[2023] KECA 1501 (KLR)

Macharia Mwangi & Njeru Advocates v Ecobank Limited (Civil Appeal E474 of 2021) [2023] KECA 1501 (KLR) (8 December 2023) (Judgment)

Neutral citation: [2023] KECA 1501 (KLR)

Republic of Kenya

In the Court of Appeal at Nairobi

Civil Appeal E474 of 2021

K M'Inoti, HA Omondi & GWN Macharia, JJA

December 8, 2023

Between

Macharia Mwangi & Njeru Advocates

Appellant

and

Ecobank Limited

Respondent

(Being an appeal from the entire Ruling and Order of the Commercial & Admiralty Division, Nairobi (D. Majanja, J.) dated 14th April 2020 in Miscellaneous Civil Application No. E298 of 2019 Miscellaneous Civil Application E298 of 2019 )

Judgment

JUDGMENT OF NGENYE, JA. 1. The appellant being aggrieved by the ruling of the High Court (D. Majanja, J.) filed the appeal before us vide a Memorandum of Appeal dated 19th August 2021, raising nine grounds of appeal which can be summarised as follows; -a.That the learned Judge erred in law and in fact in finding that the Advocate-Client Bill of Costs ought to have been taxed under paragraph 1 of Schedule 5 Part II of the Advocates Remuneration Order, and not paragraph 7 of Schedule 5 Part II of the Order.b.That the learned Judge erred in law and in fact in finding that paragraph 7 of Schedule 5 Part II of the Advocates Remuneration Order in terms of having a general agreement with a client was mandatory and not permissive.c.That the learned Judge erred in law and in fact in failing to find that paragraph 1 of Schedule 5 Part II of the Advocates Remuneration Order was open ended and, thus, unable to fairly compensate the advocates for services rendered in debt collection.The appellant urged that the appeal be allowed with costs, the ruling and order of the learned Judge be set aside and substituted with an order upholding the taxing master’s decision of 15th January 2020; its application dated 31st January 2020 be allowed as prayed; and that it be awarded costs of the application dated 19th February 2020.

2. The background to this appeal is that the appellant filed a Bill of Costs dated 24th July 2019 claiming in the main item Kshs. 43,688,883. 30 as instructions fees as follows:“Instructions for debt collection and realization for security for the debt USD. 28,232,287 (Kshs. 2,907,925,561. 00) at an exchange rate of Kshs. 103 to 1 USD as at 18/07/2019 on account of Hashi Energy Limited, to issuing 90-day Statutory Notice demands to:1. Hashi Energy Limited. 2. Group Finance Director, Hashi Limited

3. Ahmed Hashi Adan,

4. Fatuma Mohammed Issa,

5. Mohammed Ahmed Hashi,

6. Eastern and Southern Africa Trade and Development Bank (PTA Bank)To complexity of the issues herein, to detailed research in recovery proceedings, to care and labour required for recovery of the sum of USD 28,232,287 (Kshs. 2,907,925,561. 00) to the nature and importance of matter, to the subject value of recovery, to fair and reasonable instructions fees to the advocates under Schedule 5 Part II of the Advocates Remuneration Order, 2014. ”

3. The Deputy Registrar as the taxing master, found as a fact that, the Bank instructed the advocates by an email dated 11th January 2016, addressed by Ms. Mbenge to Mr. Mwangi, the latter being an advocate in the appellant’s law firm, instructing him to review the facility documentation and provide a legal opinion on the enforceability of the Bank’s securities, and advice whether there was a need to take corrective action; whether the facility in the Facility Agreement was a revolving or one-off, and the realization process; whilst noting that the Bank was sharing some of the securities with other banks. The advocates (the appellant) issued the legal opinion, and proceeded to issue statutory notices under section 90 of the Land Act, 2012 to Hashi Energy in respect of LR No. 9595/50 (Original 9695/1) Mombasa, LR Nos. 20295 and 20299 Kisumu Municipality and Kisumu Municipality/Block 7/48, demanding immediate payment of USD 28,237,287, and to Ahmed Hashi Aden in respect of Eldoret Municipality/Block 3/35. The Deputy Registrar certified the instruction fee at Kshs. 43,688,883. 40 under Paragraph 7, Part II of Schedule 5 of the Advocates Remuneration Order.

4. Aggrieved, the respondent filed a reference before the High Court, vide a Chamber Summons dated 19th February 2020, seeking an order that:a.That the decision of the Taxing Officer (Hon. Elizabeth Tanui) made on 15th January 2020 and the subsequent Certificate of Taxation dated 17th January 2020 be set aside and the Advocate- Client Bill of Costs dated 24th July, 2019 be remitted back to any other taxing master for a fresh taxation.

