[2023] KEHC 4054 (KLR)

CM Advocates LLP v Nairobi City County & another (Miscellaneous Application E202 of 2021) [2023] KEHC 4054 (KLR) (Judicial Review) (4 May 2023) (Judgment)

Neutral citation: [2023] KEHC 4054 (KLR)

Republic of Kenya

In the High Court at Nairobi (Milimani Law Courts)

Judicial Review

Miscellaneous Application E202 of 2021

JM Chigiti, J

May 4, 2023

Between

CM Advocates LLP

Applicant

and

Nairobi City County

1st Respondent

Director General, Nairobi Metropolitan Services

2nd Respondent

Judgment

1. By way of a Chamber Summon dated 18th July 2022 - under Rule 11 of the Advocates Remuneration Order, Advocates Act Cap 16 Laws of Kenya, and Article 159 (2) of the Constitution – the Respondents (Nairobi City County, and Director General of Nairobi Metropolitan Services) sought for the orders:i.That the decision of the taxing master in the Advocate and Client bill of costs dated 23rd December, 2021 in Miscellaneous Application No 589 of 2017 made on 5th July, 2022 be reviewed in terms of items Number 1,71,72,73,74,75,78,79,80,81, 81,82,83,84,85, and 86 of the said Bill of Costs.ii.That the Certificates of Taxation herein be set aside and the Bills be taxed by a different taxing master.iii.That the cost of this application be provided for.

2. The Application was supported by the Affidavit sworn by Erick Abwao, the Ag. County Solicitor of the Respondent. In sum, it was the Respondents case that on 23rd December, 2021 the Applicant filed their Bill of Cost which was taxed before Honourable E.C Chelule on 05th July 2022.

3. Aggrieved by the said Ruling on taxation, and in particular on items number 1,71,72,73,74,75,78,79,80,81,82,83,84,85, and 86 of the said Bill of Costs, the Respondent preferred this instant Application/Reference.

4. The grounds relied on were that the taxing master in her impugned decision made wrong interpretations, and misapplied the applicable law to instruction fees, that is, item number 1 on instruction fees. That the decision was irrational, punitive, without any legal foundation, and failed to take into account public interest. The Respondents averred that the taxing master failed to take into account their submissions dated 24th May 2022.

5. The Respondents maintained that it is only just and fair that the impugned tax master’s Ruling be set aside, and the matter be remitted to a new taxing master for taxation - in strict compliance and according to the applicable legal principles guiding taxation of bills of costs.

6. In response, and in opposing the Application (Reference), the Applicant (CM Advocates LLP) through its Replying Affidavit sworn by Caroline Kendi Kithinji and dated 30th November 2022, stated that it (the Applicant) offered various legal services to the Respondents as particularized in the subject Bill of Cost.

7. Nevertheless, the Applicant conceded that the court can interfere with the taxing master’s ruling where it (court) opines that the taxing master was wrong. That however, in this instant case, the tax master’s Ruling was not erroneous as she relied on appropriate legal principles, that is Schedule 6 (1)(j) of the Advocates Remuneration (Amendment) (No.2) Order 2014.

8. The Applicant contended that the taxing master took into account the relevant consideration and factors specifically provided for in Schedule 6A to increase the instructions fees. That such considerations included the importance and value of the subject matter being Kes. 19,698,417,830.

9. Further, the Applicant maintained that items 71,72,73,74,75,78,79,80, and 81 are court attendances and had been taxed under Schedule 6 - which is the applicable schedule under ordinary scale for half-day. That thus, the same cannot be said to be excessive as they have been taxed as per the scale. Further, that items no 81-86, which the Respondents seek re-taxation, were actually taxed off by the taxing master.

10. It was the Applicant’s position that the remuneration of an advocate ought to commensurate to his work; and in this case, the award of Kes. 17,626,156. 50/= is sufficient remuneration for the services offered by them (Applicant) as Advocates. The Applicant beseeched this court to dismiss the Chamber Summon date 18th July 2022 with costs.

11. To advance their cases, the parties filed their written submissions. The Respondents, in supporting the Application, through their written submissions dated 10th November 2022 submitted that the taxing master ought to exercise the discretion vested in her and wholly rely on the provisions of the law. That the costs recoverable are those fees fixed for the steps in the proceeding by a schedule of fees plus reasonable disbursements, as observed in the Canadian case of Reese v. Alberta {1993} 5 A.LR. (3rd) 40 and as quoted in KANU National Elections Board & 2 others v Salah Yakub Farah [2018] eKLR.

