https://new.kenyalaw.org/akn/ke/judgment/kehc/2026/10055

LJA Associates LLP v Heineken East Africa Import Company Ltd (Miscellaneous Application E245 of 2025) [2026] KEHC 10055 (KLR) (Commercial and Tax) (10 July 2026) (Ruling) Neutral citation: [2026] KEHC 10055 (KLR) Republic of Kenya In the High Court at Nairobi (Milimani Commercial Courts) Commercial and Tax Miscellaneous Application E245 of 2025 RC Rutto, J July 10, 2026 Between Lja Associates Llp Applicant and Heineken East Africa Import Company Limited Respondent Ruling 1.By way of a Chamber Summons dated 11th November, 2025, the Applicant has invoked rules 2, 11 (1) and (4) of the Advocates Remuneration Order, as well as Section 3A of the Civil Procedure Act, and seeks the following reliefs:1.… Spent;2.That this Honourable Court be pleased to enlarge time and grant leave to the Applicant/advocate to object to and file a reference against the ruling delivered by the Deputy Registrar on 3rd October 2025 out of time;3.That this Honourable Court be pleased to deem the Applicant/advocate’s Notice of Objection dated 10th November 2025 and the draft reference herein to be properly and duly filed, or be granted limited time within which to file and serve the Notice of Objection and the reference;4.That the Taxing Master’s ruling delivered on 3rd October 2025 pertaining to the taxation of the bill of costs dated 6th March 2025 be set aside, and the matter be referred back for re-taxation before another Taxing Master;5.That in the alternative to prayer 4, the Honourable Court exercises its inherent jurisdiction and be pleased to re-tax the Bill of Costs dated 6th March 2025 afresh and/or make directions to a fresh taxation;6.That the costs of this application be provided for. 2.The reference is supported by the grounds set out on its face and by the supporting and supplementary affidavits sworn by Owuor Thatcher, a partner in the Applicant firm, on 11th November, 2025, and 29th April, 2026, respectively. The Applicant states that it filed an advocate/client bill of costs dated 6th March, 2025, seeking taxation in the sum of Kshs. 56,313,959.99/-. However, in a ruling delivered on 3rd October, 2025, the taxing master dismissed the bill of costs, with costs awarded the Respondent, costs assessed at Kshs. 200,000.00/-. 3.The Applicant contended that the ruling was delivered in its absence and that it only became aware of the same on 10th November, 2025. It Being dissatisfied with the outcome, it seeks to challenge the decision through the present reference. It was explained that the delay in filing the notice of objection and reference is attributed to an inadvertent failure to diarise the matter and to prepare appropriate hand over notes by Mr. Aaron Kinyanjui, the advocate previously handling the matter, who subsequently left the country to pursue further studies at the University of Birmingham. The Applicant maintains that the omission was inadvertent and urges the Court to excuse the delay in the interest of justice. In support of this contention, it relies on an internal memorandum. 4.The Applicant contended that the reference is meritorious as it raises arguable issues with high chances of success. In particular it was argued that the taxing master erred in finding that a retainer agreement existed in the absence of a written agreement executed by both parties, as required by Section 45 of the Advocates Act. The Applicant further asserted; that the taxing master improperly treated the work in progress correspondence and email exchanges, as constituting a valid retainer agreement, whereas the said correspondence merely comprised updates relating to the Respondent’s matters in Kenya, Tanzania and Uganda. 5.The Applicant further argued that the taxing master ought to have treated the issue of fees as estimates. It maintained that the alleged retainer agreement contravened Section 45 of the Advocates Act and could not therefore operate to bar taxation under the Advocates Remuneration Order. According to the Applicant; the taxing master applied the wrong principles and consequently arrived at an improper finding. The effect of that decision, it was argued, was to deprive the Applicant of its entitlement to legal fees, thereby occasioning a miscarriage of justice. 6.In view of the foregoing, the Applicant urged the Court to allow the reference, contending that it stood to suffer substantiation financial prejudice and grave injustice if the impugned decision of the Taxing Master were allowed to stand. It accordingly prayed that the Bill of Costs be remitted for fresh taxation. 7.The Respondent opposed the reference through a replying affidavit sworn on 24th April, 2026, by Kevin Santry, a director of the Respondent Company. It was deposed that the application failed to satisfy the threshold prescribed under Rule 11(4) of the Advocates (Remuneration) Order and ought therefore to be struck out as incompetent. The Respondent contended that the reasons advanced for the delay were purely internal administrative matters within the Applicant’s control and were therefore inexcusable. It was further argued that the advocate allegedly responsible for the omission ought to have sworn an affidavit explaining the circumstances of the lapse, rather than the deponent of the supporting affidavit. Consequently, the Respondent maintained that the Applicant’s evidence amounted to inadmissible hearsay. 