Apa Insurance Limited v Michael Kinyanjui Muturi [2016] KEHC 5378 (KLR)

REPUBLIC OF KENYA

IN THE HIGH COURT OF KENYA

AT NAIROBI

CIVIL   APPEAL NO.  354   OF 2015

APA INSURANCE LIMITED ……………………………….APPELLANT

VERSUS

MICHAEL KINYANJUI MUTURI ………………………….RESPONDENT

RULING

1. This ruling determines the  appellant/applicant’s application dated      27^th July 2015 and  a preliminary objection filed by the respondent’s  counsel dated  18^th August  2015  and filed on  31 August  2015.  The application by the applicant seeks for two main prayers namely:-

1. Leave be granted to appeal  out of time against  the whole judgment  and decree  in Milimani CMCC 4145 of 2014 by Honourable  Mr D. Ole  Keiwa Principal Magistrate delivered  0n 27^th March 2015; and that the  Memorandum of Appeal dated      22^nd July 2015 and filed  on 27^th July 2015 be and  is hereby deemed  as filed and  served upon  the respondent  within  the prescribed  time.
2. There be  stay of  execution  of decree/judgment  entered  against the applicant  on 27^th March 2015  in Milimani CM CC 4145/2014 Milimani CMCC 4144/2014 pending the hearing and determination  of this  appeal.

2.  The grounds upon which  the application is   predicated are  that the  failure to file  the appeal in time was due to an inadvertent  mistake  as the matter was being  moved from one advocate  who previously represented  the applicant (Ms  Michael, Daud  & Associates) to the  present firm of  Ochieng K & Associates) to be  handled   by Mr Ochieng K. who  had left  the previous  firm of  advocates; That  the delay in filing the appeal in time   was purely due to  administrative procedures of transferring  of the matter and  tens of  others  which  made the  matter to be  overlooked which mistake  is excusable;  That the application is made in good faith;  That the applicant  was  dissatisfied  with the decree passed  by the lower court  and has preferred  an appeal  and that   unless the stay of  execution  sought  is granted  the appeal  shall be  rendered  nugatory  if successful; That the appeal has overwhelming  chances of  success, is arguable and not  without merit; and   that should the  decretal sum be paid out, it  shall be out of  the  applicant’s reach should the appeal succeed and that there is  sufficient  cause for  seeking  the orders herein.
3. The application is supported by  an affidavit sworn by Mr Kennedy Ochieng on 27^th July 2015  whose depositions  as detailed  as they are basically explains  out the  grounds  upon which the application   is predicated  and setting  out the  history of the dispute  as determined  by the subordinate  court, annexing pleadings. The depositions explain the reasons for the delay and that the applicant is willing to abide by any conditions that this court may impose, in the interest of justice, upon allowing the application. 
4. The application by the applicant  is seriously opposed by the  respondent who filed  grounds  of opposition  and notice of  preliminary objection both dated  18^th August  2015 and filed in court  on 21^st  August  2015. In the grounds  of opposition, the respondent  contends that   both applications are  incompetent for being  predicated upon the  equally incompetent  Nairobi HCCA 354/215 filed on 27^th July 2015  against a decision  rendered  on 27^th March 2015  and which  was hopelessly  outside the  30 days allowed under  Section 79G of the Civil  Procedure Act and particularly since no leave  to file it was obtained  prior to the filings  thereof.  That the appeal is therefore  incompetent  and is for striking out  in limine; there is no cause  shown for  orders staying execution; there has been undue  and unexplained  delay; proceedings   were stated to have been ready for  collection by letter from  court to the  applicants  advocates  dated 19^th June  2015  but  no action  was taken  for over  30 days  which is  long delay;  and that  the draft  decree was sent  to the  applicant  on 14^th April 2015  but nothing  was done from  then on until after the proclamation in August  2015.
5. In the  Notice of Preliminary  objection, the respondent  maintains that this appeal  and application   are  incurably  defective and incompetent  and should be  struck out  with costs  because- 

1. The appeal was filed  out of time  without leave of court;
2. The application filed must collapse like a house of cards once the appeal is struck out and must of necessity be struck out with costs.

