Muriuki t/a Gitonga Muriuki & Company Advocates v Ufundi Savings & Credit Co-operative Society Limited; Co-op Holding Co-operative Society (Interested Party) [2025] KEHC 3570 (KLR)

Muriuki t/a Gitonga Muriuki & Company Advocates v Ufundi Savings & Credit Co-operative Society Limited; Co-op Holding Co-operative Society (Interested Party) (Miscellaneous Civil Application E1244 of 2023) [2025] KEHC 3570 (KLR) (Civ) (21 March 2025) (Ruling)

Neutral citation: [2025] KEHC 3570 (KLR)

Republic of Kenya

In the High Court at Nairobi (Milimani Law Courts)

Civil

Miscellaneous Civil Application E1244 of 2023

JN Mulwa, J

March 21, 2025

Between

Gitonga Kithinji Muriuki t/a Gitonga Muriuki & Company Advocates

Applicant

and

Ufundi Savings & Credit Co-operative Society Limited

Respondent

and

Co-op Holding Co-operative Society

Interested Party

Ruling

1. Before the Court for determination is the motion dated 25/04/2024 filed by Gitonga Kithinji Muriuki t/a Gitonga Muriuki & Co. Advocates (the Applicant) pursuant to Section 1A, 1B & 3A of the Civil Procedure Act (CPA), Order 40 Rule 2, Order 51 Rule 1 of the Civil Procedure Rules (CPR) and Section 51(2) of the Advocates Act seeking inter alia:a.Spent.b.Spent.c.Spent.d.Judgment be and is hereby entered in favour of the Applicant, Gitonga Muriuki & Company Advocates, for the sum of Kshs. 20,791,340/-.e.Upon entry of judgment, an order be issued directing the Co-op Holding Co-operative Society (the Interested Party) and Ufundi Savings & Credit Co-operative Ltd (the Respondent) to pay and or deposit to the Applicant all the dividend amounting to Kshs. 19,111,037. 09 and any subsequent dividends until payment of all the decretal sum.f.Interest be and is hereby granted on prayer (e) above at Court rates from the date of taxation.g.Costs of the application be borne by the Respondent.

2. The motion is premised on grounds found at the supporting affidavit sworn by the Applicant. The gist of his deposition is that having filed a bill of costs against the Respondent, the same was taxed to the tune of Kshs. 20,791,340/- with a certificate of taxation issued thereafter. That he is aware that the Respondent holds 14,524,272 shares with the Interested Party equating to a net dividend of Kshs. 19,111,037. 09 and asserts apprehension that the Respondent may hurriedly transfer and or dispose its shares or spend the dividends on the backdrop of an Annual General Meeting (AGM) held by the Interested Party on 23/04/2024 in which it recommended and resolved that dividends be distributed to shareholders including the Respondent.

3. Further it is deposed that the Respondent has not filed a reference in respect of the taxed bill of costs and therefore if an order to stay the distribution to the Respondent dividends pending hearing and determination of this application as directed by the court on 13/5/2024(Ongeri J), he stands to suffer loss if the Respondent is allowed to receive the funds as it might might utilize the same and fail to settle the taxed amount therefore it is in the interest of justice that the motion is allowed as prayed.

4. The Respondent opposes the motion by way of a replying affidavit deposed by Alphonce Maragia Makori. Therein, he concedes to the fact that the Applicant’s bill of costs was taxed to the tune of Kshs. 20,791,340/- in respect of legal services rendered however proceeds to address other peripheral issues and not the substance of the Applicant’s motion.

5. The Interested Party on its part filed grounds of opposition in response to the Applicant’s motion to the effect:- that the motion is misconceived and bad in law as the orders as against the Interested Party can only be pursued through garnishee proceedings as provided for under Order 23 of the CPR; that the prayer sought as against the Interested Party is substantive in nature and the same cannot be granted as sought; that the Applicant has failed to demonstrate compliance with the provision of Order 22 Rule 40(1) of the CPR which mandates that attachment of shares shall be effected by a written order prohibiting the transfer of shares or receipt of dividends thereon.

6. The motion was canvassed by way of written submissions, which this Court has duly considered and flags the following issues for determination:a.Whether the Applicant is entitled to judgment in the sum of Kshs. 20,791,340/- in respect of the taxed costs?b.Whether the Applicant is entitled to interest on the taxed costs?c.Whether an order ought to issue directing the Interested Party and the Respondent to pay and or deposit to the Applicant all the dividend amounting to Kshs. 19,111,037. 09 and any dividend until payment of all the decretal sum?d.Who ought to bear the costs of the motion?

Whether the Applicant is entitled to judgment in the sum of Kshs. 20,791,340/- in respect of the taxed costs? 7. As rightly submitted by the Applicant, upon taxation no reference or other challenge to the taxation proceedings and the certificate of costs have since been mounted by the Respondent as provided for under Rule 11 of the Advocates Remuneration Order. That said the Applicant’s motion invokes Section 51(2) of the Advocates Act, which provides that:“The certificate of the taxing officer by whom any bill has been taxed shall, unless it is set aside or altered by the Court, be final as to the amount of the costs covered thereby, and the Court may make such order in relation thereto as it thinks fit, including, in a case where the retainer is not disputed, an order that judgment be entered for the sum certified to be due with costs.”

