[2022] KEHC 11290 (KLR)

KTK Advocates v Kenya Tea Packers Ltd (Ketepa) (Miscellaneous Cause E561 of 2021) [2022] KEHC 11290 (KLR) (Commercial and Tax) (19 May 2022) (Ruling)

Neutral citation: [2022] KEHC 11290 (KLR)

Republic of Kenya

In the High Court at Nairobi (Milimani Commercial Courts Commercial and Tax Division)

Commercial and Tax

Miscellaneous Cause E561 of 2021

JN Mulwa, J

May 19, 2022

Between

KTK Advocates

Applicant

and

Kenya Tea Packers Ltd (Ketepa)

Client

Ruling

1. Before court for consideration are two applications dated November 4, 2021. The first one is the client’s notice of motion while the second has been lodged by the advocates. The two applications arise from the Deputy Registrar’s ruling of October 13, 2021 in respect to the advocates-client bill of costs dated July 28, 2020.

The Client’s Application 2. The client’s application was brought under sections 1A, IB, 3A of the Civil Procedure Act, order 10 rule 11, order 51 rule 1 of the Civil Procedure Rules, 2010, and all other enabling provisions of the law, for orders :a.That the court be pleased to set aside and/vacate the ex-parte taxation proceedings of October 13, 2021 and the certificate of taxation issued on October 21, 2021 be set aside and all consequential orders emanating therefrom.b.That the client/respondent be granted leave to defend the bill of costs dated July 28, 2021 unconditionally.c.That costs of this application be provided for.

3. The application is supported by the affidavit of Susan Musyoka, the Head of Legal Department at Kenya Tea Development Agency Holdings Limited (KTDA). She avers the client herein is a subsidiary of KTDA which offers legal management services to all its subsidiaries including the client herein. That the client was served with the subject bill of costs on September 1, 2021. However, due to the Board of Directors and management changes at KTDA Management Services Limited which was the principal instructing client, there was an inadvertent and honest mistake and/or omission to instruct counsel to defend the bill.

4. Further, she noted that the bill was taxed ex parte at a colossal sum of Kshs 8,167,396. 44. It was also her contention that the client has a good defence to the bill and should be granted a chance to defend it since the advocates did not carry out the client's instructions to warrant the taxed amount. In this regard, she stated that:(i)The advocates did not register the "Safari Pure” trademark in Egypt as instructed;(ii)The advocates did not file an opposition to the registration of the Safari Pure in Egypt as instructed;(iii)The advocates failed to give the client the correct legal opinion to wit; that the registration of a trademark in Kenya did not entitle the filing of an opposition against a third party's registered trademark in Egypt;(iv)The advocates caused the client to pay USD 500 to Al Kamal of Egypt for no legal services rendered or at all.

5. In addition, she stated that the right to be heard is a fundamental constitutional right which should not be denied unjustifiably. That the court is constitutionally bound to dispense equitable and substantive justice which can only be served by allowing the client to defend the bill of costs herein. Lastly, it was her contention that no prejudice will be suffered by the advocates since they will still have their day in court and any inconvenience can be compensated by way of costs.

6. In opposition, the advocates filed a replying affidavit sworn on November 12, 2021 by its Managing Partner Donald B Kipkorir. He contended that the client’s application is a non-starter and this court lacks jurisdiction to hear and determine it as it has been brought under the Civil Procedure Act and the Civil Procedure Rules instead of by way of a reference under the Advocates Remuneration Order. Further, he contended that KETEPA and KTDA, though related, are two distinct and separate corporate persons. That the client has not given any plausible reason for failure to respond to the bill of costs or turning up in court on all the occasions it was served with notices to appear in court. That the client is a corporate body with perpetual succession hence board or management changes are irrelevant as they are internal matters that are immaterial to outsiders.

7. It was also the advocate’s further contention that the bill has 158 items detailing all the services rendered and the client's supporting affidavit has not attempted to deny any of the services.

The Advocates Application 8. The advocates application was brought under section 51 (2) of the Advocates Act and order 51 rule 1 of the Civil Procedure Rules, 2010. The advocates seek the following orders:(1)That judgment be entered against the client in the sum of Kshs 8,167,396. 44 plus and interest at 14% pa and costs for the application and all the other incidental costs

9. The application is supported by the affidavit of Donald B Kipkorir Advocate in which he avers that in December 2016, the client instructed his firm to act for them in a registration and protection of the trademark "Safari Pure" in Egypt. They proceeded to act for the client from then on until their relationship irretrievably broke down because of the client’s failure to pay legal fees. That the bill of costs was on October 21, 2021 taxed in the sum of Kshs 8,167,396. 44 and a certificate of taxation was issued in that respect. That the client has refused to settle the taxed costs.

10. In opposition, the client filed a replying affidavit sworn on November 16, 2021 by Susan Musyoka, the Head of Legal at Kenya Tea Development Agency Holdings Limited (KTDA). The client reiterated the averments in the affidavit in support of its application hereinabove and urged the court to set aside the ex parte taxation proceedings.

