Corat Africa v Mbobu t/a Kyalo & Associates (Civil Case E284 of 2023)
[2025] KEHC 3101 (KLR) (Commercial and Tax) (13 March 2025) (Ruling)
Neutral citation: [2025] KEHC 3101 (KLR)
REPUBLIC OF KENYA
IN THE HIGH COURT AT NAIROBI (MILIMANI COMMERCIAL COURTS)
COMMERCIAL AND TAX
CIVIL CASE E284 OF 2023
F GIKONYO, J
MARCH 13, 2025
BETWEEN
CORAT AFRICA ........................................................................................ PLAINTIFF
AND
MATHEW KYALO MBOBU T/A KYALO & ASSOCIATES .............. DEFENDANT
RULING
1. Before the court are two applications. One by the defendant and the other by the plainti, dated 18th
September 2023 and 27th November 2023, respectively. The former is seeking stay of proceedings on
the basis of advocates’ lien. The latter is seeking striking out of the defence and counterclaim and entry
of judgment on admission.
2. This ruling determines the issues of whether the defendant has made a case for stay of proceedings
based on an advocate’s lien and whether the plainti has made a case for the striking out of the defence
and counterclaim and/ or entry of judgment on admission. The issues arise from the applications led
by the defendant and the plainti dated 18th September 2023 and 27th November 2023 respectively.
Background
3. The dispute between the parties emanated from the appointment of the defendant as the plainti’s
advocate to represent it in the sale of two parcels of land known as LR No. 7777/8 and LR No. 7777/9
Karen. The defendant drew the agreements for sale. The purchase price for the two parcels was Kshs.
250,000,000/-, payable in instalments to the defendant to hold as stakeholder pending completion.
The purchasers deposited the entire purchase price of Kshs. 250,000,000/- to the defendant on various
dates. The transfer instruments were registered on 6th January 2022. The defendant released Kshs.
153,000,000/- to the plainti with the purchaser’s authorization on various dates. However, despite
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demand, the defendant failed to remit to the plainti the balance of Kshs. 97,000,000/-, precipitating
this suit.
4. In addition to the balance of Kshs. 97,000,000/-, the plainti claims interest at 15% from April 2022
until payment in full, Kshs. 2,606,508.87/- to be paid in penalties and interest for late payment of
capital gains tax, incurred interest in the sum of KES. 8,069,380.17/- on the loan and overdraft facility
at Standard Chartered Bank Kenya Ltd, Kshs. 4,876,000.00/- on lost interest on investment of Kshs.
50,000,000/- and costs of the suit.
5. The defendant entered appearance on 27th July 2023 and thereafter led a defence and counterclaim
dated 9th August 2023. He admitted that an advocate-client relationship existed between the parties
and that he held the purchase price on behalf of the plainti, part of which is not remitted to the
plainti. However, he denied holding the Kshs. 97,000,000/- illegally, claiming that he was holding
the unremitted amount as lien for the various legal services rendered to the plainti.
6. The plainti led a reply to defence and counterclaim dated 23rd August 2023.
First application
7. The rst application dated 18th September 2023 by the defendant seeks stay of proceedings pending
hearing and determination of ELC Misc Civil Application No. E050/ E051/ E057/ E058 and E173
of 2023 which are due for taxation before the Taxing Master of the Court on 28th November 2023.
8. The application is supported by the adavits sworn by Mathew Kyalo Mbobu on 18th September
2023 and 20th November 2023. The defendant also led initial and supplementary written submissions
dated 20th November 2023 and 27th March 2024 respectively.
9. The application is opposed by the plainti through grounds of opposition dated 2nd October 2023,
a replying adavit sworn by the plainti’s director, Oliver Kisaka Simiyu on 2nd October 2023 and
written submissions dated 21st November 2023. The core contention is that the defendant has not met
the legal threshold for stay.
Second application
10. The second application dated 27th November 2023 by the plainti seeks striking out the defence and
counterclaim dated 9th August 2023 for disclosing no reasonable defence and cause of action against
it and entry of judgment on admission against the defendant for the sum of KES. 112,551,889.04/-
together with interest and costs of the suit as sought in the Plaint.
11. The application is supported by adavits sworn by Oliver Kisaka Simiyu on 27th November 2023 and
27th September 2024 and written submissions dated 27th September 2024.
12. The grounds are that the defendant has admitted to the principal amount of KES. 97,000,000/- and
the accruing penalties and additional charges that the plainti suered as a result of the failure to remit
the principal amount.
13. The defendant opposed the application through a replying adavit sworn on 18th January 2025 and
written submissions dated 7th February 2025. The main argument is that the defence and counterclaim
cannot be said to an admission that is clear, plain, unequivocal and/ or obvious and the suit should
proceed for a full hearing to dispose the issues fully.
