1. The application before court is a motion dated 28 November 2024 in which the applicant seeks the following orders:
“1. That the matter herein be certified urgent and service of the application be dispensed with in the first instance.
2. That pending the inter partes hearing of this Application, this Honourable Court be pleased to stay the execution of the Judgment delivered on 22ⁿᵈ November 2024 by the Honorable Gathogo Sogomo (Mr.) in Mombasa CMCC No. 490 of 2017 and the consequential Decree arising therefrom.
3.That pending the hearing and determination of this Application, this Honourable Court be pleased to stay the execution of the Judgment delivered on 22ⁿᵈ November 2024 by the Honorable Gathogo Sogomo (Mr.) in Mombasa CMCC No. 490 of 2017 and the consequential Decree arising therefrom.
4. That pending the hearing and determination of the Appeal filed herein, this Honourable Court be pleased to stay the execution of the Judgment delivered on 22ⁿᵈ November 2024 by the Honorable Gathogo Sogomo (Mr.) in Mombasa CMCC No. 490 of 2017 and the consequential Decree arising therefrom.”
The applicant has also sought for an order on costs of the application.
2. The application is expressed to be brought under sections 1A, 1B, 3A of the Civil Procedure Act, cap. 21; Order 42 Rule 6 and Order 51 Rule 1 of the Civil Procedure Rules 2010. It is supported by the affidavit of Sharon Songwa.
3. Songwa has sworn that she is a legal officer in the applicant company and that on 27 November 2024, the respondent obtained judgment against the applicant, in the sum of Kshs. 948,250/= and interest at court rates in Mombasa Chief Magistrates Court Civil Suit No. 490 of 2017. The respondent was also awarded costs. The judgment is said to have been circulated on the judiciary’s Case Tracking System, e-filing platform and, therefore, the applicant’s advocates were unable to seek from the court stay of execution.
4. Nonetheless, being aggrieved by the said judgment, the applicant has appealed against the decision in this Honourable Court. According to the applicant, the appeal has high chances of success and that if the orders sought are not granted, the applicant will suffer irreparable harm and also, the appeal will be rendered nugatory. The appellant is ready and willing to provide a bank guarantee of Kshs 1,000,000/= as security for the due performance of the decree pending the hearing and determination of the appeal.
5. The respondent has opposed the application and filed a replying affidavit to that effect. She has admitted that indeed she obtained judgment against the applicant but denies that the applicant will suffer more irreparable harm than the respondent has hitherto been subjected to. To be precise, if stay is granted, it is urged, the respondent will continue to incur daily losses of Kshs. 4,000/= on car hire since the applicant is said to have sold the respondent’s vehicle illegally and the respondent has to hire a car on daily basis to enable her move around.
6. The judgment, according to the respondent, is for the sum of Kshs. 9,048,250 and, therefore, way above the sum of Kshs. 1,000,000/= which the applicant intends to provide as security for the performance of the decree. The respondent also denies that the appeal has got any chances of success.
7. Ordinarily, the grant of stay under Order 42 Rule 6(1) of the Civil Procedure Rules is discretionary remedy. The rule provides as follows:
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.
8. However, this discretion is tampered with by Order 42 Rule 6(2) which outlines the circumstances when discretion will not be exercised in favour of an applicant. To be precise, the sub-rule sets out circumstances when grant of stay of execution will be declined notwithstanding the latitude given to court to exercise its discretion under Rule 6(1). Thus, the exercise of discretion under Rule (1) is, to some degree, subject to Rule 6(2) which provides as follows:
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 the decree or order as may ultimately be binding on him has been given by the applicant.
9. Thus, over and above the discretion with which the court is clothed to grant or refuse stay, it must be certain, before it grants any stay that firstly, the appellant has satisfied the court that he will suffer substantial loss if the order for stay is not made, secondly, he has demonstrated that his application has been made without unreasonable delay and thirdly, he has given security for satisfaction or performance of the decree in the event his appeal fails.
10. To the extent that grant of stay under order 42 Rule 6(1) is discretionary, the satisfaction of these conditions does not automatically entitle an applicant to an order for stay of execution. The conditions under order 42 Rule 6(2) are less of conditions for granting an order for stay of execution but more of grounds for refusal of such an order. The court may very well decline to grant an order for stay even after satisfaction of the conditions set out in Order 42 Rule 6(2) as long as its discretion is exercised judiciously and not whimsically. If it was to be argued that an applicant is automatically entitled to the stay of execution upon satisfaction of the conditions in Rule 6 (2) of Order 42 then discretion with which the court is clothed in Rule 6(1) would be of no consequence.
