[2021] KEHC 5076 (KLR)

REPUBLIC OF KENYA

IN THE HIGH COURT OF KENYA

AT KITUI

HIGH COURT MISC. APPLICATION CAUSE NO. 85 OF 2019

KANGETHE & MOLA ADVOCATES.................................................ADVOCATES/APPLICANTS

VERSUS

CORPORATE INSURANCE COMPANY LIMITED...............................................RESPONDENTS

R U L I N G

1. This Ruling is in respect to this Miscellaneous cause and Miscellaneous Cause No. 64 of 2019, Misc. Cause Number 65 of 2019, Misc. Application Number 66 of 2019, Misc. Application Number 80 of 2019 and Misc. Application Number 81 of 2019.

The ruling itself is in respect to the Notice of Motion dated 14th January, 2021, lodged by Corporate Insurance Co. Ltd (the Applicant herein) who has invoked Section 45(6) of the Advocate and Order 51 Rule 3 of the (C.P.R) Civil Procedure Code in asking for the following orders/reliefs: -

a) Spent.

b) That pending the hearing and determination of this application, there be a stay of taxation and any further proceedings in this matter.

c) That the advocate/Client bill of costs dated 16th August,2019 be struck out.

d) That costs be provided for.

2. The Applicant has based its application on the following grounds namely: -

(i) That the Respondent an Advocate has served the Applicant/Client with an Advocate/Client bill of Costs on 26th August, 2019 claiming fees arising from a civil suit Number Kitui Chief Magistrate Civil Case Number 71 of 2012.

(ii) That the Applicant/Client had settled the Respondent’s final fee not amounting to Kshs. 93,379 on 23rd May, 2019.

(iii) That its trite that an advocate is estopped from seeking further legal fees via taxation from a client once a final fee note is settled.

3. The Applicant has supported the above grounds with an affidavit of its legal officer Linda Oliveny sworn on a date not indicated on the Jurat but filed on 22nd January, 2021. This court will address that anomaly later in this ruling.

4. The Applicant avers that, it engaged the Respondent to represent it in Kitui Chief Magistrate Civil Case Number 71 of 2012 and that it paid all the legal fees raised by the Respondent as agreed which fee amounted to Kshs. 93,370.

5. It avers that, the Respondent clearly indicated in their invoice that the fee of Kshs. 93,379 was final fee and it has exhibited a copy of the invoice to buttress that fact.

6. The Applicant complaints that, despite settling the final legal fees, the Respondent has continued pursuing it for further fees. He contends that the Respondent should be estopped from prosecuting its advocate client bill of costs herein, and is asking this court to strike it out altogether.

7. In its oral submissions through Mutupwa Advocate, the Applicant stated that the Respondent’s firm of Advocates represented it in various related matters in Kitui Chief Magistrate’s Court and after the cases were finalized, it raised final fee notes that were fully paid/settled. It insisted that, despite payments, the Respondent proceeded to file taxations notes that were almost six times the agreed fee as per the fee raised in the final fee notes.

8. The Applicant gave an example in the Misc. Cause Number 85/2019 where the Respondent had reportedly raised a fee note of Kshs. 94,874 but in the bill of costs, it is asking for Kshs. 985,948. 24 which is about ten times more. The Applicant terms the bill exorbitant, exaggerated and extortionist. It submits that, once a final fee note is raised, a contractual agreement is presumed and that the advocate is estopped by his own deed from turning around to ask for more.

9. The Applicant further submitted that, the principle of estoppel applies and cited the decision in Sifa International Limited versus Board of Trustees NSSF [2018] eKLR, where the court held that, where parties have compromised a fee note, an Advocate is estopped from filing a bill of costs. The Applicant has also sought to rely on the decision of Abincha and Co. Advocates versus Trident Insurance Co. Ltd [2013] eKLR.

In its submissions that the Respondent is estopped from filing bill of costs where legal fees agreed have been settled. It further submitted that, the Applicant paid and/or settled the Respondent’s legal fees on the basis of final fee notes raised.

10. The Respondent has opposed this Application vide a replying affidavit sworn by Nancy Wambui Kang’ethe sworn on 23rd February, 2021.

11. The Respondent intends that there is no legal or factual basis for striking out their bill of costs. It further contends that, this court is not seized with the jurisdiction to grant the relief sought as it is not seized of the taxation itself because there is no appeal or reference pursuant to paragraph 11(i) and 12 of the Advocates Remuneration Order. It avers that taxation is not a suit filed for the recovery of costs.

12. According to the Appellant, this application is an aforethought aimed at delaying taxation of their bills of costs. The Respondent points out that the bill of costs was filed on 19th August, 2019 and served on the Applicant on 26th August, 2019 and that it took the Applicant one year four months to file the present application on 22nd January, 2021. The Respondent faults the delay and terms it inordinate contending that no reasons have been advanced to explain the delay.