6. The parties’ advocates agreed to canvass the applications and preliminary objection together by way of written submissions.
7. In their  written submissions dated 10^th  October  2015  and filed on      12^th October  2015, the appellant contended  that it  was  procedurally correct to have filed  the appeal before  seeking  leave to  have the appeal deemed  to have been  filed within time. The appellant  relied  on the proviso to Section 79G of the Civil Procedure  Act and argued that the  court  has interpreted  the power to extend  time for  filing appeal under the said Section  to include  the power to  admit  an appeal already filed  out of time.  Counsel cited Michael Kinyanjui Mbuthia V John Kamau Nganga HCCA 322 of 2008 where he court dismissed an objection to the appeal filed out of time before seeking leave to validate the same.  The appellant  also relied  on  Richard  Ngetich & Another V Francis  Vozena Kidiga  HCCA 75/2012 where  the respondent  had argued  that there  was no appeal since it  was  filed out of time before  leave was  sought and the court rejected  that argument. More reliance was placed on Asma Ali Mohamed V Fatime Mwinyi Juma CA 75/2014 where the court deciding on an application under similar circumstances as the one in the present matter observed that:

” when a party wishes to obtain leave to file an appeal out of time   such a party must file the appeal and as provided in the proviso of Section 79G, then must seek leave to admit that appeal out of time.  Appellant here has done that.”

The Learned Judge  in the above  decision  adopted  an earlier reasoning  by justice M.J. Anyara Emukule  in the case  of Gerald M’limbine V Joseph  Kangangi [2009] e KLR.

8. The appellant  urged the court to uphold the above cited decisions and  dismiss the preliminary  objection and find that  it was  procedurally  in order to file  an appeal then seek for leave  to have the appeal deemed as properly filed.
9. On whether  the applicant has  satisfied  conditions for  leave to file an appeal out of time, the appellant  submitted  that it  had shown good  and sufficient  cause to warrant  grant of the extension of time.  That the application had been filed without inordinate delay and that the delay in any case had been satisfactorily explained.  They relied on Mwangi V Kenya Airways Ltd  where the Court of Appeal  listed  4  matters which the court ought  to take into account  in  deciding whether or not  to grant  extension of time  to appeal namely:

1. The length of delay
2. The reason for the delay.
3. Possibly, the chances of appeal  succeeding  if the application  is granted and
4. The degree   of prejudice to the respondent if the application is granted.

