ANNE MWIHAKI NGUNJIRI AND GERALD GUNJIRI MAINA VS Muthoni Muhoro & Associates Advocates

1.    The Applicant filed the Notice of Motion dated 11th December 2024 seeking the following orders:
1.    Spent.

2.    THAT pending the hearing and determination of this appeal, there be a stay of execution of the judgment in CMCC Civil Suit No.58 of 2024 and the ruling dated 5th December 2024.

3.    THAT costs of this application be provided for.

2.    The application is supported by the grounds on the face of the application and the affidavit of the 2nd Applicant.  The Applicants claim that an irregular judgment was entered against the Applicants in CMCC NO. 58 of 2023 on 4th December 2023, as a result of which the Applicant's land stands to be auctioned in execution of the decree. The Applicants claim that, should execution proceed, they stand to suffer irreparable loss. The 2nd Applicant deposed that on 7th February 2022, entered into an agreement with the Respondent herein, the Plaintiff before the trial court, for the sale of the suit property, LR NO. Kabaru/Block 1/Mureri/464 and a quarter acre to be excised from LR NO. Kabaru/Block 1/Mureri/463.
3.    The Respondent paid Kshs. 500,000 as part of the agreed purchase price, leaving a balance of Ksh. 1,500,000/=. The Respondent informed the Applicant that she was unable to complete the agreement because she did not have the necessary funds and thereafter filed a suit seeking refund of the money paid, penalty for non-performance and attendant costs.
4.    The Applicants depose that they were never served with the summons to enter appearance, and only learnt of the existence of the suit when the parcels of the suit land registered in their names were proclaimed. They were also not served with notice of entry of judgment.
5.    The Applicants filed before the Trial Court, an application dated 16th August 2024, seeking to set aside the interlocutory judgment and leave to file a defence and counter-claim. By the ruling delivered on 5th December 2024, the Applicants were directed to deposit the decretal amount in Court within 7 days; failure to do so would result in their application being dismissed with costs. The Applicants stated that from the ruling, it was not clear what would happen after they deposited the decretal amount, whether or not judgment had been set aside or whether leave to file a defence had been granted.
6.    Being aggrieved by this ruling, the Applicants filed this appeal, which they state raises triable issues. The Applicants added that they stand to incur irreparable harm if a stay is not granted, as the suit parcels stand to be auctioned, when it is in fact the Respondent who breached the sale agreement. That they are willing to give such security for costs as the court may order.

The Respondent’s Replying Affidavit
7.    The Respondent swore an affidavit in response to the instant application on the 15th of January 2025, deposing that an order for stay of execution of the judgment and decree herein cannot be granted without security or imposition of such conditions upon the judgment debtor as the court thinks fit.
8.    The Respondent maintained that proper service was conducted on all occasions with visits to the Applicants’ home in Maragima. That upon receipt of all pleadings, the applicant has always gone to the advocates’ offices, engaged in several telecommunications with promises of disposing of the property and was advised to seek the services of an advocate from 2022.
9.    The Respondent deposed that on the 16th May 2023, the 2nd Applicant recorded an affidavit for loss of national ID in the advocates’ offices attached as proof that the 2nd Applicant was not a stranger to them.
10.    As advised by her Advocates on record, the Respondent deposed that the application herein has no merit without first meeting the conditions of the payment of decretal amount in full as per the trial court’s ruling dated the 5th December 2024.
11.    It is deposed that the trial court desired security as a show of goodwill, and the Applicants intentionally disobeyed the court orders and are now in contempt of the court orders. The Respondent thus urges the court to find no sufficient ground for interfering with the Ruling and Orders appealed against and thus dismiss the applicants’ application.

