1. This Ruling determines the Notice of Motion Application dated 31st January 2025 brought under Sections 1A, 1B, 3 and 3A of the Civil Procedure Act, Order 42 Rule 6(1), (2) and (4) of the Civil Procedure Rules 2010 by the Client – Corporate & Pension Trust Services Limited, in which the Applicant seeks the following orders:
i. Spent
ii. That pending inter partes hearing and determination of this application, this Honourable Court be pleased to stay the taxation proceedings herein.
iii. That pending hearing and determination of the Respondent’s/Applicant’s intended appeal, this Honourable Court be pleased to stay the taxation proceedings herein.
iv. That this Honourable Court does issue such further orders or directions that it may deem fit to grant.
v. The costs of the Application abide the outcome of the intended appeal.
2. In essence, the Client/Applicant seeks an order of this court staying the taxation of the Advocate-Client a Bill of Costs dated 10/08/2021 pending the hearing and determination of an intended appeal against this Court’s (Sifuna J) decision rendered on 19/12/2024 dismissing the Applicant’s application dated 20th January 2023 for joinder of Kenya Railways Corporation (Corporation) and Kenya Railways Staff Retirement Benefits Scheme (Scheme), to the said taxation proceedings. The Applicant also sought to have its name struck out from the proceedings and be substituted with that of the Corporation and Scheme.
3. The background of the matter is that the Advocate/Respondent filed a Bill of Costs dated 10/08/2021, seeking a total sum of Kshs. 2,211,682 against Applicant, in respect of legal services offered in the Nairobi Milimani High Court Commercial Case No. 294 of 2012: Erdemann Property Limited v The Registered Trustees of the Kenya Railways Staff Retirement Benefits Scheme and Kenya Railways Corporation, where the Applicant, in its capacity as a Trustee instructed the Advocates to represent the Scheme.
4. In the application for joinder, the Applicant argued that he was merely an agent of disclosed principals and therefore no taxation proceedings ought to be brought against it. By a Ruling dated 19th December 2024, the Court (Sifuna J) dismissed the application. It is this Ruling by this Court that the Applicant intends to appeal against, and now seeks an order staying the taxation proceedings (Bill of Costs dated 10th August 2021) pending hearing and determination of the intended appeal.
5. The Application is opposed by the Advocate/Respondent via the affidavit sworn on 8th March 2025 by Jomo Nyaribo, a Partner in the Respondent’s law firm. According to the Respondent, the Application has not satisfied the strict conditions precedent in granting a stay of proceedings pending appeal and cited, among others, the case of Kenya Wildlife Service v James Mutembei [2019] eKLR in support of this argument.
6. The application was canvassed by way of written submissions. The Applicant filed its submissions dated 7th March 2025, whilst that of the Respondent is dated 8th March 2025.
Analysis and determination:
7. I have considered the Notice of Motion Application filed herein, the response thereto, and the submissions by the parties in support of their respective positions. The question for consideration is whether the Applicant has met the conditions for the grant of orders for stay of proceedings pending appeal.
8. Order 42 Rule 6 of the Civil Procedure Rules under which the application has been brought provides as follows:
(1) No appeal or second appeal shall operate as a stay of execution or proceedings under a decree or order appealed from except in so far as the court appealed from may order but, the court appealed from may for sufficient cause order stay of execution of such decree or order, and whether the application for such stay shall have been granted or refused by the court appealed from, the court to which such appeal is preferred shall be at liberty, on application being made, to consider such application and to make such order thereon as may to it seem just, and any person aggrieved by an order of stay made by the court from whose decision the appeal is preferred may apply to the appellate court to have such order set aside.
(2) No order for stay of execution shall be made under subrule (1) unless—
(a) the court is satisfied that substantial loss may result to the applicant unless the order is made and that the application has been made without unreasonable delay; and
(b) such security as the court orders for the due performance of such decree or order as may ultimately be binding on him has been given by the applicant.
(3) ………
(4) For the purposes of this rule an appeal to the Court of Appeal shall be deemed to have been filed when under the Rules of that Court notice of appeal has been given.