10. On delay, it was submitted  by the appellant’s counsel that  judgment  was delivered  on 27^th March  2015  and typed  proceedings   were applied  for on 8^th April 2015.  The proceedings are said to have been ready on 19^th June 2015 and that the communication  for collection of the typed proceedings  was send to the appellant’s former advocates  who did not  react  and  that the  present advocates only  learnt of the same on 22^nd July 2015 upon which they timeously  filed an application for leave on  27^th July 2015, by which time the statutory  appeal period  of 30 days  had  lapsed hence the delay  was not  inordinate.  Reliance   was placed on  Hellen Wanza Maeker, Bernard  Njoroge Gathua & Another HCC Miscellaneous Application 286/2009 where the court  held that  delay is excusable where it is  contributed to by delay  by the court registry  to provide  typed proceedings, and that  in that case  the application for  leave  was made  2 months after  the proceedings were available for collection.
11. It was further  submitted that  the  applicant  had  demonstrated  that  the delay  was occasioned by the  confusion   caused  by the change  of advocates  in the matter  due to administrative  lapses  between  the two firms’  offices  during  the  intervening  transition  period, which  deposition  the applicant contends, have not been rebutted by the respondent and that  therefore  they should be deemed  admitted, relying on Mohamed  & Another  V Haidena[1972] EA  166 where it was held that  the facts that are not denied  in the affidavit  ought to be deemed to have been admitted.  The appellant’s counsel maintained  that a delay caused by administrative  lapses in the process of change of  advocates  has been accepted  by  the court in Richand Velji Shah & 3 Others V Victor Maina Ngunjiri  ELC 359/2009 where a party  sought to strike out  suit for  want of  prosecution and the  court accepted the respondent’s explanation for the delay on account of administrative  lapses  in changing  of advocates.
12. On whether the appeal has chances  of success, it  was submitted  by the applicant’s counsel that the appeal raises  serious critical issues that  cast serious  questions of infallibility  of  the decision of the trial magistrate  which made  fundamental errors which occasioned  injustice that ought  to be  corrected  among them, that the  trial court  made errors  in finding that  the issues  raised by the applicant  in its statement  of defence  should  have been raised  in CMCC 4573  of 2010 yet the  applicant  was never a party  to the said suit; the  trial court  disregarded  clear  triable  issues  in the applicant’s  statement  of defence   and draft  statement  of defence  when he struck out the  appellant’s defence; and  that he did  not consider  the merits  or demerits  of  the application to amend  the defence.  Reliance   was placed on the case of Co-operative Merchant Bank Ltd V George Fredrick Wekesa CA 54/1999. Finally  that the  trial court  failed  to address himself to the principle  that under Section 10  of the Insurance  (Motor Vehicles  Third Party Risks ) Act  Cap 405, the applicant  was only bound to satisfy  judgment against  an insured and  not judgment  against   third party  who did not have an  insurable interest  in the  motor vehicle in question. Reliance  was placed on Geminia Insurance Company Ltd V Dwara Kanath  Bhatt HCC 76/2010 where it was held that the  appellant  was not liable because  the accident motor vehicle  had been  transferred  and  therefore the  applicant  was  not liable  to satisfy  a decree arising there from and that the suit should have proceeded  to full hearing   on merit and  not  to strike  out the  defence contrary  to the principles  laid down in D.T. Dobie  & Company (K) Ltd V Muchina  CA 37/78.
13. On whether the respondent stands to suffer any prejudice, the applicant submitted that the respondent would not be prejudiced in any way if leave to appeal out of time is granted.  They relied  on this  court’s decision  in Factory Guards  Ltd V Abel Vundi Kitungi; Richard  Ngetich  & Another  V Francis  Vozena  Kidiga (supra) and Waljees     ( Uganda ) Ltd V Ranji Punjabhai  Bugerere Tea Estates  Ltd [1971] EA  188 wherein the court  held that  no prejudice  would be so great  that would not  be adequately compensated for an award of  costs if leave to appeal out of time was granted.
14. On the second  prayer for  stay of execution of decree  pending   appeal, the applicant  submits  that it had met all the three conditions for granting of  stay order pending appeal under Order  42  (6) (2)  of the Civil Procedure Rules in  that the respondent   has already  commenced  execution process by issuing  a proclamation and hence  execution is imminent  and that  unless stay is  ordered the execution  will issue  yet there is no  guarantee that should the appeal succeed, the respondents  would be  able to  refund the  decretal sum if paid out  to them.
15. It was submitted that the applicant stands to suffer substantial loss that would be in compensable if execution proceeds and in the likely event that the appeal eventually succeeds.  That   the appellant   is a reputable insurance company and therefore the attachment and sale would be devastating on the applicant’s image and business reputation.  Such loss cannot  be estimated  or  quantified, since the importance of  reputation  to an insurance  company  has been underscored  by the court  in UAP Insurance  Company Ltd  V Toiyoi  Investment Company Ltd HCC 24/2013.  Reliance  was also placed on Tropical  Commodities  Suppliers Ltd & Others V  International Credit  Bank Ltd ( in liquidation) [2004] 2 EA 331  where the court  held that  substantial loss is  a quantitative  concept.  It refers to any loss, great or small, that is of real worth or value as distinguished or a loss without value or a loss that is merely nominal.  Further reliance was   placed on James Wangalwa & Another V Agnes Naliaka Cheseto Bam HC Miscellaneous Application 42/2011.
