1. The Appellant/Applicant filed a Notice of Motion application dated 24th October 2024 under Certificate of Urgency pursuant to Article 159 of the Constitution, Order 22 Rule 22, Order 10 Rule 11 of the Civil Procedure Rules, Section 3, 3A and 63 (e) of the Civil Procedure Act and all other enabling provisions of the law.
2. The Appellant/Applicant seeks for orders that this court be pleased to exercise its discretion and vary its order issued on 26th September 2024 and allow the Appellant to deposit in court an alternative non-cash security of a title deed of a parcel of land known as KILIFI/MTWAPA/7638 located in Mtwapa, that the time of depositing of security herein be extended for a further 30 days pending the hearing and determination of this application, that this court be pleased to issue such other orders it deems just and fit to grant, and that the costs of this application be provided for.
3. The application is premised on grounds on its face and the annexed affidavit of Joseph Bwire Sikudi, the Director of the Appellant/Applicant sworn on 24th October 2024 that vide a court ruling delivered on 21st March 2023, the Appellant was ordered to deposit in court the decretal sum of Kshs. 3,575,678.40 within 30 days which period will lapse on 26th October 2024. That the Appellant has come to the realization that they are unable to raise the deposit of Kshs. 3,575,678.40 as they are low in cash flow in their business. That one of the Appellant’s colleague at work Dr. Khadija Essa Mohamed has agreed to deposit a non-cash security of a title deed for her parcel of land known as KILIFI/MTWAPA/7638.
4. The Appellant/Applicant maintained that the Respondent will not be prejudiced by the deposit of a non-cash security whose value is almost twice the security required. That the proceedings have also been typed, the record of appeal is being compiled and prepared and that it will not take long before the appeal is heard and determined. That if the orders prayed for herein are not granted, this application will be rendered nugatory and the Appellant stands to suffer prejudice, irreparable loss and damage.
5. The Respondent in opposing the application filed a Grounds of Opposition dated 5th November 2024 that the security to be offered was an issue raised by the Appellant at ground 7 of the Notice of Motion and paragraph 11 of the Further Affidavit and responded to at paragraph 7 of its Replying Affidavit, and that the court then made a considered decision on it. That the present application is an appeal disguised as an application to vary the order for deposit of security, it is res judicata and an abuse of the court process.
6. The Respondent further stated in the Grounds of Opposition that in any event, the Appellant has not demonstrated that it is not capable of depositing the security as ordered by the court. That the Appellant’s conceded poor financial position is more reason the court ought to allow the Respondent to exercise its contractual right. That the security of a title deed sought to be offered is worthless to the Respondent and that charged properties take long before they are sold in the exercise of the statutory power of sale. That the security offered is not in the name of the Appellant and it cannot be enforced even if the court directed so.
7. The application was canvassed by way of written submissions. The Appellant/Applicant in their submissions dated 19th November 2024 argued that the purpose of security as provided by Order 42 Rule 6 of the Civil Procedure Rules is to guarantee the due performance of such decree or order as may ultimately be binding on the Appellant/Applicant and that this position was reiterated in the case of Arun C. Sharma v Ashana Raikundalia t/a A. Raikundalia & Co. Advocates & 2 Other (2014) eKLR. That the alternative security offered is sufficient and adequate to satisfy the order of deposit by the court and that the issue of adequacy of security was dealt with by the Court of Appeal in Nduhiu Gitahi v Warugongo (1988) KLR 621, 1 KAR 100, (1988-92) 2 KAR 100.
8. The Appellant/Applicant submitted that security can take many forms and it does not necessarily have to be monetary so long as it is adequate to satisfy the amount ordered. The Appellant/Applicant further cited the case of Focin Motorcycle Co. Ltd v Ann Wambui Wangui & Another (2018) eKLR and urged the court to exercise its discretion in their favour. The Appellant/Applicant contended that the court faced with a similar application for alternative security in the case of Michael Waweru & Another v Grace Nyokabi Kinuthia (2019) eKLR. The Appellant/Applicant stated that their application has satisfied the threshold for grant of the orders prayed. That the court should therefore exercise its discretion in their favour.
