Beta Bakers Company Limited v Jemimah Muthike Mutua & 2 others

3. Directions were given for the application to be canvassed through written submissions. The Applicant’s submissions are dated 3rd December 2024 while the Respondent’s submissions are dated 31st January 2025. Appellant/Applicant’s Submissions 4. The Appellant submitted that the Appeal from which the instant application spawns was filed in time vide Memorandum of Appeal dated 24th May 2024. 5. That after filing the Memorandum of Appeal and securing a date at the registry, they served the Respondent through her Counsel’s email address where they requested her proposal regarding securing the decretal sum but Counsel did not respond to the email. They referred to annexure SD-3 to the supporting Affidavit to that effect. 6. Given that the matter had been set down for directions before Hon. Deputy Registrar Victoria Ochanda on 26th September 2024, they elected to wait for the mention to address the issue of stay of execution while on the floor. As per annexure SD4 to the Supporting Affidavit in the application. 7. The Appellant submitted that, immediately after they got wind of the events of 26th September 2024, they directed their Counsel to hold extensive discussions with the Respondent’s Counsel to agree on the security of the judgment sums. That even on the 5th day of November 2024, the Appellant proposed to secure the entire judgment sum by depositing it all into a joint interest-earning account in the names of the parties’ advocates respectively as per annexure SD-5 to the Supporting Affidavit in the application. 8. It is further submitted that the Respondent’s Counsel did not respond to the Appellant’s proposal forcing the institution of the instant application for appropriate orders to avoid adverse execution proceedings from commencing in the interim. Respondent’s Submissions 9. The Respondent submitted that the main issue for determination herein is whether the Appellant/ Applicant has met the threshold for granting of Stay Execution Orders as prayed in the application dated 07/11/2024. 10. It was submitted that the principles guiding the grant of a stay of execution pending appeal are well settled as provided under Order 42 rule 6(2) of the Civil Procedure Rules as follows: “ No order for stay of execution shall be made under subrule (1) unless— 11. a. the court is satisfied that substantial loss may result to the applicant unless the order is made; and b. that the application has been made without unreasonable delay; and c. such security as the court orders for the due performance of such decree or order as may ultimately be binding on him has been given by the applicant. On substantial loss, the Respondent submitted that the Applicant herein has not demonstrated any substantial loss they will suffer if stay of execution is not granted to them. On the other hand, the Respondent has a valid judgement and has a right to enjoy the fruits of her Judgement. Consequently, for the Judgement Debtor to be kept away from enjoying the fruits of her judgement, there must be substantial and tangible reason to do so. The Respondent cited the case of Kimarut J in Century Oil https://new.kenyalaw.org/akn/ke/judgment/kehc/2025/14418/eng@2025-06-11 2

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Trading Company Ltd vs. Kenya Shell Limited Nairobi (Milimani) HCMCA No. 1561 of 2007 where he stated that: “ The word "substantial" cannot mean the ordinary loss to which every judgement debtor is necessarily subjected when he loses his case and is deprived of his property in consequence. That is an element which must occur in every case and since the Code expressly prohibits stay of execution as an ordinary rule it is clear the words "substantial loss" must mean something in addition to all different from that”. 12. Reliance was also placed on the position of Warsame, J (as he then was) in Samvir Trustee Limited vs. Guardian Bank Limited Nairobi (Milimani) HCCC 795 of 1997, where he it was held as follows:“ It is a fundamental factor to bear in mind that, a successful party is prima facie entitled to the fruits of his judgement; hence the consequence of a judgement is that it has defined the rights of a party with definitive conclusion. The respondent is asserting that matured right against the applicant/defendant...For the applicant to obtain a stay of execution, it must satisfy the court that substantial loss would result if no stay is granted. It is not enough to merely put forward mere assertions of substantial loss, there must be empirical or documentary evidence to support such contention” 13. Moreover, in Kenya Shell Limited vs. Benjamin Karuga Kibiru [19861 KLR 410, the Court expressed itself as follows:“ It is usually a good rule to see if Order XLI Rule 4 of the Civil Procedure Rules can be substantiated. If there is no evidence of substantial loss to the applicant, it would be a rare case when an appeal would be rendered nugatory by some other event. Substantial