UBA KENYA BANK LTD VS JANE NTHENYA MUVAU AND AFRICA MERCHANT ASSURANCE LTD AND 2 Others

RULING

1. On 11/08/2022 the magistrate’s court issued a garnishee order absolute against the applicant to attach and pay the 1^st respondent’s advocates within 7 days of the order the sum of Kshs. 2,559,662/00 from Mpesa Paybill A/c No.545400 and 758423 belonging to the 2^nd respondent or any other money in any other accounts held by the applicant on account of the 1^st respondent.
2. On 26/08/2022 the applicant informed the 1^st respondent’s advocates through an email that the 2^nd respondent’s bank account

held by themselves did not have sufficient funds to satisfy the decree and costs of the suit.

1. On 6/10/2022, the applicant’s goods were proclaimed by an auctioneer under the instructions of the advocates of the 1^st respondent in execution of the decree of the magistrate’s court.
2. On 11/10/2022 the applicant filed an application before the magistrate’s court to quash and lift the proclamation of its goods and have the garnishee proceedings heard afresh.
3. On 30/11/2022 the learned magistrate delivered the ruling and dismissed the application.
4. The applicant was aggrieved and filed this appeal vide Memorandum of Appeal filed on 16/12/2022 together with the application before me dated 15/12/2024.
5. That application seeks orders:
6. That pending the hearing and determination of the application inter-partes or further orders of the court, this honourable court be pleased to grant to the appellant/applicant an interim stay of execution of the decree of the magistrate’s court dated 23^rd  June 2022 together with the warrants of attachment and sale dated 4^th  October 2022 issued to Betabase Auctioneers.
7. That pending the hearing and determination of the appeal herein, this honourable court be pleased to grant to the appellant/applicant an interim stay of execution of the decree of the magistrate’s court dated 23^rd June 2022 together with the warrants of attachment and sale dated 4^th October 2022 issued to Betabase Auctioneers.
8. That the 1^st respondent be condemned to bear the costs of this application.
9. The application is supported by the affidavit of Micky Matheka sworn on 15/12/2022.
10. It is opposed by the affidavit of Rebecca Kipng’eno advocate sworn on February 20/2/2023 and filed on 10/03/2023. It is opposed on the grounds that the garnishee (applicant) was served with the garnishee nisi, the application and hearing notice for the hearing of the garnishee proceedings – but the applicant did not respond/challenge the garnishee order nisi – and that is when the garnishee absolute was issued.
11. That the applicant is now saying that the paybill accounts in issue are not held by them yet they had admitted to holding those accounts for the 1^st respondent – the applicant on its part contends
12. that the only account it holds with 1^st respondent was not the subject of the garnishee proceedings and it was the applicant who revealed the same to court.
13. When the matter first came up under certificate of urgency during the recess of 2022 December, the Hon. Limo J. gave the following orders:
14. That a temporary stay in terms of prayer 2 of the application is granted on condition that the applicant deposits security in form of bank guarantee of the decretal amount within 15 days from today.
15. That inter parties hearing will be on 16^th January 2023 before Hon. Judge at Makueni.
16. That the respondents be served with the hearing notice and the application.
17. I have carefully considered the rival submissions and affidavits sworn by counsel for each of the parties.
18. The parties set out a similar issue for determination and that is whether the application is in compliance with the requirements of order 42 Rule 6 of the CPR 2010.
19. The respondent cites inter alia RWW v- EKW (2019) eKLR;

“The purpose of an application for stay of execution pending an appeal is to preserve the subject matter in  dispute so that the rights of the appellant who is exercising the undoubted right of appeal are safeguarded and the appeal if successful, is not rendered nugatory. However, in doing so, the court should weigh this right against the success of a litigant who should not be deprived of the fruits of his/her judgment. The court is also called upon to ensure that no party suffers prejudice that cannot be compensated by award of costs.

Indeed to grant or refuse an application for stay of execution pending appeal is discretionary. The court when granting the stay however, must balance the interests of the appellant with those of the respondent.”