9. The Respondent in their submissions dated 2nd December 2024 argued that the Appellant/Applicant has referred to the case of Arun C. Sharma v Ashana Raikundalia t/a A. Raikundalia & Co. Advocates, Nishit Raikundalia & Sapphire Trading & Marketing Ltd (2014) KEHC 2430 (KLR) but failed to appreciate that the case provides two grounds for dismissing the application. That the title sought to be offered as security is in the name of Dr. Khadija Essa Mohamed and not the Appellant. That additionally, the Appellant boldly admits that it has not presented any evidence to support its bare allegation of economic difficulties. The Respondent cited the case of BN Kotecha & Sons Limited & Hemal Kotecha v Amalo Company Limited (2021) KECA 859 (KLR) and submitted that no satisfactory reason has been given to review an order granted consciously after considering all factors and which lapsed on 26th October 2024. That the Court of Appeal in the case refused to review a similar condition order. That the order sought is equitable in nature but it is highly inequitable for the Appellant to refuse to repay the loan, stop realization of the security offered for that specific purpose and insist that it must be granted a reprieve on its terms and not the court’s terms. The Respondent therefore prayed that the application is dismissed with costs.
10. I have considered the Appellant/Applicant’s Notice of Motion application dated 24th October 2024, the Respondent’s Grounds of Opposition dated 5th November 2024 and submissions by the parties.
11. Vide a ruling delivered on 21st March 2023, the Appellant was ordered to deposit in court the decretal sum of Kshs. 3,575,678.40 pending the hearing and determination of the appeal. The Appellant are unable to comply with the order citing low cash flow in the business. That however, a colleague, Dr. Khadija Essa Mohamed has agreed to deposit non-cash security of a title deed for the parcel of land known as KILIFI/MTWAPA/7638, and that the value of the said non-cash security is more than the required value.
12. The Respondent opposed the application on the basis that the issue was previously raised by the Appellant and the court made a considered decision, that the application is res judicata and an abuse of the court process, that the Appellant’s poor financial position is more reason why the application should not be allowed, and that the security offered is not in the name of the Appellant.
13. Accordingly, the issues for determination are: -
(a) Whether the application is res judicata
(b) Whether the application is merited for grant of the orders sought.
14. Section 7 of the Civil Procedure Act provides: -
No court shall try any suit or issue in which the matter directly and substantially in issue has been directly and substantially in issue in a former suit between the same parties, or between parties under whom they or any of them claim, litigating under the same title, in a court competent to try such subsequent suit or the suit in which such issue has been subsequently raised, and has been heard and finally decided by such court.
15. It is the considered view of this court that the instant application dated 24th October 2024 is seeking that the court varies its order issued on 26th September 2024 whereas the issue for determination in the Notice of Motion application dated 14th June 2024 was an order of stay. This court therefore finds that the instant application has not met the conditions to qualify as being res judicata.
16. On whether there can be extension of time of 30 days of depositing security, Sections 3A and 95 of the Civil Procedure Act grant this court unfettered discretion to enlarge time as follows: -
17. Section 3A of the Civil Procedure Act provides: -
Nothing in this Act shall limit or otherwise affect the inherent power of the court to make such orders as may be necessary for the ends of justice or to prevent abuse of the process of the court.
18. Section 95 of the Civil Procedure Act provides: -
Where any period is fixed or granted by the court for the doing of any act prescribed or allowed by this Act, the court may, in its discretion, from time to time, enlarge such period, even though the period originally fixed or granted may have expired.
19. In the case of Aviation & Allied Workers Union of Kenya v Kenya Airways Limited & 3 Others (2015) eKLR the Supreme Court set out guiding principles for extension of time as follows: -
1. extension of time is not a right of a party; it is an equitable remedy that is only available to a deserving party at the discretion of the court;
2. a party who seeks extension of time has the burden of laying a basis, to the satisfaction of the court;
3. whether the court should exercise the discretion to extend time, is a consideration to be made on a case- to- case basis;
20. This court notes that the order made on 26th September 2024 lapsed on 26th October 2024. The application herein was filed under urgency on 24th October 2024, prior to lapse of the date. I find that the said order was in existence and therefore capable of extension.