13. The Respondent further points out that, when they filed a reference dated 11th August, 2020 against the taxing masters’ decision, the Applicant at paragraph 8 and 10 of the replying affidavit sworn by Linda Oliveny on 10th November, 2020 supported the taxation. The Respondent has exhibited a copy of the said affidavit to demonstrate that fact.

14. The Respondent contends that the Applicant despite reminders, failed to settle the legal fees demanded forcing it to send notice of taxation and thereafter, filing a bill of costs under schedule five of the Advocates Remuneration Order 2014.

15. The Respondent further contends that, it clearly pointed out to the Applicant in its demand letter dated 22nd November, 2019 that unless payment of raised fee of Kshs. 94,879 was paid within 7 days, it would file a bill of costs and it would no longer be bound to accept Kshs. 94,879 as final fees. It has exhibited the copy of the demand letter to demonstrate the fact.

16. The Respondent contends that the Applicant failed to take head and that it filed its bill of costs on 29th April, 2019 and contends that the unpaid fee under paragraph 7 of Advocates Remuneration Order, attracted interests.

17. It further claims that, the Applicant is dishonest by claiming that it paid the legal fee on 14th June, 2019 while the cheque of Kshs. 88,663 was forwarded on 20th June, 2019. They have exhibited a letter dated 20th June, 2019 from Applicant forwarding payments on various matters as proof of that fact.

18. The Respondent claims that, while payments of legal fees were made, the Applicant failed to settle full fees and interests accrued. It further alleges that some payments were received after the lapse of the timelines indicated in the demand letter and notice of taxation. The Respondent has made extensive submissions on when the fee notes were raised in various matters, and when the demands were made.

Below is a summary of the analysis of the submissions made in the table below: -

Case No. Date of Final Fee Note Date of Payment Date of filing of bill of costs

65 of 2019 9th October,2017 5th July,2019 29th April,2019

66 of 2019 14th July,2014 5th July,2019 29th April,2019

64 of 2019 14th July,2014 5th July,2019 29th April,2019

80 of 2019 27th January, 2019 17th May, 2019 7th August,2019

81 of 2019 13th July, 2016 5th July, 2019 7th August,2019

85 of 2019 13th February,2017 5th July, 2019 29th August,2019

19. The Respondent contends that upon taxation of the Bill of Costs, on 24/10/2019 by the Deputy Registrar of this court, the Applicant through its Advocates on record on 22nd November, 2019, demanded a refund of excess payment of Kshs. 12,496 being the difference of Kshs. 93,379, paid and amount of Kshs. 80,883 raised in the fee note. It alleges that, the Applicant wrote a letter dated 22nd November, 2019 and another letter dated 10th December, 2019 asking for a refund. It has exhibited a demand letter dated 22nd November 2019 from the Applicants Counsels to prove their allegations.

20. The Respondent submits that, the act of demanding a refund meant that neither party intended to be bound by the fees earlier demanded as per its final fee note and contends that the Applicant cannot on one hand allege that the Respondent is estopped from claiming further fees while on the other hand demand, a refund of amount paid in excess. It submits that the doctrine of estoppel is an equitable remedy and he who comes to it, must do so with clean hands.

21. The Respondent submits that, the doctrine of estoppel can only apply against the Applicant because of its conduct of demanding a refund.

22. The Respondent asserts that it filed references against the decision of the taxing master and it succeeded when this court sent the matters back for re-taxation. It claims that the Applicant was represented during the reference and should not be speculative about the final decision of the taxing master upon re-taxation of the bill of costs.

23. The Respondent has cited two authorities which it relies on to oppose this application. The two cases are: -

a) Kenya Electricity Generating Co. Ltd versus OJSC Power Machines Ltd & Others [2017] eKLR. In that case, the Applicant had filed an application seeking to strike out a bill of costs claiming that the bill was irregular by virtue of the fact that it was based on a subject matter that had ceased to exist. It further argued that the bill was exaggerated and that the matter was pending in the Court of Appeal.

The court held that it would not interfere with the taxation as it did not have jurisdiction on taxation matters and that the real authority lied with the taxing master.

b) Lubullellah & Associates Advocates versus Nassaer Ahmed t/s airtime Business Solutions [2010] eKLR. The Applicant asked the court to stay taxation of a Bill and make a determination that an advocate was not entitled to costs as they failed to act on the client’s express instructions. The court held that taxation was a role specifically vested upon the taxing master and the High Court is vested with the power to hear references. It further held that the question of work done or not done by counsel should have been presented before the taxing master.

c) John Njogu Kimani & Another versus James Gitau Kariuki & Co. Advocates [2010] eKLR. Similarly, in this case, the court found that it had no jurisdiction to stay the process of taxation and that it could only stay execution of decrees.

d) Premier bag & Cordage Limited versus National Irrigation Board [2012] eKLR. In this matter, an auctioneer filed a bill of costs for taxation, and the client filed an application to the High Court seeking stay orders against taxation of the auctioneer’s bill on grounds that there was an appeal pending at the Court of Appeal on the main suit. The court held that it was inappropriate for the court to deal with the application for stay as the taxation proceedings were pending before the taxing master.

