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JudgmentSound Creations Limited VS Daniel Owino6 min read

Sound Creations Limited VS Daniel Owino

Employment and Labour Relations Court at Nairobi Employment and Labour Relations Court (ELRC) · · Jemimah Wanza Keli

Summary

The court granted a stay of execution of a judgment from Daniel Owino v Sound Creations Limited pending appeal, as the applicant demonstrated substantial loss risk if execution proceeded, the application was made without unreasonable delay, and the applicant provided security by depositing the decretal sum in a joint interest-earning account. The court upheld the applicant's arguable appeal and ordered compliance within 30 days.


(On the Notice of Motion Application dated 11th September 2024 by the Appellant/Applicant)

  1. The ruling is on application by way of a Notice of Motion application by the Appellant (herein “Applicant”) dated 11th September 2024 and filed on 12th September 2024 brought under the provisions of Sections 1A, 1B & 3A of the Civil Procedure Act, Chapter 21 Laws of Kenya, and Order 42 Rule 6, and Order 51 Rule 1 of the Civil Procedure Rules, 2010, seeking the following orders: -
  2. Spent.
  3. Spent
  4. THAT this Honourable Court be pleased to grant an order of stay of execution of the judgment delivered in MCELRC /E592/2021 Daniel Owino v Sound Creations Limited on 13th August 2024 and the consequential Decree arising therefrom pending the hearing and determination of the appeal.
  5. Costs of the application be provided for.

  1. The Notice of Motion was premised on the grounds on the face of the Application and the grounds in the Supporting Affidavit of Nepal Shah sworn on 11th August 2024. The gist of the application was that a judgment was entered in favour of the Respondent on the 13th August 2024 by the lower court against the Applicant on grounds of unfair termination (NS1 was a copy of the judgment). That the trial court had given a stay of execution for 30 days which was lapsing on 13th September 2024 and the Applicant being apprehensive of execution sought extension of the stay. That the Applicant was dissatisfied with the entire judgment of the lower court and had lodged Memorandum of Appeal (NS2 was a copy of the filed Memorandum of Appeal).
  2. The Applicant through Nipul Shah alleged that the Respondent was not in a financial position to refund the decretal sum if paid hence risk of substantial loss in the event of their success on appeal. He further deponed the Applicant was willing to comply with orders the Court may issue.
  3. The Application was opposed by the Respondent vide his replying affidavit of 24th September 2024 and received in Court on the 25th September 2024. The Respondent, inter alia, stated the Appellant was guilty of laches as the appeal was on denial of adjournment during the trial, that execution was a lawful process and he was entitled to enjoy the fruits of his judgment. The Respondent proposed that should the Court proceed to grant the orders sought, then the entire decretal sum of Kshs. 558,4888.11 be deposited in a joint interest earning account held by both Advocates until the determination of the appeal.

Hearing

  1. The Application was listed for hearing interpartes on the 2nd October 2024 when the parties appeared. The Applicant was represented by Mr. Kyalo Advocate, who canvassed the application as pleaded. He further agreed to the condition of deposit of the entire decretal sum as proposed by the respondent in 60 days. The Respondent represented by Brian Otieno Advocate opposed to the 60 days’ period stating 30 days was the normal period for compliance. On costs he agreed the same be in the cause further stating they were hoping to negotiate settlement.

DETERMINATION

  1. The sole issue for determination was whether the application was merited.

Decision

  1. Order 42 Rule 6 of the Civil Procedure Rules, 2010 specifies the circumstances under which the Court may order a stay of execution of a Decree or Order pending an Appeal. It provides that an Applicant must demonstrate the following: -

‘’a) Substantial loss may result to the applicant unless the order was made;

b) The application was made without unreasonable delay; and

c) 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.”