1. We start at the beginning: - the application was brought without delay, the applicant was ordered by court to provide security and did so. The issue remaining is on whether the applicant has demonstrated it will suffer substantial loss.
2. The applicant submits that the 1^st respondent has not demonstrated the ability to refund the decretal sum should the same be paid to her, and the appeal succeeds. Relying on National Industrial Credit
3. Bank Limited v- Aquinas Francis Wasike and Another (2006) e KLR whereby the Court of Appeal stated that:

“This court has said before and it would bear repeating that while the legal duty is on an applicant to prove the allegation that an appeal would be rendered nugatory because a respondent would be unable to pay back the decretal sum, it is unreasonable to expect such applicant to know in detail the resources owned by a respondent or the lack of them. Once an applicant expresses a reasonable fear that a respondent would be unable to pay back the decretal sum, the evidential burden must then shift to the respondent to show what resources he has since that is a matter which is peculiarly within his knowledge”.

1. The applicant argues that the 1^st respondent had the obligation to file an affidavit of means.
2. On the other hand, the applicant argues that it is a financial institution of repute, should the appeal be dismissed it will be in a position to pay the money; going by Santowels Limited V- Stanbic Bank Kenya Ltd (2020) e KLR, where the court expressed itself as hereunder:

“The plaintiff has not in this matter annexed an affidavit of means to confirm the resources available to it. Further, I find that the applicant being a commercial bank in business is possessed of sufficient means to satisfy any award that may be made against it by the Court of Appeal.

I do agree with counsel for the applicant that in the circumstances it would be prudent to grant a stay sought as this will enable both parties to ventilate their respective arguments before the Court of Appeal.”

1. The respondent argues that the applicant has not established it will suffer substantial loss. It relies on James Wangalwa & Another v- Agnes Naliaka Cheseto (2012) e KLR, that:

“No doubt, in law, the fact that the process of execution has been put in motion, or is likely to be put in motion, by itself, does not amount to substantial loss. Even when execution has been levied and completed, that is to say, the attached properties have been sold, as is the case here, does not in itself amount to substantial loss under Order 42 Rule 6 of the CPR. This is so because execution is a lawful process. 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”.

1. On this issue of security for the due performance of the decree/order as may be ultimately be binding on the appellant – it is urged that should the court be inclined to allow the application the applicant ought to deposit the entire decretal sum plus costs – Kshs. 2,560,662 in an interest earning account in a reputable commercial bank in the names of both advocates. The respondent cites Nicholas Stephen Okaka & Another –vs- Alfred Waga Wesonga [2022] e KLR:

“As to security of costs, the appellants have made provision for a Bank Guarantee meaning, they are able and willing to comply with that condition on security for the due performance of the decree appealed from. However, this court is not bound by the type of security offered by an applicant. It can make appropriate orders which serve the interest of justice taking into account the fact that money depreciates unless I is kept in an interest earning account for

the period of the appeal …. The court proceeded to order that, “The applicants/appellants shall deposit the entire decretal sum into an interest earning account in a reputable commercial bank, to be held

by both advocates for the parties to this appeal, within 21 days of this ruling.”

1. I have carefully considered the submissions on this issue.
2. The applicant has demonstrated that perhaps the 1^st respondent would be unable to refund the money if it is paid in the execution of the decree. It has also demonstrated that it would be able to pay the decretal sum plus costs upon the dismissal of the appeal. The respondent has offered an olive branch by stating that the money could be deposited in an interest earning account, it makes common sense – that if stay is granted at least the money stays in an interest earning account.
3. In the circumstances;
   1. The application for stay of execution pending appeal is granted on condition that the money is held in an interest earning account in the joint names of both counsel – to be deposited in the next 45 days. In default the application will

stand dismissed and the stay will lapse, with costs to the 1^st respondent.

• 1. The 1^st respondent will also have costs of this application.
  2. The applicant to file and serve the record of appeal within 45 days hereof.
  3. Mention in 45 days before Deputy Registrar for compliance on the filing and service of the Record of Appeal and further directions.
  4. Orders accordingly.

Dated, signed and delivered virtually on 22^nd April 2024