24. This court has carefully considered this application and the submissions made by both Counsels. The issues arising from this application are two fold which are: -

(i) Whether this court has jurisdiction to determine this application.

(ii) Whether the Respondent is estopped from presenting its Advocate/Client bill of costs for taxation.

25. (i)Whether this court is seized with jurisdiction.

The Respondent has made strong arguments that the jurisdiction of this court over the reliefs has been invoked improperly and that the Applicant should have presented its grievances to the Deputy Registrar or the Taxing Master. This court believes that this is a primary issue for determination because, as Hon. Nyaranga Judge of Appeal, stated in the cases of Mr. Lilians [1989] eKLR.

‘‘Jurisdiction is everything, without it, a court has no power to make one or more step. Where the Court has no jurisdiction, there would be no basis for a continuation of proceedings pending other evidence. A court of law downs tools in respect of the matter before it the moment it holds the opinion that it is without jurisdiction’’.

26. The matters before they were consolidated in this matter, indicate that, the Respondent was aggrieved by a ruling of the Taxing Master dated 24th October, 2019 and filed references to this court seeking inter alia, an order for re-taxation of bill of costs. The application was set down for hearing on 30th September, 2020 and on that date, the Respondent, (then the Applicant) tendered proof that the Applicant herein, (then the Respondent in the reference) was duly served. This court entertained the reference and found merit in the application dated 11th August, 2020 and referred this matter and the related matters back to the Taxing Master for fresh taxation. This court further went ahead to give a mention date before the Deputy Registrar which was on 13th October 2020.

27. The record further shows that, both the parties duly appeared before the Taxing Master on 13th October, 2020 and 18th November, 2020 where the Deputy Registrar gave directions to the parties in respect to filing of pleadings.

As it stands, the matter is still pending for re-taxation before the Deputy Registrar and that was the position when, as observed above, the Applicant on 22nd January, 2021 preferred this instant application.

28. There is no doubt going by the A.R.O (Advocates Remuneration Order) that, the jurisdiction to tax or assess fees payable between advocates and their clients is given to the Deputy Registrar.Paragraph 10 of the Advocate Remuneration Order 2009 provides as follows: -

‘‘The taxing for the taxation of bills under this Order shall be Registrar or a district or Deputy Registrar of the High Court or, in the absence of a Registrar, such other qualified officer as the Chief Justice may in writing appoint; except that in respect of bills under Schedule 4 of the order the taxing Officer shall be the Registrar of trade marks or any Deputy Registrar of trade marks.’’

29. The jurisdiction of this court (High Court) to deal with taxation related matters is covered under Paragraph 11(1) (2) and (3) of A.R.O(Advocates Remuneration Order)which provide as follows: -

‘‘Paragraph 11 (1) –Should any party object to the decision of the taxing officer, he may within fourteen days after the decision give notice in writing to the taxing officer of the items of taxation to which he objects.’’

(2) The taxing officer, shall forthwith record and forward to the objector the reasons for his decision on those items and the objector may within fourteen days from the receipt of the reasons apply to a judge by chamber summons which shall be served on all the parties concerned, setting out the grounds of this objection.

(3) Any person aggrieved by the decision of the Judge upon any objection referred to such Judge under subsection (2) may, with the leave of the Judge but not otherwise, appeal to the Court of Appeal.’’

30. The Respondent’s contention that this court lacks jurisdiction to grant the reliefs sought is well founded, given that the taxing Master has not rendered itself to give this court jurisdiction to relook into any grievances by any aggrieved party.

31. The Applicant has raised legitimate issues of having made payments towards the satisfaction of the legal fees, but these facts should be placed before the taxing master for consideration. This court’s position is emboldened by the decision of Justice Martha Koome (as she then was) in Lubudellah & Associates Advocates versus Nasser Ahmed T/A Airtime Business Solutions [2010] eKLR. Where she held as follows: -

‘‘Formidable opposition was put forth by Counsel; Mr. Mutumbwa relied on his replying affidavit. It was argued that, this court has no jurisdiction to stop taxation before a taxing master. Taxation of Bills of Costs is a special jurisdiction provided for under rule 11 of the Advocates Remuneration Order and it is a preserve of the taxing master. The court can only stay the outcome of the taxation after a reference has been filed but the court cannot enter the realm of taxation and interfere with the jurisdiction of the taxing master.’’