9. Halsbury’s Laws of England, 4th Edition, Vol. 37 at p. 330 states:
“The stay of proceedings is a serious, grave and fundamental interruption in the right that a party has to conduct his litigation towards the trial on the basis of the substantive merits of his case, and therefore the Court’s general practice is that a stay of proceedings should not be imposed unless the proceedings, beyond reasonable doubt, ought not to be allowed to continue….This is a power which, it has been emphasized, ought to be exercised sparingly, and only in exceptional cases…It will be exercised where the proceedings are shown to be frivolous, vexatious or harassing or to be manifestly groundless or in which there is clearly no cause of action in law or in equity. The applicant for a stay on this ground must show not merely that the plaintiff might not, or probably would not, succeed but that he could not possibly succeed on the basis of the pleading and the facts of this case.”
10. From the above, it is clear that given that an order of stay of proceedings has a fundamental negative impact on the right that a party has to conduct its litigation based on merits, the order should only be sparingly given.
11. In the present application, the Applicant seeks a stay of taxation proceedings in the Bill of Costs dated 10th August 2021, on the grounds that;
a) It intends to appeal against the decision of this Court in which the court declined the prayer to have the Applicant’s name struck out of the taxation proceedings.
b) The intended appeal inter alia seeks to have its name struck out of the taxation proceedings, which prayer, if allowed, will prevent the Advocate/Respondent from pursuing the claim for costs against it.
c) It is apprehensive that if no stay of proceedings is granted and the intended appeal eventually succeeds, it will suffer irreversible prejudice since it will have been forced into a judicial process (taxation proceedings) which it should never have been involved in.
d) If the intended appeal is successful, the entire taxation proceedings and any proceedings arising from a Reference will be set aside, rendering the said proceedings futile and redundant.
12. I am not persuaded that the intended appeal will be rendered nugatory if the taxation proceedings were to be allowed to proceed. From the record, it is not in dispute that the Advocate was instructed by the Applicant in its capacity as the Trustee of Kenya Railways Corporation and the Kenya Railways Staff Retirement Benefits Scheme. What is in dispute is whether the Applicant should be personally liable for the payment of the Advocate’s legal fees.
13. In the present case, the quantum of the costs is not yet known as the same is yet to be taxed by a taxing master. It is therefore in my view premature for the Applicant to allege that proceeding with the taxation would be prejudicial to its cause.
14. In the case of Mukoma v Abuoga (1998) KLR 645 it was held:
“Substantial loss is what has to be prevented by preserving the status quo because such loss would render the appeal nugatory.”
15. The question of whether there exists an Advocate-Client relationship between the Applicant herein is one of the issues a taxing officer has the jurisdiction to deal with in taxation proceedings. The Court of Appeal in Wilfred N. Konosi t/a Konosi & Co. Advocates v Flamco Limited [2017] KECA 431 (KLR) stated as follows on the issue:
“As a Judicial Officer sitting to tax a bill of costs between an advocate and his or her client, a taxing officer must determine the question whether he/she has jurisdiction to tax a Bill if the issue of want of advocate/client relationship is raised. An allegation that the advocate/client relationship does not obtain in taxation of an advocate/client Bill of Costs must be determined at once. The Taxing Officer has jurisdiction to determine that question…”
16. The Applicant, therefore, still has the opportunity to contest the Bill of Costs on the basis of lack of an Advocate-Client relationship, with an option to appeal therefrom to this court, if not satisfied with the finding of the taxing master on the issue.
17. In any event I note from the record that on 9th December 2022, this Court (Majanja J) allowed the Applicant’s application dated 22nd February 2022, in which the Applicant sought the setting aside of the Certificate of Costs in the matter on the basis that the taxation had proceeded ex-parte, and that the Client (Applicant herein) needed to contest the Bill of Costs. The Learned judge gave a conditional order directing that the Bill of Costs be taxed afresh. However, to date, the same is yet to be taxed.
18. It is in the interest of both parties, as well as in the interest of justice, that the Bill of Costs dated 10th August 2021 be taxed. In any event, the Applicant will have an opportunity to challenge the Bill of Costs as drawn, including the right to challenge the same in a reference to this Court, to forestall the taxation proceedings, would in my view be highly prejudicial to the Advocate.
