Skip to content
AI-generated case briefs sourced from Kenya Law · Not legal advice
AI-generated case brief
Case Brief · caselaw.co.ke
Court of AppealAllowedCivil Appli NAI 173 of 2005 (105/05 UR)· [2005] KECA 159 (KLR)

Naitonal Bank of Kenya Ltd v Edward Maina Njanga t/a Maina Njanga & Co. Advocates [2005] KECA 159 (KLR)

Court of Appeal
29 July 2005
1,734 words in judgment
View original judgmentRead on Kenya Law Watch case
AI-assisted case brief
·~7 min to read original · ~4 min brief

The bottom line

#

Kenya's Court of Appeal halted collection of a Shs.10 million-plus advocate fee decree because a pending objection to the taxation could reduce the bill substantially.

What this practically means

#

Executive summary

#
The National Bank of Kenya Limited applied under Rule 5(2)(b) of the Court of Appeal Rules for a stay of execution of a summary judgment decree of the High Court at Mombasa (Mwera J, dated 17 June 2005) in an advocate-client fee suit, pending an intended appeal. The respondent advocate had been retained in a commercial suit and a bankruptcy cause. A dispute over fees produced two Bills of Costs; an earlier ruling (Maraga J, 15 December 2003) found the parties had fixed fees at a maximum of Shs.200,000/- but declared the agreement illegal for fixing fees below the Advocates' (Remuneration) Order scale, and dismissed the Bank's application to set the bills aside. The bills were taxed at Shs.10,457,880/- and Shs.6,442,077/-; the advocate sued for the certified sums plus filing fees, less Shs.7,275,687/- paid on account. Mwera J entered summary judgment under section 51(2) of the Advocates Act, holding the certificates of taxation final notwithstanding a pending objection to taxation. Tunoi, O'Kubasu and Githinji JJ.A, in a single ruling of the court, applied the two-limb test for stay: arguability and nugatory effect. They found the intended appeal arguable, its grounds attacking the finality of the certificates, the construction of section 51(2), and the deprivation of the Bank's statutory right to object while the Taxing Officer had not furnished reasons for taxation. On the nugatory limb, they weighed the large decretal sum, the substantial sum already paid, doubts over realizing the advocate's assets, and the possibility that the pending objection might substantially reduce the fees. The application was allowed, execution was stayed as prayed, and costs of the application were made costs in the appeal.

Key legal issues

#
01

Whether the intended appeal is arguable under the first limb of the Rule 5(2)(b) test.

Holding

The intended appeal is arguable: it raises several issues of law which are undoubtedly not frivolous, including the finality of the certificates of taxation, the construction of section 51(2) of the Advocates Act, and whether summary judgment deprived the Bank of its statutory right to challenge the taxation.

Reasoning

The court applied the settled two-limb test under Rule 5(2)(b), the first being that the applicant must demonstrate an arguable, non-frivolous appeal. Examining the draft grounds - that the claim was not a liquidated demand because a Notice of Objection to taxation was pending, that the certificates of costs were not final, that section 51(2) was misconstrued, and that summary judgment deprived the Bank of its statutory right to challenge taxation - the court was satisfied the intended appeal raises several undoubtedly arguable issues of law.

p. 2
02

Whether the appeal would be rendered nugatory if execution of the decree is not stayed.

Holding

Stay was warranted: the decretal sum was large, the Bank had already paid a substantial portion, the Advocate's assets might not be easily realized on a refund, and it would be unjust to require payment before determination of the appeal or the pending objection to taxation.

Reasoning

On the second limb the court weighed whether success of the appeal would be rendered nugatory if the decretal sum were paid out. The decretal amount was large and the Bank had already paid Shs.7,275,687/-, a substantial portion. The Advocate's means to refund, including a house under construction worth about Shs.10,000,000/-, were not conclusive since the property might not be easily realized. Uniquely, the decree rested on certificates of taxation against which a statutory objection was pending, so the fees payable might be substantially reduced; staying execution preserved the substratum of the appeal.

p. 3
03

Whether summary judgment can competently be entered for an advocate on certificates of taxation on an advocate/client bill of costs while a pending objection to taxation has not been heard and determined.

Holding

The court did not decide this question finally; it identified it as the Bank's principal ground, found it arguable, and treated the pending objection to taxation as a live factor in the nugatory analysis, noting the Taxing Officer had not furnished reasons for taxation.

Reasoning

The court recorded the Bank's central contention that summary judgment cannot competently be entered for an advocate on certificates of taxation before a pending objection to taxation has been determined, and noted the Taxing Officer had not forwarded reasons for his decision to enable a formal objection under rule 11 of the Advocates' (Remuneration) Order. The point was characterized as the main ground of the intended appeal and was held arguable rather than decided on the merits, since the court's task on this application was confined to the two-limb stay test.

p. 2

Legal principles established

#
  • An applicant for stay of execution under Rule 5(2)(b) must satisfy the twin tests: the intended appeal must be arguable (not frivolous), and if execution is not stayed the appeal, if it succeeds, will be rendered nugatory.
  • What may render the success of an appeal nugatory must be considered within the circumstances of each particular case; it is not confined to inability to refund a money decree.
  • The respondent's ability to refund the decretal sum is not the sole consideration on the nugatory limb.
  • A decree founded on certificates of taxation against which a statutory objection is pending is a special category of money decree for stay purposes, because the objection may substantially reduce the amount payable and execution may destroy the substratum of the appeal.

Court orders

#
  1. 1.Application allowed and execution of the decree of the High Court at Mombasa in H.C.C.C. No. 180 of 2004 stayed as prayed, pending the hearing and determination of the intended appeal.
  2. 2.Costs of the application to be costs in the appeal.

Authorities

#

Legislation

  • Court of Appeal RulesRule 5(2)(b)
  • Advocates Act, Cap 16, Laws of Kenyasection 51(2)
  • Advocates' (Remuneration) Orderrule 11(1) and rule 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 (application for stay of execution pending an intended appeal)

Key timeline

#

Practical implications

#

Frequently asked questions

#

Cite this brief

#

Cite this brief

Caselaw, "Naitonal Bank of Kenya Ltd v Edward Maina Njanga t/a Maina Njanga & Co. Advocates [2005] KECA 159 (KLR)", Case Analysis (2005). Civil Appli NAI 173 of 2005 (105/05 UR). Source: https://new.kenyalaw.org/akn/ke/judgment/keca/2005/159/eng@2005-07-29

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