The Applicants’ Submissions
12.    Counsel for the Applicants quoted Order 42 rule 6 of the Civil Procedure Rules (2010) on stay of execution and cited the case of Butt vs Rent Restriction Tribunal(1979)eKLR on the factors to be considered in determining whether to grant or refuse stay of execution pending appeal.
13.    It is submitted that the Application was made without undue delay and that the Applicants stand to suffer substantial loss, as their parcels of land stand to be sold while, in fact, it is the Respondent who breached the sale agreement. They noted that the Respondent did not file an affidavit of means to show that, in the event that she is paid the decretal sum and the appeal is successful, she will be in a position to refund the same. On this point, they relied on the cases of Tropical Commodities Suppliers Ltd & others vs International Credit Bank Ltd(in liquidation)(2004)2EA 331 and James Wagalwa & Another vs Agnes Naliaka Cheseto(2012)eKLR.
14.    On matters of security for costs, Counsel relied on the authority of Gianfranco Manenthi& Another v. Africa Merchant Assurance Co.Ltd(2019)eKLR, stating that the Applicants are ready and willing to pay the sum of Ksh 350,000/= as security for due performance of the decree herein. The Applicants prayed that the Court allow the application with costs.
The Respondent’s submissions.
15.    Counsel for the Respondent relied on the equitable maxim that 'he who comes to equity must do equity,' meaning that to obtain an equitable relief, the applicant must be prepared to do equity in a just and fair way, and that the applicants are acting unjustly by not complying with court orders. The appellate practice in our judicial system, providing security for the due performance of a decree, is a crucial requirement when seeking a stay of execution pending appeal.  Failure to furnish such security can and should significantly impact the outcome of an application for stay, as demonstrated in several recent cases.
16.    The Respondent’s Counsel accused the Applicants of rushing to court with execution documents, which is a clear indication that service was effected. That they did not prove or bring this to court, evidence of ever moving or changing the address where service was always effected, inviting the court to take judicial notice of this.
17.    Counsel relied on the authorities of Equity Bank Limited v.Taiga Adams Company Limited (2006) eKLR, Simon Wahome Wachihi V Iriaini Tea Factory & 2 Others [2016]eKLR and Masisi Mwita V Damaris Wanjiku Njeri[2016]eKLR on stay pending appeal, submitting that the application should thus be dismissed with costs for not meeting the conditions tenets being sought in their application.

