Lake Victoria North Water Services Board v Densey Tours & Travels & 1 other

appeal raises triable issues and that they had brought the application without unreasonable delay and in a bid to protect the public interest. He further averred that the Respondents would not suffer any prejudice or substantial harm if the stay orders were granted. 3. The Applicant asserts that they will incur significant losses that would render the appeal nugatory if the stay order is not granted and the decree is enforced, as they have long settled the decree. 4. The 1st Respondent opposed the application and filed a Replying affidavit sworn by John Mwanthi on 28th October 2025, in which they asserted that the application must fail and the appeal summarily rejected under section 79B of the Civil Procedure Act, as it does not raise triable issues. They averred that the Applicant sought to introduce new evidence in its application for review, and that their application was rejected on the ground that there was no satisfactory evidence of payment. They annexed what they referred to as the Applicant’s “alleged new evidence to their affidavit and argued that the trial court had found that it was not sufficient proof of payment. They averred that the decretal amount stood at Kshs. 2,063,815.36 as at 9th October 2025, for which they had applied for the re-issue of the warrant. It was their averment that the Applicant had deliberately concealed the fact that they owed them far more than the disputed amount, and, for that, their application should be denied, as the Applicant had not come to court with clean hands. 5. They argue that the Applicant has not met the requirements for a stay of execution, as they have not shown the substantial loss they would incur if the stay is not granted, nor have they offered security for due performance of the money decree. 6. The parties were directed to file written submissions, which directions both parties duly complied with. Analysis and Determination 7. The parties were directed to file written submissions, which directions both parties duly complied with. 8. I have carefully reviewed the application, the associated affidavits on record and the parties' respective submissions. The two main issues for determination are: a. Whether the appeal should be summarily rejected. b. Whether the Applicant has met the prerequisite for the grant of stay of execution pending appeal. 9. The Applicant submitted that they have a good appeal with high chances of success on account of their contention that the trial court made the impugned ruling without taking into consideration the overwhelming evidence of their payment to the 1st Respondent. They contended that they had made full payment of the amount of Kshs. 1,900,00/= for chopper services. 10. The 1st Respondent submitted that the appeal does not raise reasonable grounds of appeal as the Applicant is seeking to introduce new evidence, which was held insufficient by the trial court. They invited the court to make a similar finding to the trial court, based on the documents they have produced. 11. During the highlighting of the submissions, Mr Mbithi pointed out that the disputed amount is Kshs. 874,265/= while the decretal sum was Kshs. 3,649,177/= with principal sum being Kshs. 3,331,060/ =. He submitted that the decretal sum stood at Kshs. 2,063,815/= as at that date. 12. On behalf of the Applicant, Ms Kyulu submitted that they had paid Kshs. 874,265/= before institution of suit and a further Kshs. 1,996,000/= of the decretal amount. https://new.kenyalaw.org/akn/ke/judgment/kehc/2025/19670/eng@2025-11-27 2

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13. Without delving much into the merits of the appeal, a cursory look reveals that it invites the court to review the evidence adduced in its application to the trial court for review under Section 80 of the Civil Procedure Act and Order 45 Rule 1 of the Civil Procedure Rules. I have perused the rulings dated 22nd August 2024 and the impugned ruling dated 4th September 2024. The Respondents were beneficiaries of a summary process which did not afford the Applicant an opportunity to be heard. It cannot, therefore, be said that the appeal does not raise triable issues. A triable issue has been held to be an issue that is not frivolous and that would require the court to examine the facts and evidence at a full trial. It need not necessarily mean that the appeal will succeed. 14. By introducing the invoices and vouchers that were the subject of the impugned ruling as evidence to persuade this court to strike out the appeal summarily, the 1st Respondent was tacitly acknowledging that the appeal called for interrogation by the court. The appeal was filed within time, and since it raises triable issues, I will not strike it out. 15. The law governing the issuance of orders for a stay of execution pending appeal is set out in Order 42, Rules 6 (1) and (6) of the Civil Procedure Rules, which provides:- 16. “ (1) No appeal or second appeal shall operate as a stay of execution or proceedings under a decree or order appealed from except appeal case of 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 referred may apply to the appellate court to have such order set aside. (2) No order for stay of execution shall be made under sub-rule (1) unless— (a) The court is satisfied that a 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. (c) The above provision requires an Applicant seeking orders for stay of execution to establish that he/she has a sufficient cause for seeking the orders, that he stands to suffer substantial loss if the orders are not granted and lastly, that he is willing to furnish security for the due performance of the decree. In addition to the above conditions, an application for stay of execution pending appeal must be made without unreasonable delay.” The three conditions that need to be fulfilled can therefore be summarized as follows: a) That substantial loss may result for the Applicant unless the order is made. b) That the application has been made without unreasonable delay. https://new.kenyalaw.org/akn/ke/judgment/kehc/2025/19670/eng@2025-11-27 3

