Marula Estates Limited (hereinafter referred to as the defendant applicant) vide application dated 23rd October 2024 prays for an order that pending the hearing and determination of the intended appeal by the Applicant against the judgment delivered herein on 13th September 2024 by Hon. Justice Mr. Antony O, Ombwayo, this Honorable Court be pleased to grant an order for stay of taxation of the Bill of Costs dated 31st October 2024. Moreover, an order be issued to Stanbic Bank to release the monies deposited into Account Number 0100006896019 in the names of Kaplan & Stratton Advocates/ Ochieng Opiyo & Company Advocates, being the sum of Kshs. 267,781,500 together with interest accrued thereon to date to WS Kaplan & Stratton Advocates and that the costs of this application be provided for. The application is based on grounds that the defendant/applicant was awarded a sum of Kshs286,908,750 as compensation of for land known as L.R No11367 in Nakuru County but has filed a notice of appeal.
On 2nd October 2024, the respondent filed a Bill of Costs dated 1st October 2024. The applicant argues that taxation of the Bill of cost is tantamount to execution of the judgment.
According to the applicant, she has an arguable appeal against the said judgment and that the same shall be rendered nugatory if the orders sought in this application are not granted. The defendant applicant argues that costs is a contestable issue as the amount of money for the applicant was increased. The applicant argues that though the court made a finding for the applicant the court did not order the release of the money to the applicant. The application is supported by the affidavit of Dr Fred N’cruba Ojiambo S.C wherein he reiterates the grounds of the application.
In the replying affidavit, Alfred Ochieng, advocate for the plaintiff states that the application is premature as the total costs of the suit are to be ascertained by the taxing master. There is no evidence of the prejudice to be suffered by the applicant if the Bill of costs is taxed. Moreover, that taxation of Bill of costs cannot mean stay of execution. The applicant has not moved to court for stay of execution of the decree herein.
The applicant in her submission argues that the plaintiff having taken possession of the suit property in the year 2018 and having not sought to challenge the judgment awarding the sum, lacks any legal rights to retain any portion of the funds in the joint account and that the plaintiff further lacks any claim to a set off of the amount that would be due to it upon taxation of its awarded costs in the absence of such order from the court. On stay of taxation proceedings the applicant argues that she is seeking stay of taxation and not execution of the judgment and decree. That stay of proceedings does not require any security. The applicant argues that the appeal has great chances of success.
The plaintiff respondent argues that the Applicant herein cannot have-his cake and eat it at the same time since the applicant wants to be allowed to access the funds held in escrow in satisfaction of the Judgment award but does not want party and party costs to be ascertained so that provision for security of costs may be set aside pending appeal. The Application herein intends to disenfranchise the Respondent in the event that their Intended Appeal fails before the Court of Appeal by exposing the Respondent to unnecessary rigours of tracing the Directors of the applicant who are well known not to reside in the Country to recover any costs that may be awarded if the appeal fails.
The respondent submits that there is no prejudice that will be suffered should the taxation proceedings be allowed to continue and that the Bill of costs cannot occasion any loss as the only effect of taxing a Bill is the ascertainment of quantum of costs payable. That it is only after a Bill has been taxed that the Court of Appeal would find a basis of establishing to what extent that the Applicant should be ordered to deposit security for costs for grant of conditional stay before the Court of Appeal.
The respondent further submits that stay of taxation proceedings is an equitable remedy and the Court must strike a balance between the competing interests of the parties, keeping in mind the right to a fair hearing as enshrined in Article 50 of the Constitution of Kenya. Further Order 42 Rule 6(T) of the Civil Procedure Rules stipulate that no appeal or second appeal shall operate as stay of execution on proceedings under a Decree or Order appealed from unless by Order of the Court appealed from and for sufficient cause.
The respondent relies on the decision in the Nairobi High Court Judicial Review Noa E129 of 2021 Republic vs Retirement Benefits Authority & Another Exparte Kilonzi & 119 Others delivered on 25th July 2024 by Hon. Justice John Chigiti where he noted at paragraph 22 as follows:-
"At this juncture, it is imperative to note that there is a difference between stay of proceedings and stay of execution. I am in agreement with the observations of Gikonyo J, in Kenya Wildlife Service vs. James Mutembei (2019) eKLR citing from Halsbury Law of England 4th Edition at page 330, where the Learned Judge observed that stay of proceedings is a serious, grave and fundamental interruption of the right of a party to conduct litigation: it impinges on access to justice, expeditious trial and the right to a fair trial.