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Analysis and Determination
14. The two applications raises the following three major issues:-
1. Whether the defendant has met the threshold for stay of proceedings pending taxation of its
bills of costs.
2. Whether the plainti has made a case for entry of judgment on admission.
3. Whether the plainti has made a case for the striking of the defence and counterclaim.
Stay of proceedings
15. According to the defendant, these proceedings should be stayed as a way of ensuring a just
determination of the dispute between the parties. submitted that he has met the threshold for stay
of proceedings. His reason is the advocates’ lien over the funds subject of this suit for payment of his
costs which are yet to be taxed. In his opinion, staying these proceedings is the lower risk of injustice
and which meets the ends of justice. He cited Kenya Power & Lighting Co. Ltd v Esther Wanjiru
Wokebii Civil Appeal No. 326 of 2013 [2014] eKLR and Global Tours & Travels Limited; Nairobi HC
Winding Up Cause No. 43 of 2000. He also relied on Sections 1A, 1B & 3B of the Civil Procedure Act .
16. On its part, the plainti submitted that the defendant has not met the legal threshold for stay; the court
has not issued an order that is being appealed or capable of leading to the relief of stay of proceedings
under Order 42 Rule 6; the present suit is not related to the bills of costs led by the defendant that
could lead to possible conicting decisions; and the application is a delaying tactic made in bad faith,
is frivolous, vexations.
17. From the defence, the replying adavit and submissions, the defendant’s case is that he is holding the
balance of Kshs. 97,000,000/- as lien for his unpaid fees for the various legal services rendered to the
plainti.
18. I do note that at the time of ling the application, there were bills of costs led by the advocate
which were pending taxation. However, in its further adavit, the plainti deposed that the
defendant acknowledges Kshs. 4,072,150/- out of the total amount claimed in the bills of costs of
Kshs. 12,737,241.70/-. That the bill of costs in ELC Misc E050/2023, E051/2023, E057/2023 and
E058/2023 relate to the sale of LR No. 7777/8 and 7777/9. That the bills of costs led in ELC Misc
E050/2023, E051/2023, E057/2023 and E058/2023 have since been determined and dismissed or
struck out. That only one bill of costs in Misc. E407/2024 is pending determination.
19. The plainti exhibited taxation rulings in ELC Misc E050/2023 and E057/ 2023, E058 and E051 of
2023, ELC Misc E006 of 2023, ELC Misc E007 of 2023, ELC Misc E008 of 2023, ELC Misc E009
of 2023. It also exhibited its reference applications against the taxation rulings in ELC E006 of 2023,
ELC E007 of 2023, ELC Misc E008 of 2023, E009 of 2023 that are pending.
20. An advocate has a right to hold a client’s property as lien under Section 52 of the Advocates Act.
Statutory Manager United Insurance Company Limited v Edward Muriu Kamau, Njoroge Nani
Mungai & Peter Munge Murage P/A Muriu Mungai & Co.Advocates [2013] eKLR.
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21. In Booth Extrusions (Formerly) Booth Manufacturing Africa Limited v Dumbeyia Nelson Muturi
Harun t/a Nelson Harun & Company Advocates [2014] eKLR, the late Justice Onguto explained
that:-
“ 18. A review of case law in the context of an Advocate – Client relationship, will
reveal that there is the general lien which confers upon the advocates the right
to retain all papers, money or other chattel the property of their client which
came into possession of the advocates as their clients’ advocate until all the
costs and charges due to the advocates are paid. The lien is general and not
restricted to costs owing in respect to the property which the client is claiming
possession. It is simply a retaining lien premised upon the advocate having
actual physical possession of the property the subject of the lien.
19. The policy underlying liens briey put is that it would be unfair for a party
to enjoy the result of an advocate’s work without paying the advocate and
then let the advocate seek payment elsewhere when payment could be easily
gathered through the lien. Consequently, an advocate having a retaining lien
over documents in her or his possession is entitled to retain the documents
against the client until the full amount of his costs is paid: see Barrat –v- Gough
Thomas [1950]2 All ER 1048, 1053. Provided that the costs in question have
been incurred, the existence of the lien arguably does not rest upon a bill having
been rendered to the client: see Re Taylor [1891] 1Ch 590, 596. In so much
however as the lien protects the advocate, the general lien confers only a right
to retain property. It exists for no other purpose. It is merely passive and “the
solicitor [advocate] has no right of actively enforcing his demand”: see Barrat –
v- Gough Thomas [1950] 2All ER 1048, 10563. Once the Advocates’ taxable
costs, charges and expenses are paid the client is no doubt entitled to an order
for the delivery up of the retained documents.
