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Court of AppealPartially AllowedCivil Application No. NAI 13 of 2014 (UR 8/2014)· [2014] KECA 700 (KLR)

Eastland Hotel Limited v Wafula Simiyu & Co. Advocates [2014] KECA 700 (KLR)

Court of Appeal
21 March 2014
EGE. M. GithinjiDavid Kenani MaragaD. K. MaragaSKS. Gatembu Kairu
2,260 words in judgment
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The bottom line

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Kenya's Court of Appeal paused collection of a Kshs 19 million legal fee decree, but only because the hotel agreed to deposit security and file its appeal on time.

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 (Githinji, Maraga and Gatembu Kairu, JJ.A) on an application under Rule 5(2)(b) of the Court of Appeal Rules by Eastland Hotel Limited for stay of execution of a decree of Kshs. 19,374,317.00 arising from the taxation of an advocate/client bill of costs, and for stay of further proceedings in High Court Misc. Cause No. 713 of 2012, pending an intended appeal from Ogola J's ruling of 21st January 2014. The High Court had declined to disturb the Deputy Registrar's taxation, holding on Steel Construction Petroleum Engineering (EA) Ltd v Uganda Sugar Factory that a taxing master's decision cannot be interfered with absent an error of principle or manifestly excessive fees, but referred the bill back for taking of accounts on fees already paid. The applicant contended the taxation wrongly took the value of the subject matter as Kshs. 1 billion rather than the Kshs. 300 million value of the shares in dispute, and that recovery from a sole practitioner would be difficult if the appeal succeeded. Applying the settled twin test under Rule 5(2)(b), the Court found the intended appeal arguable - the complaints were not frivolous - and, weighing the amount involved, the Kshs. 5 million already in a joint interest-earning account, the applicant's offer of security and the respondent's conditional offer, granted the stay of execution and of further proceedings. The stay was made conditional on the applicant depositing a further Kshs. 5 million into a joint interest-earning account within 45 days and lodging its record of appeal within 60 days, failing which the stay lapses automatically and the application stands dismissed. Costs of the application were made costs in the appeal. The decision below was not disturbed; the ruling preserves the position pending the substantive appeal.

Key legal issues

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Whether the twin test for relief under Rule 5(2)(b) was satisfied

Holding

The intended appeal was arguable because the complaints about the taxation of the advocate/client bill of costs, particularly the value of the subject matter adopted by the Deputy Registrar, were not frivolous; and, considering the amount involved, the sums in the joint account, and the parties' offers of security, the appeal would be rendered nugatory absent a stay.

Reasoning

The court applied the settled two-pronged Rule 5(2)(b) test. It found the applicant's complaints about the taxation - the adoption of Kshs. 1 billion as the value of the subject matter rather than the value of the shares in dispute, and the scope of work done - to be non-frivolous, hence arguable. On nugatory-ness, it weighed the amount involved, the Kshs. 5 million already in a joint account, the applicant's offer of security, and the respondent's own conditional offer, and granted stay subject to conditions.

p. 4

Legal principles established

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  • An applicant under Rule 5(2)(b) must demonstrate both that the appeal or intended appeal is arguable and that, unless the stay or injunction is granted, the success of the appeal will be rendered nugatory.
  • The grant or refusal of relief under Rule 5(2)(b) is an exercise of judicial discretion, exercised as a court of first instance, designed to preserve the subject matter of the appeal.

Court orders

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  1. 1.Stay of execution of the decree dated 10th May 2013 and any consequential orders therefrom pending the hearing and determination of the intended appeal
  2. 2.Stay of further proceedings in Misc. Civil Application No. 713 of 2012 pending the hearing and determination of the intended appeal
  3. 3.The applicant shall within 45 days deposit the sum of Kshs. 5,000,000.00 in a joint interest earning account with the respondent in a reputable bank, to be held pending the hearing and determination of the intended appeal or until further orders
  4. 4.The amount of Kshs. 5,000,000.00 held in the joint account between the parties shall continue to be held pending the hearing and determination of the intended appeal or until further orders
  5. 5.The applicant shall within 60 days lodge and serve its record of appeal with this Court
  6. 6.In default of compliance with any of these conditions the order for stay shall be automatically discharged and the application shall stand dismissed
  7. 7.The costs of the application shall be in the appeal

Authorities

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Legislation

  • Court of Appeal Rules (Rules of this Court)Rule 5(2)(b)
  • Advocates (Remuneration) OrderParagraph 11(2)

Cases cited (10)

  • Steel Construction Petroleum Engineering (EA) Limited vs. Uganda Sugar Factory
    (1970) EA 141
  • Equity Bank Limited vs. West Link Mbo Limited
    Civil Application No. NAI 78 of 2011
  • Ishmael Kagunyi Thande vs. Housing Finance of Kenya Ltd
    Civil Application No. NAI. 157 of 2006
  • Githunguri Vs Jimba Credit Corporation Limited
    Nairobi Civil Application No. 161 of 1988
  • Butt Vs Rent Restriction Tribunal
    No. 6 of 1979
  • Kenya Kazi Security Services Ltd Vs Kenya National Private Security
    Nairobi Civil Appeal No. 108 of 2013
  • Francis Kabaa V Nancy Wambui and Jane Wanjiru
    Civil Application No. 298 of 1996 (unreported)
  • G.R Mandavis V The Commissioner of Income Tax
    (1957) EAI
  • Morgan V Elford
    (1877) 4 Ch. D 352
  • Reliance Bank Limited vs. Norlake Investments Ltd
    [2002] 1 EA 231
On appeal from
High Court of Kenya at Nairobi
Misc. Civil Application No. 713 of 2012
Jurisdiction invoked
Rule 5(2)(b) of the Rules of this Court (Court of Appeal Rules) - application for stay of execution and further proceedings pending intended appeal

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, "Eastland Hotel Limited v Wafula Simiyu & Co. Advocates [2014] KECA 700 (KLR)", Case Analysis (2014). Civil Application No. NAI 13 of 2014 (UR 8/2014). Source: https://new.kenyalaw.org/akn/ke/judgment/keca/2014/700/eng@2014-03-21

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