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ELRCPartially AllowedNot stated in the judgment· [2016] KEELRC 1175 (KLR)

David G. Warwathe & Joseph Kirai Ndung’u v Kiambu Unity Finance Co-operative Union [2016] KEELRC 1175 (KLR)

Employment and Labour Relations Court
12 May 2016
HWHellen Wasilwa
1,228 words in judgment
View original judgmentRead on Kenya Law Watch case
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·~5 min to read original · ~4 min brief

The bottom line

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A Kenyan employment court stopped a damages payout pending appeal, but only because the appellant agreed to deposit the full judgment sum in a joint interest-earning account.

What this practically means

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Executive summary

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The Applicants, who were the appellants in an appeal from the Nairobi Chief Magistrates Court, brought a notice of motion dated 13 January 2016 seeking stay of execution of a decree of 5 June 2015 pending appeal to the Court of Appeal. The underlying ruling of 29 June 2015 had awarded the Respondents Kshs. 436,074 and Kshs. 323,298 respectively as damages for unfair termination. The Applicants, through the affidavit of their CEO Simon Njenga, argued that the Respondents, no longer in employment, would be unable to refund the decretal sum if the appeal succeeded, and offered to deposit the sum in an interest-earning account. The Respondents, through David Gichuhi Warwathe, opposed the application, contending there was no demonstration of substantial loss, that the application was filed after an inordinate six-month delay, and that it was designed merely to deny them the fruits of judgment. Relying on Order 42 Rule 6(2), the court identified the twin conditions of substantial loss, absence of unreasonable delay, and security. Although it found the six-month delay of great magnitude, the court exercised its discretion to excuse it so the appeal would not be rendered nugatory. On 12 May 2016 the court granted stay of execution conditional upon the entire decretal sum being deposited in a joint interest-earning account in the joint names of counsel on record within 30 days, failing which execution would issue. No costs order was recorded.

Key legal issues

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01

Unreasonable delay in filing the stay application

Holding

The delay of over six months was of great magnitude, but the court exercised its discretion to excuse it to preserve the appeal

Reasoning

The judgment was delivered on 29 June 2015 and the application filed on 13 January 2016, a period of over six months. Under Order 42 rule 6 such delay fetters the court's discretion. However, the court held that stay orders exist to ensure an appeal is not rendered nugatory, and exercised its discretion to excuse the delay in order to preserve the substratum of the appeal, subject to conditions.

p. 3
02

Substantial loss and ability to refund the decretal sum

Holding

The court accepted the risk that the decretal sum could not be recovered if paid out, given the Respondents' admission they are no longer in employment

Reasoning

The Applicants contended that the Respondents, no longer in employment, would be unable to refund the decretal sum if the appeal succeeded, citing S Mehta & Sons for the proposition that the Respondent's assets are within his peculiar knowledge. The Respondents did not demonstrate means. The court nonetheless protected the Respondents by conditioning stay on deposit of the full decretal sum in an interest-earning joint account.

p. 2

Legal principles established

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  • Stay of execution requires substantial loss, absence of unreasonable delay, and security for due performance of the decree
  • Delay may be excused where necessary to preserve the substratum of the appeal

Court orders

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  1. 1.Stay of execution of the decree given on 5th June 2015 granted pending appeal
  2. 2.Entire decretal sum to be deposited in a joint interest earning account held in the joint names of counsels on record within 30 days
  3. 3.In default of the deposit, execution to issue

Authorities

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Legislation

  • Civil Procedure Rules 2010 (referred to in the judgment as 'Criminal Procedure Rules 2010')Order 42 Rule 6(2)
  • Employment Act2007 (referenced as coming into force after the terminations)

Cases cited (2)

  • S Mehta & Sons Vs Stephen Ndungu Mwaura & Another
    (2007) eKLR
  • Machira t/a Machira & Co. Advocates Vs East African Standard
    (2002) 2 KLR 63
On appeal from
Nairobi Chief Magistrates Court
Not stated
Jurisdiction invoked
Order 42 Rule 6(2) of the Civil Procedure Rules 2010 (cited in the judgment, though misdescribed as 'Criminal Procedure Rules')

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 G. Warwathe & Joseph Kirai Ndung’u v Kiambu Unity Finance Co-operative Union [2016] KEELRC 1175 (KLR)", Case Analysis (2016). Not stated in the judgment. Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2016/1175/eng@2016-05-12

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