Analysis and Determination
18.    The Court has considered the application herein and all the supporting documents, the reply thereto and submissions by Counsel for the parties. The issue for determination is whether the Court should grant the Applicants a stay of execution of the judgment of the trial court and the ruling delivered in Nyeri MCC NO. 58 of 2023 on 5th December 2024.
19.    The impugned decision relates to the Applicant's Notice of Motion dated 16th August 2024 seeking to set aside the ex parte Judgment of the trial court on account of lack of proper service. The trial court ordered the applicants to deposit the entire decretal sum in Court; failure to do so, the said Notice of Motion would stand dismissed in its entirety with costs.
20.    Stay of execution pending appeal is provided for under Order 42 Rule 6 of the Civil Procedure Rules, which provides that:
1)    No appeal or second appeal shall operate as a stay of execution or proceedings under a decree or order appealed from except appeal case of 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 the application being made, to consider such application and to make such order thereon as may to it seems 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 subrule (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.
21.    The purpose of orders of stay of execution pending appeal is to preserve the subject matter of the appeal with the aim that an appeal ought not to be rendered nugatory. The Applicants relied on the case of Butt vs. Rent Restriction Tribunal [1979] eKLR, where the Court of Appeal underscored the considerations for the grant or refusal of an order of stay of execution pending appeal. In summary, the court said that the power of the court is discretionary, and the discretion should be exercised in such a way as not to prevent the pursuit of an appeal. The general principle is that if there is no other overwhelming hindrance, a stay must be granted so that an appeal may not be rendered nugatory should the appeal court reverse the judge's discretion. Thirdly, 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. Finally, the court, in exercising its discretion whether to grant or refuse an application for stay, will consider the special circumstances of the case and its unique requirements.
22.    O.K. Mutungi J in the case of Equity Bank Limited V Taiga Adams Company Limited [2006] Kehc 860 (KLR), relied upon by the Respondent, held that all the conditions necessary for stay must be satisfied as he noted as follows:
    “For the success of an application for stay of execution pending appeal, the applicant must meet all the tenets and requirements of Order 41 Rule 4 of the Civil Procedure Rules.  Failure to satisfy any one of the tenets stipulated in that rule is fatal to the application. Accordingly, whereas the applicant/appellant might have an arguable appeal, and whereas the application was brought without undue delay, those are not all that the rule calls for.”
23.    As to what substantial loss is, the Applicants relied on the case of James Wangalwa & Another vs. Agnes Naliaka Cheseto [2012] eKLR, where it was observed in 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 ... the issue of substantial loss is the cornerstone of both jurisdictions. Substantial loss is what has to be prevented by preserving the status quo because such loss would render the appeal nugatory.”
24.     From the Applicants' depositions and the Respondents' response, the Court is persuaded that failure to grant the order of stay of execution will render the appeal nugatory, and it would mean the end of the journey for the Applicants. The Applicants’ Application to set aside the Trial Court’s judgment would stand dismissed;
25.    The Court notes from the Notification of Sale/ Redemption Notice dated 29th July 2024 issued by the auctioneers, the parcels of land attached in execution of the decree are the same subject matter of the Agreement for sale dated 30th May 2020 between the parties hereto. The said sale agreement was for the entire parcel L. R. No. KABARU/BLOCK 1/MURERI/464 and a ¼ of an acre out of KABARU/BLOCK 1/MURERI/463. The Respondent paid Kshs 500,000 and did not pay the balance of the purchase price. If execution is allowed to proceed, the Applicants stand to suffer loss of their land after having received a small part of the purchase price and without having been heard on whether or not they are the ones who were in breach of the agreement and/or whether they deliberately failed to enter appearance and file a defence before the Trial Court. In the Court's view, this is a substantial loss.
26.    From the Counsel’s submissions, it appears that the biggest bone of contention is the requirement for security for the due performance of the decree in case the appeal is not successful. The purpose of security was clearly elaborated in Arun C. Sharma vs. Ashana Raikundalia t/a Rairundalia & Co. Advocates & 2 others [2014] eKLR, where the court stated:-
    "The purpose of the security needed under Order 42 is to guarantee the due performance of such decree or order as may ultimately be binding on the applicant.  It is not to punish the judgment debtor…. Civil process is quite different because in civil process, the judgment is like a debt, hence the applicants become and are judgment debtors in relation to the respondent.  That is why any security given under Order 42 rule 6 of the Civil Procedure Rules acts as security for due performance of such decree or order as may ultimately be binding on the applicants.  I presume the security must be one which can serve that purpose.”
27.    Reuben Nyakundi J, in the case of Gianfranco Manenthi & another v Africa Merchant Assurance Company Ltd [2019] KEHC 7586 (KLR), relied upon by the Applicants, observed that:
     “Thus, the objective of the legal provisions on security was never intended to fetter the right of appeal. It was also put in place to ensure that courts do not assist litigants to delay execution of decrees through filing vexatious and frivolous appeals. In any event, the issue of deposit of security for due performance of decree is not a matter of willingness by the applicant but for the court to determine.”
28.    The Applicants proposed to deposit a sum of Ksh 350 000/= as security and have expressed willingness. The decretal sum ordered by the trial court was Ksh 707 000/=. The Respondent contended that the Applicant was in contempt of court in failing to comply with the Trial court’s directions to deposit the decretal sum. The Trial Court’s order issued on 5th December 2024 stated as follows;
“1)    That the 1st and 2nd Applicants/Defendants to deposit the entire decretal sum in court within 7 days from the date hereof.
2)     Failure to comply with (1) above means that the Notice of Motion stands dismissed in its entirety with costs.
3)     Mention on 18/12/2024.”
29.    This Court notes that, as stated by the Applicant, the Trial Court did not make any order on what would happen after depositing the decretal sum in Court and whether the ex parte judgment would be set aside. It appears to the court that depositing the money in court as directed without an order setting aside the judgment would not have served any purpose in the circumstances of this case.
30.    The Court is satisfied by the security offered by the Applicants in the sum of Kshs. 350,000= and notes that they have already filed the record of appeal and are thus in a position to fast-track the hearing of the appeal.
31.    In conclusion, the Court finds that the application dated 11th December 2024 has merit and makes the following orders;
1)    The application dated 11th December 2024 is hereby allowed in the following terms;
A)    Pending the hearing and determination of this appeal, there be a stay of execution of the judgment in CMCC Civil Suit No.58 of 2024 and the ruling dated 5th December 2024.

B)    The order of stay of execution is granted on condition that the Applicants deposit in Court the sum of Kshs. 350,000 as security within 21 days from the date of this ruling, in default of which the order will automatically lapse.

C)    The Appeal to be listed for directions on the hearing on 17th February 2026.

Dated, Signed and Delivered at Nyeri, this 4th day of December 2025

In the Presence of:-
Ms. Kendi        -    Court Assistant
Ms. Mwikali    -    For the Applicant
Wambugu        -    For the Respondent