Apa Insurance Limited v Patrick Munyao Kisingi

b. That the said judgement declared and ordered inter alia that: i. The Appellant is liable and is duty bound under the insurance policy issued to the Respondent to settle any claims arising from a road traffic accident that occurred on I St October 2012 in respect of the Respondent's motor vehicle registration number KBN XXXX. ii. The Appellant to perform all its contractual obligations to the Respondent and all third-party claims as per the insurance policy number P/A0816/0000240 issued in favour of the Respondent on 12th May 2012. iii. A declaration is hereby made that public policy enjoins the Appellant to uphold the contract in terms of the compulsory third party insurance dimensions of the contract dated 12th May 2012. iv. Costs of the suit. c. That there is an injury compensation suit that is alleged to arise from the said road traffic accident being Kthimani PMCC No. 74 of 2013 that had apparently been kept on hold to await the judgement appealed against herein but is now being fast tracked before the same court for the purpose of compelling the Appellant herein to settle the damages that are to be awarded therein. d. That the Respondent has so far quantified the costs at Kshs, 146,145.00 and may move at any time to extract decree and warrants for a threatened execution against the Appellant since the order of stay of execution that was granted upon the delivery of judgement has since lapsed on 18th June 2014, e. That the Appellant/Applicant being aggrieved by the said judgment have preferred the instant appeal. f. That the Appellant is reasonably apprehensive that the Respondent may proceed to execute the decree of the lower court to the Appellant/Applicant’s detriment as the appeal herein will then be rendered nugatory. g. That the Appellant/Applicant wishes to have a chance to have its day on appeal and there is therefore a need to have an order of stay of execution in place herein pending the hearing and determination of the application herein and indeed, the Appeal. h. That the Appellant's/Applicant's appeal has merit and with high chances of success and the appeal whose grounds are set out in the memorandum of appeal that is on the record and further exhibited to this application. i. That the appeal will be rendered nugatory and the Appellant will suffer and lose irreparably if the order for stay of execution is not granted as the Respondent is of no means to refund the costs if paid and the orders emanating from the Kthimani PMCC No. 74 of 2013 are enforced against the Appellant. j. That unless the application is admitted for hearing as urgent and orders of stay of execution granted ex parte on interim basis, the Respondent who has already threatened execution will proceed with the execution against the Appellant/Applicant's attachable property at any time and thereby render the application herein and the Appeal an academic exercise in the very likely event that the appeal succeeds. https://new.kenyalaw.org/akn/ke/judgment/kehc/2025/14474/eng@2025-04-30 2

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3. k. That the appeal herein is in good faith as the Appellant has already moved with speed to fast track the processing of the appeal and applied for certified copies of the proceedings, judgement and decree for the purpose of preparing a record of appeal. l. That the Appellant is ready to comply with any conditions as to security for granting the orders sought. In particular, securing the amount of costs awarded to the Respondent as may properly be assessed by the lower court. Otherwise, the Appellant is a reputable insurance company with sufficient financial muscle to comply with any order of the court that may be passed against it. m. That the Appellant/Applicant has sufficient cause for seeking the orders sought. This application is opposed by the Respondent who filed a Replying Affidavit sworn by the Respondent dated 9th July 2024 on the basis that: a. The Applicant's application is vexatious and waste of court time and the same has been brought in bad faith with the intention of prolonging the end of this matter, and the orders sought therein are deliberately meant to obstruct or delay cause of justice and denying enjoying the fruits of justice especially now that the Applicant has nor offered any security whatsoever. b. The Respondent is a renowned business man based in Matuu Town and is able and willing to reimburse to the Appellant/Applicant any sums of money that might be required of him in the event that the Appeal succeeds and that might not be necessarily be the case as the primary suit being Kthimani PMCC No. 74 of 2013 which the Applicant is expected to settle is yet to be determined by the trial court and the same might even be dismissed if the Applicant was to take over its contractual responsibility and ably defend the same as required, c. Order 42, rule 6 of the Civil Procedure Rules states that no appeal operates as a stay of execution or proceedings under a decree or order appealed, except when the court finds it is reasonable to do so, which in this case the Applicant has not fulfilled the requirements for stay of execution instead the Applicant only aim is evading its contractual obligations under the Insurance Act in terms of upholding the contract between the parties herein in terms of compensating and/or settling any claims arising from Kthimani PMCC No.74 of 2013 which is still pending before the lower court as the same had been stayed pending the hearing and determination of the test suit which is the subject matter of the instant Appeal. d. The Respondent is not the only one who will be prejudiced as the Plaintiff in Kthimani PMCC No. 74 of 2013 will continue to suffer irreparable harm as his case has been pending before court for over a decade now whereas the Applicant herein can easily recoup any amounts and or compensation from the Respondent in the unlikely event that the instant Appeal succeeds. e. In law the fact that the process of execution is likely to be put in motion, by itself, does not amount to substantial loss. Even when execution has been levied and completed, that is to say, the attached properties have been sold, which is not the case here, does not in itself amount to substantial loss under Order 42 Rule 6 of the Civil Procedure Rules. The fact that the Applicant is dissatisfied with the lower court's decision does not in any way demonstrate any substantial loss. It is incumbent upon the Applicant to demonstrate the substantial loss by way of placing material evidence before the court for consideration especially now that the nature of the Judgement herein is declaratory in nature. This is also so because execution is a lawful process and the Respondent is entitled to execute for costs of the lower court as directed by the trial court. https://new.kenyalaw.org/akn/ke/judgment/kehc/2025/14474/eng@2025-04-30 3