8.On the merits of the reference, the Respondent deposed that the Taxing Master properly evaluated the evidence and arrived at the correct determination. It maintained that the existence of a retainer agreement was properly established on the basis of the documentary evidence placed before the Taxing Master. In any event, the Respondent contended that the sums claimed in the Bill of Costs were excessive and unsupported by any legal or factual basis. It therefore argued that, there being no error in principle, the findings of the Taxing Master ought to be upheld. The Respondent further asserted that it had fully settled all invoices raised by the Applicant and that no monies remained outstanding. 9.The Respondent further deposed that the Applicant was seeking to relitigate issues that had already been conclusively determined. It argued that, having failed to act diligently, the Applicant was undeserving of the Court’s discretionary relief. For those reasons, the Respondent prayed that the reference be dismissed with costs. 10.The reference was canvassed by way of written submissions. The Applicant filed its submissions dated 9th February, 2026. After setting out a brief background to the dispute, the Applicant framed the following issues for determination; whether the Notice of objection and the reference ought to be entertained having been filed out of time? And whether its bill of costs ought to be referred back to taxation? 11.On the first issue, the Applicant submitted that the delay of 27 days was neither inordinate nor deliberate, and that the reasons advanced for the delay were excusable. It therefore urged the Court to exercise its discretion and enlarge time. In support of its position, the Applicant relied on the overriding objective principles embodied in the Civil Procedure Act, Paragraph 11(1) and (4) of the Advocates (Remuneration) Order, and various judicial authorities. 12.On the second issue, the Applicant relied on Section 45 of the Advocates Act and submitted that, for an agreement on fees to be valid and enforceable under that provision, it must be in writing and signed by the client. It contended that no such agreement regarding fees was executed between the Applicant and the Respondent. In support of this argument, the Applicant cited several judicial decisions. 13.Be that as it may, the Applicant further submitted that the Work-in-Progress (WIP) estimates were merely indicative and could not conclusively determine the legal fees payable in the matter. It argued that, by their very nature, estimates are speculative and lack finality. Consequently, the Taxing Master ought to have proceeded to assess the Applicant’s fees, including instruction fees, in light of the legal services rendered in safeguarding the Respondent’s interests. For those reasons, the Applicant prayed that the reference be allowed. 14.The Respondent filed written submissions dated 13th April, 2026. Likewise, it set out a summary of the factual background leading to the reference and framed the following issues for determination; whether the Applicant had established sufficient cause to warrant enlargement of time under paragraph 11(4) of the Advocates (Remuneration) Order? And whether this Court can lawfully interfere with and set aside the decision of the taxing master? 15.On the first issue, the Respondent submitted that the Applicant was undeserving of the discretionary relief sought as it had failed to take the basic step of monitoring the delivery of the ruling. According to the Respondent, the reasons advanced for the delay reflected a complete breakdown of the Applicant’s internal case management systems and were therefore neither unforeseen nor unavoidable. Relying on several judicial authorities, the Respondent urged the Court to decline the prayer for enlargement of time. 16.Regarding the second issue, the Respondent submitted that the Applicant had failed to demonstrate any basis upon which this Court could interfere with the Taxing Master’s decision, as no error of principle had been shown. It maintained that the Taxing Master correctly found that the Work-in-Progress (WIP) arrangements constituted a retainer agreement governing the Applicant’s remuneration. The Respondent cited several authorities in support of the proposition that a retainer agreement may be inferred from the correspondence exchanged and the conduct of the parties. 17.The Respondent further argued that, once the existence of a valid retainer agreement had been established, the jurisdiction of the Taxing Master to tax the Bill of Costs was effectively ousted. It therefore contended that the findings of the Taxing Master were sound and well founded. Since the Applicant had failed to demonstrate any error of principle, the reference was devoid of merit. Accordingly, the Respondent urged the Court to dismiss the reference with costs. 18.I have considered the reference, the response thereto, the parties' respective written submissions, the impugned ruling, and the applicable law. The Applicant principally seeks leave of this Court to enlarge time within which to object to and file a reference against the ruling delivered by the Deputy Registrar on 3rd October, 2025. In the alternative, the Applicant prays that its Notice of Objection dated 10th November, 2025, and the present reference be deemed as duly and properly filed notwithstanding their filing outside the prescribed timelines. 