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ELCAllowedEnvironment and Land Appeal E023 of 2023· [2023] KEELC 20201 (KLR)

Leonard N. Shimaka t/a Marende Necheza & Company Advocates v Registered Trustees of Mudzini Kwetu Center Trust

Environment and Land Court of Kenya
25 September 2023
6,959 words in judgment
View original judgmentRead on Kenya Law Watch case
AI-assisted case brief
·~28 min to read original · ~4 min brief

The bottom line

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A Mombasa court paused collection of a Kshs. 350,000 judgment against an advocate, provided he deposits the full amount in a joint escrow account within 21 days.

What this practically means

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Executive summary

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The Appellant, an advocate trading as Marende Necheza & Company Advocates, moved the Environment and Land Court at Mombasa by Notice of Motion dated 6th April 2023 seeking stay of execution of a judgment delivered on 3rd March 2023 by Hon. D.W. Mburu (SPM) in CMCC No. 2328 of 2018, in which the Respondent Trust obtained a money decree of Kshs. 350,000 plus costs and interest against him. The Appellant had been denied leave to defend, filed a memorandum of appeal, and feared execution would render the appeal nugatory, contending the firm held the monies as vendor's advocate for specific purposes and had refunded the stakeholder sum. The Respondent opposed, arguing the appeal was filed out of time without leave, raised no triable issues, that the Applicant had shown no substantial loss, and that the motion was filed during vacations without invoking the correct jurisdiction. The court, L.L. Naikuni J, framed three issues and applied the three conditions in Order 42 Rule 6(2) of the Civil Procedure Rules: substantial loss, absence of unreasonable delay, and security. It found no inordinate delay (one month and three days), accepted the risk of the appeal being rendered nugatory given the Respondent's silence on refund ability, and, although noting the Applicant had not pledged security, allowed the application on condition that the entire decretal sum be deposited into an interest-earning escrow joint account within 21 days. The court granted stay of execution pending the hearing and final determination of the appeal, directed filing of the record of appeal within 30 days, set a mention for directions, and awarded the costs of the application to the Appellant.

Key legal issues

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01

Whether the Applicant demonstrated substantial loss

Holding

The court found the Applicant had established a case for stay, accepting that the Respondent had not demonstrated ability to refund the decretal amount should the appeal succeed.

Reasoning

The Applicant argued that the Respondent had not stated whether it could refund the decretal sum if the appeal succeeded and had filed no affidavit of means. The court accepted that unless the judgment was stayed the appeal risked being rendered nugatory, and applied the jurisprudence that substantial loss is what has to be prevented by preserving the status quo.

p. 11
02

Whether the application was made without unreasonable delay

Holding

The court found no inordinate delay: judgment was delivered on 3rd March 2023 and the application filed on 6th April 2023.

Reasoning

The impugned judgment was delivered on 3rd March 2023 and the application was lodged on 6th April 2023, a period of one month and three days. The court held this did not constitute inordinate delay, satisfying the second condition of Order 42 Rule 6(2).

p. 12
03

Whether security was furnished

Holding

Although the Applicant had not pledged the title deed as security, the court directed deposit of the decretal sum into an interest-earning escrow joint account as the security condition.

Reasoning

The court noted the mandatory requirement to furnish security under Order 42 Rule 6(2)(b) and observed the Applicant had not pledged the title deed. It nonetheless exercised its discretion to allow the application on condition that the entire decretal sum be deposited into a joint interest-earning escrow account within 21 days.

p. 13
04

Costs of the application

Holding

Costs follow the event under Section 27(1) of the Civil Procedure Act; the successful Applicant was awarded costs against the Respondent.

Reasoning

The court invoked Section 27(1) of the Civil Procedure Act, holding that costs follow the event, and since the Applicant succeeded in the application, the Respondent was ordered to bear the costs.

p. 12

Legal principles established

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  • The three mandatory conditions for granting stay of execution pending appeal under Order 42 Rule 6(2) are substantial loss, absence of unreasonable delay, and furnishing of security.
  • The purpose of stay of execution pending appeal is to preserve the subject matter in dispute so the appeal, if successful, is not rendered nugatory.
  • Security under Order 42 Rule 6 guarantees due performance of the decree, not punishment of the judgment debtor.