12. The Respondents posited that the general principles governing interference with the exercise of the taxing master's discretion were authoritatively stated by the South African Court in Visser Gubb 1981(3) SA 753 (C) 754H-755C and the same reiterated in Ocean Commodities Inc and Others v Standard Bank of SA Ltd and Others 1984(3) SA 15 (A) at 18F C G, as quoted in the KANU National Elections Board case (Supra).

13. The Respondents averred that the definition of error of principle was restated in the case of Kamunyori Company Advocates v Development Bank of Kenya Limited (2015) Civil Appeal 206 of 2006, as cited in Del Monte Kenya Limited v Kenya National Chamber of Commerce and Industry (KNCCI) Murang'a Chapter & 2 others [2021] eKLR case.

14. That the valuation of the subject matter of a suit, for the purposes of taxation of a Bill of costs, as addressed in the case of Joreth Ltd v Kigano Associates [2002] 1EA 92, ought to be determined from the pleadings, judgment, or settlement (if such be the case), but if the same is not so ascertainable the taxing officer is entitled to use his/her discretion to assess such instruction fee - as he considers just, taking into account, amongst other matters: the nature and the importance of the cause or the matter, the interest of the parties, general conduct of the proceedings, any direction by the trial judge, and all other relevant circumstances.

15. That in principle, costs are awarded, having regard to such factors as the difficulty and complexity of the issues, the length of the trial, value of the subject matter, and other factors which may affect the fairness of an award of costs. The law obligates the taxing master to consider the above principles as observed in the case of KANU National Elections Board case (supra).

16. It was the Respondents’ submissions that the Bill of Costs has been taxed astronomically high. That such high taxation puts the provision of legal services out of reach, and defeats the purpose of taxation which is to compensate a winning party for the expenses incurred in the case.

17. That whereas, the taxing master, in her decision dated 5th July, 2022 relied upon the provisions of Schedule 6 (1)(j) of the Advocates Remuneration (Amendment) (No. 2) Order 2014 and confirmed that the instruction fees for the instant suit is Kenya Shillings One Hundred Thousand (Kes. 100,000/=), still the taxing master proceeded to award Kenya Shillings Ten Million (Kes. 10,000,000/=) - without any explanation, justification, and without issuing any reasonable or necessary factors to satisfy the award. Consequently, that the taxing master's wrong interpretation and misapplication of the law applicable to instruction fees was: irrational, punitive, and without any legal foundation.

18. It was the Respondents position that neither the object of this lawsuit nor the nature of the procedure warrants the payment of such fees. That the taxing master erred in fact and law, in concluding that the Applicant (CM Advocates LLP) was entitled to taxed costs of Kes. 17,626,156. 50. Particularly, that the taxing master’s decision was based on an error of principle, and amounted to wrongful exercise of discretion. Thus, the Respondents prayed for the Application dated 18th July, 2022 be upheld as merited and allowed as sought.

19. The Applicant (CM Advocates LLP), in opposing the Application, filed its written submissions dated 2nd February 2023. It was its submission that, the Taxing Officer’s ruling can only be interfered with by the courts where it (court) opines that the taxing master is clearly wrong, erroneous in principle, or manifestly excessive awarded fees. The case of Republic v Medical Practitioners & Dentist Board & 2 others Ex-parte Mary A. Omamo-Nyamogo [2017] eKLR which set out the principles to be considered by the court in determining references, was relied upon.

20. That not in every case where courts view of the matter in dispute differs from that of the Taxing Master, but only where the taxing master view of the matter in dispute differs so materially from courts own view, that it should be held to vitiate the tax master’s ruling. That in this instant case, the taxing master applied the right principles, relied on relevant factors, and gave proper reasons for her decision in awarding Kes. 10,000,000 as instruction fees. The cases of Andrew Kanari Ruingora v Gachoka Mwangi Advocates [2022] eKLR and Ishamael & Co Associates v Bajaj Electricals Limited & Wayne Homes [2020] eKLR were relied on.

21. The Applicant maintained that the taxing master, in her ruling, demonstrated an understanding of the relevant applicable principles, placed reliance on the relevant factors, and gave proper reasons for her decision in awarding Kes. 10,000,000 as instruction fees. Relied on the case of Ishamael & Co Associates v Bajaj Electricals Limited & Wayne Homes [2020] eKLR. In totality, the Applicant argued that the instant Application, is not merited and prayed it be dismissed with costs.