21. On whether the Applicant can be allowed to deposit in court an alternative non-cash security of a title deed, the Court in Mwaura Karuga t/a Limit Enterprises v Kenya Bus Services Ltd & 4 Others (2015) eKLR had the following view: -
“First of all, the security must be one which shall achieve due performance of the decree which might ultimately be binding on the applicant. The rule does not, therefore, envisage just any security. The words ‘’ultimately be binding’ are deliberately used and are useful here, for they refer to the entire decree as will be payable at the time the appeal is lost. That is the presumption of law here.”
22. The court in Arun C Sharma v Ashana Raikundalia t/a A Raikundalia & Co Advocates & 2 Others (2014) eKLR held that: -
“The alternative security being offered presents several problems. The first one-the security is owned by another person. This is a civil suit where the Applicants are judgment-debtors. But, the Applicants seem to have borrowed from the criminal procedures where a person stands surety for the attendance of another in court. Civil process is quite different because, in a 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 the 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. When one imagines, if it becomes necessary, the steps required to be taken for such security being offered to be realized by the decree-holder, it becomes absolutely clear that mere affidavit by the owner does not convert the said property into any legally binding security for the due performance of such decree or order as may ultimately be binding on the Applicant. I, therefore, hold that the security offered is not suitable for purposes of Order 42 rule 6 of the CPR.”
23. The Applicant is proposing to deposit alternative non-cash security of a title deed of a parcel of land known as KILIFI/MTWAPA/7638 in the name of Khadija Issa Mohamed. Pursuant to the holding above, the alternative security offered by the Applicant is not sufficient to warrant the court to vary its order issued on 26th September 2024.
24. In consideration of the court’s findings above, the Notice of Motion application dated 24th October 2024 is partially allowed in terms of prayer 3. Time for depositing security as ordered on 26th September 2024 is extended for a further 30 days from the date hereof. Costs shall be in the cause.
DATED and DELIVERED VIA CTS at MOMBASA this 21ST day of JANUARY, 2025
2. The Appellant/Applicant seeks for orders that this court be pleased to exercise its discretion and vary its order issued on 26th September 2024 and allow the Appellant to deposit in court an alternative non-cash security of a title deed of a parcel of land known as KILIFI/MTWAPA/7638 located in Mtwapa, that the time of depositing of security herein be extended for a further 30 days pending the hearing and determination of this application, that this court be pleased to issue such other orders it deems just and fit to grant, and that the costs of this application be provided for.
3. The application is premised on grounds on its face and the annexed affidavit of Joseph Bwire Sikudi, the Director of the Appellant/Applicant sworn on 24th October 2024 that vide a court ruling delivered on 21st March 2023, the Appellant was ordered to deposit in court the decretal sum of Kshs. 3,575,678.40 within 30 days which period will lapse on 26th October 2024. That the Appellant has come to the realization that they are unable to raise the deposit of Kshs. 3,575,678.40 as they are low in cash flow in their business. That one of the Appellant’s colleague at work Dr. Khadija Essa Mohamed has agreed to deposit a non-cash security of a title deed for her parcel of land known as KILIFI/MTWAPA/7638.
4. The Appellant/Applicant maintained that the Respondent will not be prejudiced by the deposit of a non-cash security whose value is almost twice the security required. That the proceedings have also been typed, the record of appeal is being compiled and prepared and that it will not take long before the appeal is heard and determined. That if the orders prayed for herein are not granted, this application will be rendered nugatory and the Appellant stands to suffer prejudice, irreparable loss and damage.
5. The Respondent in opposing the application filed a Grounds of Opposition dated 5th November 2024 that the security to be offered was an issue raised by the Appellant at ground 7 of the Notice of Motion and paragraph 11 of the Further Affidavit and responded to at paragraph 7 of its Replying Affidavit, and that the court then made a considered decision on it. That the present application is an appeal disguised as an application to vary the order for deposit of security, it is res judicata and an abuse of the court process.