5. The High Court (Majanja, J.) in its ruling identified the issue for determination to be whether the Deputy Registrar applied the proper charging provision of the Advocates Remuneration Order. According to the learned Judge, it was not in dispute that the subject matter was non-contentious in nature and therefore governed by Schedule 5; that under Paragraph 22 of Advocates Remuneration Order, the advocates were entitled to elect the applicable schedule, and they elected to tax the bill under Schedule 5 of the Order which comprises two parts; Part I dealing with agreed hourly rates which was not applicable to the case, and Part II which deals with alternative methods of assessment of costs. It was the view of the learned Judge that, the dispute between the parties related to whether the instruction fees were to be assessed in terms of Paragraph 1, Part I, or, whether the subject matter was a debt collection and, therefore, subject to taxation under Paragraph 7, Part II of Schedule 5 of the Order.

6. The court observed that, whereas it is true that the advocates issued statutory notices in terms of section 90 (1) of the Land Act, 2012 towards realization of the securities held by the respondent, the whole intent and purpose of the notices was to demand payment and collect the payments owed to the Bank by its customer; that the Bank did not deny that it instructed the advocates to recover the debt owed to it by its customer; and that the fact that the recovery of the debt was by issuing of statutory notices as provided by statute did not detract from the nature of instructions; and that the more fundamental issue concerned the interpretation and application of Paragraph 7, Part II of Schedule 5 of the Advocates Remuneration Order to the circumstances of the case.

7. To the learned Judge, a reading of Paragraph 7 Part II of Schedule 5 shows that it contains three elements. First, it applies to debt collection; second, there must be a general agreement between the advocate and client; and third, that the agreement should charge fees in accordance with the scale in lieu of charging for the items set out in paragraphs 1 to 6, Part II of Schedule 5 for work done. The court then found that, for paragraph 7 to apply, the advocate and client must enter into a general agreement that applies the scale thereunder. And, in this case, since the parties did not enter into a general agreement, for the scale in paragraph 7 Part II of Schedule 5 to apply, the applicable provision for taxing the Bill of Costs was therefore under paragraph 1 Part II of Schedule 5.

8. Applying his mind to the principles applicable in interfering with the discretion of a taxing master, the learned Judge found that the Deputy Registrar, sitting as the taxing master, erred in applying the wrong provisions in taxing the Advocate- Client Bill of Costs; and that it ought to have been taxed in accordance with paragraph 1, Part II of Schedule 5 of the Advocates Remuneration Order. The court then allowed the reference and remitted the Bill of Costs back for fresh taxation before a different taxing master, with a direction that the instruction fees should be taxed in accordance with paragraph 1 of Part II of Schedule 5 of the Advocates Remuneration Order. The appellant was ordered to bear the costs of the reference.

9. Aggrieved, the appellant filed the instant appeal to this Court. We heard this appeal through a virtual platform on the 19th June 2023. Present at the hearing was learned counsel, Mr. Elijah Mwangi for the appellant and learned counsel Mr. Njoroge Regeru for the respondent.

10. The appeal was canvassed by way of written submissions with limited oral highlights. The appellant’s submissions are dated 6th June 2023 while those of the respondent are dated 12th June 2023 with an attached bundle of list of authorities dated 14th June 2023.

11. Mr. Mwangi submitted that, while the learned Judge agreed that this was a debt collection legal service, he erred in stating that there must be a prior agreement before an advocate takes up debt collection services, for the bill to be taxed under the tabulated scale provided in section 8 of Part II of Schedule 5 of the Advocates Remuneration Order. Counsel submitted that under section 44 of the Advocates Act, the Chief Justice sets remuneration for all advocates, and provides that no advocate may charge below the remuneration set therein; that under section 45 of the Act, a client and an advocate may agree on remuneration; and therefore, it is not possible that section 8 of Part II of Schedule 5 would require that an advocate and a client enter into an agreement prior to the advocate charging fees, as this would contradict section 45, and, hence, put a regulation above the parent statute, which is not feasible. Counsel submitted that all that section 8 of Part II of Schedule 5 does is to cap the maximum fees an advocate may charge in regards to debt collection while section 44 provides the minimum fees an advocate may claim from a client. To counsel, therefore, paragraph 17 of the impugned ruling is erroneous having rendered section 8 redundant.