11. Turning to the applicant’s application, the date stamp shows that the motion was filed on 5 December 2024 and if the impugned judgment was rendered on 22 November 2024, the delay in filing the instant application cannot be said to have been inordinate, assuming the applicant was not aware of the judgment immediately it was posted on the case tracking system portal. The respondent has not contested the application in this regard and I only raise it because, as noted, timely filing of the application for stay is pertinent in exercise of the discretion either to grant or decline an order for stay of execution.
12. As far as the danger of substantial loss, if execution is allowed to proceed, is concerned, the applicant has submitted that it may not recover the decretal sum from the respondent if the appeal succeeds and, in the same vein, the appeal would be rendered nugatory. To cover for the performance of the decree, the applicant undertakes to provide a bank guarantee to the tune Kshs. 1,000,000/= as security.
13. As noted, provision of security is only one of the conditions the court will consider, in exercising its discretion to stay execution of a decree or order pending appeal. As the court of appeal held in Butt v Rent Restriction Tribunal [1979] KECA 22 (KLR), the ultimate goal is to ensure that if the appeal is not frivolous, it is not rendered nugatory. A passage from the leading judgment of Madan, J.A. is instructive in this regard. The learned judge held as follows:
“If there is no other overwhelming hindrance, a stay ought to be granted so that an appeal, if successful, may not be nugatory. A stay which would otherwise be granted ought not to be refused because the judge considers that another, which in his opinion will be a better remedy, will become available to the applicant at the conclusion of the proceedings.
It is in the discretion of the court to grant or refuse a stay but what has to be judged in every case is whether there are or not particular circumstances in the case to make an order staying execution. It has been said that the court as a general rule ought to exercise its best discretion in a way so as not to prevent the appeal, if successful from being nugatory, per Brett, LJ in Wilson v Church (No 2) 12 Ch D (1879) 454 at p 459. In the same case, Cotton LJ said at p 458:
“I will state my opinion that when a party is appealing, exercising his undoubted right of appeal, this court ought to see that the appeal, if successful, is not nugatory.”
Megarry J, as he then was, followed Wilson (supra) in Erinford Properties Limited v Cheshire County Council [1974] 2 All ER 448 at p 454 and also held that there was no inconsistency in granting such an injunction after dismissing the motion, for the purpose of the order is to prevent the Court of Appeal’s decision being rendered nugatory should that court reverse the judge’s decision. The court will grant a stay where special circumstances of the case so require, per Lopes LJ in the Attorney General v Emerson and Others 24 QBD (1889) 56 at p 59. The special circumstances in this case are that there is a large amount of rent in dispute between the parties and the appellant has an undoubted right of appeal.
Proceeding on this narrow basis, that is to prevent the appeal, if successful, from being nugatory, I would grant the stay asked for pending determination of the appeal by this court against the decision dated January 9, 1979 but upon terms, as authorised by the provisions of Order XLI rule 4(2)(b), that the applicant will deposit in court within thirty days the sum of Kshs 60,000 as security for the due performance of such decree or order as may ultimately be binding upon him, failing which the stay shall lapse without a further order of this court being necessary. I would order the costs of this application to be costs in the appeal.”
14. In the instant application, the trial court established as a fact that no valid chattels instrument had been registered in accordance with section 7 of the Chattels Transfer Act, cap. 28 and proceeded to hold that according to section 13 of that Act, the purported agreement between the appellant and the respondent as void. The vehicle in issue was again apparently sold despite the existence of a court order restraining the appellant from selling it.
15. The respondent has, on her part, urged that she is likely to suffer more damages if stay is granted because she continues to incur losses at the rate of Kshs. 4000/= per day on hire of alternative means of transport.
16. Taking all these circumstances into account and, considering the law applicable, I will allow the applicant’s application on condition that the applicant deposits the decretal sum owing to date in an interest earning bank account in the joint names of the applicant’s and respondent’s respective representatives’ names within thirty (30) days of the date of this ruling and, in default, execution to proceed. Costs of this application will abide the outcome of the appeal. It is so ordered.
