Murgor & Murgor Advocates v Kenya Pipeline Company Limited (Miscellaneous Petition 15 of 2020) [2022] KEHC 17119 (KLR) (Constitutional and Human Rights) (16 December 2022) (Ruling)
Neutral citation:
[2022] KEHC 17119 (KLR)
Republic of Kenya
Miscellaneous Petition 15 of 2020
AC Mrima, J
December 16, 2022
Between
Murgor & Murgor Advocates
Advocate
and
Kenya Pipeline Company Limited
Client
Ruling
Introduction
1.Murgor & Murgor Advocates, the applicant/advocate herein, instituted the notice of motion application dated July 16, 2021, (hereinafter ‘the application’). It is supported by the affidavit of Eva Kala deposed to on a similar date.
2.The application was precipitated by this court’s ruling of July 1, 2021 that dismissed the applicant/advocate’s application dated October 12, 2020 which sought to disqualify the firm of Mohammed Muigai LLP from representing Kenya Pipeline Company Limited, the client/respondent herein in taxation proceedings on account of conflict of interest.
3.The application sought the following orders;1.Spent.2.Spent3.That this honourable court be pleased to grant a stay of the taxation proceedings pending the hearing and determination of the advocates/applicant’s intended appeal to the Court of Appeal, against the ruling dated July 1, 2021.4.That the cost of this application do abide the results of the intended appeal.
4.The applicant sought stay of procedings before the taxing master on the basis that it had filed a notice of appeal dated July 7, 2021.
5.It was its case that the intended appeal raises arguable points and if this court fails to grant stay of proceedings, the appeal shall be rendered nugatory because the firm of Mohammed Muigai LLP shall continue to represent the client/respondent to its great prejudice.
6.The applicant further stated that the stay ought to be granted to avert substantial prejudice that would be occasioned to it, which could not be atoned by damages, in the event the be appeal was allowed.
7.The applicant stated that the application had been made timeously and was in the interest of justice and fairness that it is allowed so as not to render the intended appeal nugatory.
The Submissions
8.In its written submissions dated September 8, 2021, the advocate/applicant submitted that it was not legally proper for the firm of Mohammed Muigai LLP to represent the client/respondent herein in the taxation proceedings since it was conflicted.
9.It was the applicant/advocate case that the application for stay of proceedings was properly before the court for having been instituted under order 42 rule 6 of the Civil Procedure Rules which allow for stay of proceedings where there is an order to that effect from the court appealed from.
10.Support to the foregoing legal position was drawn from the decision in Imperial Bank Limited (In Receivership) & 2 others -vs- Alnashir Popat & 17 others (2017) eKLR where the court spoke to the import of order 42 of the Civil Procedure Rules.
11.In rebutting the client/respondent’s allegation that the applicant/advocate was undeserving of the prayers sought on account of non-compliance with the Taxation Master’s orders of July 21, 2020, it was submitted that the facts alluded to were a distortion of facts and extraneous and irrelevant to the determination of the instant application.
12.It was submitted that, as established in the case of Global Tours & Travels Limited, Nairobi Winding Up Cause No 43 of 2000 the applicant had satisfied the requirements needed for the stay of proceedings. In the case it was observed;
13.Further reference was made to the decision in Imperial Bank Limited (in receivership & 2 others -vs- Alnashir Popat & 17 others where the following factors were set out;i.That there is sufficient cause to order stay, that it, that substantial loss would ensue from a refusal to grant stay.ii.That the application was brought without delay.
14.It was submitted that the court ought to exercise discretion in a manner that would prevent an appeal, if successful, from being rendered nugatory. Reference to that end was made to the Court of Appeal decision in Butt -vs- Rent Restriction Tribunal (1979) eKLR where it was observed;
15.It has been said that the court as a general rule ought to exercise its best discretion in a way so as not to prevent the appeal if successful from being nugatory.
16.It was submitted that the issue of conflict of interest ought to be determined since its continuance will, in the event of success, will irreparably cause prejudice.