loss in its various forms, is the corner stone of both jurisdictions for granting a stay. That is what has to be prevented. Therefore, without this evidence it is difficult to see why the respondents should be kept out of their money” 14. It was averred that the argument that the purpose of the stay being sought herein is for purposes of preserving the subject of the Appeal cannot be the basis of grant of stay of execution and this being a mere money decree, any amounts will be refunded by the Respondent who is a business lady at Sofia Market who has deponed in her response that she is able and willing to refund any amounts if need be. There is no justification whatsoever for holding that there is a likelihood that the Respondent will not repay the decretal sum if the appeal is successful and that the appeal will thereby be rendered nugatory. 15. On whether the application has been made without unreasonable delay, the Respondent submitted that the Applicant/Appellant herein filed this application on the 07/11/2024, days after the lapse of the 30 days stay of execution granted by the trial court. The Applicant/Appellant has not stated the reason for delay to file this application. It is apparent that the Appellant has only approached this court after it discovered that the Appeal was set down for mention as an afterthought and to buy time having filed and abandoned the Appeal. There is no explanation given for the delay to file this application which should be dismissed. 16. On proof of security, the Respondent submitted that the Applicant/Appellant herein has not demonstrated that it is willing and ready to provide security before for due performance of the decree or order to bind them pending the hearing and determination of the Appeal filed herein. The Deponent of the supporting Affidavit does not also mention anything to do with proof of security the Appellant is willing to offer as required and as such, the application as filed must fail. The Respondent cited the https://new.kenyalaw.org/akn/ke/judgment/kehc/2025/14418/eng@2025-06-11 3

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case of Gianfranco Manenthi Another vs Africa merchant Assurance Co. Ltd [20191 eKLR the court observed: ''The applicant must show and meet the condition of payment of security for due performance of the decree. Under this condition, a party who seeks the right of appeal from a money decree of the lower court for an order of stay must satisfy this condition on security. In this regard, the security for due performance of the decree under Order 42 Rule 6(1) of the Civil Procedure Rules, it is trite that the winner of litigation should not be denied the opportunity to execute the decree in order to enjoy the fruits of his judgment in case the appeal falls”. 17. Further Order 42 should be seen from the point of view that a debt is already owed and due for payment to the successful litigant in a litigation before a court which has delivered the matter in his favour. This is therefore to provide a situation for the court that if the appellant fails to succeed on appeal there could be no return to status quo on the part of the plaintiff to initiate execution proceedings where the judgment involves a money decree. 18. It was submitted that the Respondent will continue to suffer and be denied the fruit of the judgment delivered in her favour as it was demonstrated during trial in the subordinate court. The Respondent therefore asks the court to exercise its discretionary powers sparingly and dismiss this application, because it is a clear that the Applicant/Appellant has not provided this court with substantial proof to warrant the prayers sought in the application and the same is only filed as a "Holding Appeal'. 19. The Respondent submitted that the general rule is that the Court ought not to deny a successful litigant of the fruits of his judgment save in exceptional circumstances which must be ably demonstrated which is not the case here. That the orders being sought herein are discretionary in nature and discretionary power must not be exercised capriciously or whimsically. The Respondent relied on the case of Machira T/A Machira Co Advocates us. East African Standard (No 2) [20021 KLR 63 where it was held that: “ To be obsessed with the protection of an appellant or intending appellant in total disregard or flitting mention of the so far successful opposite party is to flirt with one party as crocodile tears are shed for the other, contrary to sound principle for the exercise of a judicial discretion. The ordinary principle is that a successful party is entitled to the fruits of his judgement or of any decision of the court giving him success at any stage.” 20. Reliance was also made to the decision of G V Odunga J in Victory Construction v BM (a minor suing through next friend one PMM) [20191 eKLR where the court expressed itself as follows:''In my view even if it were shown that the respondent is a man of lesser means, that would not necessarily justify a stay of execution as poverty is not a ground for denial of a person's right to enjoy the fruits of his success since lack of means per se is not necessarily a ground for granting stay.” 21. The Respondent concluded that in this case none of the principles to warrant grant of stay of execution pending Appeal has been ably demonstrated by the Applicant at all. The Applicant simply prays for stay only because they have filed an Appeal without more and as such, does not deserve grant of stay of execution as prayed. https://new.kenyalaw.org/akn/ke/judgment/kehc/2025/14418/eng@2025-06-11 4