19. Accordingly, I find this application bereft of merit and dismiss it with costs to the Advocate/Respondent.
20. It is so ordered.
SIGNED, DATED, and DELIVERED IN VIRTUAL COURT THIS
5TH DAY OF JUNE, 2025
ADO MOSES
JUDGE
In the Presence of:
Moses – C/A
Ngethe……………..for the Applicant
Nyaribo………for the Respondent
i. Spent
ii. That pending inter partes hearing and determination of this application, this Honourable Court be pleased to stay the taxation proceedings herein.
iii. That pending hearing and determination of the Respondent’s/Applicant’s intended appeal, this Honourable Court be pleased to stay the taxation proceedings herein.
iv. That this Honourable Court does issue such further orders or directions that it may deem fit to grant.
v. The costs of the Application abide the outcome of the intended appeal.
2. In essence, the Client/Applicant seeks an order of this court staying the taxation of the Advocate-Client a Bill of Costs dated 10/08/2021 pending the hearing and determination of an intended appeal against this Court’s (Sifuna J) decision rendered on 19/12/2024 dismissing the Applicant’s application dated 20th January 2023 for joinder of Kenya Railways Corporation (Corporation) and Kenya Railways Staff Retirement Benefits Scheme (Scheme), to the said taxation proceedings. The Applicant also sought to have its name struck out from the proceedings and be substituted with that of the Corporation and Scheme.
3. The background of the matter is that the Advocate/Respondent filed a Bill of Costs dated 10/08/2021, seeking a total sum of Kshs. 2,211,682 against Applicant, in respect of legal services offered in the Nairobi Milimani High Court Commercial Case No. 294 of 2012: Erdemann Property Limited v The Registered Trustees of the Kenya Railways Staff Retirement Benefits Scheme and Kenya Railways Corporation, where the Applicant, in its capacity as a Trustee instructed the Advocates to represent the Scheme.
4. In the application for joinder, the Applicant argued that he was merely an agent of disclosed principals and therefore no taxation proceedings ought to be brought against it. By a Ruling dated 19th December 2024, the Court (Sifuna J) dismissed the application. It is this Ruling by this Court that the Applicant intends to appeal against, and now seeks an order staying the taxation proceedings (Bill of Costs dated 10th August 2021) pending hearing and determination of the intended appeal.
5. The Application is opposed by the Advocate/Respondent via the affidavit sworn on 8th March 2025 by Jomo Nyaribo, a Partner in the Respondent’s law firm. According to the Respondent, the Application has not satisfied the strict conditions precedent in granting a stay of proceedings pending appeal and cited, among others, the case of Kenya Wildlife Service v James Mutembei [2019] eKLR in support of this argument.
6. The application was canvassed by way of written submissions. The Applicant filed its submissions dated 7th March 2025, whilst that of the Respondent is dated 8th March 2025.
Analysis and determination:
7. I have considered the Notice of Motion Application filed herein, the response thereto, and the submissions by the parties in support of their respective positions. The question for consideration is whether the Applicant has met the conditions for the grant of orders for stay of proceedings pending appeal.
8. Order 42 Rule 6 of the Civil Procedure Rules under which the application has been brought provides as follows:
(1) No appeal or second appeal shall operate as a stay of execution or proceedings under a decree or order appealed from except in so far as the court appealed from may order but, the court appealed from may for sufficient cause order stay of execution of such decree or order, and whether the application for such stay shall have been granted or refused by the court appealed from, the court to which such appeal is preferred shall be at liberty, on application being made, to consider such application and to make such order thereon as may to it seem just, and any person aggrieved by an order of stay made by the court from whose decision the appeal is preferred may apply to the appellate court to have such order set aside.
(2) No order for stay of execution shall be made under subrule (1) unless—
(a) the court is satisfied that substantial loss may result to the applicant unless the order is made and that the application has been made without unreasonable delay; and
(b) such security as the court orders for the due performance of such decree or order as may ultimately be binding on him has been given by the applicant.
(3) ………
(4) For the purposes of this rule an appeal to the Court of Appeal shall be deemed to have been filed when under the Rules of that Court notice of appeal has been given.
