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Court of AppealAllowedNotice of motion dated 2nd June 2023 (Civil Application)

Vaghjiyani Enterprises Ltd v Osundwa & Company Advocate (Civil Application E234 of 2023) [2024] KECA 81 (KLR)

Court of Appeal
9 February 2024
1,086 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 stopped execution of a Kshs 4.5 million advocate-fee award because a single arguable appeal point is enough to win a stay.

What this practically means

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Executive summary

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Vaghjiyani Enterprises Ltd. applied to the Court of Appeal under Rule 5(2)(b) for a stay of a High Court ruling dismissing its application for conservatory orders pending an intended appeal. The dispute arose from a taxing master's award of advocate-client fees of Kshs. 4,533,120.00 to Osundwa & Company Advocates. The applicant's reference to set aside the award was dismissed, leave to appeal was later granted, and judgment was entered for the taxed amount, prompting execution by warrants of attachment. The applicant argued the intended appeal raised arguable issues, including an alleged mathematical error underlying the bill of costs, and that execution would render the appeal nugatory. The respondent opposed, contending there was no appeal on record, that a negative order cannot be stayed, and that the applicant had not shown the respondent could not refund the decretal sum. Applying the settled twin principles - an arguable appeal and nugatoriness - the court found triable issues regarding the allegedly erroneous figure and the Order 42 stay threshold, holding that a single arguable issue suffices. On nugatoriness, it held that the respondent's financial capacity to refund is not the sole determinant; since the amount ultimately payable will only be settled on appeal, immediate execution would render the appeal futile. The application was allowed, with costs to abide the outcome of the appeal.

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 is arguable
  2. 2.Whether, if the orders sought are not granted, the intended appeal will be rendered nugatory

Key legal issues

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01

Whether the intended appeal raises arguable issues

Holding

The court found triable issues in whether the bill of costs was pegged on an erroneous figure and whether the applicant met the Order 42 threshold for stay of execution.

Reasoning

The court, taking care not to prejudice the hearing of the intended appeal, identified two issues it considered triable: whether the judge erred in failing to find the bill of costs was pegged on an erroneous figure, and whether the applicant had met the Order 42 Civil Procedure Rules threshold for stay of execution. Relying on the settled principle that one bona fide arguable point suffices and need not ultimately succeed, the threshold was satisfied.

p. 2
02

Whether the appeal would be rendered nugatory if stay is not granted

Holding

Because the final amount payable remains unsettled pending the appeal on the reference, execution now would render the appeal futile.

Reasoning

The court held that nugatoriness must be assessed in the circumstances of each case, and the respondent's ability to refund is not the only factor. Here leave to appeal against the dismissal of the reference was granted, an appeal is pending, and the amount ultimately owed will only be ascertained on appeal. Allowing execution before that determination would render the appeal futile, so the nugatory limb was satisfied.

p. 3

Legal principles established

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  • An applicant under Rule 5(2)(b) must demonstrate an arguable appeal and that the appeal will be rendered nugatory if stay is not granted.
  • A single arguable issue suffices for a Rule 5(2)(b) application and it need not succeed on appeal.
  • The nugatory inquiry is fact-specific and the respondent's financial capability to refund the decretal sum is not the sole determining factor.

Court orders

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  1. 1.Stay of the High Court ruling dismissing the applicant's application for conservatory orders pending appeal, granted in the applicant's favour
  2. 2.Costs to abide by the outcome of the appeal

The bench

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

Mohamed Abdulahi Warsame
M. WarsameJA
Currently serving
majority

Wrote the judgment

majority

Wrote the judgment

Wrote the judgment

On appeal from
High Court
Jurisdiction invoked
Rule 5(2)(b) of the Court of Appeal Rules

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.

Firstly that the applicant must demonstrate that they have an arguable appeal or an appeal that is not frivolous, and secondly, that if the orders sought are not granted, the intended appeal will be rendered nugatory, if it eventually succeeds.
p. 2Rule 5(2)(b) twin principles
The rule is that one arguable issue is suficient and the issue does not need to succeed on appeal.
p. 2Arguability threshold
we do not think that the financial capability of the respondent to refund the decretal sum in the event the appeal is successful is the only determining factor of whether an appeal will be rendered nugatory.
p. 2Nugatory aspect - not limited to refund capability
Accordingly the application is allowed. Costs to abide by the outcome of the appeal.
p. 3Final orders

Issues in the judgment

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minor

Internal inconsistency in the date of the ruling dismissing the reference: stated as 5th May 2022 earlier and 5th May 2023 later.

minor

The impugned High Court decision is described both as a ruling of 24th November 2022 and as an application dated 25th January 2023, making the chronology of the decision under review unclear.

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, "Vaghjiyani Enterprises Ltd v Osundwa & Company Advocate (Civil Application E234 of 2023) [2024] KECA 81 (KLR)", Case Analysis (2024). Notice of motion dated 2nd June 2023 (Civil Application). Source: https://new.kenyalaw.org/akn/ke/judgment/keca/2024/81/eng@2024-02-09

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