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Analysis and Determination 22. I have considered the application, the supporting affidavit, the Replying Affidavit and the rival submissions filed by Parties counsel as well as the judicial decisions relied upon. In my view, the issues for determination are as follows: a. Whether the Applicant/Appellant has met the criteria for grant of orders of stay pending Appeal. b. Who shall bear costs of the application? a. Whether the Applicant/Appellant has met the criteria for grant of orders of stay pending Appeal. 23. The law relating to stay pending Appeal is Order 42 Rule 6 (2). It is also important to state that the power to grant an order of stay is discretionary and is dependent on certain conditions being met. 23. Order 42 rule 6(1) and (2) of the Civil Procedure Rules,2010 provides as follows: 23. 23. “ (1) No appeal or second appeal shall operate as a stay of execution or proceeding under a decree or order appealed from except in so far as the court appealed from may order but, the court appealed from may for sufficient cause order stay of execution of such decree or order, and whether the application for such stay shall have been granted or refused by the court appealed from, the court to which such appeal is preferred shall be at liberty, on application being made, to consider such application and to make such order thereon as may to it seem just, and any person aggrieved by an order of stay made by the court from whose decision the appeal is preferred may apply to the appellate court to have such order set aside. (2) No order for stay of execution shall be made under subrule (1) unless – (a) the court is satisfied that substantial loss may result to the applicant unless the order is made and that the application has been made without unreasonable delay; and (b) such security as the court orders for the due performance of such decree or order as may ultimately be binding on him has been given by the applicant.” In Vishram Ravji Halai vs. Thornton & Turpin Civil Application No. Nai. 15 of 1990 [1990] KLR 365, the Court of Appeal held that whereas the Court of Appeal’s power to grant a stay pending appeal is unfettered, the High Court’s jurisdiction to do so under Order 41 rule 6 of the Civil Procedure Rules is fettered by three conditions namely: i. establishment of a sufficient cause, ii. satisfaction of substantial loss and iii. the furnishing of security. Further the application must be made without unreasonable delay. https://new.kenyalaw.org/akn/ke/judgment/kehc/2025/14418/eng@2025-06-11 5

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23. To the foregoing, Justice Odunga in Michael Ntouthi Mitheu v Abraham Kivondo Musau [2021] eKLR held that: “ I would add that the stay may only be granted for sufficient cause and that the Court in deciding whether or not to grant the stay and that in light of the overriding objective stipulated in sections 1A and 1B of the Civil Procedure Act, the Court is no longer limited to the foregoing provisions. The courts are now enjoined to give effect to the overriding objective in the exercise of its powers under the Civil Procedure Act or in the interpretation of any of its provisions. According to Section 1A (2) of the Civil Procedure Act: “the Court shall, in the exercise of its powers under this Act or the interpretation of any of its provisions, seek to give effect to the overriding objective.” 28. Under Section 1B some of the aims of the said objective are; the just determination of the proceedings; the efficient disposal of the business of the Court; the efficient use of the available judicial and administrative resources; and the timely disposal of the proceedings, and all other proceedings in the Court, at a cost affordable by the respective parties. 