Monarch Insurance Company Limited v Job Kilonzo Musau

3. d. The Appellant/Applicant filed a memorandum of appearance and statement of defence on 14th April 2023 and the court registry having accepted the said documents, it was deemed that there was no default judgement. e. The trial court gave a date for inter-parte hearing of the Appellant’s application on 10th May 2023 without providing stay of execution which execution’s seven (7) days' notice was set to lapse on 31st April 2023. That attachment and sale would have taken place before 10th May 2023 and the inter-parte hearing would be rendered moot and just an academic exercise f. The Applicant stands to suffer substantial loss if the application herein is not allowed as the Respondent will proceed with the process of execution. g. The Appellant has lodged an appeal in this court as the orders of the Honourable Magistrate are not supported by evidence that was tendered in court by the Appellant/ Applicant h. The Appellant’s appeal has a high probability of success and it be rendered nugatory if this application is not allowed. i. There shall be no prejudice to any party if this application is allowed as prayed, j. It is in the interest of justice to allow the present application. k. This application is brought in good faith and without any unreasonable delay This application is opposed by the Respondents who filed a Grounds of Opposition dated 29th May 2023on the basis that:i. The Applicants application is: a. Frivolous, incompetent and vexatious. b. Bad in law. c. Incurably defective. d. An abuse of the court process. e. An afterthought and brought in bad faith. f. Brought after inordinate delay. ii. the application herein is brought with unclean hands as it was only brought after proclamation was done. iii. the Appellant/Applicant has no Locus Standi as you cannot appeal a matter that is never defended. iv. the Appellant unprocedurally filed defence on 14/4/2023 which was ten (10) days after interlocutory judgment was entered on 3/4/2023. v. the sole purpose of this application as can be seen from the timing is to frustrate the process of execution and to buy time. vi. all procedural requirements were followed in the extraction of the decree. vii. the defendant is bound in law to satisfy the claim herein. https://new.kenyalaw.org/akn/ke/judgment/kehc/2025/14472/eng@2025-04-29 2

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viii. the defendant's/Applicant's failure to file defence on time clearly shows it has no defence at all to the Plaintiff's claim. ix. the Defendant/Applicant has not given good reasons as to why the application should be allowed. x. service of summons to enter appearance was personally done upon the defendants on 9/3/2023 and judgment in default of appearance entered procedurally. xi. the law is very clear on the consequences after being served with summons to enter appearance and failing to enter appearance and file defence and the law cannot be bend to suit individuals. xii. all legal procedural requirements were followed in entering the interlocutory judgment and this application is an abuse of the Court process. xiii. the Applicant's application lacks merit and an abuse of the Court's process. 4. The facts in this application are not in contention as there is a valid decree made in favour of the Respondent and which remains unsettled. The Applicant had sought stay of execution before the trial court in a application dated 25/4/2023 but which stay was not granted forcing the Applicant to file the instant application for stay of execution pending appeal. 5. Parties were directed to canvass the application through written submissions. The Applicant’s submission is dated 26th July 2023 filed by the firm of Kayuki & Kayika Advocates whilst the Respondent’s submission is dated 7th July 2023 filed by the firm of Mutunga & Co, Advocates. Analysis & Determination 6. I have carefully considered the Application, Supporting Affidavit, the Respondent's Grounds of opposition and the written submissions filed by the Parties’ Counsel. The only issue for determination is whether the Appellant has met the conditions necessary for the grant of stay pending appeal. 7. Stay of execution pending appeal is governed by Order 42 Rule 6 of the Civil Procedure Rules. It is evident from the said provision that power to grant stay of execution pending appeal is an exercise of discretion of the court on sufficient cause being shown by the Applicant that substantial loss may result to the applicant if the orders are denied; the application should be made without undue delay and the court will impose such security as the court may impose for the due performance of any decree or order as may ultimately be binding on the Applicant (see Butt Vs Rent Restriction Tribunal (1982) KLR 417 and James Wangalwa &Another Vs Agnes Nalika Chereto (2012)eKLR) 8. The case of Masis Mwita v Damaris Wanjiku Njeri (2016) eKLR provided the guiding principles which the court should consider while determining an application of this nature. These were; a. The power of the court to grant or refuse an application for stay of execution is a discretionary power. The discretion should be exercised in such a way as not to prevent an appeal. (b) 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 to be rendered nugatory should that appeal court reverse the judge's discretion. (c) A judge should not refuse 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. (d) The court in exercising the discretion whether to grant (or) refuse an application for stay will consider the special circumstances of the cases and unique requirements. https://new.kenyalaw.org/akn/ke/judgment/kehc/2025/14472/eng@2025-04-29 3