12. According to the counsel, the taxing master used the correct methodology which was mathematical, to arrive at the fees payable. In contrast, the ruling of the learned Judge created uncertainty, confusion and instability as he construed the word ‘may’ to mean ‘shall’ whose applicability is mandatory. He urged us to be persuaded by the High Court decision in the case of Mwangi Keng’ara & Co. Advocates vs. Invesco Assurance Company Limited [2018] eKLR where the court found that the applicable scale for non-contentious debt collection matters is paragraph 7 of Schedule 5.

13. Mr. Regeru submitted that it was common ground that this was a non-contentious debt collection matter, for which fees should be charged under paragraph 7 of Schedule 5, Part II; that under the provision, an advocate and client must enter into a general agreement; that consequently, if it was the intention of the parties to apply this provision whilst charging fees, then they must have entered into a general agreement; that, as such, the learned Judge rightly held that paragraph 7 applies in lieu of charging fees under paragraphs 1 to 6 which are applicable when parties do not have a general agreement; that it is general public policy that a client ought to know as a matter of information the basis on which fees is charged; that the agreement provided for under paragraph 7 is a general agreement, and it is different from the formal agreement contemplated under section 47 of the Advocates Act which requires that the amount to be charged must be fixed pursuant to an agreement entered into in accordance with section 45 of the Act; and, that therefore, there is no contradiction, conflict or inconsistency between the two parts of Schedule 5 Part II as one provides for fees chargeable for contentious matters while the other provides for fees chargeable for non-contentious matters.

14. Counsel further submitted that the respondent had tried to get the appellant to agree on a mode of charging the fees which the appellant declined; and that they (the advocates) cannot now turn around and appeal the decision of the High Court premised on alleged misapplication of the provisions of paragraph 7, in the absence of an agreement between themselves; and that the appellant cannot approbate and reprobate at the same time as far as the provisions of paragraph 7 are concerned.

15. Counsel submitted that this being a second appeal, the appellant has to meet the threshold as set out in the case of Kipkorir Titoo & Kiara Advocates vs. Deposit Protection Fund Board (2005) eKLR which is that a judge will not interfere with the discretion of the taxing officer unless the taxing officer erred in principle in assessing costs. He submitted that for the scope of paragraph 7 to apply, the appellant needed to have done certain work to completion which they did not; that the appellant only wrote a demand letter and one legal opinion, which task is clearly disproportionate to the fees demanded and taxed; and that this is why the learned Judge was categorical in pointing out that the taxing master ought to have applied paragraphs 1-6 of Schedule 5 Part II. To the counsel, the appellant is skewed in isolating paragraph 7 of Schedule 5 Part II of the Order which uses the word ‘may’ to the exclusion of the rest of the case, whilst clearly, the intention of the Legislature was that, for an advocate to charge fees under paragraph 7, parties must have entered into a general agreement. He relied on the cases of Republic vs. Council for Legal Education Ex-parte Desmond Tutu Owuoth [2019] eKLR and University of Stellenbosch Law & Others vs. National Credit Regulator Case No. 14203 of 2018 in the context of legislative intent, in advancing the argument that the word ‘may’ could very well be construed to mean a mandatory compliance.

16. Finally, counsel submitted that the appellant’s Bill of Costs was ineffective as it relied on both paragraphs 6 and 7, hence the need to resubmit it for fresh taxation before a different taxing master. He urged us to dismiss the appeal with costs.

17. In rebuttal, Mr. Mwangi submitted that a look at the Bill of Costs shows that they (advocates) relied on section 8 of Part II, which the taxing master too relied on; that the learned Judge in his ruling did not address the quantum of fees or its disproportion to the services rendered; that the learned Judge only addressed the applicability of paragraph 8 of Part II of Schedule 5; and that that aside, the advocates had issued numerous statutory notices, and the debtor had indeed proposed a settlement plan. He urged us to find the appeal merited and allow it accordingly.

18. We have carefully considered the appeal, the submissions of both parties, the relevant statute and the law. We have deduced that the main issue for determination is whether the learned Judge erred in setting aside the ruling of the taxing master on the basis that she ought to have applied paragraphs 1 to 6 of Part II of Schedule 5 of the Advocates Remuneration Order instead of paragraph 7, in taxing the appellant’s Bill of Costs.

19. From the outset, we wish to clarify that Part II of Schedule 5 runs up to paragraph 7. Learned counsel Mr. Mwangi severally referred to paragraph (sometimes ‘section’) 8 of Part II which we think was a clear oversight on his part. We say so because the provisions he referred to, to be contained in paragraph ‘8’ are clearly the provisions in paragraph 7. Therefore, so as not to cause confusion and for good order, in this judgment we shall only refer to paragraph 7 which shall apply to where reference was erroneously made to paragraph 8.