29. In Stephen Boro Gitiha vs. Family Finance Building Society & 3 Others Civil Application No. Nai. 263 of 2009, Nyamu, JA on 20/11/09 held inter alia that the overriding objective overshadows all technicalities, precedents, rules and actions which are in conflict with it and whatever is in conflict with it must give way. 29. The same Judge in Kenya Commercial Bank Limited vs. Kenya Planters Co-Operative Union Civil Application No. Nai. 85 of 2010 held that: “ Where there is a conflict between the statute (overriding objective principle) and a subsidiary legislation (rules of the court) the statute must prevail. Although the rules have their value and shall continue to apply subject to being O2 complaint, the O2 principle is not there to fulfil them but to supplement them where they prove to be a hindrance to the O2 principle or attainment of justice and fairness in the circumstances of each case.” 30. It therefore follows that all the pre-Overriding Objective decisions must now be looked at in the light of the said provisions. This does not necessarily imply that all precedents are ignored but that the same must be interpreted in a manner that gives effect to the said objective. What is expected of the Court is to ensure that the aims and intendment of the overriding objective as stipulated in section 1A as read with section 1B of the Civil Procedure Act are attained. It is therefore important that the Court takes into consideration the likely effect of granting the stay on the proceedings in question. In other words, the Court ought to weigh the likely consequences of granting the stay or not doing so and lean towards a determination which is unlikely to lead to an undesirable or absurd outcome. What the Court ought to do when confronted with such circumstances is to consider the twin overriding principles of proportionality and equality of arms which are aimed at placing the parties before the Court on equal footing and see where the scales of justice lie considering the fact that it is the business of the court, so far as possible, to secure that any transitional motions before the Court do not render nugatory the ultimate end of justice. 31. The Court, in exercising its discretion, should therefore always opt for the lower rather than the higher risk of injustice. 32 In Butt Vs. Rent Restriction Tribunal [1979], the Court of Appeal gave pointers on what ought to be considered in determining whether to grant or refuse stay of execution pending appeal. The court stated thus: https://new.kenyalaw.org/akn/ke/judgment/kehc/2025/14418/eng@2025-06-11 6

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i. The power of the court to grant or refuse an application for a stay of execution is a discretionary, and the discretion should be exercised in such a way as not to prevent an Appeal. ii. The general principle in granting or refusing a stay is, if there is no other overwhelming hindrance, a stay must be granted so that an Appeal may not be rendered nugatory should the Appeal court reverse the judge’s discretion. iii. Thirdly, a judge should not refuse a stay if there are good grounds for granting it merely because, in his opinion, a better remedy may become available to the Applicant at the end of the proceedings. iv. Finally, the court in exercising its discretion whether to grant or refuse an application for stay will consider the special circumstances of the case and its unique requirements. i) The application has been made without unreasonable delay. 33. On the first criterion as set out in Order 42 Rule 6 (2) i.e. Whether Applicant/Appellant has brought this application without unreasonable delay. The Judgement was delivered 9th May 2024. The Memorandum of Appeal was filed on 27th May 2024. The trial court had granted the Applicant 30days stay of execution which lapsed resulting to filing of the instant application dated 7th November, 2024 and filed in court on the even date. This was about six (6) months down the line. I find that application has been brought with unreasonable and inordinate delay ii) Substantial Loss 18. The second criterion is whether the Applicant/Appellant has demonstrated that he is bound to suffer substantial loss if orders of stay of execution are not granted. The question that follows is what comprises substantial loss. In Silverstein Vs Chesoni (2002)1 KLR 867 it was held that “ The issue of substantial loss is the cornerstone of both jurisdictions. Substantial loss is what has to be prevented by preserving the status quo because such loss would render the Appeal nugatory” 19. The Appellant/Applicant has not shown at all whether in the application or submissions that it stands to suffer any substantial loss if the orders sought herein are declined. 20. The Respondent on the other hand submitted that this being a mere money decree, any amounts will be refunded by the Respondent who is a business lady at Sofia Market who has deponed in her response that she is able and willing to refund any amounts if need be. There is no justification whatsoever for holding that there is a likelihood that the Respondent will not repay the decretal sum if the appeal is successful and that the appeal will thereby be rendered nugatory. 21. The court is under a duty to hold the rings of justice even handed; it should not offer any illegitimate advantage to either party. The Appellant/Applicant appeals to this Honourable Court to grant stay of execution so as to enable the applicant an opportunity to be heard on his Appeal. See James Wangalwa & Another vs. Agnes Naliaka Cheseto [2012] eKLR, where it was held that: “ No doubt, in law, the fact that the process of execution has been put in motion, or is likely to be put in motion, by itself, does not amount to substantial loss. Even when execution has been levied and completed the attached properties have been sold, as is the case here, does not in itself amount to substantial loss under Order 42 Rule 6 of the CPR. This is so because execution is a lawful process. The applicant must establish other factors which show that https://new.kenyalaw.org/akn/ke/judgment/kehc/2025/14418/eng@2025-06-11 7