19.The basis for those prayers is that the ruling on the advocate/client bill of costs was delivered in the absence of the Applicant. According to the Applicant, counsel who had conduct of the matter erroneously diarized the ruling date and subsequently left the country for further studies without adequately handing over the file. Consequently, the Applicant only became aware of the delivery of the ruling shortly before filing the present application. 20.Paragraph 11(4) of the Advocates (Remuneration) Order provides:The High Court shall have power in its discretion by order to enlarge the time fixed by subparagraph (1) or subparagraph (2) for 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. 21.The foregoing provision vests this Court with an unfettered discretion to enlarge time for the filing of a notice of objection or a reference arising from taxation proceedings. As with all judicial discretion, such power must be exercised judiciously, upon sound legal principles, and not capriciously, arbitrarily, or on the basis of sympathy alone. 22.In the present case, the Applicant has proffered an explanation for the delay. While the circumstances leading to the omission were internal to the Applicant's firm, I am satisfied that the explanation given is not entirely unreasonable. More importantly, the delay itself was not inordinate. The application seeking enlargement of time was lodged approximately twenty-seven days after the expiry of the prescribed period. 23.This Court is equally mindful of the constitutional imperative that disputes should, where possible, be determined on their merits rather than defeated by procedural lapses. The right to be heard remains a cardinal principle of natural justice. In the circumstances, and guided by the overriding objective, the provisions of Article 159(2)(d) of the Constitution, and the interests of substantive justice, I am persuaded that this is an appropriate case for the exercise of the Court's discretion. Consequently, the Notice of Objection dated 10th November 2025 and the present reference are hereby deemed as duly and properly filed. Whether the Taxing Master's Decision Should Be Interfered With 24.Having allowed the prayer for enlargement of time, I now turn to the substantive merits of the reference. The principles governing interference with a taxing officer's decision are well settled. A Judge on reference does not sit as an appellate court to re-evaluate taxation merely because another conclusion may be possible. Interference is only warranted where it is demonstrated that the taxing officer acted upon a wrong principle of law, misapprehended the evidence, took into account irrelevant factors, failed to consider relevant factors, or where the decision is so plainly erroneous as to amount to an error of principle. 25.The Court of Appeal in Kipkorir, Titoo & Kiara Advocates v Deposit Protection Fund Board [2005] eKLR succinctly stated:“On reference to a judge from the taxation by the taxing officer, the Judge will not normally interfere with the exercise of discretion by the taxing officer unless the taxing officer erred in principle in assessing the costs.” 26.Similarly, in Republic v Minister for Agriculture & 2 Others ex parte Samuel Muchiri W'Njuguna & 6 Others [2006] eKLR, the Court held:“This 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 so manifestly excessive as to justify an inference that it was based on an error of principle.” 27.The gravamen of the Applicant's complaint is that the taxing master erred in finding that a retainer agreement existed between the parties. Indeed, that question lies at the heart of the present reference. If such an agreement existed and validly governed the advocate's remuneration, then taxation would be impermissible. Conversely, if no such agreement existed, the bill of costs would properly be subject to taxation. 28.In dismissing the bill of costs, the taxing master undertook an extensive analysis of the correspondence exchanged between the parties over several years. The taxing master found that the parties had consistently discussed legal fees on a Work in Progress (WIP) basis; that estimates were communicated by the Applicant; that the Respondent approved billing arrangements from time to time; and that invoices were thereafter issued and settled pursuant to that arrangement. The taxing master concluded that the correspondence demonstrated a clear agreement regarding the manner in which the Applicant's fees were to be determined and paid. 29.The concept of a retainer has long been recognized in legal practice. Halsbury's Laws of England, 4th Edition, describes a retainer as:“The act of authorizing or employing a solicitor to act on behalf of a client constitutes the solicitor’s retainer by that client. Thus, the giving of a retainer is equivalent to the making of a contract for the solicitor’s employment…” 30.Similarly, Black's Law Dictionary, 6th Edition, defines a retainer as follows:“In the practice of law, when a client hires an attorney to represent him, the client is said to have retained the attorney. This act of employment is called the retainer. The retainer agreement between the client and Attorney sets forth the nature of services to be performed, costs, expenses, and related matters.” 