Wasika Walucho Ally v Molyne Credit Limited [2019] KEELC 2551 (KLR)

REPUBLIC OF KENYA

IN THE ENVIRONMENT AND LAND COURT AT KAKAMEGA

ELCA CASE NO. 8 OF 2017

WASIKA WALUCHO ALLY................APPELLANT/APPLICANT

VERSUS

MOLYNE CREDIT LIMITED...............................RESPONDENTS

RULING

The application is dated 27th March 2019 and is brought under sections  1A, 1B, 3A & 63 (c) of the Civil Procedure Act, and Order 42 Rule 6 of the Civil Procedure Rules seeking the following orders:-

1. That this application be certified urgent and heard exparte at the first instance.

2. That there be a stay of execution of the ruling delivered issued in Mumias MELC No. 89 of 2018 on 13th February, 2019 by the Honourable Cheruiyot C. Kipkorir, Senior Resident Magistrate and any consequential orders pending the interparties hearing of this application.

5. That there be a stay of execution of the ruling delivered issued in Mumias MELC No. 89 of 2018 on 13th February, 2019 by the Honourable Cheruiyot C. Kipkorir, Senior Resident Magistrate and any consequential orders pending the determination of the intended appeal.

6. That there be a stay of proceedings in Mumias MELC No. 89 of 2018 pending the determination of the intended appeal.

7. That cost of this application be provided for.

On 13th February, 2019, the lower court delivered a ruling disallowing the appellant’s application for injunctive relief dated 29th September, 2018. The said application sought to restrain any dealings in the suit property, L.R. No. S/Wanga/Ekero/4099, the registered property of the appellant, which the respondent had advertised for sale on 19th September, 2018, thereby precipitating the appellant’s appeal for this honourable lower court’s intervention. Consequently and in the absence of any legal impediment as it currently the case, the respondent has now been let free to make good on their threat to dispose of (as they most certainly will if not otherwise stopped) the appellant’s property, the pending proceedings of the main suit in the lower court notwithstanding. The appellant is aggrieved by the said decision of the honourable lower court magistrate and is desirous of appealing against the same. In the circumstances it will be extremely punitive, egregious and unconscionable to allow the sale of the appellant’s only property, which he resides in, and earthly belongings on account of a loan which has been repaid in principal. It is imperative that the ruling of this honourable court of 13th February, 2019 together with the proceedings appurtenant thereto are stayed in order to preserve the integrity of the subject matter of the suit. If the ruling is allowed to stand, the respondent will undoubtedly complete the sale of the appellant’s property as they have threatened and the appellant will suffer irreparable loss that cannot be sufficiently compensated by damages and/or costs. No prejudice will befall the respondent’s interests if the impugned ruling is temporarily stayed pending the determination of the appeal before this honourable court as the respondent’s claim is for a monetary sum in contract and it is a reasonable proposition that they can be adequately compensated by a suitable award of damages and costs in the event that the appellate court is not convinced of the merits of the application or the appeal before it. The appellant is liable to be rendered destitute and homeless if the instant application is not heard on priority basis.   The instant application has been brought timeously and without delay.   The appellant is apprehensive that if the injunction sought is not granted the respondent will proceed to dispose of the suit property wherefore the appellant’s instant application and the eventual appeal may be rendered nugatory and thus occasioning the appellant irreparable loss and damage.   The appellant has an arguable appeal with good chances of success.  This application seeks the discretionary powers of court to grant the orders sought so as to preserve the subject matter. It is only right to preserve the status quo pending the appeal to prevent the decision of this appellate court from being rendered nugatory should this court ultimately reverse the honourable lower court’s decision.

The respondent submitted that, the suit property herein was advertised for sale on the 15th March, 2019 (copy of the advertisement annexed and marked MNA-1) That they have already been notified of the sale by Pave Auctioneers (letter dated 18th March, 2019 annexed and marked MNA-2) That the successful bidder one Mrs. Faith Okoyo Atiti has already been issued with a certificate of sale (certificate annexed and marked MNA-3). That the sale to the successful bidder is now complete. (copy of the memorandum of sale annexed and marked MNA-4 and payment receipts marked MNA-4 (b) and (c) respectively). That the applicant filed the memorandum of appeal on the 27th March, 2019 and the decision of this court was made on 13th February, 2019.  The said appeal has therefore been filed out of time and without leave of court and is therefore incompetent and the application based on an incompetent appeal cannot succeed. That a purported notice of appeal was filed in Mumias Court on the 19th February, 2019.  The said notice is of no consequence as this is an appeal from a sub-ordinate court to the High Court (Annexed and marked MNA-5 is a copy of notice of appeal). That the applicant is guilty of laches and the application has been overtaken by events. That the applicant has made similar application in the High Court over and over again and the same have been dismissed even before the court and the trial magistrate at Mumias court only upheld the decision of this court and the court in entertainment the application will be a kin to sitting on appeal on its own decision. That the decision of the trial court in Mumias MELC 89 of 2019 mirrors the decision of this court on ELC No. 257 of 2013. That Molyn Credit Limited is not a deposit taking financial institution and is therefore not governed by the Central Bank. That the application is devoid of any merit and should be dismissed with costs.