9. Halsbury’s Laws of England, 4th Edition, Vol. 37 at p. 330 states:
“The stay of proceedings is a serious, grave and fundamental interruption in the right that a party has to conduct his litigation towards the trial on the basis of the substantive merits of his case, and therefore the Court’s general practice is that a stay of proceedings should not be imposed unless the proceedings, beyond reasonable doubt, ought not to be allowed to continue….This is a power which, it has been emphasized, ought to be exercised sparingly, and only in exceptional cases…It will be exercised where the proceedings are shown to be frivolous, vexatious or harassing or to be manifestly groundless or in which there is clearly no cause of action in law or in equity. The applicant for a stay on this ground must show not merely that the plaintiff might not, or probably would not, succeed but that he could not possibly succeed on the basis of the pleading and the facts of this case.”
10. From the above, it is clear that given that an order of stay of proceedings has a fundamental negative impact on the right that a party has to conduct its litigation based on merits, the order should only be sparingly given.
11. In the present application, the Applicant seeks a stay of taxation proceedings in the Bill of Costs dated 10th August 2021, on the grounds that;
a) It intends to appeal against the decision of this Court in which the court declined the prayer to have the Applicant’s name struck out of the taxation proceedings.
b) The intended appeal inter alia seeks to have its name struck out of the taxation proceedings, which prayer, if allowed, will prevent the Advocate/Respondent from pursuing the claim for costs against it.
c) It is apprehensive that if no stay of proceedings is granted and the intended appeal eventually succeeds, it will suffer irreversible prejudice since it will have been forced into a judicial process (taxation proceedings) which it should never have been involved in.
d) If the intended appeal is successful, the entire taxation proceedings and any proceedings arising from a Reference will be set aside, rendering the said proceedings futile and redundant.
12. I am not persuaded that the intended appeal will be rendered nugatory if the taxation proceedings were to be allowed to proceed. From the record, it is not in dispute that the Advocate was instructed by the Applicant in its capacity as the Trustee of Kenya Railways Corporation and the Kenya Railways Staff Retirement Benefits Scheme. What is in dispute is whether the Applicant should be personally liable for the payment of the Advocate’s legal fees.
13. In the present case, the quantum of the costs is not yet known as the same is yet to be taxed by a taxing master. It is therefore in my view premature for the Applicant to allege that proceeding with the taxation would be prejudicial to its cause.
14. In the case of Mukoma v Abuoga (1998) KLR 645 it was held:
“Substantial loss is what has to be prevented by preserving the status quo because such loss would render the appeal nugatory.”
15. The question of whether there exists an Advocate-Client relationship between the Applicant herein is one of the issues a taxing officer has the jurisdiction to deal with in taxation proceedings. The Court of Appeal in Wilfred N. Konosi t/a Konosi & Co. Advocates v Flamco Limited [2017] KECA 431 (KLR) stated as follows on the issue:
“As a Judicial Officer sitting to tax a bill of costs between an advocate and his or her client, a taxing officer must determine the question whether he/she has jurisdiction to tax a Bill if the issue of want of advocate/client relationship is raised. An allegation that the advocate/client relationship does not obtain in taxation of an advocate/client Bill of Costs must be determined at once. The Taxing Officer has jurisdiction to determine that question…”
16. The Applicant, therefore, still has the opportunity to contest the Bill of Costs on the basis of lack of an Advocate-Client relationship, with an option to appeal therefrom to this court, if not satisfied with the finding of the taxing master on the issue.
17. In any event I note from the record that on 9th December 2022, this Court (Majanja J) allowed the Applicant’s application dated 22nd February 2022, in which the Applicant sought the setting aside of the Certificate of Costs in the matter on the basis that the taxation had proceeded ex-parte, and that the Client (Applicant herein) needed to contest the Bill of Costs. The Learned judge gave a conditional order directing that the Bill of Costs be taxed afresh. However, to date, the same is yet to be taxed.
18. It is in the interest of both parties, as well as in the interest of justice, that the Bill of Costs dated 10th August 2021 be taxed. In any event, the Applicant will have an opportunity to challenge the Bill of Costs as drawn, including the right to challenge the same in a reference to this Court, to forestall the taxation proceedings, would in my view be highly prejudicial to the Advocate.
19. Accordingly, I find this application bereft of merit and dismiss it with costs to the Advocate/Respondent.
20. It is so ordered.
SIGNED, DATED, and DELIVERED IN VIRTUAL COURT THIS
5TH DAY OF JUNE, 2025
ADO MOSES
JUDGE
In the Presence of:
Moses – C/A
Ngethe……………..for the Applicant
Nyaribo………for the Respondent