Analysis And Determination 11. The applications were canvassed by way of written submissions in which the parties reiterated the averments in their respective affidavits and cited various authorities which this court has duly considered. The issues that arise for determination are:a.Whether the client’s application is merited?b.Whether the advocates application is merited?

Whether The Client’s Application Is Merited? 12. The gist of the application is that the taxation of the advocate-client bill of costs was conducted without the participation of the client due to an honest and inadvertent mistake and/or omission on the part of the client to instruct counsel to defend the bill. On the other hand, the advocate was emphatic that the client has not followed the correct procedure for challenging the decision of the taxing officer hence this court lacks the jurisdiction to determine the application. The advocate further maintains that the taxation was conducted procedurally as the bill of costs and taxation notices were properly served upon the client.

13. The established procedure for challenging taxation of bills of costs is set out under rule 11 of the Advocates Remuneration Order which provides that:“1) Should any party object to the decision of the taxing officer, he may within 14 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 these items and the objector may within fourteen days from the receipt of the reasons apply to a judge in chambers which shall be served on all the parties concerned, setting out the grounds of his objection;3) Any person aggrieved by the decision of the Judge upon any objection referred to such judge under sub paragraph (2) may, with the leave of the judge but not otherwise, appeal to the Court of Appeal.4) The High Court shall have power in its discretion by order enlarge the time fixed by sub paragraph (1) or sub paragraph (2) of the taking of any step, application for such an order may be made by chamber summons upon giving to every other interested party not less than three clear days’ notice in writing or as the court may direct, and may be so made notwithstanding that the time sought to be enlarged may have already expired.”

14. From the above provision, it is clear that a party who wants to challenge the decision of a taxing officer does so by way of reference which must be preceded by a notice of objection to taxation detailing the specific items of the taxed bill that the applicant is aggrieved with. All these must be done within the prescribed timelines but where such time has lapsed, a party who still wishes to challenge the decision of a taxing officer may still seek enlargement of time by a chamber summons.

15. In the instant case, the client was aggrieved by the decision of taxing officer which arose from ex parte proceedings that were conducted after the client had been duly served with the bill of costs and taxation notices but failed to appear. Notably however, the client did not follow the laid down procedure under rule 11 of the Advocates Remuneration Order. Instead of filing a notice of objection to taxation followed by a reference, the client, through his advocates on record, chose to invoke the provision of order 10 rule 11 of the Civil Procedure Rules which provides for applications for setting aside ex parte judgments.

16. In Machira & Co Advocates v Arthur K Magugu & another [2012] eKLR, the Court of Appeal stated:“With regard to advocates’ bills of costs, we agree with the decision of Ringera J (as he then was) in Machira v Magugu[1] the Advocates Remuneration Order is a complete code which does not provide for appeals from taxing master’s decisions. Rule 11 thereof provides for ventilation of grievances from such decision through references to a judge in chambers. The effect may be viewed as an appeal or a review but these being legal terms in respect of which different considerations apply, they should not be loosely used… In our view the Rules Committee intended to avoid all that and provide for a simple and expeditious mode of dealing with decisions on advocates’ bills of costs through references under rule 11 to a judge in chambers."

17. In Republic v Ann Njeri Waihumbu & 5 others Ex-Parte Joseph Ndemi Wanjiri & 3 others [2018] eKLR, Aburili, J when dealing with an application similar to the instant one stated that:“Challenging a taxation is not the same as challenging an exparte judgment or other order made in a matter where review can be sought. The manner of challenging the taxation is stipulated in the Advocates Remuneration Order under the Advocates Act cap 16 laws of Kenya. That procedure cannot be ignored and brought into the ambit of Civil Procedure Act and Rules.

18. Indeed, it is important to note that courts have been emphatic that where a procedure for the redress of any particular grievances is prescribed by theConstitution or an Act of Parliament, it should be strictly followed. See Speaker of the National Assembly v James Njenga Karume [1992] eKLR. What this means is that not even article 159(2) (d) of theConstitution can save an applicant who chooses to ignore prescribed procedures for resolution of disputes.

19. For the foregoing reasons, I find that the client’s application dated November 4, 2021 is incompetent for being improperly before the court and is hereby dismissed with costs to the advocates.

Whether The Advocate’s Application Is Merited? 20. Having found that there is no competent reference filed by the client herein, it follows that there is no ground for setting aside or altering the decision of the taxing officer of October 13, 2021 and the certificate of taxation issued on October 21, 2021. Section 51(2) of the Advocates Act which gives this court the mandate to enter judgment for taxed costs provides:“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."

21. In Lubulellah & Associates Advocates v N K Brothers Limited [2014] eKLR the court stated as follows-“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. The certificate of costs is final as to the amounts of the costs and the court would be quite in order to enter judgment in favour of the applicant against the respondent herein for the taxed sum indicated in the certificate of taxation ...”

22. Accordingly, the court hereby enters judgment in favour of the advocates as against the client for the taxed costs of Kshs 8,167,396. 44. The sum will attract interest at court rates of 14% per annum from the date of this ruling. The advocates are also awarded costs of the application dated November 4, 2021.

DELIVERED DATED AND SIGNED THIS 19TH DAY OF MAY 2022. J MULWAJUDGE.