6. The Respondent further stated in the Grounds of Opposition that in any event, the Appellant has not demonstrated that it is not capable of depositing the security as ordered by the court. That the Appellant’s conceded poor financial position is more reason the court ought to allow the Respondent to exercise its contractual right. That the security of a title deed sought to be offered is worthless to the Respondent and that charged properties take long before they are sold in the exercise of the statutory power of sale. That the security offered is not in the name of the Appellant and it cannot be enforced even if the court directed so.
7. The application was canvassed by way of written submissions. The Appellant/Applicant in their submissions dated 19th November 2024 argued that the purpose of security as provided by Order 42 Rule 6 of the Civil Procedure Rules is to guarantee the due performance of such decree or order as may ultimately be binding on the Appellant/Applicant and that this position was reiterated in the case of Arun C. Sharma v Ashana Raikundalia t/a A. Raikundalia & Co. Advocates & 2 Other (2014) eKLR. That the alternative security offered is sufficient and adequate to satisfy the order of deposit by the court and that the issue of adequacy of security was dealt with by the Court of Appeal in Nduhiu Gitahi v Warugongo (1988) KLR 621, 1 KAR 100, (1988-92) 2 KAR 100.
8. The Appellant/Applicant submitted that security can take many forms and it does not necessarily have to be monetary so long as it is adequate to satisfy the amount ordered. The Appellant/Applicant further cited the case of Focin Motorcycle Co. Ltd v Ann Wambui Wangui & Another (2018) eKLR and urged the court to exercise its discretion in their favour. The Appellant/Applicant contended that the court faced with a similar application for alternative security in the case of Michael Waweru & Another v Grace Nyokabi Kinuthia (2019) eKLR. The Appellant/Applicant stated that their application has satisfied the threshold for grant of the orders prayed. That the court should therefore exercise its discretion in their favour.
9. The Respondent in their submissions dated 2nd December 2024 argued that the Appellant/Applicant has referred to the case of Arun C. Sharma v Ashana Raikundalia t/a A. Raikundalia & Co. Advocates, Nishit Raikundalia & Sapphire Trading & Marketing Ltd (2014) KEHC 2430 (KLR) but failed to appreciate that the case provides two grounds for dismissing the application. That the title sought to be offered as security is in the name of Dr. Khadija Essa Mohamed and not the Appellant. That additionally, the Appellant boldly admits that it has not presented any evidence to support its bare allegation of economic difficulties. The Respondent cited the case of BN Kotecha & Sons Limited & Hemal Kotecha v Amalo Company Limited (2021) KECA 859 (KLR) and submitted that no satisfactory reason has been given to review an order granted consciously after considering all factors and which lapsed on 26th October 2024. That the Court of Appeal in the case refused to review a similar condition order. That the order sought is equitable in nature but it is highly inequitable for the Appellant to refuse to repay the loan, stop realization of the security offered for that specific purpose and insist that it must be granted a reprieve on its terms and not the court’s terms. The Respondent therefore prayed that the application is dismissed with costs.
10. I have considered the Appellant/Applicant’s Notice of Motion application dated 24th October 2024, the Respondent’s Grounds of Opposition dated 5th November 2024 and submissions by the parties.
11. Vide a ruling delivered on 21st March 2023, the Appellant was ordered to deposit in court the decretal sum of Kshs. 3,575,678.40 pending the hearing and determination of the appeal. The Appellant are unable to comply with the order citing low cash flow in the business. That however, a colleague, Dr. Khadija Essa Mohamed has agreed to deposit non-cash security of a title deed for the parcel of land known as KILIFI/MTWAPA/7638, and that the value of the said non-cash security is more than the required value.
12. The Respondent opposed the application on the basis that the issue was previously raised by the Appellant and the court made a considered decision, that the application is res judicata and an abuse of the court process, that the Appellant’s poor financial position is more reason why the application should not be allowed, and that the security offered is not in the name of the Appellant.
