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Court of AppealAllowedCivil Appli NAI 173 of 2005 (105/05 UR)· [2005] KECA 148 (KLR)

National Bank of Kenya Ltd v Edward Maina Njanga T/A Maina Njanga & Co. Advocates [2005] KECA 148 (KLR)

Court of Appeal of Kenya
29 July 2005
1,734 words in judgment
View original judgmentRead on Kenya Law Watch case
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The bottom line

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Kenya's Court of Appeal stopped a bank from paying Shs.17 million in legal fees because a valid fee objection was still pending, so the real amount owed wasn't settled yet.

What this practically means

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Executive summary

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This is a ruling of the Court of Appeal at Mombasa (Tunoi, O'Kubasu and Githinji, JJ.A) on a Notice of Motion under Rule 5(2)(b) of the Court of Appeal Rules by National Bank of Kenya Limited seeking a stay of execution of summary judgment entered against it by the High Court at Mombasa (Mwera, J) in H.C.C.C. No. 180 of 2004 in favour of an advocate claiming legal fees of some Shs.16,970,157 based on two certificates of taxation. The background was an advocates/client fee dispute: an agreement fixing the advocate's remuneration had been declared illegal as it fixed fees below the Advocates' (Remuneration) Order scale, and the bills were taxed while the Bank's objection to taxation remained pending and the Taxing Officer had not furnished reasons to enable a formal objection. The Court applied the twin Rule 5(2)(b) test and found the intended appeal arguable, particularly on whether summary judgment may competently be entered for an advocate on certificates of taxation before a pending objection is determined. On nugatory aspect, relying on Reliance Bank Ltd v Nor Lake Investments Ltd and Standard Bank Ltd v G.N. Kagia, the Court held that inability to refund is not the only consideration; the pendency of the objection meant the fees might be substantially reduced, and the Advocate's assets might not be easily realized. The Court allowed the application, stayed execution of the decree pending appeal, and ordered costs of the application to be costs in the appeal.

Key legal issues

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01

Whether the intended appeal is arguable

Holding

The Court was satisfied the intended appeal raised several arguable issues of law, including whether summary judgment can be entered for an advocate on certificates of taxation while an objection to taxation is pending.

Reasoning

The Bank contended that the claim was not liquidated because a Notice of Objection to taxation was pending; that the certificates of costs were not final as to amount; and that the superior court misconstrued section 51(2) of the Advocates Act by entering summary judgment before the objection was determined. The Court found these raised issues of law that were undoubtedly arguable.

p. 3
02

Whether the appeal would be rendered nugatory absent a stay

Holding

The Court held the appeal would be rendered futile and it would be unjust to require the Bank to pay the whole decretal sum before determination of the appeal or the pending objection, noting the fees might be substantially reduced on objection.

Reasoning

The decretal amount was large; the Bank had already paid a substantial portion; the Advocate's assets (a house worth about Shs.10,000,000 under construction) might not be easily realized on refund; and crucially, the decree was based on certificates of taxation subject to a pending objection under the Advocates' (Remuneration) Order, so the fees payable might be substantially reduced. Paying the whole sum would defeat the Bank's statutory right of objection.

p. 3

Legal principles established

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  • An applicant under Rule 5(2)(b) must satisfy the court that the intended appeal is arguable and that, if execution is not stayed, the appeal if successful will be rendered nugatory.
  • What may render the success of an appeal nugatory must be considered within the circumstances of each particular case.
  • In a decree for payment of money, inability of the other side to refund the decretal sum is not the only factor that may render the success of an appeal nugatory.
  • The ability of a judgment debtor to refund a decretal sum is not the sole consideration; the difficulty of realizing assets by the time the appeal is determined is also relevant.

Court orders

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  1. 1.Stay of execution of the decree of the High Court at Mombasa in H.C.C.C. No. 180 of 2004 pending the hearing and determination of the intended appeal
  2. 2.Costs of the application to be costs in the appeal

Authorities

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Legislation

  • Court of Appeal RulesRule 5(2)(b)
  • Advocates Act, Cap 16, Laws of Kenyasection 51(2)
  • Advocates' (Remuneration) Orderrule 11(1)
  • Advocates' (Remuneration) Orderrule 11(2)

Cases cited (2)

  • RELIANCE BANK LTD. VS. NOR LAKE INVESTMENTS LTD.
    [2002] 1 EA 227
  • THE STANDARD BANK LIMITED V. G. N. KAGIA T/A KAGIA & CO. ADVOCATES
    Civil Application No. NAI. 193 OF 2003 (unreported)
On appeal from
High Court of Kenya at Mombasa
H.C.C.C. No. 180 of 2004
Jurisdiction invoked
Rule 5(2)(b) of the Court of Appeal Rules

Key timeline

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Practical implications

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Frequently asked questions

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Cite this brief

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Cite this brief

Caselaw, "National Bank of Kenya Ltd v Edward Maina Njanga T/A Maina Njanga & Co. Advocates [2005] KECA 148 (KLR)", Case Analysis (2005). Civil Appli NAI 173 of 2005 (105/05 UR). Source: https://new.kenyalaw.org/akn/ke/judgment/keca/2005/148/eng@2005-07-29

Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.