32. The jurisdiction of this court on taxation of costs whether it is between party and party or between advocate and client is a jurisdiction exercised by the Deputy Registrar in the Donholm Rahisi Stores versus East African Portland Cement Limited [2005] eKLR, Waweru J. clarified the issue quite clear when he held as follows: -

‘‘Taxation of costs, whether those costs be between party and party or between Advocate and Client, is a special jurisdiction reserved to the taxing officer by the Advocate (Remuneration) Order. The court will not be drawn into the arena of taxation except by way of reference (from a decision of taxation) made under Rule 11 of the Advocates (Remuneration) Order. The court will not be drawn into the arena of taxation except by way of reference (from a decision on taxation) made under Rule 11 of the Advocates Remuneration) Order. The present application is not such reference. The application seeks an order that would have the effect of interfering with the special jurisdiction of the taxing officer does nothing beyond taxation of the bill of costs. The consequences of such taxation, for instance recovery of the taxed costs, will be a matter for the court, and the court can at that stage be asked to stay recovery of those costs pending whatever event, say, an appeal against the order granting the costs, or a reference under Rule 11 of the advocates (Remuneration) Order.’’

33. The court of Appeal has also rendered itself on this question because while dealing with a similar question in Sharma versus Uhuru Highway Development Limited [2001] 2 EA 530, Akiwumi J.A (as he then was) held;

‘‘….. (the High Court Judge) not being seized of the taxation itself, and there being no appeal or reference to him as provided for by paragraphs 11(1) and 12 of the Advocates (Remuneration) Order from a decision of the taxing Officer who was dealing with the taxation, and the taxation not being a suit filed in the High Court for the recovery of costs, simply had no jurisdiction at all, to hear as he did, the Respondent’s application to strike out the (application for taxation). This by itself makes his hearing of and his ruling of 19th May, 2000, of the Respondent’s application a nullity from the word go’’

I wholly adopt those words by Waweru J and their Lordhips of the Court of Appeal. In this case all I can only add that the Courts in Kenya are hierarchical, the jurisdiction of taxation of costs is vested upon the taxing master who should evaluate the matters placed before him/her and should do so independently. The jurisdiction that is vested in the High Court on the other hand is to deal with a reference emanating from the decisions of the taxing master. The issues of the amount of work done or not done by the advocate which were so eloquently presented by Mr. Issa should be presented to the taxing master. In other words, when defending his client, Mr, Issa should be able to argue the proportionate costs that should be paid to the advocates for the work which was done and which was not done. The high court should not micro manage the taxing master…..’

34. The above decisions clearly show that once jurisdiction has been conferred to a particular body or level of jurisdiction, it should be allowed to entertain and determine the matter before it can be escalated to the next level or forum in the event that there is a party dissatisfied. This is good practice and because an aggrieved party is granted an avenue to address any grievances if dissatisfied.

35. Whether the doctrine of estoppel applies or prevents the Respondent from presenting his bill of costs.

In light of my finding on the question of jurisdiction, this issue is really academic and even premature but considering the action made by the Applicant after initial taxations that is asking for a refund for the amount paid in excess of what was taxed, this court finds that the Applicant really cannot have its cake and eat it at the same time. As submitted by the Respondent, the doctrine of estoppel is an equitable remedy at common law as well as a legal remedy because it is well stipulated under Section 120 of the Evidence Act. The Applicant ought not to have asked for any refunds if it wanted to be bound by their agreement whether written or implied. By demanding for a refund, the Applicant in my considered view negated the application of the doctrine of estoppel in its favour.

36. I also find that the omission made by the Applicant in not stating at the jurat when the affidavit was sworn is not fatal because courts are now inclined to determine matters on substance rather technicalities. Under the provisions of Article 15a(2) (d) of the Constitution of Kenya, this court has obligation to overlook such insignificant or inconsequential omission in the interest dispensation of substantial justice. Of course under Section 5 of Oaths and Statutory Declaration Act (Cap 15 Laws of Kenya)a commissioner of oaths is required to state at the jurat, the place and the date the oath or affidavit is taken or made. The affidavit by Linda Olwenya for the Applicant omitted that but as I have observed the omission in my view, is not fatal and that is why I have determined this application on merit.

The long and shot of this, is that the Notice of Motion dated 14th June, 2021, is disallowed for the above reasons. The parties are referred to the Taxing Master for the re-taxation of Advocate/Client bill of Costs. I shall not make any order on costs so each party pays own costs for avoidance of doubt, this order shall apply Misc. Application number 64/2019, 65/2019, 66/2019, 80 of 2019 and Misc. Application Number 81 of 2019.

Dated, Signed and Delivered at Kitui this 15th day of July, 2021.

HON. JUSTICE R. K. LIMO

JUDGE