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the execution will create a situation that will irreparably affect or negate the very essential core of the applicant as the successful party in the appeal ... the issue of substantial loss is the cornerstone of both jurisdictions. Substantial loss is what must be prevented by preserving the status quo because such loss would render the appeal nugatory." 22. The loss the Appellant has alluded to is that the appeal herein will be rendered nugatory should the stay order be declined. It is my considered view that this being a monetary claim, any loss to be suffered by either party can adequately be compensated by an award in damages. iii) Security for costs 23. The third criterion is that the Applicant/Appellant must furnish security for the due performance of the decree. I am fully aware that the court has a delicate task of balancing the interests of both the Appellant and the Respondent. The Appellant who seeks to preserve the status quo pending the hearing of the Appeal so that his Appeal is not rendered nugatory and the interest of the Respondent who is seeking to enjoy the fruits of his judgement. It is true that under Order 42 rule 6 aforesaid, the Applicant is required to offer security for the due performance of the decree and the Court is entitled to take into account the fact that no such security has been offered in deciding an application thereunder. I agree with the position in Mwaura Karuga t/a Limit Enterprises vs. Kenya Bus Services Ltd & 4 Others [2015] eKLR, where it was held that: “ … the security must be one which shall achieve due performance of the decree which might ultimately be binding on the applicant. The rule does not, therefore, envisage just any security. The words ‘’ultimately be binding’ are deliberately used and are useful here, for they refer to the entire decree as will be payable at the time the appeal is lost. That is the presumption of law here. Therefore, the ultimate decree envisaged under order 42 rule 6 (2) (b) of the Civil Procedure Rules includes costs and interest on the judgment sum unless the latter two were not granted-which is seldom. The security to be given is measured on that yardstick.” 24. I also associate myself with the holding in Gianfranco Manenthi & Another vs. Africa Merchant Assurance Company Ltd [2019] eKLR, where the court observed: “ … the applicant must show and meet the condition of payment of security for due performance of the decree. Under this condition a party who seeks the right of appeal from money decree of the lower court for an order of stay must satisfy this condition on security. In this regard, the security for due performance of the decree under order 42 rule 6(1) of the Civil Procedure Rules, it is trite that the winner of litigation should not be denied the opportunity to execute the degree in order to enjoy the fruits of his judgment in case the appeal fails. Further, order 42 should be seen from the point of view that a debt is already owed and due for payment to the successful litigant in a litigation before a court which has delivered the matter in his favour. This is therefore to provide a situation for the court that if the appellant fails to succeed on appeal there could be no return to status quo on the part of the plaintiff to initiate execution proceedings where the judgement involves a money decree. The court would order for the release of the deposited decretal amount to the respondent in the appeal … This the objective of the legal provisions on security was never intended to fetter the right of appeal. It was also put in place to ensure that courts do not assist litigants to delay execution of decrees through filing vexatious and frivolous appeals. In any event, https://new.kenyalaw.org/akn/ke/judgment/kehc/2025/14418/eng@2025-06-11 8