16. It was further submitted that as a sign of good faith  the applicant had deposited  the entire  decretal sum in an  interest earning  bank account  in the joint names  of the respective  advocates for the parties  hence all the  conditions necessary for stay to issue  under  Order 42  Rule  6(2) of the Civil Procedure Rules  had been fulfilled.  The applicant  urged the  court to be  guided  by this court’s  ruling in Edward Kamau & Another  V Hannah Mukui Gichuki & Another HC  Miscellaneous Application 78/2015  where I held that  the right of appeal is a constitutional right which  is the cornerstone  of the rule of law and that to deny a party that right  would be tantamount  to denying  them access to justice  and the right  to a fair hearing  as guaranteed  under the Constitution.  The applicant’s  counsel therefore urged the court  to dismiss the preliminary objection filed by the respondent  and allow  the application for leave to file  the appeal/have it deemed  as  duly filed and order  for a stay of execution of decree in the lower  court pending  hearing  and disposal of the appeal.
17. In opposition to the twin application  by the applicant, the respondent  filed grounds of opposition and  preliminary  objection and the submissions  dated 21 September  2015 filed  on 1^st October  2015 which are hinged  on the preliminary objection   and the grounds of  opposition  aforesaid.  Starting with the preliminary objection, Mr Kaburu counsel for the respondent  submitted that the applicant’s application  and appeal  as filed are  in violation  of the provisions of Section 79G  of the Civil Procedure Act  which expressly  stipulate  that an appeal from the subordinate  court to the  High Court  should  be filed within 30 days  of the  decision  appealed from and that there is no such certificate from the  lower court as contemplated  by the section that an appeal  may be admitted out of time   if the appellant  satisfies the court  that he had good and sufficient cause  for not filing  the appeal in  time.  That consequent to the appeal being filed out of time is that it is incompetent and should be struck out with costs   since the court has no jurisdiction.  Further, that  Section 79G of the Civil procedure Act  is a substantive  provision of the  Act  of Parliament  as opposed to the Rules Committee which are subject  to the oxygen principles or overriding  objectives and that for that  matter the Section cannot be said to be (sic) prescribed  procedural technicalities.  Mr Kaburu relied  on Patrick Kiruja Kithinji V Victoria  Mugira Marete CA 48/2014 [2015] e KLR  citing  with approval  Supreme Court decision in Honourable  Lemanken Aramat V Harun  Mutembei Lempaka & 2 Others  where  the Supreme Court  of Kenya held that time prescribed  for lodging  of appeals is substantive  and goes to jurisdiction and cannot be  cured by Article 159(2) (d) of Constitution as it is not a  technicality.  The same   position, it was submitted, was taken by the Court of Appeal in Ramji Devji Vekaria V Joseph Oyula Eldoret  CA No. 154 of 2010.  The respondent’s counsel urged the court to strike out the appeal and the applications.
18. On leave to appeal, the  respondent’s  counsel submitted that the time set out  by Section 79G of the Civil Procedure Act for  filing of  the appeal to the High Court cannot  be enlarged  under  Order 50 Rule  6 of the Civil Procedure  Rules hence  retrospective  enlargement  of time  limited  as prescribed by the statute cannot  be made  under the  Rules that  allow such enlargement  as the Act does not  say so and  secondly one cannot  put the cart  before the horse. The respondent maintained  that even  if the procedure  adopted in  filing the  appeal and  application  were appropriate  the application  should still be rejected  as  no sufficient  cause has been shown since the applicant’s advocate’s  affidavit  at paragraph 17 concedes  that the client  gave instructions  to appeal against  the subject judgments well within the  statutory period within which to  file an appeal from the subordinate court.  However, it is contended that the date  when instructions were given is  not  provided and neither  is the date when the  alleged transition  took place  with Mr K. Ochieng  leaving the previous  firm and acting  for the applicant.
19. Further, that despite asking for certified  proceedings  on 7^th April  2015,  no appeal  was filed in  time  as instructed  by the client. Reliance was placed on Madison Insurance  Company Limited V Peter Mutunga  Musila  & Another Nakuru HCCA 50/2005.  The respondent’s counsel maintained  that 4  months delay  was inordinate  and unexplained and that  in  Joseph Kangethe Kabogo & Benson  Mburu Kangethe V Michael Kinyua  Ngari [2012] e KLR  the court declined  a similar application which was  filed 90 days late and held that  Article  159(2) (d)  of the Constitution was not  a panacea  of  incompetence, illegalities  and abuse of the court process.  He urged the court to decline leave to have the filed appeal admitted out of time.
20. On the prayer for stay of execution of decree in the lower court pending the hearing and determination of the appeal, the respondent submitted that no reasons were  given as to how the appeal if successful shall be rendered nugatory.  Further,  that no substantial  loss would be occasioned  and none had  been demonstrated  should the execution  be allowed  to proceed and that there  were no  reasons  given to support  allegations that the judgment  sum if executed  will be  beyond the applicant’s reach.
21. That the judgment  was for money decreed  in favour  of the respondents  for the  injuries sustained by them and there   was no allegation that  the respondents  were men of  straw  or that  once paid  they  had no means to recoup the  appellant. Further, that a money decree cannot be nugatory if the money can be repaid and that there is no allegation that that it   will be lost irretrievably.  counsel relied on Kenya Orient Insurance  Company Limited V Paul Mathenge Gichuki & Another [2014] e KLR on what an applicant ought to prove and the rebuttal required of a respondent.
22. The respondent’s counsel concluded that no case had been made out for stay of execution and that kshs 194,407 was a paltry sum which it cannot be proved that if paid out then the respondent cannot recompense should the appeal be successful.  Finally, that a successful litigant should never be denied immediate enjoyment of the fruits of his judgment unless there is just cause for stay of execution.