13. Accordingly, the issues for determination are: -
(a) Whether the application is res judicata
(b) Whether the application is merited for grant of the orders sought.
14. Section 7 of the Civil Procedure Act provides: -
No court shall try any suit or issue in which the matter directly and substantially in issue has been directly and substantially in issue in a former suit between the same parties, or between parties under whom they or any of them claim, litigating under the same title, in a court competent to try such subsequent suit or the suit in which such issue has been subsequently raised, and has been heard and finally decided by such court.
15. It is the considered view of this court that the instant application dated 24th October 2024 is seeking that the court varies its order issued on 26th September 2024 whereas the issue for determination in the Notice of Motion application dated 14th June 2024 was an order of stay. This court therefore finds that the instant application has not met the conditions to qualify as being res judicata.
16. On whether there can be extension of time of 30 days of depositing security, Sections 3A and 95 of the Civil Procedure Act grant this court unfettered discretion to enlarge time as follows: -
17. Section 3A of the Civil Procedure Act provides: -
Nothing in this Act shall limit or otherwise affect the inherent power of the court to make such orders as may be necessary for the ends of justice or to prevent abuse of the process of the court.
18. Section 95 of the Civil Procedure Act provides: -
Where any period is fixed or granted by the court for the doing of any act prescribed or allowed by this Act, the court may, in its discretion, from time to time, enlarge such period, even though the period originally fixed or granted may have expired.
19. In the case of Aviation & Allied Workers Union of Kenya v Kenya Airways Limited & 3 Others (2015) eKLR the Supreme Court set out guiding principles for extension of time as follows: -
1. extension of time is not a right of a party; it is an equitable remedy that is only available to a deserving party at the discretion of the court;
2. a party who seeks extension of time has the burden of laying a basis, to the satisfaction of the court;
3. whether the court should exercise the discretion to extend time, is a consideration to be made on a case- to- case basis;
20. This court notes that the order made on 26th September 2024 lapsed on 26th October 2024. The application herein was filed under urgency on 24th October 2024, prior to lapse of the date. I find that the said order was in existence and therefore capable of extension.
21. On whether the Applicant can be allowed to deposit in court an alternative non-cash security of a title deed, the Court in Mwaura Karuga t/a Limit Enterprises v Kenya Bus Services Ltd & 4 Others (2015) eKLR had the following view: -
“First of all, the security must be one which shall achieve due performance of the decree which might ultimately be binding on the applicant. The rule does not, therefore, envisage just any security. The words ‘’ultimately be binding’ are deliberately used and are useful here, for they refer to the entire decree as will be payable at the time the appeal is lost. That is the presumption of law here.”
22. The court in Arun C Sharma v Ashana Raikundalia t/a A Raikundalia & Co Advocates & 2 Others (2014) eKLR held that: -
“The alternative security being offered presents several problems. The first one-the security is owned by another person. This is a civil suit where the Applicants are judgment-debtors. But, the Applicants seem to have borrowed from the criminal procedures where a person stands surety for the attendance of another in court. Civil process is quite different because, in a 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 the 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. When one imagines, if it becomes necessary, the steps required to be taken for such security being offered to be realized by the decree-holder, it becomes absolutely clear that mere affidavit by the owner does not convert the said property into any legally binding security for the due performance of such decree or order as may ultimately be binding on the Applicant. I, therefore, hold that the security offered is not suitable for purposes of Order 42 rule 6 of the CPR.”
23. The Applicant is proposing to deposit alternative non-cash security of a title deed of a parcel of land known as KILIFI/MTWAPA/7638 in the name of Khadija Issa Mohamed. Pursuant to the holding above, the alternative security offered by the Applicant is not sufficient to warrant the court to vary its order issued on 26th September 2024.
24. In consideration of the court’s findings above, the Notice of Motion application dated 24th October 2024 is partially allowed in terms of prayer 3. Time for depositing security as ordered on 26th September 2024 is extended for a further 30 days from the date hereof. Costs shall be in the cause.
DATED and DELIVERED VIA CTS at MOMBASA this 21ST day of JANUARY, 2025