The respondent finally submits that the instant application is premature„ taxation by itself does not prejudice the Applicant, the right of appeal is not shown will be violated and the Intended appeal has not been demonstrated how it will be rendered nugatory. On the issue of release of funds held in escrow, the respondent submits that the Applicant Ought to only be allowed to access the compensation awarded by this Court as the Judgment sum less the party and party costs taxed and the balance thereof ought to be released to the Respondent pending the hearing and determination of the Intended Appeal.
I have considered the application and the rival submissions and do find that there is a judgment in the main suit in favour of the plaintiffs whose import is that the defendant is entitled to money offered by the plaintiff which was deposited in an escrow account held by both parties with the stanbick Bank. The applicant applies that the same be released to them because it is their entitlement and that the plaintiff respondent have already taken possession of the land. On the other hand there is a judgment on the counter claim by the defendant which was dismissed with costs. To be paid by the defendant. It is only prudent that the costs be assessed and the plaintiff be paid the same unless there is an order of stay of execution. It is also prudent that the money be released to defendant because the plaintiff has already taken possession. It would be an injustice to the plaintiff for this court to stay the taxation and allow the funds be released to the defendant. Moreover, there will be no prejudice suffered by the applicant if the court proceeds to tax costs as the applicant can apply for stay of execution.
In the case of Deposit Protection Fund V Rosaline Njeri Macharia [2006] eKLR, the Court while dealing with an application of stay of taxation proceedings, observed as follows:’ Going back to the 2nd defendant’s arguments, I note them as saying that if the court did not grant an order for stay of the proceedings, the applicant would not suffer substantial loss, on account of the taxation of the defendants’ Bills of Costs. When faced with those submissions, the applicant did not tell the court how the taxation of the defendants’ Bill of Costs would cause them substantial loss. To my mind, the taxation of a Bill of Costs cannot occasion any loss to the person against whom it is taxed. Therefore, the issue of taxation causing substantial loss does not even arise. The only effect of taxing a Bill of Costs is the ascertainment of the quantum of costs payable by one person to another. Thereafter, the party whose costs had been ascertained could take out execution proceedings. The applicant did not, in my considered view, make out a case for stay of proceedings, and in particular a stay of the taxation of the defendants’ Bills of Costs. Furthermore, if the learned taxing officer were to proceed to tax the defendants’ Bills of Costs, the sums would be ascertained, and that would be the foundation upon which this court could base the size of the security which the applicant would need to raise, if the court did order that there be a stay of execution.’ I do fully agree with this position.
This court orders release of the funds in the escrow account to the defendant subject to payment of the costs to be taxed by the taxing master. In essence the application for stay of taxation proceedings is not allowed. The matter to proceed for taxation.
On 2nd October 2024, the respondent filed a Bill of Costs dated 1st October 2024. The applicant argues that taxation of the Bill of cost is tantamount to execution of the judgment.
According to the applicant, she has an arguable appeal against the said judgment and that the same shall be rendered nugatory if the orders sought in this application are not granted. The defendant applicant argues that costs is a contestable issue as the amount of money for the applicant was increased. The applicant argues that though the court made a finding for the applicant the court did not order the release of the money to the applicant. The application is supported by the affidavit of Dr Fred N’cruba Ojiambo S.C wherein he reiterates the grounds of the application.
In the replying affidavit, Alfred Ochieng, advocate for the plaintiff states that the application is premature as the total costs of the suit are to be ascertained by the taxing master. There is no evidence of the prejudice to be suffered by the applicant if the Bill of costs is taxed. Moreover, that taxation of Bill of costs cannot mean stay of execution. The applicant has not moved to court for stay of execution of the decree herein.
The applicant in her submission argues that the plaintiff having taken possession of the suit property in the year 2018 and having not sought to challenge the judgment awarding the sum, lacks any legal rights to retain any portion of the funds in the joint account and that the plaintiff further lacks any claim to a set off of the amount that would be due to it upon taxation of its awarded costs in the absence of such order from the court. On stay of taxation proceedings the applicant argues that she is seeking stay of taxation and not execution of the judgment and decree. That stay of proceedings does not require any security. The applicant argues that the appeal has great chances of success.
The plaintiff respondent argues that the Applicant herein cannot have-his cake and eat it at the same time since the applicant wants to be allowed to access the funds held in escrow in satisfaction of the Judgment award but does not want party and party costs to be ascertained so that provision for security of costs may be set aside pending appeal. The Application herein intends to disenfranchise the Respondent in the event that their Intended Appeal fails before the Court of Appeal by exposing the Respondent to unnecessary rigours of tracing the Directors of the applicant who are well known not to reside in the Country to recover any costs that may be awarded if the appeal fails.