17.On the issue of time, it was submitted that the application was filed on July 16, 2021, 3 days after the applicant was issued with a certified copy of the ruling.
The Client/ Respondent’s Case
18.The client respondent opposed the application through grounds of opposition dated July 27, 2021.
19.It was its case that the application sought to further unjustifiably delay in the taxation of the bill of costs after filing of the notice of motion application dated October 12, 2020 and another dated November 12, 2020 which are still pending hearing and determination before the Deputy Registrar.
20.It was its case further that it was inequitable to grant stay of proceedings on account of the applicant’s non-compliance with directions and orders issued by the Deputy Registrar of July 21, 2020 for the filing of the applicant. Advocates further affidavit and submissions in support of the bill of costs despite no orders of stay of taxation proceedings being in place to the filing of the application.
21.It further was its case that it was unjust to grant stay of proceedings on account of the respondent/client’s compliance with the directions and orders issued by the Deputy Registrar of July 21, 2021 through the filing of the replying affidavit sworn by Stanley Manduku on August 26, 2020 and written submissions dated August 26, 2020 both filed on August 31, 2020 in response to the bill of costs.
22.It was its case that the application is incompetent, misconceived and abuse of the court process and no justifiable basis has been laid to make this court exercise its discretion.
23.It was urged the court to dismiss it with costs.
Submissions
24.In its written submissions dated October 24, 2021, the client/respondent first stated that the power of the court to grant stay is discretionary to be exercised in the interest of justice.
25.On the principle of substantial loss, it was submitted that court should find persuasion in the decision in Muri Mwaniki & Wamiti Advocates -vs- Wings Engineering Services Limited (2020) eKLR where it was observed that;
26.While referring to the decision in Machira t/a Machira & Co Advocates -vs- East African Standard (2002) eKLR it was submitted that it was the duty of an applicant to demonstrate substantial loss to be suffered.
27.The client/respondent challenged the claim that the appeal would be rendered nugatory should the application not be stayed by relying on the decision in Stanley Kangethe Kinyanjui -vs- Tony Ketter & 5 others (2013) eKLR.
28.It was its case that whether or not an appeal will be rendered nugatory depends on whether or not what is sought to be stayed, if allowed to happen, is reversible or if it is not reversible, whether damages will reasonably compensate such party.
29.It was its case that any harm that would be occasioned to the applicant/advocate would be reversed since the respondent client will be entitled to appoint another firm of advocates to continue the taxation proceedings to finality.
30.It was submitted further that the applicant has not demonstrated any special circumstances for the grant of stay of taxation proceedings.
31.In the end it was urged that the application be dismissed.
Analysis & Determination
32.From the foregoing respective parties’ rival positions, the only issue that arises for determination is whether the application meets the threshold for stay of proceedings.
33.To that end, I will look at the law and the principles as developed by courts that guide the process.
34.Order 42 rule 6 of the Civil Procedure Rules provides for stay of execution or proceedings in the following terms;
35.In Kenya Wildlife Service -vs- James Mutembei (2019) eKLR, the court, in reference to Halsbury’s Laws of England 4th edition vol 37 page 330 and 332, discussed stay of proceedings in the following manner;
36.The consequence of staying proceedings and the high calling placed upon an applicant for its grant was fittingly discussed in Kenya Wildlife Service -vs- James Mutembei (supra), when the Court observed as follows;
37.In Kenya Shell Kenya Ltd -vs- Kibiru & another [1986] KLR 410 the Court of Appeal remarked that the tenets of order 42 must be substantiated by a party seeking stay. The learned judges identified substantial loss as the cornerstone for the grant of stay by remarking as hereunder;
38.Further to the foregoing, in David Morton Silverstein vs Atsango Chesoni (2002) eKLR the Court of Appeal made the following clarification in respect to stay of proceedings;
39.From the outset, it is common ground that the application was instituted timeously.
40.Therefore, the only issues to consider, whilst applying the foregoing principles are whether substantial loss has been demonstrated and whether the appeal will be rendered nugatory should the taxation proceedings be allowed to proceed.