Court orders

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  1. 1.The Notice of Motion application dated 6th April, 2023 be and is hereby found to have merit and is allowed in its entirety
  2. 2.A stay of execution of the Judgment delivered on 3rd March, 2023 and all its subsequent Orders to issue pending the hearing and final determination of the Appeal
  3. 3.The Appellant/Applicant to deposit the entire decretal sum into an interest earning Escrow Joint account in a reputable commercial Bank, to be held by both advocates for the parties, within 21 days from the date of delivery of the ruling
  4. 4.The Appellant to file and serve a record of appeal within thirty (30) days of the ruling
  5. 5.The appeal to be mentioned on 25th October, 2023 for directions on the mode of disposal of the appeal
  6. 6.The costs of the application to be borne by the Respondent

Authorities

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Legislation

  • Civil Procedure ActSections 1A, 1B, 3, 3A, 63(e), 27(1)
  • Civil Procedure Rules, 2010Order 51 Rule 1; Order 40 Rules 1 & 2; Order 42 Rule 6(2)
  • Advocates ActSection 34
  • Constitution of Kenya, 2010general reference

Cases cited (17)

  • James Wangalwa & Another v Agnes Naliaka Cheseto
    [2012] eKLR

    Execution being a lawful process does not itself amount to substantial loss; applicant must show execution will irreparably affect the core of the appeal.

  • Silas Kanyolu Mwatha v Josephine Kavive James
    [2021] eKLR

    Cited Carter & Sons Ltd: strong grounds alone do not justify stay; sufficient cause, substantial loss, security and no unreasonable delay required.

  • Carter & Sons Ltd vs Deposit Protection Fund Board & 2 Others
    Civil Appeal No 291 of 1997

    Conditions for stay: sufficient cause, substantial loss, security, and application without unreasonable delay.

  • Consolidated Marine v Namprijad & Ano.
    Civil Appeal No. 93 of 1989 Nairobi

    Purpose of stay is to preserve the subject matter in dispute so the appeal, if successful, is not rendered nugatory.

  • Samvir Trustee Limited v Guardian Bank Limited
    Nairobi (Milimani) HCCC 795 of 1997

    Mere assertions of substantial loss insufficient; empirical or documentary evidence required; court must balance scales of justice.

  • Michael Ntouthi Mitheu v Abraham Kivondo Musau
  • Khairrunissa Hussein Haji Ladha & Others v Suleiman Abdulrehman & Another
  • Mukuma v Abuoga
    [1988] KLR 645

    Substantial loss is what has to be prevented by preserving the status quo because such loss would render the appeal nugatory.

  • Vishram Ravji Halai v Thornton & Turpin
    Civil Application No. Nai. 15 of 1990 [1990] KLR 365

    High Court's jurisdiction to grant stay under Order 42 Rule 6 is fettered by sufficient cause, substantial loss and security conditions.

  • Butt v Rent Restriction Tribunal
    [1979]

    Discretion to grant stay should be exercised so as not to prevent an appeal; stay must be granted so appeal is not rendered nugatory.

  • Suleiman v Amboseli Resort Limited
    [2004] 2 KLR 589

    Court should weigh consequences of granting or refusing stay, applying proportionality and equality of arms, opting for the lower risk of injustice.

  • Kenya Shell Limited v Benjamin Karuga Kigibu & Ruth Wairimu Karuga
    [1982-1988] KAR 1018

    If there is no evidence of substantial loss, the relief of stay need not be substantiated; substantial loss is the cornerstone for granting stay.

  • Machira T/A Machira & Co Advocates v East African Standard (No.2)
    [2002] eKLR 63
  • Absalom Dora v Turbo Transporters
    [2013] eKLR

    Applicant bears burden to show substantial loss; court balances appellant's right of appeal against decree holder's rights.

  • Geoffery Muriungi & another v John Rukunga M'imonyo suing as Legal representative of the estate of Kinoti Simon Rukunga (Deceased)
    [2016] eKLR

    Purpose of stay is to prevent a successful appellant from holding a barren result; 'reducing the successful appellant into a pious explorer in the judicial process'.

  • RWW v EKW
    [2019] eKLR

    Court must weigh appellant's right against successful litigant's fruits of judgment and ensure no party suffers prejudice not compensable by costs.

  • Aron C. Sharma v Ashana Raikundalia T/A Rairundalia & Co. Advocates

    Security under Order 42 guarantees due performance of the decree, not punishment of the judgment debtor.

On appeal from
Chief Magistrate's Court at Mombasa
CMCC No. 2328 of 2018
Jurisdiction invoked
Order 42 Rule 6 of the Civil Procedure Rules, 2010 (stay of execution pending appeal); Sections 1A, 1B, 3, 3A and 63(e) of the Civil Procedure Act, Cap. 21

Key timeline

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Practical implications

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Frequently asked questions

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Cite this brief

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Cite this brief

Caselaw, "Leonard N. Shimaka t/a Marende Necheza & Company Advocates v Registered Trustees of Mudzini Kwetu Center Trust", Case Analysis (2023). Environment and Land Appeal E023 of 2023. Source: https://new.kenyalaw.org/akn/ke/judgment/keelc/2023/20201/eng@2023-09-25

Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.