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9. Before I proceed further, I must say I am struggling to pick out the exact date of the judgment this application seeks to set aside and despite thorough perusal of the application, the grounds of opposition and the parties’ submissions, I have not come across the date of the relevant judgement or a copy the same. All that has been referred to is the interlocutory judgement entered on 3/4/2023 and a decree emanating from the judgment in Kangundo CMCC No. E032 of 2023-Aron Mutinda Musau v Monarch Insurance Company Limited. I am not able to tell whether the decree in the said case is on the interlocutory judgment or a subsequent judgment. 10. The Applicant stated that on 25th April 2023, the Chief Magistrate's Court issued a date for interparte hearing in relation to the Applicant's Notice of Motion application brought under certificate of urgency dated 25th April 2023 in relation to Kangundo CMCC No. E032 of 2023 -Aron Mutinda Musau vs Monarch Insurance Company Limited without issuing stay of execution orders pending the hearing and determination of the application. 11. That the Applicant faced an imminent and real danger of execution by the Respondent to satisfy the decree emanating from the default judgement entered in relation to Kangundo CMCC No. E032 of 2023 Aron Mutinda Musau vs Monarch Insurance Company Limited prompting it to file the instant application for stay of execution pending appeal. 12. It is not clear whether the Applicant’s application for stay of execution was withdrawn or what happened to it on 10th May 2023 when it was fixed for inter-partes hearing by the trial court. 13. The above notwithstanding, and having cited the case of Masis Mwita v Damaris Wanjiku Njeri (2016) eKLR (supra) on the guiding principles which the court should consider while determining an application for stay pending appeal, I will proceed to consider the instant application herein. 14. 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. As already, this court is in darkness as to when the decision as against which this appeal has been filed was delivered. The Applicant filed the initial application for stay of execution under certificate of urgency before the trial court on 25th April 2023. The trial court declined to grant the stay orders sought and the Applicant then lodged this application before this court on 27th April 2023, which was about one day after. Although the period between the refusal of the stay orders to the filing of this application is not inordinate, this court is unable to tell whether the application was made with undue delay in the absence of the judgement date. 15. The second criterion is whether the Applicant has demonstrated that it 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” 16. The Applicant submitted that they stand to suffer loss if the application is denied for the reason that they have an appeal that raises triable issues and the same will be rendered nugatory. The Applicant relied on the case of Michael Ntouthi Mitheu v Abraham Kivondo Musau [2021) eKLR where it was held that: “ Where execution of a money decree is sought to be stayed, in considering whether the applicant will suffer substantial loss, the financial position of the applicant and that of the respondent becomes an issue. The court cannot shut its eyes where it appears the possibility https://new.kenyalaw.org/akn/ke/judgment/kehc/2025/14472/eng@2025-04-29 4

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is doubtful of the respondent refunding the decretal sum in the event that the applicant is successful in his appeal. The court has to balance the interest of the applicant who is seeking 10 preserve the status quo pending the hearing of the appeal so [hat his appeal is not rendered nugatory and the interest of the respondent who is seeking to enjoy the fruits of his judgement”. 17. Further, the Applicant submitted that the Respondent has failed to demonstrate that he is engaged in any income generating activity and his means of income is unknown presumably insufficient and may not be able to repay the decretal sum together with costs just in case the same is paid to him. The Applicant relied on the case of G.N. Muema P/A (Sic) Mt View Maternity & Nursing Home v Miriam Bishar & Another [2018] eKLR where the court considered the respondent's ability to repay the decretal sum in case the appeal succeeded as there was no affidavit evidence by the respondent on record on the means. 18. I have perused the Respondent’s grounds of opposition and submission and he seems not to have addressed the issue of repayment of the decretal sum in the event it is paid to him and the Appellant’s appeal is successful in the end. I find that the Appellant’s argument on substantial loss is uncontroverted. 19. The third criterion is that the Applicant 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.” 20. 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 https://new.kenyalaw.org/akn/ke/judgment/kehc/2025/14472/eng@2025-04-29 5

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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, 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.” 21. 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”. 22. As regards security for costs, the applicants have stated that they are ready and willing to abide by any conditions this court may wish to attach to the grant of stay of execution pending the determination of the intended appeal including depositing the entire decretal sum together with cost as security to court or in a joint interest earning account in the names of both parties’ Advocates on record. 23. There is also no demonstration that the Respondent will suffer prejudice if the Applicant is allowed to exercise his right to appeal save that they will be delayed and denied the right to enjoy the fruits of their successful litigation. 24. Accordingly, I allow the Notice of Motion dated 27th April 2023 on the following terms: https://new.kenyalaw.org/akn/ke/judgment/kehc/2025/14472/eng@2025-04-29 6

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25. a. The Applicant shall deposit the entire decretal sum as security in a joint interest earning account in the names of both parties’ Advocates within Thirty (30) days of this ruling. b. The Appellants shall file and serve their Record of Appeal strictly within Thirty (30) days from the date hereof considering that the Lower Court file containing the typed proceedings is in this court file. c. Failure to comply with orders (a) and (b) above, execution to proceed. d. The costs of the application shall be in the appeal. Orders accordingly. RULING WRITTEN, SIGNED & DATED AT MACHAKOS THIS 29TH APRIL 2025 NOEL I. ADAGI JUDGE DELIVERED VIRTUALLY ON TEAMS AT MACHAKOS THIS 29TH APRIL 2025 In the presence of : Ms Keya........ for Appellant N/A.......... for Respondent Milly Grace .............Court Assistant https://new.kenyalaw.org/akn/ke/judgment/kehc/2025/14472/eng@2025-04-29 7

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