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f. That the instant Application totally lacks merit as from the way it is crafted, it is well designed on conjectures and hence I pray that the Applicants should be compelled to pay the full the decretal amount plus costs and interest therein. g. The Applicants' insurer is not a party to this suit and as such, the Applicants are not ready and willing to furnish any form of security as a condition for granting of the Orders for Stay of Execution and as such, they do not deserve the Orders sought in their application. h. The mere fact that the Appellant/Applicant is of the opinion that it is absolved from meeting its contractual obligations under the Insurance (Motor Vehicles Third Party Risks) Act does not prevent it from settling the decretal sum and then suing the Respondent for compensation or reimbursement in the unlikely event that the instant Appeal succeeds. i. The Respondent will be prejudiced if the application is allowed since the judgment before this court is lawful and there is no justifiable cause to warrant the orders sought and moreover, I continue to incur legal costs in the primary suit being Kthimani PMCC No. 74 of 2013 which is still pending before court and as such the instant Application is instead is a total waste of precious judicial time. j. The Applicant herein will not suffer any prejudice if the orders sought in the application dated 18th June, 2024 are not granted as the Appellant/Applicant has been aware of the judgment since it was rendered and no action has been taken forthwith by the said Applicant and more so especially since the primary suit being Kthimani PMCC No. 74 of 2013 is yet to be determined by the lower court. k. The instant application totally lacks merit as from the way it is crafted, it is well designed on conjectures especially since the deponent of the Supporting Affidavit thereof is not a designated officer of the Appellant/Applicant Company but just a mere temporary employee and as such a stranger to this suit and hence the application should be dismissed and in the unlikely event that the same is allowed, I pray that the Applicant should be compelled pay the costs of the lower court file which were duly awarded to the Respondent of Kshs.146, 145/= as per the tabulation dated 29th May, 2024 which was served upon the Applicant's counsel and has not been contested by the Applicant. l. The Respondent prays that the instant application be dismissed with costs. 4. The facts in this application are not in contention as there is a valid declaratory judgement together with costs made in favour of the Respondent dated 18th May 2024 (the year is erroneously indicated as 2014 by the Applicant) and which costs remain unsettled. The Applicant had orally sought for a stay of execution before the trial court upon delivery of the judgement on 15th May 2024 but which stay lapsed on 18th June 2024 forcing the Applicant to file the instant application dated 18th June 2024 for stay of execution pending appeal. 5. Parties were directed to canvass the application through written submissions. The Applicant’s submission is dated 2nd October 2024 filed by the firm of Ochieng’ K & Associates whilst the Respondent’s submission is dated 22nd October 2024 filed by the firm of Fred Mwihia & Co, Advocates. https://new.kenyalaw.org/akn/ke/judgment/kehc/2025/14474/eng@2025-04-30 4

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Analysis & Determination 6. I have carefully considered the Application, Supporting Affidavit, the Replying Affidavit 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. I. Application to be ffiled without unreasonable delay 9. 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 declaratory judgement together with costs made in favour of the Respondent was delivered on 18th May 2024. The Applicant had orally sought for a stay of execution before the trial court upon delivery of the judgement on 15th May 2024 but which stay lapsed on 18th June 2024 forcing the Applicant to file the instant application dated 18th June 2024 for stay of execution pending appeal. This application was therefore filed a month later from the date of the judgment or on the date of lapse of the initial stay orders by the trial court. The application was therefore brought without unreasonable delay. https://new.kenyalaw.org/akn/ke/judgment/kehc/2025/14474/eng@2025-04-30 5