20. The foregoing is a brief restatement of the nature of an advocate lien as
founded on various common law cases and may be continued if one asks when
the lien ceases.”
22. In this case, the defendant has raised a defence of an advocate’s lien. However, some of the bills of costs
have been concluded. In addition, the plainti has indicated that the defendant acknowledges Kshs.
4,072,150/- out of the total amount claimed in the bills of costs of Kshs. 12,737,241.70/-. The amount
that is still under consideration is 8,665,091.70/-.
23. The defendant is holding the balance of Kshs. 97,000,000/-. The plainti asserted that though
the defendant could argue that he would hold a lien, the legal fees would not be the entire KES.
97,000,000/-. In Republic v Lucas M. Maitha Chairman, Betting Control and Licensing Board & 4
others Ex -parte: Interactive Gaming and Lotteries Limited, Justice Odunga (as he then was) stated
that: -
“ …a lien is simply security for an advocate’s fees and an advocate is not entitled to exercise a
right to alien in respect of the whole property when his costs can only be recovered from
part only of the property. In other words, the lien ought to be commensurate to the claim
for fees and no more.’
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24. In accordance with the constitutional principle on proportionality of remedy, the advocate’s lien
should ‘be commensurate to the claim for fees and no more’. Lucas M. Maitha case (ibid). Accordingly,
holding a sum of Kshs. 97,000,000/- on lien for advocates’ fee which at most, will be Kshs.
8,665,091.70/-, defeats the principle of proportionally of remedy and only works extreme prejudice
to the client.
25. He seeks the stay of proceedings in the matter until the legal fees are resolved. In light of proportionality
requirements, and the fact that stay of proceedings is such a draconian remedy and a rude interruption
of a party’s right of litigation especially where it is not founded on solid grounds, there is no justication
to stay these proceedings on the ground cited. It will be unjust to stall these proceedings. On the other
hand, continuation of these proceedings will not prejudice the defendant; but, staying them would
greatly prejudice the plainti’s right to fair hearing.
26. Except, to lower the risk of injustice and attain a proportioned balance of the interests of both parties;
the court shall require the plainti to furnish security for the payment of the legal fees as per Section
52 of the Advocates Act.
27. The amount of security is upon the court’s discretion but to the extent sucient to cover the costs if
they become due and payable.
Striking out defence
28. The plainti applied for the striking out of the defence and counterclaim for it raises no reasonable
defence. On this subject, I am content to cite a long but relevant narrative in Saudi Arabian Airlines
Corporation v Sean Express Services Ltd [2014] eKLR that: -
“ A great number of judicial decisions have now settled the legal principles which should guide
the Court in determining whether to strike out a pleading. Except, I can state comfortably
that these principles now draw, not only from judicial precedent, but from the principles of
justice enshrined in the Constitution especially in Article 47, 50 and 159. The rst guiding
principle is that, every Court of law should pay homage to its core duty of serving substantive
justice in the judicial proceeding before it, which explains the reasoning by Madan JA in
the famous DT Dobie case that the Court should aim at sustaining rather than terminating
suit. That position applies mutatis mutandis to a statement of defence and counter-claim.
Secondly, and directly related to the foregoing constitutional principle and policy, is that
courts should recognize the act of striking out a pleading (plaint or defence) completely
divests a party of a hearing, thus, driving such party away from the judgment seat; which is a
draconian act comparable only to the proverbial drawing of the ‘’Sword of the Damocles’’.
Therefore, the power to strike out a suit or defence should be used sparingly and only on
the clearest of cases where the impugned pleading is ‘demurer or something worse than a
demurer’ beyond redemption and not curable by even an amendment. Thirdly, in case of a
defence, the court must be convinced upon looking at the defence, that it is a sham; it raises
no bona de triable issue worth a trial by the court. And a triable issue need not be one
which will succeed but one that passes the Sheridan J Test in Patel v E.A. Cargo Handling
Services Ltd. [1974] E.A. 75 at P. 76 (Duus P.) that“…a triable issue …is an issue which
raises a prima facie defence and which should go to trial for adjudication.” Therefore, on
applying the test, a defence which is a sham should be struck out straight away.
29. Guided by the above and upon looking at the defence, I am not convinced that it is a sham. The defence
raises issues relating to whether the plainti is entitled to Kshs. 2,606,508.87/- to be paid in penalties
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and interest for late payment of capital gains tax, incurred interest in the sum of KES. 8,069,380.17/-
on the loan and overdraft facility at Standard Chartered Bank Kenya Ltd, Kshs. 4,876,000.00/- on lost
interest on investment of Kshs. 50,000,000/- and costs of the suit.
