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ELRCDismissedCause No 59 of 2014· [2015] KEELRC 933 (KLR)

David Mbugua v Keroche Breweries Ltd [2015] KEELRC 933 (KLR)

Employment and Labour Relations Court
29 May 2015
880 words in judgment
View original judgmentRead on Kenya Law Watch case
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The bottom line

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A Kenyan employer lost its bid to pause payment of a wrongful termination award because it waited too long and failed to prove real loss.

What this practically means

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Executive summary

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The Claimant had obtained a judgment on 20 February 2015 holding that his termination by the Respondent was procedurally unfair, with an award of Kshs 1,080,000/-. The Respondent filed a Notice of Appeal on 26 February 2015 and, on 24 April 2015, moved the Court for a stay of execution of the award, the decree and warrants of attachment pending the intended appeal, arguing that it would suffer substantial loss and that the Claimant might be unable to refund the decretal sum. It also expressed willingness to furnish security and complained that two of its motor vehicles had been attached on 22 April 2015 and risked auction. The Claimant opposed, contending that the Respondent had gone into slumber and only acted when auctioneers proclaimed its property, that no harm was demonstrated, and that the Claimant's ability to repay was not disproved. The Court held that substantial loss is the crucial element of a stay application and must be shown clearly in the supporting affidavit; mere assertion that the decretal sum is large or that the decree holder is a man of straw is insufficient. Applying the dicta of Odunga J in the Wananchi Group case and Emukule J in Cosmas Kipkoech Sigei, the Court dismissed the motion. It further observed, invoking section 94 of the Civil Procedure Act and Order 22 rule 7, that the Claimant's execution before taxation of costs was irregular, and ordered the Claimant to meet the auctioneer's charges. Each party was to bear its own costs of the motion. Judgment delivered at Nakuru on 29 May 2015.

Key legal issues

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01

Substantial loss as the threshold for stay of execution

Holding

The Respondent failed to show substantial loss; the Claimant held a legitimate judgment pronounced after hearing both sides

Reasoning

The Court applied the principle that substantial loss is the cornerstone of a stay application and must be demonstrated in the supporting affidavit, not merely asserted. The Respondent only stated that the decretal sum was large and that the Claimant might be unable to repay it, which the Court held was insufficient, applying Odunga J's dictum in the Wananchi Group case.

p. 2
02

Assertion that the decree holder is a man of straw

Holding

The contention that the decree holder cannot repay the decretal sum is not, without more, a basis for stay

Reasoning

Relying on Emukule J's dictum in Cosmas Kipkoech Sigei v Madrugada Ltd, the Court held that a stay will not be granted on the ground that the decree holder is a pauper. The Respondent produced no proof of the Claimant's inability to refund.

p. 2
03

Irregularity of execution before taxation of costs

Holding

The Claimant's execution before costs were ascertained by taxation was irregular; the sanction was that the Claimant bears the auctioneer's charges, not that the stay be granted

Reasoning

Section 94 of the Civil Procedure Act, applicable to the Court, provides that a decree should be executed forthwith but as to costs only after taxation. Order 22 rule 7 contemplates that costs be included in the application for execution. The Claimant executed before taxation, and for that irregularity was ordered to meet the auctioneer's charges.

p. 2
04

Timeliness of the stay application

Holding

The application was not filed timeously, as the Respondent waited until auctioneers moved in before moving to court

Reasoning

The Claimant deposed that despite service of a Notice of Appeal on 3 March 2015, the Respondent only acted when its property was proclaimed on 22 April 2015. The Court accepted this supported the view that the Respondent had gone into slumber, undermining the stay application.

p. 1

Legal principles established

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  • An applicant for stay must demonstrate substantial loss clearly in the supporting affidavit; merely stating the decretal sum is large is insufficient
  • A stay will not be granted on the ground that the decree holder is unable to refund the decretal sum
  • Execution should not issue before taxation of costs where costs have been awarded to the succeeding party unless the Court gives leave

Court orders

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  1. 1.The motion dated 24 April 2015 is dismissed
  2. 2.Each party to bear their own costs
  3. 3.The Claimant to meet the auctioneer's charges

Authorities

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Legislation

  • Civil Procedure Actsection 94
  • Civil Procedure RulesOrder 22 rule 7

Cases cited (2)

  • Republic v The Commissioner for Investigations and Enforcement ex parte Wananchi Group Kenya Ltd
    (2014) eKLR
  • Cosmas Kipkoech Sigei v Madrugada Ltd & Ar
    (2010) eKLR
Jurisdiction invoked
Inherent jurisdiction to regulate execution of its decrees; section 94 of the Civil Procedure Act (applicable to the Court's execution procedure)

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, "David Mbugua v Keroche Breweries Ltd [2015] KEELRC 933 (KLR)", Case Analysis (2015). Cause No 59 of 2014. Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2015/933/eng@2015-05-29

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