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High CourtPartially Allowed

Applicant v Respondent (Stay of Execution Pending Appeal)

High Court of Kenya
23 July 2020
2,202 words in judgment
View original judgmentRead on Kenya Law Watch case
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·~9 min to read original · ~4 min brief

The bottom line

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Appealing a judgment gives you the right to ask the High Court for a stay, but you must prove you face substantial financial loss.

What this practically means

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Executive summary

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The applicant, defendant in a suit in which judgment was entered against it on 30th January 2019 for KShs.9,984,002 plus costs and interest, appealed and sought stay of execution. The trial magistrate (Hon. P N Gesora, CM) granted stay on 7th October 2019 conditional on depositing the entire decretal amount within 21 days, giving credit for KShs.4,224,856 already deposited. The applicant moved the High Court by Notice of Motion dated 28th October 2019, seeking stay on condition that the sum already deposited continue to be held as security. The respondent opposed, arguing abuse of process, failure to demonstrate substantial loss, and that review rather than a fresh application was the proper route. The court held that under Order 42 Rule 6(1) of the Civil Procedure Rules, a party who has appealed has a right to apply for stay in the appellate court whether or not stay was granted or refused below, and that filing a fresh application was not an abuse of process. The application was filed without unreasonable delay. On substantial loss, the applicant's claim that depositing the balance of KShs.5,759,146 would affect its working capital was unsupported by evidence, the court applying Kenya Shell and Machira on the need for credible proof of substantial loss. Balancing the parties' competing interests, the court granted stay on condition that the applicant deposit the remaining KShs.5,759,146 in a joint interest-earning account within 60 days, failing which the stay would stand discharged. Costs of the application were ordered to abide the outcome of the appeal.

Key legal issues

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01

Whether a fresh stay application in the appellate court after the trial court has ruled on stay is an abuse of process

Holding

Not an abuse; the applicant merely exercised its right under Order 42 Rule 6(1)

Reasoning

Order 42 Rule 6(1) gives a party who has appealed a right to apply for stay in the appellate court whether or not stay was granted or refused below. The appellate court considers such an application independently and may make such orders as it deems fit. An aggrieved party may also apply to have the lower court's stay order set aside.

p. 2
02

Whether the applicant demonstrated substantial loss

Holding

No; the claim that depositing the balance would affect working capital was unsubstantiated

Reasoning

The onus of proving substantial loss rests on the applicant and must be discharged by credible evidence, not averments. Although the applicant is a going concern, no evidence showed it would fold up or how its operations would be adversely affected if the trial court's condition was upheld. However, balancing competing interests, stay was granted on terms securing the entire decretal sum.

p. 3
03

Timeliness of the application

Holding

Filed without unreasonable delay

Reasoning

Judgment was delivered on 30th January 2019, the appeal filed about a month later, a stay application was filed in the trial court the same day, and the present application was filed three weeks after the trial court's ruling on 7th October 2019.

p. 2

Legal principles established

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  • Once an appeal is filed, the appellate court has original jurisdiction to hear and determine a stay application afresh, whether or not stay was granted or refused by the court appealed from
  • Proof of substantial loss must be by credible evidence, not mere averments or unsubstantiated statements

Court orders

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  1. 1.Prayer 3 of the motion allowed: stay of execution of the lower court's judgment granted on condition that the applicant deposits the remainder of the decretal sum, KShs.5,759,146, in a joint interest-earning account operated by both counsel on record
  2. 2.The deposit shall be made within 60 days failing which the stay orders granted will stand discharged
  3. 3.Costs of the application to abide the outcome of the appeal
On appeal from
Magistrates' Court (trial court, Hon. P N Gesora, CM)
Jurisdiction invoked
Order 42 Rule 6(1) of the Civil Procedure Rules - appellate court's power to hear stay applications afresh

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, "Applicant v Respondent (Stay of Execution Pending Appeal)", Case Analysis (2020). . Source: 

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