Determination

23. I have carefully considered the application by the applicant, the supporting affidavit, annextures, the grounds of opposition, preliminary objection and the elaborate written submissions filed by both parties advocates. There are four main issues for determination in this matter namely 

1. Whether  it was procedural  for the appellant  to file  an appeal and seek validation thereafter  and therefore whether  the  appeal and  application are  competent  before this court.
2. Whether the applicant deserves to be granted leave to have his appeal filed out of time deemed to be properly filed within the statutory period.
3. Whether the applicant has satisfied the court on conditions for grant of stay of execution of decree pending appeal.
4. What orders should this court make.

24. On the first issue, which forms the basis of  the preliminary objection raised by the respondents that this application and ‘appeal’  are incompetent, it is worth noting that  as a preliminary point of law, if well taken can determine the  whole matter in limine  hence  it must be  considered first.  The preliminary  objection  raised  center  around the interpretation  of Section 79G  of the Civil Procedure Act Cap 21  Laws of  Kenya  which prescribes  the  period  for filing of  appeals from decrees or orders of  the lower  court to the  High Court to 30 days  from date  of the decision or  order. However, the proviso  to the said Section 79G permits the  admission of an appeal out  of the statutory period of   30 days  where there  is sufficient  or good cause shown as to why there  was delay  in such filing.
25. According to the respondent’s  counsel, there is no short cut  and that  either  the appeal is filed within 30 days from the date of the decision or order  or one files an  application for  leave to file an appeal out of the statutory period. Further, that filing  an appeal  out of time and thereafter  seeking to have it  admitted out of time  is incompetent  hence the  appeal and  application  should  be  struck out.
26. On the other  hand, the applicant maintains that Section 79G  of the Civil Procedure  Act, the  proviso thereof  and as interpreted  by courts is clear that  one can file an appeal  out of  time   and seek for  its admission  outside  the statutory period by  way of enlargement  of the stipulated  statutory period.
27. Whereas I am in agreement  with Mr Kaburu’s submissions  that Order 50 Rule 6 of the Civil Procedure  Rules  on enlargement  of time cannot be applied  to cases  where  the time  in question is fixed  by statute  and not by the court or  rules, I am not  in agreement  with him that the application and therefore  the appeal herein  are incompetent  simply  because  the appeal  was filed out of time and leave  sought  subsequent  thereto  to have the  appeal admitted as duly filed out of time.  This court as  correctly submitted by Mr Ochieng,  has had  on many occasions to  decide on the same  issue  and has plainly, overtly  and authoritatively pronounced  itself  that an appeal  which is filed out of time can  be validated by an application  for leave  to validate the appeal  and that  is what  the  proviso to Section  79G of the Civil  Procedure  Act stipulates.  The decisions  by Honourable  H.M.  Okwengu J ( as  she then was) in HCC 322/2008 Michael Kinyanjui  Mbuthia V John Kamau Nganga;  Honourable R.V.P. Wendoh J in Richard  Ngetich  & another V Francis  Vozena Kidiga HCCA 75/2012 ; and Honourable Mary  Kasango J  in Asma Ali Mohamed V Fatime Mwinyi Juma HCCA  75/2014 (Mombasa) among others all  positive attestations   to that  pronouncement  and  so far  there is no contrary decision  from the Court  of Appeal on that  line of interpretation of Section 79G of the  Civil Procedure Act Proviso.
28. It  would indeed  be a long and tedious and winded process which is  time consuming  and costly  to the parties  contrary to the  overriding  objectives of the law as espoused in Sections 1A  and 1B of the Civil  Procedure  Act if the court were to find otherwise.  It  would likewise  in my view  be a focus on procedural technicalities  at the altar  of substantive  justice.  It is  for that reason that the court in the  cited cases made it  clear that “ when  a party wished  to obtain  leave to  file an appeal out of  time such  a party must file the  appeal and  as provided in the  proviso of Section 79G, then  must seek leave to admit that  appeal  out of time……”  (see Asma Ali  Mohamed  V Fatime   Mwinyi Juma  (supra).
29. Honourable  Anyara Emukule  J in Gerald  M’limbine  v Joseph Kangangi (supra)  too interpreted the proviso to Section 79G  of the Civil  Procedure Act thus; and I concur with that  holding:

“ My  understanding of the proviso to Section 79G  is that  an applicant  seeking an  appeal to be  admitted  out of time  must in effect  file  such an appeal and at the  same time  seek the court’s  leave to have such  an appeal  admitted out of the statutory  period of time.  The provision  does  not mean that  an intending  appellant first seeks the court’s  permission to admit a nonexistent   appeal out of the statutory  period.  To do so  would actually  be an abuse of the court’s process which under  Section 79B says……”

30. The court  in Michael Kinyanjui Mbuthia  V John Kamau Nganga  (supra)  was also emphatic  that an appeal  filed out of time could be  deemed  to be duly  filed if  leave of court   is sought to that  effect.
31. From all the foregoing, I am  satisfied that the appeal  and application for  leave as   filed are  competent   before this court  and accordingly, I dismiss  the respondent’s  preliminary  objection adding that  in any event, the application  was not brought under  Order 50 Rule  6  of the Civil Procedure Rules which counsel for the respondent  belabored  to challenge. An even if that were to be the case, then this court would not be caged into deciding the application on the basis of procedural technicalities of the matter having been brought under the wrong provisions of law, which in any event would not render the application a nullity.
32. On the issue of  whether  the  appellant has  satisfied  the court for  the grant of such  leave  to have   the filed  the appeal deemed  to be duly  filed out  of time, it is clear that Section 79G of the Civil Procedure Act  permits  such filing of  an application for leave out of time  if the appellant  satisfies  the court that  he had good  and sufficient  cause for  not filing  the appeal in time.  The  case of  Mwangi V Kenya Airways  Ltd (supra) laid down   three conditions  to be fulfilled with regard  to delay which are:

1. The length of the delay.
2. The degree of prejudice to the respondent  if the application is granted. The fourth  condition is relevant  but not  prerequisite(d) possibly, the  chances  of the appeal succeeding  if the application is granted.

33. On the   length of the delay,  the judgment/order  of the lower  court  which is  subject of this  appeal was  made on 27^th March 2015  and the application  was made on 27^th July 2015  which is  exactly 4 months or  120 days from the date of  the decision. The appeal ought to have been filed   by 27^th April 2015.  The reasons  for  the delay have  been explained   by the applicant’s advocate  who  owned  up that  indeed  it  was  due to the  advocates’  inadvertence coupled  which the transition of  the file  from the former  firm  of advocates of Michael, Daud  & Associates  to Ochieng K & Associates  which latter advocate,  Mr  Ochieng previously worked for the  former  firm.  Further, that there were several similar  files which were  being  transitioned  to Mr Ochieng  and therefore  this matter  was despite the  early instructions  to lodge  an appeal, inadvertently  forgotten  and upon learning  of the lapse  on 22^nd July 2015  the current  advocates timeously filed the  present application  on 27^th July 2015.
34. On the other hand, the respondent’s  counsel contends that the explanation  given by the applicant’s counsel for the delay  is not  satisfactorily and that there is  no sufficient  cause given hence the application should be dismissed  as was  the case in Madison Insurance  Company Limited  V Peter Mutunga  Musila & Another (supra), since  the  precise  time when instructions were given to appeal and or the firm of Ochieng & Associates  taking over  the matter  from the previous  advocates on record   was not given.  Further, that a draft  decree was  send  to the respondent’s counsel for  approval.
35. The power of the court to grant  leave  to file an appeal out of tine as stipulated  in Section  79G of the Civil Procedure Act  is discretionary  which discretion  must  nonetheless  be  exercised  judiciously  and depending on the circumstances  of each case as no two  cases are  the same; and as  leave by itself  is not a  matter  of right.  Therefore, the applicant  must satisfy  the court  by placing  before it material upon which such  discretion may be exercised  on their  favour ( see Nicholas  Kiptoo Arap Salat V IEBC & 7 Others SC  Application  16/2014.
36. In the instant  case, the  applicant’s  counsel has owned  up  to the default  and given  the reasons  for delay as being attributed  to  administrative  lapses in the respective  offices of the former   and current  advocates.  The Court of Appeal in  Phillip Keipto Chemwolo & another V Augustine Kibende  [1986] KLR 495 stated that :