20. The ratio decidendi for the learned Judge’s decision can be found in paragraph 17 of the Ruling which states that:“However, the more fundamental issue concerns the interpretation and application of Paragraph 7, Part II of Schedule 5 of the Advocates Remuneration Order to the circumstances of this case. A reading of Paragraph 7 shows that there are three elements. First, it applies to debt collection. Second, there must be a general agreement between the advocate and client. Third, that agreement is to charge in accordance with the scale in lieu of charging for the items set out in Paragraphs 1 to 6, Part II for work done. Thus, I find that for Paragraph 7 to apply, the advocates and client must enter into a general agreement applying the scale thereunder. Since the parties did not enter into a general agreement to apply the scale in Paragraph 7, Part II of Schedule 5, the applicable provision for taxing the Bill of Costs is therefore Paragraph 1 of Part II of Schedule 5. ”

21. As correctly held by the superior court, and a fact that is not in issue before us is that, the subject matter was non- contentious in nature, which would automatically render the applicable provision to be paragraph 7 of Part II in Schedule 5 of the Advocates Remuneration Order. It provides as follows: Schedule 5 Fees in Respect of Business the Remuneration for which is not Otherwise Prescribed or which has been the Subject of an Election Under Paragraph 22 Part II— alternative Method of Assessment 7. Debt CollectionIn respect of non-contentious debt collection matters an advocate may (emphasis ours) enter into a general agreement with a client to charge therefor upon the following inclusive scale in lieu of charging per item for work done, but—a.where not more than one letter of demand has been written the scale shall be reduced by one- half, subject to a minimum fee of Kshs.1, 000; orb.where the letter of demand is followed by the institution of proceedings at the instance of the same advocate the scale does not apply and fee shall be as prescribed in paragraph 5 of this Schedule or under Schedule 6 or Schedule 7 as the case may be.Where the amount of the debt does not exceed Kshs.100,000…..10%Where the amount of the debt exceeds Kshs.100,000 but does not exceed Kshs. 500,000………Kshs. 10,000 plus 5% of the amount over Kshs 100,000Where the amount of the debt exceeds Kshs. 500,000 but does not exceed Kshs. 2,000,000…………Kshs. 50,000 plus 3% of the amount over Kshs 500,000Where the amount of the debt exceeds Kshs. 2,000,000…Kshs.100,000 plus 1. 5% of the amount over Kshs. 2,000,000

22. It is also not in dispute that there was no general agreement or any agreement between the parties herein as to the fees to be charged. The respondent was of the view that it was mandatory for the client and advocate to have had a general agreement, and that the failure to have had such an agreement rendered the aforesaid paragraph 7 inapplicable. The appellant on the other hand argued that a general agreement was not mandatory in the circumstances.

23. In our view, the main contestation revolves around the interpretation of the meaning of the word “may” in the provision, and whether it ought to be interpreted to mean that an agreement is one and the same as the word ‘mandatory’ requirement.

24. Mr. Regeru urged that the word ‘may’ in some context may be construed as mandatory. This in turn would mean that the intended consequence of the failure to comply with the provision being interpreted, would invalidate what is done in contravention of the provision. For this proposition, he relied on the case of Republic vs. Council for Legal Education Ex- parte Desmond Tutu Owuoth [2019] eKLR and University of Stellenbosch Law & Others vs. National Credit Regulator Case No. 14203/2018. The case advances the proposition that, an interpreter of language must look at the language used in a provision and place it contextually within the provisions of the relevant section and purpose of the legislative instrument. To the learned counsel therefore, the context under which the word ‘may’ is used in paragraph 7 could only have been intended to mean mandatory requirement, so much so that the failure to comply with what is directed invalidates what is done. The converse is that, if the requirement is interpreted as being merely permissive (directory), the failure to comply with it would not invalidate what is done, and the law would be applied as nearly as if the requirement had been complied with.

25. Statutory interpretation is the process by which courts interpret and apply legislation. The starting point of interpreting a statute is in the language itself. In the absence of an expressed legislative intention to the contrary, the language must ordinarily be taken as conclusive. Thus, when the words of a statute are unambiguous, then this first canon rule is also the last; judicial inquiry is complete. This Court differently constituted held in the case of County Government of Nyeri & Anor vs. Cecilia Wangechi Ndungu [2015] eKLR that:“Interpretation of any document ultimately involves identifying the intention of Parliament, the drafter, or the parties. That intention must be determined by reference to the precise words used, their particular documentary and factual context, and, where identifiable, their aim and purpose. To that extent, almost every issue of interpretation is unique in terms of the nature of the various factors involved. However, that does not mean that the court has a completely free hand when it comes to interpreting documents; that would be inconsistent with the rule of law, and with the need for as much certainty and predictability as can be attained, bearing in mind that each case must be resolved by reference to its particular factors.”