The respondent submits that there is no prejudice that will be suffered should the taxation proceedings be allowed to continue and that the Bill of costs cannot occasion any loss as the only effect of taxing a Bill is the ascertainment of quantum of costs payable. That it is only after a Bill has been taxed that the Court of Appeal would find a basis of establishing to what extent that the Applicant should be ordered to deposit security for costs for grant of conditional stay before the Court of Appeal.
The respondent further submits that stay of taxation proceedings is an equitable remedy and the Court must strike a balance between the competing interests of the parties, keeping in mind the right to a fair hearing as enshrined in Article 50 of the Constitution of Kenya. Further Order 42 Rule 6(T) of the Civil Procedure Rules stipulate that no appeal or second appeal shall operate as stay of execution on proceedings under a Decree or Order appealed from unless by Order of the Court appealed from and for sufficient cause.
The respondent relies on the decision in the Nairobi High Court Judicial Review Noa E129 of 2021 Republic vs Retirement Benefits Authority & Another Exparte Kilonzi & 119 Others delivered on 25th July 2024 by Hon. Justice John Chigiti where he noted at paragraph 22 as follows:-
"At this juncture, it is imperative to note that there is a difference between stay of proceedings and stay of execution. I am in agreement with the observations of Gikonyo J, in Kenya Wildlife Service vs. James Mutembei (2019) eKLR citing from Halsbury Law of England 4th Edition at page 330, where the Learned Judge observed that stay of proceedings is a serious, grave and fundamental interruption of the right of a party to conduct litigation: it impinges on access to justice, expeditious trial and the right to a fair trial.
The respondent finally submits that the instant application is premature„ taxation by itself does not prejudice the Applicant, the right of appeal is not shown will be violated and the Intended appeal has not been demonstrated how it will be rendered nugatory. On the issue of release of funds held in escrow, the respondent submits that the Applicant Ought to only be allowed to access the compensation awarded by this Court as the Judgment sum less the party and party costs taxed and the balance thereof ought to be released to the Respondent pending the hearing and determination of the Intended Appeal.
I have considered the application and the rival submissions and do find that there is a judgment in the main suit in favour of the plaintiffs whose import is that the defendant is entitled to money offered by the plaintiff which was deposited in an escrow account held by both parties with the stanbick Bank. The applicant applies that the same be released to them because it is their entitlement and that the plaintiff respondent have already taken possession of the land. On the other hand there is a judgment on the counter claim by the defendant which was dismissed with costs. To be paid by the defendant. It is only prudent that the costs be assessed and the plaintiff be paid the same unless there is an order of stay of execution. It is also prudent that the money be released to defendant because the plaintiff has already taken possession. It would be an injustice to the plaintiff for this court to stay the taxation and allow the funds be released to the defendant. Moreover, there will be no prejudice suffered by the applicant if the court proceeds to tax costs as the applicant can apply for stay of execution.
In the case of Deposit Protection Fund V Rosaline Njeri Macharia [2006] eKLR, the Court while dealing with an application of stay of taxation proceedings, observed as follows:’ Going back to the 2nd defendant’s arguments, I note them as saying that if the court did not grant an order for stay of the proceedings, the applicant would not suffer substantial loss, on account of the taxation of the defendants’ Bills of Costs. When faced with those submissions, the applicant did not tell the court how the taxation of the defendants’ Bill of Costs would cause them substantial loss. To my mind, the taxation of a Bill of Costs cannot occasion any loss to the person against whom it is taxed. Therefore, the issue of taxation causing substantial loss does not even arise. The only effect of taxing a Bill of Costs is the ascertainment of the quantum of costs payable by one person to another. Thereafter, the party whose costs had been ascertained could take out execution proceedings. The applicant did not, in my considered view, make out a case for stay of proceedings, and in particular a stay of the taxation of the defendants’ Bills of Costs. Furthermore, if the learned taxing officer were to proceed to tax the defendants’ Bills of Costs, the sums would be ascertained, and that would be the foundation upon which this court could base the size of the security which the applicant would need to raise, if the court did order that there be a stay of execution.’ I do fully agree with this position.
This court orders release of the funds in the escrow account to the defendant subject to payment of the costs to be taxed by the taxing master. In essence the application for stay of taxation proceedings is not allowed. The matter to proceed for taxation.