REPUBLIC OF KENYA

IN THE HIGH COURT OF KENYA

AT NAROK

CIVIL APPEAL NO. 8 OF 2016

(CORAM: F. GIKONYO)

OKUMU CONSTANCE..............................................................1^ST APPELLANT

SAMMY MUTUNGA MAINGI................................................2^ND APPELLANT

VERSUS

RULING

Provision of Security

1. Other than an order for costs, the significant orders sought in the Notice of Motion dated 30/10/2020 are: -

a. Stay of execution of orders of 14/10/2020 for deposit of security; and

b. Review of those orders, and in lieu thereof, make an order that security of Kshs. 1,834,106.30 deposited in Nairobi HCCA No. 129 of 2019 be applied in this appeal.

2. The motion is expressed to be brought under section 1A, 1B, 3A and 80 of the Civil Procedure Act, Order 45 rule 1, Order 51 rule 1 of the Civil Procedure Rules and all other enabling provisions of law.  It is premised on grounds set out in the Motion as well as in the supporting affidavit. The grounds were also expounded in quite a comprehensive manner in the applicant’s written submissions.

3. The major argument is that as security had been ordered and deposited in Nairobi HCCA No. 129 of 2019- a case which is founded on same cause of action as this appeal- it would be most unjust and an act of double security to order a deposit of yet another security in the instant appeal. According to the applicant, the security deposited in Nairobi HCCA No. 129 of 2019 is sufficient and available to satisfy any decree that may become binding upon the applicant in this appeal.  Their view is that the said security is readily available for immediate release to the Respondent should the court so order.

4. They argued further that, the fact that security has been deposited in Nairobi HCCA No. 129 of 2019 is a discovery of a new and important evidence as per order 45 of the Civil Procedure Rules.  They also urged that there is an error apparent on the face of the record because, despite having canvassed all these factors before the Judge in this appeal, they were not conclusively taken on board.

5. In the final analysis, they argued that the fact that sufficient security has already been deposited in Nairobi HCCA No. 129 of 2019- a case founded on same cause of action as this appeal- constitutes sufficient reason to order review. They cited ample Judicial decision to support all the above arguments.  See submissions by the applicant.

Respondent: No security has been offered

6. The Respondent has opposed the application through grounds of opposition as well as quite succinct submissions.  In a nutshell, the Respondent argued that the applicant has already denied the Respondent’s claim in Nairobi HCCA No. 129 of 2019 on the basis that statutory Notices were not issued as required under section 5 of the Insurance (Motor vehicle Third Party Rules) Act. Yet, it claims that the security in that case is sufficient to cover the Respondent’s claim in Narok CMCCC No. 70 of 2012.  According to the Respondent that is quite a sharp contrast.  She argued that security was ordered in this case and it has not been provided- which is an act of disobedience of the court order.

7. She went further to urge that the proceedings in Nairobi are in the nature of declaratory suit whereas those in Narok are the Respondent’s primary claim. To her the security in Nairobi proceedings is not sufficient to cover her right and claim in proceedings in Narok. The Respondent stated that there is really no discovery of new and important evidence, or an error apparent on the face of the record or any sufficient reason to order review of court order on security.  The Respondent also cited ample judicial authorities in support their standpoints herein. See the submissions.

ANALYSIS AND DETERMINATION

Issues

8. The court has been called upon to determine whether the security deposited in Nairobi HCCA No. 129 of 2019 is sufficient to act as security in this appeal for purposes of stay of execution pending appeal under order 42 rule 6 of the Civil Procedure Rules.  Here three points need a subtle discussion, to wit (1) purpose of security under order 42 rule 6 of the CPR; (2) the nature of proceedings in Nairobi and Narok; and (3) claim of double security. Ultimately, the overall impression of my analysis should speak to the bigger question; whether the orders of this court should be reviewed or not.

Purpose of security

9. I will not re-invent the wheel.  Both counsels aptly argued that the purpose of security in a stay of execution order is to guarantee the due performance of the decree that may ultimately be binding upon the applicant.  See the case of Mwaura Karuga t/a Limit Enterprises vs. Kenya Bus Services Ltd & 4 others [ 2015] eKLR, 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) 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.”

10. More judicial authorities. In Gianfranco Manenthi & Another vs. Africa Merchant Assurance Company Ltd (2019) 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 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.

11. See also the case of Arun C. Sharma vs. Ashana Raukundalia t/a Rairundalia & Co. Advocates & 2 others [2014] eKLR, where the court stated:

……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 applicants become and are judgment debtors in relation to the respondent.  That is why any security given under Order 42  rule 6 of the Civil Procedure Rules acts as security for  due performance of such decree or order as may ultimately be binding on the applicants.  I presume the security must be one which can serve that purpose.”

12. Will the security in Nairobi HCCA No. 129 of 2019 serve this purpose in this appeal? This question brings me to the point where I must discuss the nature of the two proceedings.

