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Court of AppealAllowedCivil Application No. E026 of 2021· [2021] KECA 437 (KLR)

Central Bank of Kenya v Makhecha & Company Advocates & 1 other

Court of Appeal
9 July 2021
1,415 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 paused the Central Bank of Kenya paying Kshs.12 million in interest to a law firm until its appeal is decided.

What this practically means

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Executive summary

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This was a single-judge-bench motion under Rule 5(2)(b) of the Court of Appeal Rules seeking stay of execution of a High Court ruling by Majanja, J. dated 12th June 2020. The underlying dispute arose from an advocate/client bill of costs filed by Makhecha & Company Advocates in 2012 for Kshs.25,299,686, which was taxed down, restored on appeal to this Court, and certified in December 2019. Majanja, J. then awarded the advocate interest at 12% per annum from the date of filing the bill until payment in full, plus Kshs.20,000 costs. The Central Bank of Kenya, having been served with warrants of attachment and a notice of proclamation by Moran Auctioneers, sought stay pending an intended appeal challenging the award of interest. Applying the twin principles for Rule 5(2)(b) relief, the court found the intended appeal arguable on whether interest was payable and from what date, notwithstanding the absence of an annexed draft memorandum of appeal. On nugatory-ness, the court accepted the applicant's concern about the advocate's ability to refund the interest of approximately Kshs.12 million, noting an unsatisfied garnishee order nisi of Kshs.10 million against the advocate, and held that the burden had shifted to the advocate to demonstrate ability to restitute, which it failed to discharge. The court allowed the motion, staying execution of the ruling pending the intended appeal, with costs of the motion abiding the appeal's outcome.

Key legal issues

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01

Whether the intended appeal was arguable despite the absence of an annexed draft memorandum of appeal

Holding

The court held the appeal arguable on the question of entitlement to interest and the date from which it should be computed, assessing arguability from the motion and affidavit.

Reasoning

Although the applicant did not annex a draft memorandum of appeal, the court relied on precedent permitting assessment of arguability from the grounds set out on the face of the motion and the supporting affidavit. It found that whether the respondent was entitled to interest on the taxed amount and from what date were issues warranting consideration on appeal.

p. 2
02

Whether execution of the interest award would render the intended appeal nugatory

Holding

The court found the applicant's apprehension well founded given the respondent's impecuniosity evidenced by an unsatisfied garnishee order nisi, and the respondent's failure to demonstrate ability to restitute.

Reasoning

Both parties questioned the other's ability to pay the interest; the legal duty fell on each to establish its contention. The warrants showed interest of Kshs.12,024,493, and a garnishee order nisi for Kshs.10,000,000 against the respondent remained unpaid. The burden shifted to the respondent, which failed to discharge it, while nothing supported its allegation against the applicant.

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Legal principles established

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  • An applicant under Rule 5(2)(b) must establish the twin principles that the intended appeal is arguable and that it would be rendered nugatory if the orders sought are not granted.
  • Arguability of an intended appeal may be assessed from the grounds on the face of the motion and supporting affidavit even where no draft memorandum of appeal is annexed.
  • Where an applicant raises the respondent's inability to refund decretal sums, the burden shifts to the respondent to demonstrate its ability to restitute if the appeal succeeds.

Court orders

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  1. 1.Stay of execution of the ruling dated 12th June 2020 pending the lodging and determination of the intended appeal
  2. 2.Costs of the motion to abide by the outcome of the intended appeal
On appeal from
High Court of Kenya at Nairobi
Misc. Application No. 296 of 2012
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, "Central Bank of Kenya v Makhecha & Company Advocates & 1 other", Case Analysis (2021). Civil Application No. E026 of 2021. Source: https://new.kenyalaw.org/akn/ke/judgment/keca/2021/437/eng@2021-07-09

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