22. I have considered the Application, response thereto, submissions by parties, and the authorities. The issue for determination is whether the taxing master applied the correct legal principles in her assessment of the instruction fees awarded.

23. It is now trite law that the High Court will only interfere with the decision of a taxing master in cases where there has been shown to be an error in principle. In Republic v Ministry of Agriculture & 20 Others Ex-Parte Muchiri W’ Njuguna [2006] eKLR, Hon. Justice J.B. Ojwang (Retired) stated as follows: -“The taxation of costs is not a mathematical exercise; it is entirely a matter of opinion based on experience. A Court will not, therefore, interfere with the award of a taxing officer, particularly where he is an officer of great experience, merely because it thinks the award somewhat too high or too low; it will only interfere if it thinks the award so high or so low as to amount to an injustice to one party or the other…. The court cannot interfere with the taxing officer’s decision on taxation unless it is shown that either the decision was based on an error of principle, or the fee awarded was manifestly excessive as to justify an interference that it was based on an error of principle.” [Emphasis mine]

24. In other words, before the court can interfere with the decision of the taxing master, it (court) must be satisfied that the taxing master’s ruling was clearly wrong. This means that the court will not interfere with the decision of the taxing master in every case where its (court’s) view of the matter in dispute differs from that of the taxing master; but only when it is satisfied that the taxing master’s view of the matter differs so materially from its own that it should be held to vitiate the ruling.

25. The circumstances under which a Judge of the High Court interferes with the taxing officer’s exercise of discretion are now well settled. The court in the case of First American Bank of Kenya v Shah and Others [2002] 1 EA 64 set the applicable principles. These principles are:i.That the Court cannot interfere with the taxing officer’s decision on taxation unless it is shown that either the decision was based on an error of principle, or the fee awarded was manifestly excessive as to justify an inference that it was based on an error of principle;ii.It would be an error of principle to take into account irrelevant factors or to omit to consider relevant factors and, according to the Order itself, some of the relevant factors to be taken into account include the nature and the importance of the cause or matter, the amount or value of the subject matter involved, the interest of the parties, the general conduct of the proceedings and any direction by the trial judge;iii.If the Court considers that the decision of the Taxing Officer discloses errors of principle, the normal practise is to remit it back to the taxing officer for reassessment unless the Judge is satisfied that the error cannot materially have affected the assessment and the Court is not entitled to upset a taxation because in its opinion, the amount awarded was high;iv.It is within the discretion of the Taxing Officer to increase or reduce the instruction fees and the amount of the increase or reduction is discretionary;v.The Taxing Officer must set out the basic fee before venturing to consider whether to increase or reduce it;vi.The full instruction fees to defend a suit are earned the moment a defence has been filed and the subsequent progress of the matter is irrelevant to that item of fees;vii.The mere fact that the defendant does research before filing a defence and then puts a defence informed of such research is not necessarily indicative of the complexity of the matter as it may well be indicative of the advocate’s unfamiliarity with basic principles of law and such unfamiliarity should not be turned into an advantage against the adversary. The position was reiterated in Karen & Associates Advocates v Caroline Wangari Njoroge [2019] eKLR, in which the Court cited the decision of the Court in Ochieng,Onyango, Kibet and Ohaga Advocates v Adopt Light Ltd. HC Misc 729 of 2006 where the court stated that;“... The taxing master must consider the case and the labour required in the matter, the nature or importance of the matter more so the amount or value of the subject matter involved, the interest of the client in sustaining or losing a brief and the complexity of the dispute. In assessing an amount commensurate to the work undertaken, it is of fundamental importance to consider the value of the subject...”In the same case, it was held that:“The law gives the taxing master some leeway but like all discretions, it must be exercised judicially and in line to the material presented before court.”

