementary Affidavit with a view of moving the court for the assessment and payment, by the Respondent/Applicant, of the repair charges in the sum of Kshs. 1,002,228/= as well as legal costs; hence the Intended Appeal. The Applicant is apprehensive that the payment of the aforesaid amount will occasion pecuniary hardship on her part, and that unless stay is granted she stands to suffer substantial loss. She relied on the cases of George Gikubu Mbuthia vs Petre Njeri Mugo & 3 Others [2015 eKLR and Utalii Transport Company and 3 Others vs NIC Bank Limited [2014] eKLR to support her arguments.

[7]Needless to state thatunderOrder 42 Rule 6 of the Civil Procedure Rules, it is permissible fora party to apply for stay of proceedings pending the hearing and determination of an interlocutory appeal. Sub-rule 1 thereof provides that:

"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..."

Thus, the only conditions such an applicant needsto satisfy as set out in Rule 6(2) of Order 42aforementioned are:

[a]  that substantial loss may result to the applicant unless the order is made;

[b]   that the application has been made without unreasonable  delay.

[8]  Accordingly, although the court has the discretion to grant stay orders, the interests of justice require that the discretion be exercised judiciously and within the aforesaid parameters.The rationale for the circumspection has been considered in various cases such as Machira T/A Machira& Co. Advocates vs East African Standard (No. 2) [2002] KLR 63,in whichit was held that:

"The ordinary principle is that a successful party is entitled to  the fruits of his judgment or 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 acknowledgedand normally must be put 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."

Accordingly, in determining what the interests of justice require in the instant application, I will now proceed to determine whether the two conditions aforesaid have been met herein by the Respondent/Applicant.

[9]On the question of substantial loss, the Respondent/Applicant's case is thatif the proceedings are not stayed, she will be liable to pay the substantial sum of Kshs. 1,002,228/=,exposing her to pecuniary hardship and loss. This argument has, of necessity to be weighed against the interests of the Applicant/Respondent in whose favour a decree has been passed following an Arbitral Award. It is noteworthy too that the Respondent has demonstrated by way of affidavit evidence, that it has proceeded and carried out the repairs in accordance with an  order of the court herein and is now seeking reimbursement from the Respondent/Applicant in terms of that same order. In the circumstances, can it be said that the Respondent/Applicant stands to suffer substantial loss?

[10] What amounts to substantial loss was considered in the case of Kenya Shell Limited vs Kibiru [1986] KLRthus:

"It is not sufficient by merely stating that the sum of shs.20,380 is a lot of money and the applicant would suffer loss if the money is paid. What sort of loss would this be? In an application of this nature, the applicant should show the  damage it would suffer if the order for stay is not granted. By granting a stay would mean that status quo should remain as it were before judgment. What assurance can there be of appeal succeeding? "

[11] A careful perusal of the Supporting Affidavit of the Respondent/Applicant merely shows that she is averse to paying the sum of Kshs. 1,002,228/= because she considers it to be a substantial amount. It is noteworthy however that the sum is yet to be assessed and approved by the court, per the Applicant/Respondent's application dated 6 December 2013. No specific details or particulars were presented before me to warrant the apprehension that the Respondent/Applicant risks suffering substantial loss. Accordingly, it is my considered view that no sufficient cause has been shown to lead to the conclusion that there is imminent substantial loss headed in the direction of the Respondent/Applicant that require averting by way of stay of proceedings, noting that her right of appeal must, of necessity be weighed against the right of the Applicant/Respondent to enjoy the fruits of the arbitral award, and that to deprive it of that right, it can only be for just cause.

[12]  Moreover, it is now trite that the fact that the process of execution has been put in motion does not of itself amount to substantial loss. Neither is it the case that once an appeal is filed, it would follow that the same would be rendered nugatory by reason only of such filing. This point was made in the caseof Silverstein vs. Chesoni [2002] 1 EA 296thus:

"What will happen if we do not grant the stay sought is that the appeal in the High Court will be heard and may well be  determined. But when the appeal already lodged is heard and determined and, if  it succeeded, what would automatically follow is that the proceedings in the High Court would have  been rendered unnecessary, but an order of costs can be made to remedy that. However, the appeal in this court would not   have been rendered nugatory."

Accordingly, what would be rendered nugatory herein, if any, is the proposed assessment and subsequent payment, if made, but not the intended appeal. In any event, it was not demonstrated that the Applicant/Respondent would not be able to pay back the sums aforementioned or any costs arising from the envisaged further proceedings.

[13]  As to whether the application has been madewithout unreasonable delay,it is noteworthy that, though the Notice of Appeal was filed on 10 January 2014, the instant application was not filed until 26 November 2014, more than 11 months from the date of the Ruling giving rise to the intended appeal. From the standpoint of the Respondent/Applicant, the delay is not so unreasonable as to disentitle her from an order of stay. She relied on the decision of the High Court in Utalii Company & 3 Others vs NIC Bank Limited [2014] eKLR, which I, however, find distinguishable in so far as it was in respect of an application for dismissal of the suit for want of prosecution pursuant to Order 17 Rule 2(1) of the Civil Procedure Rules.

[14]  It is now well settled that what amounts to unreasonable delay for purposes of Order 42 Rule 6, Civil Procedure Rules, is dependent on the peculiar circumstances of each case. For instance, in Jaber Mohsen Ali & Another Vs. PricillahBoit& Another [2014] eKLR the court held thus:

"Even one day after judgment could be unreasonable delay depending on the judgment of the court and any order given    thereafter."

[15]  In the instant matter, no explanation was given for the 11 months' delay in filing the application for stay. In the case of Abdulraham Adam Hassan vs. National Bank of KenyaKisumu HCCC No. 446 of 2001,in which there was three months' unexplained delay, the court held the delay to be unreasonable; how much more so an unexplained delay of 11 months that is the case herein?

[16]In the light of the foregoing, it is my considered finding that on both scores, the instant applicant falls short of the parameters set out in Order 42 Rule 6(2) of the Civil Procedure Rules. Accordingly, the application dated 26 November 2014 fails and is hereby dismissed with costs.

SIGNED, DATED AND DELIVERED AT NAIROBI THIS  13th DAY OF MAY 2016

OLGA SEWE

JUDGE