  1. From the above provision of the law, it is clear that the Court must be satisfied that there is “sufficient cause” to grant a Stay. Evidently, the three (3) prerequisite conditions set out in the said Order 42 Rule 6 of the Civil Procedure Rules, 2010 cannot be severed. The key word is “and”. It connotes that all three (3) conditions must be met simultaneously.
  2. The Court of Appeal in Rhoda Mukuma v John Abuoga[1988] eKLR, held that “It was laid down in  Butt v The Rent Restriction Tribunal, Civil Application No Nai 6 of 1979, (following Wilson v Church (No 2) (1879) 12 Ch 454 at p 488) that in the case of a party appealing, exercising his undoubted right of appeal, the court ought to see that the appeal is not rendered nugatory. It should therefore preserve the status quo until the appeal is heard.

Granting a stay in the High Court is governed by Order XLI rule 4(2), the questions to be decided being – (a) whether substantial loss may result unless the stay is granted and the application is made without delay; and (b) the applicant has given security. The discretion under rule 5(2)(b) is at large, but as was pointed out in the Kenya Shell case substantial loss is the cornerstone of both jurisdictions. That is what has to be prevented, because such loss would render the appeal nugatory. Therefore it is necessary to preserve the status quo.” .(Emphasis added). I uphold the decision to apply in the instant application.

  1. The applicant stated that the respondent was not in a financial position to refund the decretal sum in event of successful appeal hence danger of substantial loss to it if stay was not granted pending the appeal. The Respondent did not rebut the allegation in his response.
  2. The applicant annexed as NS2 filed Memorandum of Appeal. The Court of Appeal in Cabinet Secretary Ministry of Health v Aura & 13 others (Civil Application E583 of 2023) [2024] KECA 2 (KLR) (19 January 2024) (Ruling) held that: “An arguable appeal is not one that must succeed and an applicant need not proffer a multiplicity of arguable points. One is sufficient. For a point to be arguable it needs merely to raise a bona fide point of law or fact sufficient to call for an answer from the respondent and is worthy of the court’s consideration.

33.Moreover, whereas such arguable points should ideally and conveniently be expressed in the form of a draft memorandum of appeal, there is no rule that it must be so. One can raise such grounds on the face of the motion and even in the supporting affidavit, as happened in this case. We reiterate what was said recently in Ontweka & 3 others vs. Onderi (supra)“While it would have been desirable for the applicant to annex a draft proposed memorandum of appeal to its application, we are of the view that the omission to do so is not fatal, and is curable in so far as the applicant has sufficiently set out its grievances on the face of the application. That is the case in this application. The applicant set out what it considers to be arguable points that it intends to raise during the appeal and addressed at length on the same. This is sufficient to demonstrate its grievances against the orders that it seeks to be reversed.”(Emphasis added) I uphold the foregoing decision to hold that the filed memorandum of appeal grounds discloses an arguable appeal.

  1. The impugned Judgment was delivered in the 13th August 2024 and hence the court finds no unreasonable delay in filing the instant application.
  2. The last is compliance with 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 counsel for applicant agreed to the proposed by the Respondent that the entire decretal sum of Kshs. 558,4888.11 be deposited in a joint interest earning account held by both advocates until the determination of the appeal. The parties did not agree on the period for compliance. The court ordered that the monies be deposited as proposed in 30 days which was a reasonable period considering there was a prior order of stay granted by the trial court.
  3. In the upshot, the application dated 11th September 2024 is allowed as follows: -
  4. THAT this Honourable Court hereby grants an order of stay of execution of the judgment delivered in MCELRC /E592/2021 Daniel Owino v Sound Creations Limited on 13th August 2024 and the consequential Decree arising therefrom pending the hearing and determination of the appeal.
  5. That the Order of Stay (above) is subject to deposit by the Applicant, within 30 days of this Order, the entire decretal sum of Kshs. 558,4888.11 in a joint interest earning account held by both advocates until the determination of the appeal.
  6. Costs in the cause.
  7. It is so Ordered.

DATED, SIGNED, AND DELIVERED IN OPEN COURT AT NAIROBI THIS 2ND DAY OF OCTOBER, 2024.


    Sound Creations Limited VS Daniel Owino Sound Creations Limited VS Daniel Owino