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ELRCPartially AllowedNot stated in the judgment (arising from a decree issued on 1st December 2017)· [2018] KEELRC 2319 (KLR)

Humphrey Mukundi Mwangi v Brade Gate Holdings Limited [2018] KEELRC 2319 (KLR)

Employment and Labour Relations Court
7 February 2018
1,347 words in judgment
View original judgmentRead on Kenya Law Watch case
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The bottom line

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A Kenyan court stopped execution of a Kshs. 2.3 million judgment, but only if the losing employer deposits the full amount and pays costs within 21 days.

What this practically means

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Executive summary

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The Respondent/Applicant, the judgment debtor, moved the Employment and Labour Relations Court at Nyeri by Notice of Motion dated 8th January 2018 seeking a stay of execution of the decree issued on 1st December 2017 for Kshs. 2,320,881.46, pending an intended appeal against the judgment delivered on 14th July 2017. The application, supported by the affidavit of Rawlings Thuo Mathenge, explained that former advocates had failed to seek a stay, that auctioneers had proclaimed the applicant's assets, and that the assets were charged to Family Bank; the applicant feared irreparable loss and inability of the claimant to refund the decretal sum if the appeal succeeded. The Claimant/Respondent opposed, contending there was no evidence that the proclaimed assets were unavailable for attachment, no demonstration of prejudice, and that the application was an abuse of process. The court, Nzioki wa Makau J, applied the settled criteria from Halai & Another v Thorton & Turpin (1963) Ltd, Hassan Guyo Wakalo v Straman East Africa Ltd and Butt v Rent Restriction Tribunal: sufficient cause, substantial loss, security, absence of unreasonable delay, and whether the appeal would be rendered nugatory. The court found the draft memorandum disclosed an arguable appeal; rejected as unevidenced the assertion that the proclaimed goods were charged property and held them amenable to attachment; found the decretal sum of over Kshs. 2 million substantial such that non-refund would constitute substantial loss; and noted no security had been furnished but the applicant offered to meet conditions. In the interests of justice, a conditional stay was granted: deposit of the decretal sum in a joint interest-earning account and payment of Kshs. 50,000/- thrown away costs within 21 days.

Key legal issues

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01

Whether an arguable appeal constitutes sufficient cause

Holding

Yes – the draft memorandum of appeal annexed to the application showed an arguable appeal, satisfying the first limb of the Halali criteria

Reasoning

The court examined the draft memorandum of appeal annexed to the application and found the intended appeal arguable. This satisfied the first of the three conditions for stay as laid down in Halai & Another v Thorton & Turpin (1963) Ltd, namely that the applicant must establish a sufficient cause for the grant of the discretionary remedy of stay.

p. 3
02

Whether the proclaimed assets were unavailable for attachment as charged property

Holding

No – mere averment that property is subject to a debenture or charge is insufficient; no evidence was annexed, so the goods remain amenable to attachment

Reasoning

The applicant asserted that the proclaimed assets were charged to Family Bank and thus unavailable for attachment. The court held that an averment unsupported by documentary evidence cannot displace the decree holder's right to attach, finding the proclaimed goods amenable to attachment despite the claim of a security interest.

p. 3
03

Whether substantial loss would ensue from refusal of the stay

Holding

Yes – the decretal sum of over Kshs. 2 million is substantial, and inability of the claimant to refund it upon a successful appeal would constitute substantial loss

Reasoning

The court accepted that the decretal sum of over two million shillings, with interest, was substantial. It reasoned that should the applicant succeed on appeal and the claimant be unable to refund the sum paid, the applicant would suffer substantial loss, thereby satisfying the second condition for the grant of a stay.

p. 3
04

Whether the applicant satisfied the security condition

Holding

Not strictly – the applicant had not furnished security but offered to meet any conditions the court imposed; the court therefore granted a conditional stay

Reasoning

Although the applicant had not actually furnished security as required by the third condition, the court noted the offer to comply with any conditions imposed. Rather than refuse the application, the court converted the offer into enforceable terms: deposit of the decretal sum in a joint interest-earning account and payment of thrown away costs within 21 days.

p. 3

Legal principles established

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  • The High Court's discretion to stay execution is fettered by three conditions: sufficient cause, substantial loss, and security; the application must be made without unreasonable delay
  • The applicant must also show that the appeal, if successful, would not be rendered nugatory; the twin principles go hand in hand
  • Stay is discretionary and depends on the particular circumstances of each case, exercising the court's best discretion so as not to render a successful appeal nugatory

Court orders

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  1. 1.Stay of execution of the decree dated 1st December 2017 granted pending the hearing and determination of the intended appeal, on conditions
  2. 2.The Respondent/Applicant to deposit Kshs. 2,320,881.46 in an interest-earning account in the joint names of the advocates for the Claimant/Respondent and Respondent/Applicant
  3. 3.The Respondent/Applicant to pay thrown away costs assessed at Kshs. 50,000/- within 21 days, to meet auctioneers' charges and incidentals
  4. 4.The stay is conditional on compliance with these terms within 21 days

Authorities

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Cases cited (4)

  • Halai & Another v Thorton & Turpin (1963) Ltd
    [1990] KLR 365
  • Hassan Guyo Wakalo v Straman East Africa Ltd
    [2013] eKLR
  • Butt v Rent Restriction Tribunal
    [1982] KLR 417
  • Wilson v Church (No. 2)
    12 Ch D (1879) 454
Jurisdiction invoked
Inherent discretion to stay execution of the court's own decree pending appeal (Order 42 criteria as articulated by the Court of Appeal); the judgment does not cite a specific constitutional or statutory provision

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, "Humphrey Mukundi Mwangi v Brade Gate Holdings Limited [2018] KEELRC 2319 (KLR)", Case Analysis (2018). Not stated in the judgment (arising from a decree issued on 1st December 2017). Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2018/2319/eng@2018-02-07

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