AZIM TAIBJEE & another v KENYA COMMERCIAL BANK LIMITED & another [2007] KECA 19 (KLR)
The bottom line
#Kenya's Court of Appeal let taxation of costs proceed but blocked the bank from recovering those costs from the advocates until their appeal is heard.
What this practically means
#Executive summary
#Questions the Court framed
#The issues the Court set itself to decide, in its own words.
- 1.Whether the intended appeal against the ruling and orders of Warsame J dated 4th September 2007 is arguable.
- 2.Whether, if the application for stay is refused, the success of the intended appeal would be rendered nugatory.
- 3.Whether the taxation and execution of the costs awarded against the applicants should be stayed pending the intended appeal.
Key legal issues
#What principles govern an application under rule 5(2)(b) of the Court of Appeal Rules for a stay pending an intended appeal?
The principles are well settled and two-fold: the applicant must first satisfy the court that the appeal or intended appeal is arguable; secondly, it must be demonstrated that if the application is refused, the results of the intended appeal, were it to succeed, would be rendered nugatory.
The court restated the two-limb test as settled law, citing Reliance Bank Limited v Norlake Investments Limited, and applied each limb to the facts before it. The enquiry is structured: arguability of the appeal or intended appeal is considered first, and the nugatory effect of refusing the application second. Both limbs must be satisfied before a stay issues.
Was the intended appeal arguable where mandatory orders, including personal liability for costs, were made against advocates who were not parties to the originating summons?
Yes. The intended appeal was arguable on whether applicants who, at the material time, were no longer advocates for the second respondent and were not parties to the originating summons could be ordered to pay the costs of the entire compromised suit, and on the refusal of their application for adjournment.
The court observed that the originating summons was served on the second respondent and not on the applicants, and that the notice of motion of 31st August 2007 was drawn to be served on the incoming firm, Ochieng’, Onyango, Kibet & Ohaga, rather than on the applicants. The undertaking for the applicants' costs by the new firm was given on 14th September 2007, ten days after the order, which made the refusal of the applicants' adjournment application arguable. The court expressly did not decide the point at that stage.
Would refusal of the stay render the intended appeal nugatory, and what stay should issue?
Yes, in part. Costs ordered in personam against the firm would certainly affect its practice, and as the parties to the originating summons were each to bear their own costs the order did not state who was to have them; the court therefore declined to interfere with taxation but stayed execution of the costs once taxed until the intended appeal is determined.
The court weighed the effect on the applicants' practice of a personal costs order, the fact that the order did not state who was to have the costs since the parties to the originating summons were each to bear their own costs, and the fact that the costs were untaxed. It preserved the taxing officer's role and deferred only execution, so the applicants remain exposed to taxation but not to recovery pending the intended appeal. Costs of the application were made costs in the intended appeal.
Legal principles established
#- An application under rule 5(2)(b) of the Court of Appeal Rules for a stay pending an intended appeal must satisfy two conditions: the appeal or intended appeal must be arguable, and, if the application is refused, the results of the intended appeal, were it to succeed, must not be rendered nugatory.
- A costs order made in personam against a firm of advocates, in a suit where the parties themselves were each to bear their own costs and the order does not state who is to have the costs, may render an intended appeal nugatory and justify staying execution of the taxed costs pending the appeal.
Court orders
#- 1.Execution of the costs awarded against the applicants is stayed, once those costs are taxed, pending the filing, hearing and determination of the intended appeal.
- 2.Costs of the application are made costs in the intended appeal.
The bench
#One judgment of the whole court — no separate or dissenting opinions.
- On appeal from
- High Court of Kenya at Nairobi
- H.C.C.C No. 626 of 2006 (O.S)
- Jurisdiction invoked
- Rule 5(2)(b) of the Court of Appeal Rules (stay of proceedings/execution pending an intended appeal)
Relief refused
#Stay of all further proceedings in H.C.C.C No. 626 of 2006 (O.S) pending the intended appeal
Abandoned by the applicants' counsel at the hearing as overtaken by events, the security documents having already been released
Stay of the taxation of the costs awarded against the applicants
The costs were untaxed and the court would not interfere with their taxation; only execution was stayed
Costs
Costs of this application shall be costs in the intended appeal.
Quotable passages
#Verbatim from the judgment, each located to the page it appears on in the official PDF — so these can be cited and checked directly.
The execution for costs once taxed, is stayed pending the filing, hearing and determination of the intended appeal. Costs of this application shall be costs in the intended appeal.
First, the applicant must satisfy the court that the appeal or the intended appeal (as in this matter before us) is arguable. Secondly, it must be demonstrated that if the application is refused, the results of the intended appeal, were it to succeed, would be rendered nugatory see the case of Reliance Bank Limited vs. Norlake Investments Limited (2002) I EA.
the issue as to whether the applicants cited in that application and who were at that time not the advocates for the second respondent should have been ordered to pay costs of the entire originating summons compromised by parties other than the applicants is an arguable point.
The applicants are trading as a firm of advocates. Costs were ordered against them in person. That will, in our mind, certainly affect their practice while at the same time it is not specifically stated in the order as to who is to have the costs as the parties to the originating summons were each to bear their own costs.
Clearly, that order is confused in as much as it states at 3(c) that the documents should be released within four days of the service of the order and also states at 4 that the documents to be released within the next 7 days.
Issues in the judgment
#The High Court order under appeal, as reproduced in this ruling, is internally inconsistent as to the period allowed for release of the documents (four days at order 3(c) versus seven days at order 4); the Court of Appeal noted the confusion but expressly declined to resolve it.
The parties are styled as applicants in a rule 5(2)(b) application throughout, but are once referred to as 'appellants' in the court's nugatory analysis.
Key timeline
#Practical implications
#Frequently asked questions
#Cite this brief
#Cite this brief
Caselaw, "AZIM TAIBJEE & another v KENYA COMMERCIAL BANK LIMITED & another [2007] KECA 19 (KLR)", Case Analysis (2007). Civil Appli. Nai 234 of 2007 (UR 145/07). Source: https://new.kenyalaw.org/akn/ke/judgment/keca/2007/19/eng@2007-11-09
Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.