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Case Brief · caselaw.co.ke
Court of AppealPartially AllowedCivil Appli 234 of 2007

AZIM TAIBJEE t/a TAIBJEE AND BHALLA ADVOCATES & another v KENYA COMMERCIAL BANK LIMITED & another [2007] KECA 161 (KLR)

Court of Appeal of Kenya
9 November 2007
2,800 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 collection of court-ordered costs from a law firm pending its appeal, because paying could seriously damage the firm's practice.

What this practically means

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Executive summary

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The applicants, the firm of Taibjee & Bhalla Advocates, applied under rule 5(2)(b) of the Court of Appeal Rules for a stay of proceedings in High Court Civil Suit No. 626 of 2006 pending an intended appeal against a ruling of Warsame, J dated 4th September 2007. That ruling had granted the Kenya Commercial Bank's application to have the suit marked as settled and had directed that, if the applicants did not release security documents, an order for enforcement of an undertaking would issue against them, and that they be personally liable for the costs of the originating summons and application. The background was an undertaking of 2nd June 2006 by Charterhouse Bank, the applicants' then client, to return title and security documents released by the Kenya Commercial Bank upon redemption of Ksh.56 million; the documents were released to the applicants, the transaction failed, and the documents were not returned. By the time of the hearing before the Court of Appeal the documents had been released, so counsel abandoned the application for a stay of proceedings, confining the application to a stay of taxation and execution of costs. The court applied the settled twin principles: the intended appeal was arguable because the applicants, apparently no longer acting for Charterhouse and not named as parties to the originating summons, had costs ordered against them personally; and execution of such a personal costs order would affect their practice. The court refused to interfere with taxation but stayed execution of the costs once taxed pending the intended appeal, with costs of the application to be costs in the intended appeal. The ruling of Warsame, J itself was left undisturbed.

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 order of Warsame, J is arguable
  2. 2.Whether, if the application is refused, the results of the intended appeal, were it to succeed, would be rendered nugatory
  3. 3.Whether execution of costs ordered against the applicants should be stayed pending the intended appeal

Key legal issues

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01

Test for stay under rule 5(2)(b) of the Court of Appeal Rules

Holding

The court applied the settled twin principles of arguability and nugatory effect, and found both satisfied on the facts.

Reasoning

The court held that the issue whether persons not party to the originating summons, and who had ceased to act for the second respondent, could be ordered to pay its costs was arguable. It further found that a personal costs order against a firm of advocates would affect their practice, and since the parties to the suit were each to bear their own costs, execution of the taxed costs would render the appeal nugatory.

p. 4
02

Effect of a personal costs order on advocates who were not parties to the suit

Holding

A personal costs order against a firm of advocates would affect their practice, supporting the nugatory-ness limb of the rule 5(2)(b) test.

Reasoning

The applicants, trading as a firm of advocates, had costs ordered against them in person despite not being parties to the originating summons. The order did not specify who was to have the costs since the parties to the suit were to bear their own costs. The court held that such an order would certainly affect their practice, and stayed execution once costs were taxed pending the intended appeal.

p. 4

Legal principles established

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  • An applicant under rule 5(2)(b) must demonstrate first that the appeal or intended appeal is arguable, and secondly that if the application is refused, the results of the intended appeal, were it to succeed, would be rendered nugatory.

Court orders

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  1. 1.Stay of execution of costs once taxed, pending the filing, hearing and determination of the intended appeal
  2. 2.Costs of the application to be costs in the intended appeal

The bench

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

majority
majority
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

Relief refused

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Stay of all further proceedings in H.C.C.C No. 626 of 2006

Abandoned by the applicants as overtaken by events since the security documents had been released

p. 4

Stay of taxation of the costs

The court declined to interfere with the taxation process

p. 4

Costs

Costs of this application shall be costs in the intended appeal.

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.

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.
p. 4Rule 5(2)(b) twin principles
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.
p. 5Final orders - stay of execution of costs

Issues in the judgment

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minor

The order of the High Court under appeal is internally inconsistent as to the deadline for release of documents, and the Court of Appeal expressly declined to resolve the conflict.

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, "AZIM TAIBJEE t/a TAIBJEE AND BHALLA ADVOCATES & another v KENYA COMMERCIAL BANK LIMITED & another [2007] KECA 161 (KLR)", Case Analysis (2007). Civil Appli 234 of 2007. Source: https://new.kenyalaw.org/akn/ke/judgment/keca/2007/161/eng@2007-11-09

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