[2022] KEHC 10386 (KLR)

Lubulellah & Associates Advocates v Vinayak Builders Limited (Miscellaneous Civil Application E187 of 2021) [2022] KEHC 10386 (KLR) (Commercial and Tax) (16 May 2022) (Ruling)

Neutral citation: [2022] KEHC 10386 (KLR)

Republic of Kenya

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

Commercial and Tax

Miscellaneous Civil Application E187 of 2021

DAS Majanja, J

May 16, 2022

Between

Lubulellah & Associates Advocates

Applicant

and

Vinayak Builders Limited

Respondent

Ruling

1. There are two applications for consideration before the court. The first, is the Client’s Notice of Motion dated 10th February 2022 made, inter alia, under Paragraph 11 of the Advocates Remuneration Order (“the Order”) seeking to set aside the decision of the Deputy Registrar made on 12th November 2021 in respect of the taxation of the Advocates Bill of Costs dated 24th March 2021 (“the Reference”). The application is supported by the affidavit of the Client’s Managing Director, Premji Vekaria, sworn on 10th February 2022. The application is opposed through grounds of opposition dated 6th May 2022.

2. The Advocates Notice of Motion dated 25th February 2022 made, inter alia, under section 51 of the Advocates Act (Chapter 16 of the Laws of Kenya) seeking judgment against the Client for KES. 5,756,023. 04 as certified by the Certificate of Taxation dated 27th January 2022 with interest thereon at 14% p.a from 21st May 2021. The application is supported by the affidavit of Eugene Lubale Lubullelah, an advocate in the firm, sworn on 25th February 2022. The application is opposed by the replying affidavit of Premji Vekaria sworn on 21st August 2022.

3. When the matter came up for hearing, I directed that both application be heard together. Their counsel made brief oral submissions which I have considered. Since the Client’s Reference seeks to challenge the taxation culminating in the Certificate of Taxation, I will deal with it first.

4. The Client’s application is opposed on several grounds set out in the Grounds of Opposition dated 6th May 2022 but I do not propose to go through all of them as the preliminary issue on jurisdiction has been raised. The Advocates contend that the Reference is incompetent as it filed outside the time permitted and without leave of the court contrary to Para. 11 of Advocates Remuneration Order.

5. It is not in dispute that the Bill of Costs was taxed on 12th November 2021. According to the Client’s deposition in support of its application, ‘’The Client advocates ….. promptly filed a Notice of Objection to the taxation dated 17th November 2021 and requested for reasons and which reasons were provided for in a Ruling received by the Client’s Advocates on 27th January 2022. ’’ The procedure for filing references is set out in Para. 11(1) and (2) of the Order which provides as follows: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 his 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.(4)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.

6. In this case, the Client’s advocates filed the Notice of Objection on 17th November 2021 which was within the time prescribed under Para. 11(1) aforesaid. What is in issue is whether the Client filed the Reference within fourteen days of receiving of the reasons from the Taxing Officer. The Client states that it received the reasons contained in the ruling on 27th January 2022.

7. A strict reading of Para. 11(2) of the Order shows that the Deputy Registrar must respond to the Notice of Objection by giving reasons for the taxation. It is not apparent from the record that this is what was done in the matter. On the other hand, the reasons for the taxation decision are contained in the ruling which was delivered in presence of the parties (see Ahmednasir Abdikadir and Co., Advocates v National Bank of Kenya [2006] 2 EA 5, Evans Thiga Gaturu v Kenya Commercial Bank NRB Misc. Appl. No. 343 of 2011 [2012] eKLR, Mumias Sugar Company Limited v Professor Tom Ojienda and Associates KSM HC Misc. No. 279 of 2017 [2018] eKLR and Kenya Railways Golf Club v Evans Thiga Gaturu NRB Misc. Appl. E072 of 2019 [2020] eKLR). Since the Client relies on the ruling as the reasons for the decision, I do not see why the Reference was not filed forthwith as the ruling contained the reasons for the taxation. Further, no application has been made for extension of time to file the reference. Since the Reference is incompetent it is hereby struck out.

8. The Advocates’ application seeks judgment against the Client for the certified taxed sum of KES. 5,756,023. 04. Section 51(2) of the Advocates Act provides that:The certificate of the taxing officer by whom a 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 caser where the retainer is not disputed, an order that judgment be entered for the sum certified to be due with costs.

9. The Certificate of Costs is conclusive as to the amount unless set aside by way of a reference under Para. 11 of the Order (See Otieno, Ragot & Company Advocates v Kenya Airports AuthorityNRB CA Civil Appeal No. 39 of 2017 [2021] eKLR). Since I have struck out the Client’s Reference, there is no reason to deny the application.

10. As regards interest, the Advocate seeks interest from 21st May 2021 which was the day the Bill of Costs was served. The issue of interest is dealt with by Para. 7 of the Order provides that:An advocate may charge interests at 14% per annum on his disbursement and costs whether by scale or otherwise, from the expiration of one month from the delivery of his bill to the client, providing such claim for interest is raised before the amount of the bill has been paid or tendered in full.

11. Under Para. 7 aforesaid, an advocate is entitled to claim interest at 14% p.a on condition that the interest is claimed when the bill of costs is served on the client. The reasons for this is not difficult to discern. It is intended to give the client an opportunity to settle the bill otherwise it will face the consequences of failure to settle the bill by way of interest. I have looked at the deposition of Mr Lubullellah and the bill of cost annexed thereto and there is no indication that the Advocates claimed interest either on the face of the bill or in the forwarding letter. Interest thereon shall there be at court rates from the date of the taxation.

12. For the reasons I have set out above, I now make the following orders:a.The Client’s Notice of Motion dated 10thFebruary 2022 is dismissed with costs.b.The Advocates’ Notice of Motion dated 25th February 2022 is allowed on terms that judgment be and is hereby entered for the Advocates against the Client for the sum of KES 5,756,023. 04 with interest thereon at court rates from 12th November 2021 until payment in full together with costs of the application.c.The costs for both applications to be borne by the Client are assessed at KES. 20,000. 00 only.

DATED AND DELIVERED AT NAIROBI THIS 16TH DAY OF MAY 2022. D. MAJANJAJUDGECourt Assistant: Mr M. OnyangoMr Lubullelah instructed by Lubulellah and Associates Advocates for the Advocates/Applicants.Ms Masengeli instructed by Migele and Company Advocates for the Client/Respondent.