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II. Substantial loss 10. 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” 11. The Applicant submitted that there is an injury compensation suit that is alleged to arise from the road traffic accident subject of this matter being Kthimani PMCC No. 74 of 2013 that had apparently been kept on hold to await the judgement appealed against herein but is now being fast tracked before the same court for the purpose of compelling the Appellant herein to settle the damages that are to be awarded therein. 12. That the Respondent has so far quantified the costs at Kshs.146,145.00 and may move at any time to extract decree and warrants for a threatened execution against the Appellant since the order of stay of execution that was granted upon the delivery of judgement has since lapsed. 11. The appeal will be rendered nugatory and the Appellant will suffer and lose irreparably if the order for stay of execution is not granted as the Respondent is of no means to refund the costs if paid and the orders emanating from the Kthimani PMCC No. 74 of 2013 are enforced against the Appellant. The Applicant relied on the case of James Wangalwa & Another vs. Agnes Naliaka Cheseto Bungoma HC Misc Application No 42 of 2011 (cited with approval in Nesco Services Limited v Cm Construction (EA) Limited where the Court in that case expressed itself as follows: “ The applicant must establish other factors which show that the execution will create a state of affairs that will irreparably affect or negate the very essential core of the Applicant as the successful party in the appeal. This is what substantial loss would entail...” 11. The Applicant is a reputable Insurance Company. The inglorious process of attachment and sale would be devastating on the Applicant’s image and business reputation. It is not possible to estimate the loss of business that would flow from the Appellant Company being exposed to attachment and sale. 13. Additionally, the Respondent has alleged that he is a renowned business man who is able to reimburse the appellant should the appeal succeed; there is no financial records to prove the said allegations by the respondent. The Applicant thus submitted that the Respondent is a person undertaking a financial commitment without adequate means and more than likely may not repay the said sum in the event of the appeal succeeds. 14. In rebuttal, the Respondent submitted that, the aim of the stay being sought herein is for purposes of preserving the subject of the Appeal, that an Appeal cannot be the basis of grant of stay of execution. It is apparent that the intended appeal is premised on a declaratory judgement and the Respondent does not understand how such an appeal can be rendered nugatory if the stay is refused as the Appellant can always be reimbursed and in any event, the primary suit being Kthimani CMCC No 74 of 2013 is still pending in court and there is no judgement to settle yet. The Respondent argue that any amounts will be refunded by him as he is a businessman. There 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. The Respondent relied on the case of Kimaru, J in Century https://new.kenyalaw.org/akn/ke/judgment/kehc/2025/14474/eng@2025-04-30 6

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Oil 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” 15. The Respondent also placed reliance 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 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." 16. The Respondent further referred to the decision in Kenya Shell Limited vs. Beniamin Karuga Kibiru [1986] KLR 410 where 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?'. 17. In addition, no Decree and or Warrants of Attachment have been taken out by the Defendant in the lower court and as it stands there is no imminent threat of execution at all to warrant a stay of execution. 18. I am able to ascertain from the pleadings herein that there is the primary suit being Kthimani PMCC No. 74 of 2013 which is still pending in court and there is no judgement to settle yet. The said suit was stayed pending determination of the declaratory suit in Kthimani CMCC No. 68 of 2019 from which this appeal arises. 19. The declaratory suit in Kthimani CMCC No. 68 of 2019 has now been determined followed by the instant appeal arising from the said determination thereof. It is my opinion that following the determination in Kthimani CMCC No. 68 of 2019, then Kthimani PMCC NO. 74 OF 2013 ought to be allowed to proceed for hearing and determination. 20. Clearly, what the Applicant is expected to pay in the declaratory suit are costs which have already been incurred and tabulated at Kshs.146,145.00 which the Applicant has not contested in this application. 21. The Applicant has not demonstrated that substantial loss would result if no stay is granted. In any event, if the Plaintiff in the primary suit is successful and judgment is to be entered in his favour, it will be a monetary award just like the costs which have been awarded in the declaratory suit that is capable of being compensated by an award in damages. https://new.kenyalaw.org/akn/ke/judgment/kehc/2025/14474/eng@2025-04-30 7

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22. The Respondent has deponed under oath that he is a man of means being a reknown businessman based at Matuu Township, a fact which has also not been controverted by the Applicant. 23. On the foregoing, I find that the Appellant has not demonstrated that it will suffer substantial loss if stay of execution is denied. III. Security for costs 24. 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.” 25. 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, 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.” https://new.kenyalaw.org/akn/ke/judgment/kehc/2025/14474/eng@2025-04-30 8

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26. 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”. 27. As regards security for costs, the Applicant has stated that it is ready to comply with any conditions as to security for granting the orders sought. In particular, securing the amount of costs awarded to the Respondent as may properly be assessed by the lower court. Otherwise, the Appellant is a reputable insurance company with sufficient financial muscle to comply with any order of the court that may be passed against it. 28. Accordingly, I make the following orders a. The Notice of Motion dated 18th June 2024 is without merited and the same is dismissed with costs to the Respondent. a. The entire costs of Kshs.146,145.00 as tabulated by the Respondent in the Declaratory suit shall be deposited in a joint interest earning account in the names of both parties’ Advocates within Thirty (30) days of this ruling failure to which execution to issue. b. The Appeal is hereby admitted for hearing. The same to be canvassed through written submissions. c. The Appellant will file and serve its submission within 14 days of this ruling. d. Upon service, the Respondent will have similar period of 14 days to file and serve his submission.’ https://new.kenyalaw.org/akn/ke/judgment/kehc/2025/14474/eng@2025-04-30 9

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e. 29. The timelines are to be strictly adhered to. A mention date to be fixed to confirm compliance and to take a judgment date. Orders accordingly. RULING WRITTEN, SIGNED & DATED AT MACHAKOS THIS 30TH APRIL 2025 NOEL I. ADAGI JUDGE DELIVERED VIRTUALLY ON TEAMS AT MACHAKOS THIS 30TH APRIL 2025 In the presence of : Ms, Nakeel......................for Appellant Ms. Chelangat..................for Respondent Milly Grace...................Court Assistant https://new.kenyalaw.org/akn/ke/judgment/kehc/2025/14474/eng@2025-04-30 10

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