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c) 17. That the Applicant has offered security for the due performance of the decree in the event the appeal fails. Substantial loss was explained in the case of James Wangalwa & Another vs Agnes Naliaka Cheseto [2012] eKLR, where the court stated as follows: “ No doubt in law, the fact that the process of execution has been put in motion, or is likely to be placed 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, 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 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…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. See also Kenya Shell Ltd v Kibiru & Another [1986]KLR 410.” 18. According to the Applicant, were execution to proceed, it would amount to double payment and misuse of the taxpayer’s money. Further, the Applicant contends that the appeal would be rendered nugatory in the event of success. 19. In Century Oil Trading Company Ltd vs. Kenya Shell Limited, Nairobi (Milimani) HCMCA No. 1561 of 2007, Kimaru J, as he was stated as follows: “ The word 'substantial' cannot mean the ordinary loss to which every judgment 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…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 become an issue. The court cannot shut its eyes where it appears the possibility is doubtful of the respondent refunding the decretal sum if the applicant is successful in his appeal. The court has to balance the interest of the applicant who is seeking 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 judgment.” 20. It is trite that in money decrees, a stay of execution will only issue where it is demonstrated that the Respondent is unlikely to have the ability to refund the monies in the event the appeal is successful. In considering an application for stay of execution, therefore, the court must balance the rights of both parties, as a successful litigant should not be denied the fruits of his judgment. 21. The decree that is the subject matter of this appeal emanates from a debt owed to the 1st Respondent for services rendered way back in the year 2018. No doubt the 1st Respondent has suffered financially due to the delay in settlement. The court ought to assist a decree holder realise the fruits of his judgment rather than be an impediment. 22. It is common ground that the contested sum is Kshs. 874,265/= only. The decretal sum now stands at Kshs. 2,063,815/= since the judgment debtor has paid Kshs. 1,996,000/=/= towards settlement of the original decree. In total, after deducting the disputed sum, the decretal amount still stands at Kshs. https://new.kenyalaw.org/akn/ke/judgment/kehc/2025/19670/eng@2025-11-27 4

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1,189,950/=, subject to downward review in the event the Applicant succeeds in their appeal. The issue before the court is whether to grant a blanket order of stay based on the disputed sum of Kshs. 874,265/=. 23. I find that the Applicant has not stated what substantial loss it shall suffer were execution to recover the balance of the decretal sum to proceed. There is nowhere in the Applicant’s depositions that claim that the chances of getting a refund from the 1st Respondent are limited. However, they averred that their operations would be interfered with if their properties were attached and that, to protect the public interest, it would be prudent to grant the orders. 24. Regarding the test as to whether the application was made without unreasonable delay, I note that the application was filed contemporaneously with the memorandum of appeal, which was within time, so the application was made expeditiously. 25. On the element of security for the due performance of the decree, in the case of Arun C. Sharma v Ashana Raikundalia T/A Rairundalia & Co. Advocates (2014) eKLR, the Court held that: “ The purpose of the security needed under Order 42 is to guarantee the due performance of such decree or order as may ultimately be binding on the Applicant. It is not to punish the judgment debtor … Civil process is quite different because in civil process the judgment is like a debt, hence the Applicant becomes are judgment debtor against the respondent. That is why any security given under Order 42 Rule 6 of the Civil Procedure Rules acts as security for the due performance of such decree or order as may ultimately be binding on the Applicants.” 26. In their affidavit, the Applicant has not expressed readiness to provide security for due performance of the decree. However, the court has the discretion to order an Applicant to furnish a suitable security. 27. Having said that, it is noted that the Applicant is a public institution and is bound by the principles of public finance and has a fiduciary duty to the public underpinned by Article 201(d) and (e) of the Constitution of Kenya. It is obligated to ensure that public funds are well managed. If the 1st Respondent were to execute for monies that are later to be established not to be owing, it would have occasioned a great inconvenience to the Applicant. In the case of Africa Merchant Assurance Co Ltd v Nyamai Kea & Another (Suing on behalf of the estate of Vincent Kyalo Nyamai (deceased), Machakos HC Miscellaneous Civil Application No 540 of 2019 (KLR), while considering an application for stay of execution, Odunga J (as he then was ) had this to say:“ 9. 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, establishment of a sufficient cause, satisfaction of substantial loss, and the furnishing of security. Further, the application must be made without unreasonable delay. To the foregoing 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 https://new.kenyalaw.org/akn/ke/judgment/kehc/2025/19670/eng@2025-11-27 5

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the exercise of its powers under this Act or the interpretation of any of its provisions, seek to give effect to the overriding objective” while 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. 10. 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.” 28. The court is guided by the principle that substantive justice should be done as part of the overriding objective of court processes. The court is inclined to allow the application in part. In John Gachanja Mundia vs. Francis Muriira Alias Francis Muthika & Another [2016] eKLR the court held that: “ There is doubt the Applicant has shown that substantial loss would occur unless stay is granted. However, I will be guided by a greater sense of justice. Courts of law have said that, with the entry of the overriding principle in our law and the anchorage of substantive justice in the Constitution as a principle of justice, courts should always take the wider sense of justice in interpreting the prescriptions of law designed for the grant of relief.” 29. Accordingly, I partially allow the application and grant a stay of execution of the decree under the following conditions: a. That there be stay of execution limited to the disputed sum of Kshs. 874,265/=. b. The Applicant shall furnish a bank guarantee in favour of the 1st Respondent for the said sum within 30 days and in default the 1st Respondent be at liberty to execute. c. The Applicant shall pay the balance of Kshs. 1,189,950/= plus accrued interest, and within 30 days, and in default, execution to proceed. d. Costs of this application shall be in the cause. DATED, SIGNED AND DELIVERED AT KAKAMEGA THIS 27TH DAY OF NOVEMBER 2025. A. C. BETT https://new.kenyalaw.org/akn/ke/judgment/kehc/2025/19670/eng@2025-11-27 6

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JUDGE In the presence of: No appearance for the Appellant No appearance for the Respondents Court Assistant: Polycap HC. Civil Appeal No. E143/2025 – Ruling Page 4 of 4 https://new.kenyalaw.org/akn/ke/judgment/kehc/2025/19670/eng@2025-11-27 7

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