Nature of proceedings

13. Nairobi HCCA No. 129 of 2019 is founded on declaratory suit under the provisions of the Insurance (Motor Vehicle Third Party Risk) Act.  The Insurer is the appellant in the said appeal.

14. The appeal before me is between the Respondent and the Appellant- the insured- arising from the primary suit number NAROK CMCCC NO 70 OF 2012. I am aware, however, that the two appeals have some nexus with Narok CMCCC No. 70 of 2012.  It seems the applicant suggests that, because of that nexus; (1) the security in Nairobi HCCA No. 129 of 2019 is sufficient security in the appeal before me; and (2) accordingly, it would be most unjust and an act of double security to order provision of security in both cases. 

15. The Respondent was categorical; that despite the nexus, there is no security deposited in this case. Her learned legal counsel submitted that the parties in the two proceedings are different and so are the remedies. It appears that the learned legal counsel for the Applicant did not place any significance to these arguments. He insisted that as long as these two cases relate to NAROK CMCC NO 70 OF 2010, the security in NBI HCCA NO 129 OF 2019 is sufficient for both cases. Common sense would go the applicant’s way. But fathom these factors.

16. The Applicant has denied liability in the declaratory suit for alleged failure by the insured to serve the relevant notices as required in law. Those are kind of execution proceedings in a way. The insured is the judgment-debtor and Appellant in the appeal before me. The said judgment has neither been satisfied nor reversed; it is also enforceable against the Insured. The kind of defence by the Applicant against the Insured in the NBI case, completely negates the notion that the applicant’s security deposited in the NBI HCCA 129 OF 2019 is sufficient security for the due performance of the decree that might become binding on the appellant in the appeal before me.

17. Of greater value in all these arguments is that; the Insurer- the applicant herein- is denying liability arising from the policy of insurance taken by the Insured- the appellant/judgment-debtor herein- under the Insurance (Motor Vehicle Third Party Risk) Act. Should the applicant succeed in avoiding liability, the security in NBI case is blown away and will not be available for this case. Security should always be available for the purposes it was intended unless otherwise ordered by court. See the case of Mwaura (supra) that: -

...order 42 should be seen from the point of view that a debt is already owed and due for payment to the successful 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…Thus 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.  Counsel for the applicant submitted that he is ready to provide a bank guarantee as security for the performance of the decree.

18. When these peculiar facts are placed on the legal scale, it is not difficult to tell that the invitation by the Applicant offends the sense of bona fides and defeats the purpose of security in stay of execution pending appeal. The security in NBI HCCA NO. 129 OF 2019 in so far as securing the judgment herein against the Insured and the rights of the Respondent thereto is concerned, is obscure- too far distant away from being available as or sufficient security, for the due performance of the decree that might become binding on the Insured in the instant appeal. In other words, the invitation by the applicant for the order sought is akin to placing the respondent’s right to realize her judgment at the mercy of the applicant. The insured remains the judgment-debtor until the decree is satisfied or the judgment is reversed.

19. The foregoing finding renders support to the standpoint taken by the respondent that there is no security deposited in this appeal as was ordered by the court. In light thereof, security that was ordered by the court herein is not double security as argued by the applicant.  

Discovery of new and important evidence

20. Be that as it may, is the deposit of security in Nairobi HCCA No. 129 of 2019 a discovery of a new and important evidence which warrants review? Let me consult the record on this.

21. I have perused the ruling delivered by this court (Bwonwong’a J) on 14/10/2020 and I note that deposit of security in Nairobi HCCA No. 129 of 2019 was one of the major issues discussed in the ruling.  The test of law is that the discovery must be of a matter, or, evidence which, after exercise of due diligence, was not within his knowledge or could not be produced by the applicant at the time the decree was passed or order made.  I note in their submission at page 4, the applicant stated that they brought to the attention of the judge the fact of the deposit in Nairobi HCCA No. 129 of 2019.  They claim that the Judge did not allow them to file a further affidavit to that effect. They term this as an error on the face of the record. Accordingly, refusal of leave by court to file a further affidavit is not an error on the fact of the record on which review may be founded. Such point may however be a good ground for appeal.

22. I have noted also that the matter was before the Judge and he made a decision on it. Therefore, it is neither a discovery of new and important matter, nor a potent ground for review.

Sufficient reason

23. Much was submitted on the term sufficient reason and what it entails within order 45 of the CPR. On the basis of my finding that the security in NBI case is not sufficient security for the due performance of decree that might becoming ultimately binding on the appellant in this case, I do not find any other sufficient reason to review the decision of the court in question.

24. In the upshot, I dismiss the Notice of Motion dated 30/10/2020. No orders as to costs. It is so ordered.

Dated, signed and delivered at NAROK through Teams Application this 10^th day of December, 2020

........................

F. GIKONYO

JUDGE