30. Therefore, I nd that the plainti has not met the threshold for the striking out of the defence and
counterclaim.
Judgment on admission
31. The third issue is whether the plainti has made a case for the entry of judgment on admission. Order
13 Rule 2 of the Civil Procedure Rules provides that:-
“ 2. Any party may at any stage of a suit, where admission of facts has been made,
either on the pleadings or otherwise, apply to the court admissions for such
judgment or order as upon such admissions he may be entitled to, without
waiting for the determination of any other question between the parties; and
the court may upon such application make such order, or give such judgment,
as the court may think just.”
32. In Choitram v Nazari [1984] eKLR, the Court of Appeal outlined the guiding principles for entry of
judgment on admission, as follows:-
“ For the purpose of order XII rule 6, admissions can be express or implied either on the
pleadings or otherwise, e.g. in correspondence. Admissions have to be plain and obvious, as
plain as a pikesta and clearly readable because they may result in judgment being entered.
They must be obvious on the face of them without requiring a magnifying glass to ascertain
their meaning. Much depends upon the language used. The admissions must leave no
room for doubt that the parties passed out of the stage of negotiations onto a denite
contract. It matters not if the situation is arguable, even if there is a substantial argument,
it is an ingredient of jurisprudence, provided that a plain and obvious case is established
upon admissions by analysis. Indeed, there is no other way, and analysis is unavoidable to
determine whether admission of fact has been made either on the pleadings or otherwise to
give such judgment as upon such admissions any party may be entitled to without waiting
for the determination of any other question between the parties. In considering the matter,
the judge must neither become disinclined nor lose himself in the jungle of words even when
faced with a plaint such as the one in this case. To analyse pleadings, to read correspondence
and to apply the relevant law is a normal function performed by judges which has become
established routine in the courts…”
33. The plainti submitted that the current case is t for entry of judgment on admission as it is clear and
plain due to alleged admissions by the defendant conrming receipt of the purchase price and that he
is holding the money to date.
34. The plainti pointed to paras. 17 and 18 of the Defence and Counterclaim which read as follows:-
“ 17. Paragraph 13 of the plaint is admitted save that the transfer of LR No. 7777 was
not eected until 6/01/2022, whereafter counsel for the 2nd buyer requested
for time to conrm the disbursement of the balance of the proceeds of sale
pending ocial search and pending conrmation of change of particulars of
ownership with the Nairobi County Government.
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18. Accordingly, when the plainti called for the remittance of the outstanding
balance of the purchase price in or about 4/4/2022, the Defendant informed
it of the issue raised by the counsel for the 2nd buyer and in respect whereof the
matter has never been formally resolved.”
35. The plainti also relied on letters exhibited at page 46-48 of the exhibit OKS-1, where the defendant
states that the funds were misappropriated by his partners in the rm of Kyalo and Associates where he
is a sole proprietor. The plainti also added that the defendant promised to make good the principal
sum and penalties soonest possible. The plainti asserted that though the defendant could argue that
he would hold a lien, the legal fees would not be the entire KES. 97,000,000/-. It pointed out that the
court has already decided the bills of cost relating to this transaction and found that all fees owed to
the defendant were already paid.
36. On the other hand, the defendant argued that the defence and counter claim raise triable issues between
the parties which require that the suit be heard at full hearing for the court to determine the issue of
liability in this suit.
37. The court has power to enter judgment on admission on facts which have been admitted in the
pleadings or otherwise without waiting for determination of any other question between the parties.
The defendant has admitted that he holds a sum of Kshs. 97,000,000 for the plainti except he holds
it upon the advocates’ lien for fees.
38. The admission is clear.
39. Therefore, the court is satised that admission of fact has been made, and that the plainti is entitled
to the entry of judgment on admission for the part of its claim against the defendant for Kshs.
97,000,000/-.
Final disposal
40. The upshot is that: -
1. The defendant’s application dated 18th September 2023 is dismissed for want of merit.
2. The plainti’s application dated 27th November 2023 partially succeeds, and is allowed in the
following specic terms: -
i. That judgment on admission is entered in favour of the plainti against the defendant
for the admitted sum of KES. 97,000,000/- together with interest thereon at court rate
from the date of ling of the suit.
3. The defendant shall retain and hold a sum of 8,665,091.70/- as security (lien), for the advocates’
fee once taxed.
4. The remainder of the claims to proceed to hearing.
5. Orders accordingly.
DATED, SIGNED AND DELIVERED THROUGH MICROSOFT TEAMS ONLINE
APPLICATION THIS 13TH DAY OF MARCH, 2025.
-------------------------
F. Gikonyo M
Judge
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In the presence of: -
Ms. Linet for defendant
Waiyaki for Plainti
CA - Kinyua
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