Margaret Njoki Muchiri & 1 other v Osundwa & Company Advocates

2025 pending the hearing and determination of the appeal. 2. The application is supported by the affidavit sworn by the Appellant. The Applicant contends that unless stay is granted, execution is imminent and the intended appeal shall be rendered nugatory. It is further deponed that the Applicant stands to suffer substantial loss should execution proceed. 3. The application was placed before this Court on 8th August 2025, whereupon the Court granted an interim stay of execution on condition that the Applicant deposit the entire decretal sum in an escrow account within 30 days and a date for inter partes hearing set on 25 th September 2025. 4. When the matter subsequently came up for inter partes hearing, no evidence whatsoever was produced demonstrating compliance with the condition imposed by the Court. Neither was any application made seeking enlargement of time nor variation of the conditional order. Response 6. The Respondent opposed the application through Grounds of Opposition dated 23rd September 2025 together with the Replying Affidavit of Michael Osundwa Sakwa sworn on the same date. 7. The Respondent raises two principal objections. HCSCA E175/2025 2

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a) First, that the appeal itself ought to be summarily rejected under Section 79B of the Civil Procedure Act since the Appellant has challenged findings of both fact and law whereas appeals from the Small Claims Court lie only on matters of law pursuant to section 38 of the Small Claims Court Act, No. 2 of 2016. b) Secondly, the Respondent submits that the Applicant has failed to satisfy the requirements for grant of stay under Order 42 Rule 6 because: i. no substantial demonstrated; loss has been ii. the Applicant has failed to comply with the security ordered by the Court; iii. the application is therefore undeserving of the Court's discretion. Issues for Determination 10.Having considered the application, affidavits and submissions, the issues for determination are: a) Whether the Applicant has satisfied the requirements for stay pending appeal. b) Whether the appeal discloses sufficient grounds to warrant admission or is liable to summary rejection under Section 79B of the Civil Procedure Act. HCSCA E175/2025 3

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(A) Whether the Applicant has established grounds for stay 11.The law governing stay pending appeal is settled under Order 42 Rule 6(2) of the Civil Procedure Rules. The Applicant must demonstrate: fi fi fi Substantial loss; That the application has been brought without unreasonable delay; Provision of security for due performance of the decree. 13.These conditions are cumulative and not alternative. 14.The principles governing stay were comprehensively stated by the Court of Appeal in Halai & Another v Thornton & Turpin (1963) Ltd [1990] KLR 365, where the Court held that an applicant must satisfy all the statutory requirements before the discretion of the Court can be exercised in his favour. 15.Likewise, in Butt v Rent Restriction Tribunal [1982] KLR 417, the Court of Appeal held that although the power to grant stay is discretionary, such discretion must be exercised judicially and upon settled principles. Whether substantial loss has been demonstrated 16.The cornerstone of every application for stay is proof of substantial loss. The Court of Appeal emphasized this HCSCA E175/2025 4

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principle in Kenya Shell Ltd v Benjamin Karuga Kibiru & Another [1986] KLR 410, where Platt JA observed: "It is usually a good rule to see if Order XLI Rule 4 (now Order 42 Rule 6) 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." 18.In the same decision, Gachuhi Ag JA held that substantial loss is what has to be prevented by preserving the status quo because such loss would render the appeal nugatory. 19.The Applicant herein merely states that substantial loss shall be suffered. No attempt has been made to demonstrate: fi The Respondent's inability to refund the decretal sum; fi Financial hardship; fi Irreparable prejudice; fi Or any exceptional circumstances. 21.Bare allegations cannot satisfy the legal threshold. The Court of Appeal reiterated this position in National Industrial Credit Bank Ltd v Aquinas Francis Wasike & Another [2006] eKLR, where it held that although an applicant cannot always know the respondent's financial means, there must first be a reasonable basis laid before the HCSCA E175/2025 5

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burden shifts to the respondent. No such basis has been laid in the present case. 22.Consequently, this Court is not persuaded that substantial loss has been established. Security 25.Security is not a procedural technicality. It is a mandatory statutory requirement under Order 42 Rule 6(2)(b). 26.In the present matter, this Court on 8th August 2025 granted the Applicant interim stay upon one express condition—that the decretal amount be deposited in an escrow account within 30days.The Applicant has neither complied with that order nor offered any explanation for the default. 27.Courts have consistently held that a party seeking equity must obey existing court orders. 28.In Samvir Trustee Limited v Guardian Bank Limited Nairobi (Milimani) HCCC No. 795 of 1997 [1997] eKLR, Warsame J. observed that a stay is an equitable remedy and a party seeking it must demonstrate utmost good faith and readiness to comply with the conditions imposed by the Court. 29.The Applicant's conduct demonstrates the opposite. Having failed to comply with the very condition upon which interim stay was granted, the Applicant cannot seek the continued exercise of the Court's discretion. HCSCA E175/2025 6