This court has carefully considered the application and the submissions herein. The principles for granting stay of execution are provided for under Order 42 rule 6 (1) of the Civil Procedure Rules as follows:

“No appeal or a 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 an application being made, to consider such application and to make such orders thereon as may to it seem just, 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 the orders set aside.”

Order 42, rule 6 states:

“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.”

The appellants need to satisfy the Court on the following conditions before they can be granted the stay orders:

1. Substantial loss may result to the applicant unless the order is made.

2. The application has been made without unreasonable delay, and

3. Such security as the Court orders for the due performance of the decree or order as may ultimately be binding on the applicant has been given by the applicant.

The principles governing the exercise of the court’s jurisdiction are now well settled. Firstly, the intended appeal should not be frivolous or put another way, the applicants must show that they have an arguable appeal; and second, this Court should ensure that the appeal, if successful, should not be rendered nugatory. These principles were well stated in the case of Reliance Bank Ltd (In Liquidation) vs. Norlake Investments Ltd –Civil Appl. No. Nai. 93/02 (UR), thus:

“Hitherto, this Court has consistently maintained that for an application under rule 5(2) (b) to succeed, the applicant must satisfy the court on two matters, namely:-

1. That the appeal or intended appeal is an arguable one, that is, that it is not a frivolous appeal,

2. That if an order of stay or injunction, as the case may be, is not granted, the appeal, or the intended appeal, were it to succeed, would have been rendered nugatory by the refusal to grant the stay or the injunction.”

The question of stay pending appeal has been canvassed at length in various authorities, such as in the Court of Appeal decision in Chris Munga N. Bichange Vs Richard Nyagaka Tongi & 2 Others eKLR where the Learned Judges stated the principles to be applied in considering an application for stay of execution as thus:-

“……………. The law as regards applications for stay of execution, stay of proceedings or injunction is now well settled.  The applicant who would succeed upon such an application must persuade the court on two limbs, which are first, that his appeal or intended appeal is arguable, that is to say it is not frivolous. Secondly, that if the application is not granted, the success of the appeal, were it to succeed, would be rendered nugatory. These two limbs must both be demonstrated and it would not be enough that only one is demonstrated………”

In the case of Mohamed Salim T/A Choice Butchery Vs Nasserpuria Memon Jamat (2013) eKLR, the court stated that:-

“That right of appeal must be balanced against an equally weighty right that of the plaintiff to enjoy the fruits of the judgment delivered in his favour. There must be a just cause for depriving the plaintiff of that right …………….”

We are further guided by this court’s decision in Carter & Sons Ltd vs Deposit Protection Fund Board & 2 Others Civil Appeal No. 291 of 1997, at Page 4as follows:

“ . . . the mere fact that there are strong grounds of appeal would not, in itself, justify an order for stay. . .the applicant must establish a sufficient cause; secondly the court must be satisfied that substantial loss would ensue from a refusal to grant a stay; and thirdly the applicant must furnish security, and the application must, of course, be made without unreasonable delay.”

From the grounds of this application, on 13th February, 2019, the lower court delivered a ruling disallowing the appellant’s application for injunctive relief dated 29th September, 2018. The said application sought to restrain any dealings in the suit property, L.R. No. S/Wanga/Ekero/4099, the registered property of the appellant, which the respondent had advertised for sale on 19th September, 2018, thereby precipitating the appellant’s appeal. This court is not persuaded, that the appeal or intended appeal is arguable, that is to say it is not frivolous. Secondly, lam not persuaded that if the application is not granted, the success of the appeal, were it to succeed, would be rendered nugatory.I find that the applicant has not fulfilled any of the grounds to enable me grant the stay. I find this application has no merit and I dismiss it with costs.

It is so ordered.

DELIVERED, DATED AND SIGNED AT KAKAMEGA IN OPEN COURT THIS 4TH JULY 2019.

N.A. MATHEKA

JUDGE