41.As established in the foregoing authorities, substantial loss is evidence based.
42.In her affidavit deposed to on July 16, 2021, Eva Kala gave evidence detailing the source and nature of conflict of interest the firm of Mohammed Muigai LLP had in respect of the taxation proceedings.
43.She drew the nexus between prejudice to be suffered by continued representation of the client/respondent by Mohammed Muigai LLP as occasioned by conflict of interest.
44.She was categoric there will be substantial loss and will not be in the interests of justice and prudent use of judicial time to allow the taxation proceedings to proceed at the same time as the appeal.
45.As pointed out by the Court of Appeal in Kenya Shell Kenya Ltd -vs- Kibiru & another [1986] KLR 410, substantial loss exists in various forms. To the extent that there is the possibility of the Court of Appeal barring Mohammed Muigai LLP from representing the client/respondent, substantial loss in the form of delay, expense and hardship is is likely to be visited, not only upon the parties but also on the court’s time. There would be wasteful use of judicial time if taxation is allowed to proceed.
46.I find that the foregoing runs contrary the overring objective in disposal of civil disputes which places an obligation upon courts to focus on meeting the ends of justice without unreasonable delay, expense and hardship to the parties.
47.In Civil Application No Nai 173 of 2010, Abdirahman Abdi also known as Abdirahman Muhumed Abdi v Safi Petroleum Products Ltd & 6 others, the Court of Appeal spoke to the foregoing principles as follows;
48.Coming back to the issue of substantial loss, the court in Machira t/a Machira & Co Advocates -vs- East African Standard No 2 (2002) KLR spoke to it in the following terms;
49.In view of the wider interests of justice, it is my finding that the advocate/applicant has attained the high and stringent test for the grant of stay. (See Machira t/a Machira & Co Advocates -vs- East African Standard (2002) eKLR and Kenya Wildlife Service -vs- James Mutembei (2019) eKLR.)
50.On the issue whether the appeal will be rendered nugatory in the event it is successful, it was the applicant/advocate’s case that damages could not sufficiently atone the prejudice it will have suffered.
51.The client/respondent’s rival view was that any harm that would be occasioned to the applicant/advocate would be reversed since the respondent/client will be entitled to appoint another firm of advocates to continue the taxation proceedings to finality.
52.The Black’s Law Dictionary 11th edition Thomson Reuters Publishers, defines the term ‘nugatory’ as follows;
53.The question that arises is, in the special circumstances of the dispute, will the appeal be of no force, effect, useless and invalid, in the event it is successful?
54.The circumstances of this case are that, if stay is not granted, taxation will proceed before taxing master. Whereas that scenario seems to favour expeditious disposal of the case, in the event the appeal is successful and by that time the taxation proceedings are over, the outcome of the appeal will indeed be rendered nugatory.
55.The client/respondent’s position that the firm of Mohammed Muigai LLP will be changed is simplistic as it fails to consider far reaching implications of not granting the stay. Essentially therefore, in the event the appeal is successful, it will be of no force or effect, if by that time, taxation proceedings would have been completed and executed.
56.The foregoing finds favour on the decision in Machira t/a Machira & Co Advocates -vs- East African Standard No 2 (2002) KLR where Kuloba J as he then was observed as follows;
57.I find that the applicant/advocate’s circumstances align with foregoing requirements as to render nugatory the intended appeal if it succeeds.
Disposition
58.In the end, find that the application meets the minimum requirements for the grant for stay of proceedings and the following final orders herby issue;i.The application dated July 16, 2021 is allowed and an order is hereby issued staying taxation proceedings.ii.Costs of the application to be in the appeal.
59.It is so ordered.
DELIVERED, DATED AND SIGNED AT KITALE THIS 16TH DAY OF DECEMBER, 2022.A. C. MRIMAJUDGERuling virtually delivered in the presence of: -Mr. Murgor SC and Miss Kala Learned Counsel for the Applicant/AdvocateMiss Ngige Learned Counsel for the Client/Respondent.Kirong/Regina – Court Assistants.