31.Section 45(1) of the Advocates Act permits an advocate and client to enter into an agreement fixing the advocate's remuneration. Such agreement, if validly entered into, generally ousts the jurisdiction of the taxing officer to tax costs covered by the agreement. 32.The distinction between a retainer and a retainer agreement was clearly articulated by the Court of Appeal in Omulele & Tollo Advocates v Mount Holdings Ltd, Civil Appeal No. 75 of 2015, where the Court explained that a retainer denotes the advocate-client relationship, while a retainer agreement constitutes the written manifestation of the terms governing that relationship, including remuneration. The court stated;“A retainer means the instruction, employment or engagement of an advocate by his client. On the other hand, a retainer agreement is merely a contract in writing prescribing the terms of engagement of an advocate by his client, including fees payable. Therefore, it is submitted while a retainer denotes a relationship between parties, the retainer agreement is merely the physical written document or manifestation of such a relationship.” 33.More recently, courts have acknowledged that the existence of a fee arrangement may, in appropriate circumstances, be inferred from the conduct of parties and the totality of their dealings. In Njeru Nyaga & Co. Advocates v Muriuki [2022] KEELC 2435 (KLR), the Court observed that a retainer agreement may be discerned from correspondence and surrounding circumstances demonstrating a mutual understanding regarding fees by stating that;“A retainer agreement does not necessarily have to be in writing but may also be inferred from the conduct of the parties or the circumstances of the case. In the reference before this court, the Taxing Master referred to the email correspondence between the parties which according to her was evident that the parties had entered into a retainer agreement.” 34.The Applicant urges this Court to adopt a stricter interpretation of Section 45 of the Advocates Act and contends that the absence of a single formal document signed by the client renders any purported agreement invalid. Reliance was placed on Ali Mohammed Egal v Maina & Onsare Partners Advocates [2021] KEHC 8960 (KLR), where emphasis was placed on the statutory requirement that an agreement fixing fees be in writing and signed. 35.I agree that where a party seeks to rely upon Section 45 as creating a binding fee agreement capable of being summarily enforced, the statutory requirements must be satisfied. However, the question before the taxing master was not whether there existed a formally executed standalone agreement, but whether the parties had mutually agreed upon the mode and basis of remuneration such as to render taxation inappropriate. 36.Having reviewed the correspondence referred to by the taxing master, I am satisfied that there was a clear meeting of minds between the parties regarding the Applicant's remuneration. The emails reveal repeated requests for WIP estimates, communication of projected fees, authorization of billing, issuance of invoices, and payment thereof over a substantial period of time. This was not a single isolated exchange. Rather, it was a consistent course of dealing extending over several years. 37.The evidence demonstrates that both parties understood, accepted, and operated under a WIP-based fee arrangement. The Respondent repeatedly sought estimates, the Applicant furnished them, invoices were raised pursuant to those estimates, and payment followed. Such conduct is wholly inconsistent with the absence of an agreement regarding remuneration. 38.In those circumstances, I find no misdirection on the part of the taxing master. The conclusion reached was firmly grounded on the documentary evidence placed before her. The taxing master properly analysed the correspondence, identified the governing fee arrangement, and correctly concluded that the dispute concerned the enforcement of that arrangement rather than the taxation of costs. 39.Ultimately, the Applicant has failed to demonstrate any error of principle, misapprehension of the evidence, or improper exercise of discretion on the part of the taxing master. What emerges from the reference is largely a disagreement with the conclusion reached rather than proof that the conclusion was legally or factually flawed. This Court cannot interfere with a taxing officer's decision merely because another view of the evidence is possible. 40.I am therefore satisfied that the taxing master properly directed herself on both the law and the facts and arrived at the correct conclusion that a fee arrangement existed between the parties governing the Applicant's remuneration. Consequently, no basis has been established to warrant this Court's intervention. 41.In the result, although the Court has exercised its discretion to enlarge time and deem the reference as properly filed, the reference lacks merit on the substantive issues raised. The same is hereby dismissed with costs to the Respondent. 42.It is so ordered. DELIVERED, DATED AND SIGNED VIRTUALLY THIS 10TH DAY OF JULY, 2026RHODA RUTTOJUDGECourt Assistant: WabwireMs. Ndiho holding brief for Mr. Owuor for Advocate ApplicantMr. Sake holding brief for Omwanza for the Respondent