 “ Blunders will  continue  to be made   from time  to time and  it does not  follow that because  a mistake  has been  made that  a party should suffer  the penalty of having his  case determined  on its merits.”

37. In the case of Banco Arabe Espanol  V Bank of Uganda [1999] 2 EA 22 it  was  held that:

“ The administration of justice should  normally  require that the substance  of all disputes should  be investigated  and decided  on their  merits  and that errors, lapses  should not  necessarily debar  a litigant  from the pursuant  of his  rights  and unless lack of  adherence  to rules renders the  appeal process  difficult  and inoperative.  It should seem that the main purpose of litigation, namely, the  hearing and determination of disputes should be  fostered  rather than  hindered.”

38. Though persuasive, the above decision speaks    to this court  in no uncertain  terms that  it is good  precedent  and I have therefore  no reason  to depart  from such noble  principles  of law established  by the courts over a period of time and which have withstood  the test of times. I am further  fortified  by the  decision and principles laid down  in Factory  Guards  Limited  V Abel Vundi Kitungi that the right  of  appeal should not be impeded as it is a constitutional right  and the  cornerstone  of the rule of law.  Where there is delay which  is explained  and the court accepts  that explanation in order to render  substantive  justice and  to facilitate  access to justice  for all by ensuring  that deserving   litigants  are not  shut out  of the judgment seat, such leave  should be  granted.
39. In  this case, I accept the  explanation given  for the delay in filing  the appeal late as  being  logical  and rational.  Furthermore, I  see no prejudice that will be  occasioned  if leave  is granted  to file the appeal  out of time as the prejudice if any following the delay , and  which prejudice has not been demonstrated  by the  respondent, can adequately be  compensated  by an award of  costs.
40. It is for  the above reasons  that I  hereby  grant to the  appellant  leave to file  an appeal out of  time and  the appeal herein  as filed  is hereby  deemed to be duly filed within the extended  period.
41. On the issue of   whether the appellant  is deserving of the orders  of stay  of execution of decree pending  the hearing  and determination of the appeal  herein as admitted  out of time, the law applicable  is order 42 Rule  6 of the Civil  Procedure  Rules which provide that:

1. No appeal or second appeal shall  operated as a stay of execution or proceedings  under  a decree or order  appealed  from except  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 should  have been granted or refused  by  the court   appealed  from, the court to which  such appeal is preferred  shall be  at liberty, on application  and to make such order thereon as it may seen just, and any person aggrieved  by an order  of stay made by the court from whose  decision  the appeal is preferred  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:-

1. The court   is satisfied  that substantial  loss may result to an applicant unless  the order is made and that the  application has been made  without  unreasonable  delay; and
2. 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.