“1. That the matter herein be certified urgent and service of the application be dispensed with in the first instance.
2. That pending the inter partes hearing of this Application, this Honourable Court be pleased to stay the execution of the Judgment delivered on 22ⁿᵈ November 2024 by the Honorable Gathogo Sogomo (Mr.) in Mombasa CMCC No. 490 of 2017 and the consequential Decree arising therefrom.
3.That pending the hearing and determination of this Application, this Honourable Court be pleased to stay the execution of the Judgment delivered on 22ⁿᵈ November 2024 by the Honorable Gathogo Sogomo (Mr.) in Mombasa CMCC No. 490 of 2017 and the consequential Decree arising therefrom.
4. That pending the hearing and determination of the Appeal filed herein, this Honourable Court be pleased to stay the execution of the Judgment delivered on 22ⁿᵈ November 2024 by the Honorable Gathogo Sogomo (Mr.) in Mombasa CMCC No. 490 of 2017 and the consequential Decree arising therefrom.”
The applicant has also sought for an order on costs of the application.
2. The application is expressed to be brought under sections 1A, 1B, 3A of the Civil Procedure Act, cap. 21; Order 42 Rule 6 and Order 51 Rule 1 of the Civil Procedure Rules 2010. It is supported by the affidavit of Sharon Songwa.
3. Songwa has sworn that she is a legal officer in the applicant company and that on 27 November 2024, the respondent obtained judgment against the applicant, in the sum of Kshs. 948,250/= and interest at court rates in Mombasa Chief Magistrates Court Civil Suit No. 490 of 2017. The respondent was also awarded costs. The judgment is said to have been circulated on the judiciary’s Case Tracking System, e-filing platform and, therefore, the applicant’s advocates were unable to seek from the court stay of execution.
4. Nonetheless, being aggrieved by the said judgment, the applicant has appealed against the decision in this Honourable Court. According to the applicant, the appeal has high chances of success and that if the orders sought are not granted, the applicant will suffer irreparable harm and also, the appeal will be rendered nugatory. The appellant is ready and willing to provide a bank guarantee of Kshs 1,000,000/= as security for the due performance of the decree pending the hearing and determination of the appeal.
5. The respondent has opposed the application and filed a replying affidavit to that effect. She has admitted that indeed she obtained judgment against the applicant but denies that the applicant will suffer more irreparable harm than the respondent has hitherto been subjected to. To be precise, if stay is granted, it is urged, the respondent will continue to incur daily losses of Kshs. 4,000/= on car hire since the applicant is said to have sold the respondent’s vehicle illegally and the respondent has to hire a car on daily basis to enable her move around.
6. The judgment, according to the respondent, is for the sum of Kshs. 9,048,250 and, therefore, way above the sum of Kshs. 1,000,000/= which the applicant intends to provide as security for the performance of the decree. The respondent also denies that the appeal has got any chances of success.
7. Ordinarily, the grant of stay under Order 42 Rule 6(1) of the Civil Procedure Rules is discretionary remedy. The rule provides as follows:
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.
8. However, this discretion is tampered with by Order 42 Rule 6(2) which outlines the circumstances when discretion will not be exercised in favour of an applicant. To be precise, the sub-rule sets out circumstances when grant of stay of execution will be declined notwithstanding the latitude given to court to exercise its discretion under Rule 6(1). Thus, the exercise of discretion under Rule (1) is, to some degree, subject to Rule 6(2) which provides as follows:
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 the decree or order as may ultimately be binding on him has been given by the applicant.
9. Thus, over and above the discretion with which the court is clothed to grant or refuse stay, it must be certain, before it grants any stay that firstly, the appellant has satisfied the court that he will suffer substantial loss if the order for stay is not made, secondly, he has demonstrated that his application has been made without unreasonable delay and thirdly, he has given security for satisfaction or performance of the decree in the event his appeal fails.
10. To the extent that grant of stay under order 42 Rule 6(1) is discretionary, the satisfaction of these conditions does not automatically entitle an applicant to an order for stay of execution. The conditions under order 42 Rule 6(2) are less of conditions for granting an order for stay of execution but more of grounds for refusal of such an order. The court may very well decline to grant an order for stay even after satisfaction of the conditions set out in Order 42 Rule 6(2) as long as its discretion is exercised judiciously and not whimsically. If it was to be argued that an applicant is automatically entitled to the stay of execution upon satisfaction of the conditions in Rule 6 (2) of Order 42 then discretion with which the court is clothed in Rule 6(1) would be of no consequence.
