Automated Summary
Key Facts
Peter Maina Ndungu (appellant) filed an appeal against the judgment in Limuru Magistrate's Court Civil Case No. 48 of 2018, seeking a stay of execution pending the appeal. He proposed a bank guarantee from Diamond Trust Bank to Directline Assurance Company Limited as security. The court found the guarantee only secured Directline (not a party to the case) and noted it expired on 5th November 2021. The court ordered Peter to deposit the decretal sum into a joint interest-earning account within 30 days to secure the stay of execution.
Issues
The court had to determine whether a bank guarantee issued by Diamond Trust Bank to Directline Assurance Company Limited (not a party to the case) and expiring on 5th November 2021 could serve as valid security for a stay of execution. The court found the guarantee insufficient as it would expire the day before the hearing and only covered Directline's liability, not the appellant Peter's obligations. This necessitated an order for Peter to provide alternative security within 30 days.
Holdings
- Stay of execution of the Limuru Magistrate's Court judgment is granted on the condition that the appellant (Peter) deposits the decretal sum into an interest-earning account in the joint names of both parties' law firms within 30 days.
- The costs of the chamber summons dated 16th August 2021 will be determined by the outcome of the appeal.
Remedies
- The costs of the chamber summons application dated 16th August 2021 are to be determined based on the outcome of the appeal.
- The court granted a stay of execution for the Limuru Magistrate's Court judgment (Civil Case No. 48 of 2018) pending the appeal. The condition for this stay is that the appellant, Peter Maina Ndungu, must provide the decretal sum within 30 days and deposit it into an interest-earning account jointly held by the law firms of both parties.
Legal Principles
The court determined that the proposed bank guarantee was insufficient as it did not cover the appellant's liability and had expired. Consequently, the court ordered the appellant to provide the decretal sum from the lower court judgment within 30 days, to be deposited into an interest-earning account jointly held by both parties' law firms as an alternative security for the stay of execution.
Judge Name
Mary Kasango
Passage Text
- There shall be stay of execution of the SPMCC Limuru No. 48 of 2018 on condition that the appellant does provide the decretal sum within 30 days from today to be deposited into an interest earning account in the joint names of both law firms of the parties hereof.
- What is significant to note is that the undertaking to issue a Bank guarantee, in that letter, is an undertaking to guarantee Directline Assurance Company Limited. Directline, however is not a party to the action for which stay of execution is sought. It follows therefore that, even if the guarantee is issued, it would only cover the liability of Directline and not liability of Peter, hereof.
- Further, and perhaps more importantly, is that the proposed guarantee to Directline is valid for 12 month from 6th November, 2020. It follows that such a guarantee will be invalid up to 5th November, 2021, that is tomorrow.