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Exercise of discretion 33.Stay pending appeal is discretionary. As stated by the Court of Appeal in Butt v Rent Restriction Tribunal [1982] KLR 417, discretion should be exercised so as not to prevent an appeal, but equally not to deny the successful litigant the fruits of his judgment without lawful justification. 34.The Respondent obtained a lawful judgment. The Applicant has neither demonstrated substantial loss nor complied with the security ordered. 35.This Court therefore finds no legal basis upon which to continue denying the Respondent the fruits of the judgment. (B) Whether the appeal is liable to summary rejection under Section 79B 38.The Respondent further urges this Court to summarily reject the appeal under Section 79B of the Civil Procedure Act. 39.Section 79B obligates the High Court to peruse an appeal before admission and reject it summarily where there is no sufficient ground for interfering with the decree appealed against. 40.Equally relevant is section 38 of the Small Claims Court Act, which provides that appeals from the Small Claims Court lie only on matters of law. 41.The Memorandum of Appeal filed by the Appellant raises numerous complaints challenging factual findings reached HCSCA E175/2025 7

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by the trial court, including the trial court's evaluation of evidence and factual conclusions. 42.The jurisdiction of this Court on appeals from the Small Claims Court is, however, circumscribed by statute. 43.The Supreme Court in Samuel Kamau Macharia & Another v Kenya Commercial Bank Ltd & 2 Others [2012] eKLR held that: "A court's jurisdiction flows from either the Constitution or legislation or both. A court cannot arrogate to itself jurisdiction exceeding that which is conferred upon it by law." 44.Similarly, in Owners of the Motor Vessel "Lillian S" v Caltex Oil (Kenya) Ltd [1989] KLR 1, the Court of Appeal famously held: "Jurisdiction is everything. Without it, a court has no power to make one more step." 45.Parliament deliberately restricted appeals from the Small Claims Court to matters of law in order to promote expedition and finality in the determination of small claims. 46.Consequently, where an appellant merely invites the High Court to re-evaluate evidence or interfere with findings of fact, the Court lacks jurisdiction to entertain such complaints. That said, the exercise under Section 79B is HCSCA E175/2025 8

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intended to determine whether there exists an arguable question of law warranting admission of the appeal. 47.Having perused the Memorandum of Appeal, this Court finds that the overwhelming majority of the grounds challenge factual findings. The Appellant has not demonstrated any identifiable error of law capable of invoking this Court's appellate jurisdiction under section 38 of the Small Claims Court Act. The High Court cannot re-evaluate evidence merely because the appellant disagrees with the Small Claims Court's findings of fact. The Court's jurisdiction is confined to determining whether the adjudicator misapprehended or misapplied the law, acted without jurisdiction, applied the wrong legal principles, or reached a conclusion that no reasonable court properly directing itself on the law could reach. 48.The appeal therefore discloses no sufficient ground for interference within the meaning of Section 79B of the Civil Procedure Act. Disposition 50.The Notice of Motion dated 28th July 2025 lacks merit. 51.The Applicant has failed to demonstrate substantial loss as required under Order 42 Rule 6 of the Civil Procedure Rules. 52.The Applicant further failed to comply with the conditional order issued by this Court on 8th August 2025 requiring HCSCA E175/2025 9

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deposit of the decretal sum into a joint interest earning account. 53.In addition, upon perusal of the Memorandum of Appeal pursuant to Section 79B of the Civil Procedure Act, this Court finds that the appeal raises no arguable question of law within the contemplation of section 38 of the Small Claims Court Act and is therefore incompetent. 54.Accordingly, this Court makes the following orders: a) The Notice of Motion dated 28th July 2025 is hereby dismissed. b) The interim stay granted on 8th August 2025 is hereby vacated forthwith. c) The appeal is summarily rejected under Section 79B of the Civil Procedure Act for disclosing no sufficient ground warranting interference and for falling outside the appellate jurisdiction conferred by section 38 of the Small Claims Court Act. d) The Respondent shall have the costs of both the application and the appeal. Orders accordingly. HCSCA E175/2025 10

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DATED, SIGNED AND DELIVERED AT NAIROBI THIS 28TH DAY OF JULY 2026. HON. L.P. KASSAN JUDGE HCSCA E175/2025 11

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