11. Turning to the applicant’s application, the date stamp shows that the motion was filed on 5 December 2024 and if the impugned judgment was rendered on 22 November 2024, the delay in filing the instant application cannot be said to have been inordinate, assuming the applicant was not aware of the judgment immediately it was posted on the case tracking system portal. The respondent has not contested the application in this regard and I only raise it because, as noted, timely filing of the application for stay is pertinent in exercise of the discretion either to grant or decline an order for stay of execution.
12. As far as the danger of substantial loss, if execution is allowed to proceed, is concerned, the applicant has submitted that it may not recover the decretal sum from the respondent if the appeal succeeds and, in the same vein, the appeal would be rendered nugatory. To cover for the performance of the decree, the applicant undertakes to provide a bank guarantee to the tune Kshs. 1,000,000/= as security.
13. As noted, provision of security is only one of the conditions the court will consider, in exercising its discretion to stay execution of a decree or order pending appeal. As the court of appeal held in Butt v Rent Restriction Tribunal [1979] KECA 22 (KLR), the ultimate goal is to ensure that if the appeal is not frivolous, it is not rendered nugatory. A passage from the leading judgment of Madan, J.A. is instructive in this regard. The learned judge held as follows:
“If there is no other overwhelming hindrance, a stay ought to be granted so that an appeal, if successful, may not be nugatory. A stay which would otherwise be granted ought not to be refused because the judge considers that another, which in his opinion will be a better remedy, will become available to the applicant at the conclusion of the proceedings.
It is in the discretion of the court to grant or refuse a stay but what has to be judged in every case is whether there are or not particular circumstances in the case to make an order staying execution. It has been said that the court as a general rule ought to exercise its best discretion in a way so as not to prevent the appeal, if successful from being nugatory, per Brett, LJ in Wilson v Church (No 2) 12 Ch D (1879) 454 at p 459. In the same case, Cotton LJ said at p 458:
“I will state my opinion that when a party is appealing, exercising his undoubted right of appeal, this court ought to see that the appeal, if successful, is not nugatory.”
Megarry J, as he then was, followed Wilson (supra) in Erinford Properties Limited v Cheshire County Council [1974] 2 All ER 448 at p 454 and also held that there was no inconsistency in granting such an injunction after dismissing the motion, for the purpose of the order is to prevent the Court of Appeal’s decision being rendered nugatory should that court reverse the judge’s decision. The court will grant a stay where special circumstances of the case so require, per Lopes LJ in the Attorney General v Emerson and Others 24 QBD (1889) 56 at p 59. The special circumstances in this case are that there is a large amount of rent in dispute between the parties and the appellant has an undoubted right of appeal.
Proceeding on this narrow basis, that is to prevent the appeal, if successful, from being nugatory, I would grant the stay asked for pending determination of the appeal by this court against the decision dated January 9, 1979 but upon terms, as authorised by the provisions of Order XLI rule 4(2)(b), that the applicant will deposit in court within thirty days the sum of Kshs 60,000 as security for the due performance of such decree or order as may ultimately be binding upon him, failing which the stay shall lapse without a further order of this court being necessary. I would order the costs of this application to be costs in the appeal.”
14. In the instant application, the trial court established as a fact that no valid chattels instrument had been registered in accordance with section 7 of the Chattels Transfer Act, cap. 28 and proceeded to hold that according to section 13 of that Act, the purported agreement between the appellant and the respondent as void. The vehicle in issue was again apparently sold despite the existence of a court order restraining the appellant from selling it.
15. The respondent has, on her part, urged that she is likely to suffer more damages if stay is granted because she continues to incur losses at the rate of Kshs. 4000/= per day on hire of alternative means of transport.
16. Taking all these circumstances into account and, considering the law applicable, I will allow the applicant’s application on condition that the applicant deposits the decretal sum owing to date in an interest earning bank account in the joint names of the applicant’s and respondent’s respective representatives’ names within thirty (30) days of the date of this ruling and, in default, execution to proceed. Costs of this application will abide the outcome of the appeal. It is so ordered.