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the issue of deposit of security for due performance of decree is not a matter of willingness by the applicant but for the court to determine.” 25. The law is that where the applicant intends to exercise its undoubted right of appeal, and in the event, it were eventually to succeed it should not be faced with a situation in which it would find itself unable to get back its money. Likewise, the Respondent who has a decree in his favour should not, if the applicant were eventually to be unsuccessful in its intended appeal, find it difficult or impossible to realize the decree. This is the cornerstone of the requirement for security. The issue of adequacy of security was dealt with by the Court of Appeal in Nduhiu Gitahi vs. Warugongo [1988] KLR 621; 1 KAR 100; [1988-92] 2 KAR 100 where the Court of Appeal expressed itself as follows: “ The process of giving security is one, which arises constantly. So long as the opposite party can be adequately protected, it is right and proper that security should be given in a way, which is least disadvantageous to the party giving the security. It may take many forms. Bank guarantee and payment into court are but two of them. So long as it is adequate, then the form of it is a matter, which is immaterial. In an application for stay pending appeal the court is faced with a situation where judgement has been given. It is subject to appeal. It may be affirmed or it may be set aside. The court is concerned with preserving the rights of both parties pending that appeal. It is not the function of the court to disadvantage the defendant while giving no legitimate advantage to the plaintiffs. It is the duty of the court to hold the ring even-handedly without prejudicing the issue pending the appeal. For that purpose, it matters not whether the plaintiffs are secured in one way rather than another. It would be easier for the defendants or if for any reason they would prefer to provide security by a bank guarantee rather than cash. There is absolutely no reason in principle why they should not do so. The aim of the court in this case was to make sure, in an even-handed manner, that the appeal would not be prejudiced and that the decretal sum would be available if required. The respondent is not entitled, for instance, to make life difficult for the applicant, so as to tempt him into settling the appeal. Nor will either party lose if the sum is actually paid with interest at court rates. Indeed, in this case there is less need to protect the defendant because nearly half the sum will have been paid and the balance was at one stage open to negotiation to reduce it”. 28. In this case, the Applicant has not offered any security. However, that failure to offer security does not preclude this court from making such order for security, since the applicant cannot have it both ways; that he is unable to settle decree and that he is unable to raise security for the due performance of decree. The Applicant deposed that it is willing to deposit the entire decretal sum into court’s custody to guarantee that it serves as security pending the determination of the appeal. b) Who should bear the cost of this application? 29. On the question of costs of the application, the general rule is that costs shall follow the event in accordance with the provisions of Section 27 of the Civil Procedure Act (Cap. 21). A successful party should ordinarily be awarded costs of an action unless the court, for good reason, directs otherwise. In Jasbir Singh Rai & 3 others Vs Tarlochan Singh Rai & 4 others SC. Petition No. 4 of 2012: [2014] eKLR. The Supreme Court held that costs follow the event and that the Court has the discretion in awarding such costs. 30. Taking all the above factors into account and in order not to render the intended appeal nugatory as well as to give effect to the overriding objective of the Civil Procedure Act, I find and hold that the https://new.kenyalaw.org/akn/ke/judgment/kehc/2025/14418/eng@2025-06-11 9

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Appellant/Applicant has fulfilled the requirements of loss and willingness to offer security for grant of stay of execution pending appeal as stipulated under Order 42 Rule 6 of the Civil Procedure Rules. 31. 32. Accordingly, I hereby allow the Appellant/Applicant’s application dated 7th November, 2024 and grant stay of execution of the judgment of Hon. Paul Matanda Wechuli in KITHIMANI PMCC NO. E287 OF 2022 that was delivered on 9th May 2024 pending the hearing and determination of the appeal on the following conditions: a. The Appellant/ Applicant shall deposit the entire decretal sum into an interest earning account in a reputable commercial Bank, to be held by both advocates for the Parties to this appeal, within 30 days of this ruling in default execution to proceed; b. The Appellant shall file and serve a record of appeal within Forty-Five (45) days of this ruling; c. Costs shall be in the appeal; d. The appeal shall be mentioned on a date to be fixed for directions on the mode of disposal of the appeal. It is so ordered. RULING WRITTEN, DATED & SIGNED AT MACHAKOS THIS 11TH JUNE 2025 NOEL I. ADAGI JUDGE DELIVERED VIRTUALLY ON TEAMS AT MACHAKOS THIS 11TH JUNE 2025 In the presence of : Mr. Dede...... for Appellant/Applicant Ms. Chelangat hb for Mr. Mwihia................. ..for Respondent Milly.................... Court Assistant https://new.kenyalaw.org/akn/ke/judgment/kehc/2025/14418/eng@2025-06-11 10

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