26. In the instant case, the nature of the suit to which the subject costs relate was a judicial review application seeking prerogative orders. The fees chargeable thereof are provided for under Schedule 6A(1)(j)(ii) of the Advocates Remuneration Order which provides:“Where the matter is opposed and found to satisfy the criteria set out above, such sum as may be reasonable but not less than 100,000. ’’

27. In her assessment of the instructions fees, the taxing master expressed herself as follows:“In public law litigation, the amount involved is not the sole determinant when it comes to costs. Judicial review suits are not money suits as they merely seek declaratory reliefs or orders.Bearing in mind all the aforesaid factors and reasons herein and exercise of the discretion vested in me, I am fully convinced that the amount sought by the applicant is excessive.I have carefully considered the volume of the documents, the entities involved, the time taken to determine this suit as well as the interests of the parties to this suit. This is a matter that did attract great interests from the parties involved owing to the value of the subject matter in question.In taxing this bill I am guided by the Provisions of Schedule 6 (1) (j) of the Advocates Remuneration (Amendment) (No. 2) Order 2014 which set out the minimum instruction fees at Kshs. 100,000/- for this suit. In exercise of the discretion vested in me and having considered all the necessary factors I am satisfied that the sum of Kshs. 10,000,000/- is reasonable and sufficient. (Emphasis added)I hereby tax off Kshs. 15,000,000/-.”

28. In Republic v Minister for Agriculture & 2 Others ex parte Samuel Muchiri W’njuguna (supra) Ojwang, J (as he then was) while remitting the matter for fresh taxation in a judicial review matter observed that;1. The proceedings in question were purely public-law proceedings and are to be considered entirely free of any private-business arrangements or earnings of the tea production sector;2. The taxation of advocates’ instruction fees is to seek no more and no less than reasonable compensation for professional work done;3. The taxation of advocates’ instruction fees should avoid any prospect of unjust enrichment, for any particular party or parties;4. So far as apposite, comparability should be applied in the assessment of advocate’s instruction fees;5. Objectivity is to be sought, when applying loose-textures criteria in the taxation of costs;6. Where complexity of proceedings is a relevant factor, firstly, the specific elements of the same are to be judged on the basis of the express or implied recognition and mode of treatment by the trial judge;7. Where responsibility borne by advocates is taken into account, its nature is to be specified;8. Where novelty is taken into account, its nature is to be clarified;9. Where account is taken of time spent, research done, skill deployed by counsel, the pertinent details are to be set out in summarised form. (Emphasis added).

29. Flowing from the above, it is therefore not enough for a taxing master to give a general narrative of complexity of a matter, the scope, the level of responsibility, novelty of the matter, time spent, research done, or skill deployed. The taxing master must employ some degree of specificity, only then can the exercise of discretion to increase or decrease fees be said to have been exercised judiciously as per the demands of the law. As held in Republic v Minister for Agriculture & 2 Others Ex-Parte Samuel Muchiri W’njuguna & 6 Others (supra);“.... It is necessary to ascertain how she arrived at that figure; for although the judicial review applicant’s firm position is that it was an exercise of lawful discretion which therefore, this court should uphold, the correct perception of the discretion donated by law, I believe, is that such a discretion is only duly exercised when it is guided by transparent, regular, reliable and just criteria ....it was necessary to specify clearly and candidly how she exercised her discretion… it is not enough to set by attributing to oneself discretion originating from legal provision and thereafter merely cite wonted rubrics under which that discretion may be exercised, as if these by themselves could permit of assignment of mystical figures of taxed costs…complex elements in the proceedings which guide the exercise of the taxing officer’s discretion must be specified cogently and with conviction…if novelty is involved in the main proceedings the nature of it must be identified and set out in a conscientious mode….if the conduct of the proceedings necessitated the deployment of a considerable amount of industry and was inordinately time consuming, the details of such a situation must be set out in a clear manner.....”

30. In the instant case, and in applying the above criteria, despite the taxing officer clearly making a finding that she is fully convinced that the amount sought by the Applicant was excessive, she still went ahead to allow an enhanced figure in instruction fees beyond the set Kes. 100,000 under the relevant remuneration schedule. Without any justification for enhancement of the instruction fee, the taxing master wrongfully exercised discretion and this creates room for this court to interfere with the exercise of the discretion.

Orders: 1. The Chamber Summon dated 18th July 2022 succeeds to the extent that the finding made by the taxing master, in item number 1 in respect of instruction fees payable is set aside, and the same to be placed before a different taxing master for taxation.

2. The finding made by the taxing master in terms of items number 71,72,73,74,75,78,79,80,81,82,83,84,85, and 86 of the subject Bill of costs dated 23rd December, 2021 is upheld.

3. All other items in the bill of costs dated 23rd December, 2021 as taxed by the taxing master, which in any event were not challenged, remain undisturbed.

DATED, SIGNED AND DELIVERED AT NAIROBI THIS 4TH DAY OF MAY, 2023. .....................................J. CHIGITI (SC)JUDGE