42. On the first condition of proving that  substantial  loss may result unless  stay order is  made.  It is  incumbent  upon the applicant to demonstrate  what kind of substantial loss it will suffer  unless stay order  is made  in its  favour. The applicant contends that  should  the money decree subject of the  judgment  in the lower court  be paid out  to the respondent, it shall  not be  within the applicant’s reach  and that the  appeal will therefore  be rendered  nugatory. On the other hand, the respondent’s  counsel through  grounds of opposition  and submissions contends that  this being a meagre  money  decree, there  was no affidavit  evidence  to suggest  that the respondent  was so impecunious  that he  would not be  in a position  to recompense  the  decretal sum should the  appeal  succeed.  Further, that the  respondent  should not be  delayed and or  denied  his lawfully obtained judgment.
43. This court  is cognizant of the  principle  of law  that legal  burden  is on  he who alleges to prove the allegations to the  required  standard of balance of probabilities.  It is therefore  upon  the applicant to prove the  allegations that  if paid out, the respondent shall not be  in a position to pay back the decretal sum  and that as a result  the appeal  shall be  rendered  nugatory and as a consequence  the applicant  will suffer substantial  loss. 
44. The applicant  has submitted that  it is a  reputable  insurance  company  that thrives on its reputation  hence any attempt to attach its property will send   a negative  message   to the whole  world that  it is unable to  meet  its financial obligations. However, it is my view that the  applicant being a reputable insurance company, it  can as well  pay the decretal sum and  wait for  the verdict  such that  there need  not be any attachment  and sale of its properties  to recover  the decretal sum.  Nonetheless this court is  cognizant  of the  principle that once  it is alleged  that the  respondent is not able  to recompense  the decretal sum once it is  paid out  and the appeal  is successful thereby rendering the  appeal nugatory  and a mere academic  exercise, the burden of proof shifts  to the respondent to prove  that he  is of  means  or that  he shall  be capable of refunding  the decretal  sum should  the  appeal succeed.  He can do so by filing an  affidavit  of means.  This is what was espoused in the case of National Industrial Credit Bank  Ltd  V Aquinas  Francis Wasike Civil Appeal 238/2005  where the  appellate court  stated.

“  This court  has said  before  and it would  bear repeating that while the  legal duty is on an applicant  to prove the allegations  that an appeal would be rendered  nugatory because the respondent would  be unable to pay back the decretal  sum, it is unreasonable  to expect  such  an applicant to know in detail  the resources  owned by the respondent  or the lack of  then.  Once an  applicant expresses  a reasonable  fear  that a  respondent  would be  unable to pay back, the decretal sum , the evidential burden must  then shift to the respondent  to show what resources  he has since e that is a matter which is peculiarly within  his knowledge.”

45. Therefore, in order to balance  out the  interests  of both the appellant  who is   exercising  its unfettered  right  of appeal  and without denying the respondent  his fruits  of the  lawfully obtained  judgment, this court  is inclined to exercise its discretion  and make  orders that  balance  out those  rights.  But  before that  happens, I must  decide  whether  the application  was made  without unreasonable  delay and whether  any security for the due performance  of decree  should be made.
46. On the issue of whether the application was made without  unreasonable   delay, I have  already, while  deciding  on whether  or not  to grant leave  admitting  the appeal out of time rendered  myself that the application  was not made  late-after 4 months from the date of judgment in the lower court.  That delay  was  satisfactorily  explained  to the court  by the applicant and which delay  in my view  has not occasioned  to  the respondent  any prejudice  that  cannot be   compensated  by an award  of costs.  Accordingly, I find that despite  the delay, which is explained   satisfactorily, justice  can still be done to  the both parties.
47. On the deposit of security for the due performance  of decree, the  applicant  submitted  of its willingness and ability and that in any event the  decretal  sum is already deposited  in a joint  interest earning  account held  by both parties’  advocates  following consent  order recorded  before Honourable  A. Mabeya  J on 25^th August  2015.  A sum  of kshs 1,250,000  was deposited  to cover  decree in Milimani CMCC 4145/2014  and CMCC 4144/2014 .   That being the case, I am  satisfied  that the last condition  for stay is fulfilled.
48. As to what orders  this court should make, taking into account  the rights  and interests  of both parties, I make  the following    orders:-

1. That the appeal  herein  as filed  is hereby admitted out of time  and deemed to be duly filed and served within  the stipulated  statutory period.
2. That there shall be stay of execution of decree in Milimani CM CC 4144/2014 and CMCC 4145/2014  pending hearing  and determination  of the appeal  herein.
3. That the decretal sum in the above named  two suits  shall remain  deposited  in the joint interest earning accounts  as opened and operated by both advocates for the parties until further orders  of this court as  to its disposal and  or pending  hearing and  determination of the appeal herein.
4. That the appellant  shall within 90 days from to date  compile, file and serve upon the respondent  a compete  record of appeal.
5. The  Deputy Registrar is directed   to call for the submission of the lower court   record for  admission  of this appeal to hearing expeditiously.
6. Costs  of this application  shall be   to the respondent, assessed  at kshs  20,000/- to be paid before  the appeal is heard  and in default execution  to issue for  recovery of the same.

Orders accordingly.

Dated, signed  and delivered  in open court  at Nairobi  this 17^th day of  March  2016 .

R.E. ABURILI

JUDGE