8. While calling to aid the decisions in Kalonzo Musyoka & Paul M. Wambua (Practicing as Musyoka & Wambua, Advocates) v Rustam Hira (Practicing as Rustam Hira, Advocate) [2006] KEHC 3078 (KLR) and Otieno, Yogo & Company Advocates V Gulf Fabricators [2009] KEHC 3108 (KLR), the Applicant summarily submitted that considering the finality of the Certificate of Taxation and in the absence of any legal challenge, the taxed amount of Kshs. 20,791,340 should be entered as judgment in his favour

9. The Court’s understanding of Section 51(1) of the Act, is that the Certificate of Taxation unless challenged by a reference to the judge, it stands as final, and judgment may be entered in respect of the Certificate of costs, and the applicant is at liberty to execute the same as a decree of the court on costs.

10. In Otieno, Ragot & Company Advocates v Kenya Airports Authority [2021] eKLR, Murgor JA, cited with approval the decision in Lubulellah & Associates Advocates v N.K. Brothers Limited [2014] eKLR it was held that:“The law is very clear that once a taxing master has taxed the costs, issued a Certificate of costs and there is no reference against his ruling or there has been a ruling and a determination made and not set aside and/or altered, no other action would be required from the court save to enter judgment. An applicant is not required to file suit for the recovery of costs.”

11. For the foregoing judgment is entered for the Applicant against the Respondent in respect of the taxed costs pursuant to Section 51(1) of the Act.

Whether the Applicant is entitled to interest on the taxed costs? 12. By this motion, the Applicant has sought that interest to be awarded at the Court’s rates from date of taxation. Paragraph 7 of the Advocates Remuneration Order provides that: -“An advocate may charge interest at 14 per cent per annum on his disbursements and costs, whether by scale or otherwise, from the expiration of one month from the delivery of his bill to the client, provided that such claim for interest is raised before the amount of the bill shall have been paid or tendered in full”

13. The Applicant lodged his bill of costs on about 19/12/2023. Pursuant to the above provision, the Applicant is entitled to levy interest after the bill was served upon the Respondent one month thereafter. However, Had the Applicant anchored his claim on interest under Paragraph 7 of the Advocates Remuneration Order he would have been entitled to the same a month after service of his bill of costs. Having failed to do so, the award on interest on costs would be at the discretion of the Court, thus from the date of taxation 11/04/2024 until payment in full, and as prayed in the application at paragraph 1(f)

14. Accordingly, judgment is entered in favour of the Applicant as against the Respondent to the tune of Kshs. 20,791,340/- with the said sum attracting interest at 14% from 11/04/2024 until payment in full.

Whether an order ought to issue directing the Interested Party and the Respondent to pay and or deposit to the Applicant all the dividend amounting to Kshs. 19,111,037. 09 and any dividend until payment of all the decretal sum? 15. The Applicant argues that by dint of Section 38 of the CPA and Order 40 of the CPR the Court ought to grant the order to ensure that the dividends are paid or deposited towards the satisfaction of the decretal sum. The decision in Kagwimi Kang'ethe & Co Advocates v. Wachira [2023] KEHC 18652 (KLR) was relied on in the forestated regard.

16. In response, the Interested Party relies on the decisions in Orion East Africa Limited v Tetu Coffee Growers Cooperative Society Limited (in Liquidation), Civil Suit No. 1822 of 2000, Orion East Africa v Mugama Farmers Cooperative Union Limited & Another [2018] eKLR, Orion East Africa Limited vs Mugama Farmers Co-operative Union Limited & Another [2015] eKLR, Methodist Church in Kenya v Mohammed Fugicha & 3 others [2019] eKLR and Park Road Nursing Home v National Land Commission of Kenya; Nairobi North Healthcare Limited (Interested Party) (Environment & Land Case E010 of 2023) [2023] KEELC 22354 (KLR) to summarily submit that the prayer as against it could only apply by way of garnishee proceedings pursuant to Order 23 of the CPR and that the order seeking attachment of shares is not in compliance with Order 22 Rule 40(1) of the CPR.

17. Agreeably, it appears that the Applicant has presented within the instant motion what appears to be a garnishee application as against the Interested Party. The manner in which the reliefs have been sought seems to be an attempt to steal a march as against both Interested Party and the Respondent with respect to the shares and dividends amounting to Kshs. 19,111,037. 09 purportedly held by the Interested Party. Order 23 Rule 1 & 2 of the CPR, is elaborate with respect to garnishee proceedings and it is evident that the Applicant by seeking the above relief and presentation of the motion, has flouted rules within which this Court can proceed to order the Interested Party to attach dividends held by the Interested Party. Without due regard to procedure provided under Order 22 Rule 40(1) of the CPR. Provisions of Section 38 of the CPA cannot be read in isolation of rules of procedure provided for in the CPR.

18. It follows therefore that the order as sought cannot issue in the circumstance and the same is accordingly declined.

Who ought to bear the costs of the motion? 19. Given the foregoing and without further encumbering parties with further litigation on costs of the instant motion given that the application has partially succeeded, the Court will award costs of the application to the Applicant, and proceeds to assess the same at Kshs. 3,000/=000/-.Order accordingly.

DELIVERED DATED AND SIGNED AT NAIROBI THIS 21STDAY OF MARCH, 2025……………………….JANET MULWA.JUDGE