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Court of AppealAllowedCivil Application 292 of 2009

Karuturi Networks Limited & another v Daly & Figgis Advocates [2009] KECA 8 (KLR)

Court of Appeal of Kenya
11 December 2009
3,509 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 halted a Kshs 56 million legal fee taxation, confirming courts can now use the overriding objective to grant flexible interim relief.

What this practically means

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Executive summary

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This is a ruling of a three-judge bench of the Court of Appeal at Nairobi (Waki, Aganyanya and Nyamu, JJA) on a single-judgment application under Rule 5(2)(b) of the Court of Appeal Rules for stay of proceedings pending an intended appeal. The applicants sought to stay a taxation of an advocate-client bill of costs scheduled for 29 October 2009, following Kimaru J's order of 24 July 2009 striking out their appeal against the taxing master's ruling without a hearing. The dispute concerned legal fees of approximately Kshs 56 million for work on the acquisition of Sher Agencies Limited; the applicants contended there was a fee agreement under section 45(6) of the Advocates Act ousting the taxing master's jurisdiction. The Court held the intended appeal arguable on both the fee agreement and jurisdictional questions. On nugatory value, it balanced the hardships: the applicants risked paying a substantial sum with no guarantee of repayment by the respondent firm, and allowing taxation would spawn further appeals, delay and costs. Drawing on its recent decision in Caltex Oil v Evanson Njiiri Wanjihiia, the Court held that the overriding objective newly incorporated into the Appellate Jurisdiction Act and Civil Procedure Act on 23 July 2009 enhanced its jurisdiction and latitude, requiring active case management and appropriate interim relief. The application was allowed with costs in the appeal, staying the taxation pending the intended appeal. No separate judicial opinions were expressed.

Questions the Court framed

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The issues the Court set itself to decide, in its own words.

  1. 1.Whether the intended appeal against the striking out of the applicants' appeal is arguable
  2. 2.Whether the intended appeal would be rendered nugatory if a stay of proceedings (the taxation) is not granted
  3. 3.Whether the incorporation of the overriding objective (sections 3A and 3B of the Appellate Jurisdiction Act and sections 1A and 1B of the Civil Procedure Act) expands the Court's latitude in granting interim relief

Key legal issues

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01

Arguability of the intended appeal

Holding

The intended appeal was arguable: both the existence or not of a fee agreement and the jurisdictional issue under section 45(6) of the Advocates Act are not frivolous.

Reasoning

The Court did not delve into the merits but found the questions of whether an advocate/client fee agreement existed under section 45(6) of the Advocates Act, and whether the taxing master had jurisdiction to tax in a non-contentious matter where such an agreement exists, raised substantial matters warranting full argument before the Court.

p. 4
02

Nugatory value and balancing of hardships

Holding

The balance tilted in favour of a stay because the applicant would pay a substantial contested fee note (approximately Kshs 56 million) with no guarantee of repayment by the law firm should the appeal succeed.

Reasoning

The Court weighed the hardship to the respondent firm of delayed payment against the applicant's risk of paying a large sum to a firm that had exhibited no evidence of means to repay. It also considered the delay, extra costs and lack of finality from successive proceedings if taxation proceeded, concluding that these considerations might render the intended appeal nugatory.

p. 4
03

Effect of the overriding objective on Rule 5(2)(b) applications

Holding

The overriding objective enhances the Court's jurisdiction and latitude, permitting the Court to balance the parties' claims and hardships and design a stay order on terms.

Reasoning

Following the 2009 amendments (State Law (Miscellaneous Amendment) Act No. 6 of 2009) inserting sections 3A and 3B into the Appellate Jurisdiction Act and sections 1A and 1B into the Civil Procedure Act, the Court must facilitate just, expeditious, proportionate and affordable resolution. Dealing with a case justly includes reducing delay and costs, acting expeditiously and fairly, and actively managing cases including granting appropriate interim relief in deserving cases.

p. 5
04

Whether a stay lies against an order striking out an appeal

Holding

The only order capable of being stayed following a striking-out order is the taxation proceedings, since the striking-out itself was not a positive order.

Reasoning

Applying the Ndungu Kinyanjui principle, an order striking out an appeal is not a positive order requiring anything to be done, so there is nothing in it to enforce or restrict; the legally stayable aspect was the pending taxation, which the Court restrained pending the intended appeal.

p. 4

Legal principles established

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  • An applicant under Rule 5(2)(b) must first show the intended appeal is arguable (not frivolous) and second that, if stay is not granted, the appeal will be rendered nugatory if it ultimately succeeds.
  • The overriding objective in sections 3A and 3B of the Appellate Jurisdiction Act and sections 1A and 1B of the Civil Procedure Act enhances the Court's jurisdiction and latitude, permitting innovation in case management including granting appropriate interim relief on terms to balance the parties' hardships.
  • Where the court below has made no positive order (nothing to do, refrain from doing, or pay), a stay under Rule 5(2)(b) can only legally operate on the aspect that is enforceable, such as staying proceedings.

Court orders

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  1. 1.Stay of proceedings (including the taxation scheduled for 29th October 2009) pending the lodging, hearing and determination of the intended appeal
  2. 2.Application allowed with costs in the appeal

The bench

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One judgment of the whole court — no separate or dissenting opinions.

majority
majority
majority
On appeal from
High Court of Kenya at Nairobi
H.C.M.C. No. 278 of 2008
Jurisdiction invoked
Rules 5(2)(b) and 42 of the Court of Appeal Rules; sections 3A and 3B of the Appellate Jurisdiction Act (Cap 9)

Quotable passages

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Verbatim from the judgment, each located to the page it appears on in the official PDF — so these can be cited and checked directly.

In the result the application is allowed with costs in the appeal. It is so ordered.
p. 5Final orders
we think the balance tilts in favour of granting a stay
p. 4Nugatory value and balancing of hardships
It follows therefore that the jurisdiction of this Court has been enhanced and its latitude expanded in order for the Court to drive the civil process and to hold firmly the steering wheel of the process in order to attain the overriding objective as set out above including its principal aims.
p. 5Overriding objective
Happily the two requirements have by and large stood the test of time and will continue to be important guidelines in the future.
p. 4Rule 5(2)(b) test

Issues in the judgment

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minor

The judgment states the appeal against the taxing master's ruling was listed for hearing on 25th June 2004, which appears to be a typographical error for 2009 given the chronology.

minor

The judgment variously describes the fee claimed as US$ 800,700 in the bill of costs, US 91,000 in the fee note, and approximately Kshs 56 million as the contested fee note, without reconciling these figures.

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, "Karuturi Networks Limited & another v Daly & Figgis Advocates [2009] KECA 8 (KLR)", Case Analysis (2009). Civil Application 292 of 2009. Source: https://new.kenyalaw.org/akn/ke/judgment/keca/2009/8/eng@2009-12-11

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