26. The Black's Law Dictionary, 9th Edition, gives several definitions of the word “may” including: "to be permitted to, to be a possibility, or loosely put: is required to.” In Vidarbha Industries Power Limited vs. Axis Bank Limited (2022) 8SCC 352, the Supreme Court of India stated;64. “Ordinarily the word “may” is directory. The expression ‘may admit’ confers discretion to admit. In contrast, the use of the word “shall” postulates a mandatory requirement. The use of the word “shall” raises a presumption that a provision is imperative. However, it is well settled that the prima facie presumption about the provision being imperative may be rebutted by other considerations such as the scope of the enactment and the consequences flowing from the construction.”

27. At this stage, even if the said provision is read in its full context as suggested by learned counsel Mr. Regeru, we are not of the mind that the word “may” as used connotes a mandatory duty. Firstly, in the said paragraph 7, more specifically sub-paragraphs (a) & (b), the word “shall” is used. The fact that the Legislature used ‘may’ and ‘shall’ in the same provision attests that ‘may’ and ‘shall’ are intended to convey a different meaning.

28. Secondly, if we were to hold that the word “may” is in the case to be construed as mandatory, it would create an absurdity, and cause inconvenient consequence for all advocates practicing within the boundaries of Kenya. For instance; what would be the consequence when an agreement is prepared but a client declines to sign? Would this not be prejudicial to the advocate(s) who would be placed, if not crucified, at the mercy and whims of their clients? How then, would an advocate execute an unsigned agreement?

29. These questions are answered by the mischief the word ‘may’ was intended to cure. We say so in the context that the agreement would be drawn after both the advocate and the client have agreed on its terms so that there does not arise a stalemate of one party declining to sign it. If that were to happen, such an agreement would just but be some scripts on a paper, and not even worth mentioning for purposes of effectuating what is in it. Therefore, it cannot be said that it was the intention of the Legislature to have parties enter into a general agreement for every non-contentious debt collection matter. If it was, as the adage goes, nothing would have been easier for Parliament to do than to state so in clear words. And, in this case, it would have used the word “shall” as opposed to “may”. We cannot then belabour to conclude that the word ‘may’ can only connote a discretionary mandate.

30. In conclusion, to reduce a legal nuance into simple English, the word ‘may’ in the context at hand means existence of discretion. In reference to the provisions applied in this case, we do not see any reason why the word ‘may’ in paragraph 7 Schedule 5, Part II should be read as ‘must’ or ‘shall.’

31. From the above, it is evident that the learned Judge erred in finding that a general agreement was a required document for purposes of paragraph 7 in Part II of Schedule 5 to apply to the appellant’s Bill of Costs.

32. Having observed the foregoing, we now grapple with the question of whether the learned taxing master properly taxed the Advocate-Client Bill of Costs. It is now a settled principle that a court siting on appellate jurisdiction, cannot interfere with a taxing officer’s discretion unless it is demonstrated that the taxing master committed an error of principle, or, that the taxed amounts were either manifestly too high or too low as to represent an error in principle to warrant an interference. In this case, we are persuaded by the holding of the High Court in the case of First American Bank of Kenya vs. Shah and Others (2002) eKLR in which Ringera, J. (as he then was) held that: -“First, I find that on the authorities, 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”.

33. In present case, the appellant received instructions from the respondent pursuant to an email dated 11th January 2016, to review the facility documentation and provide a legal opinion on:a.enforceability of the respondent’s security and advise whether there was need to take any corrective action;b.whether the facility as detailed in the facility agreement was revolving or one off.c.The realization process noting that the respondent was sharing two properties with other institutions on a pari passu basis, and they also enjoyed a specific debenture over the Monusco Contract.

34. The appellant prepared the legal opinion and issued statutory demand notices to Hashi Energy Limited and Ahmed Hashi Adan, on the 5th April 2016. The demand was for USD 28,232,287. 00 owing to the respondent as at 23rd March 2016. This led to Hashi Energy Limited giving a proposal to the respondent as to repayment of amounts owing and the parties entering into a settlement agreement.

35. Our finding is that a notice issued under the statutory power of sale falls under debt collection for which the applicable schedule is paragraph 7 under Part II of Schedule 5.

36. It behooves us to revisit the ruling of the learned taxing master so as to address our minds to which paragraph of Part II in Schedule 5 the fees were taxed. She taxed the bill of costs in the following words:“aInstructions fess………. Kshs. 43,688,883. 40b.VAT @ 16%………… Kshs. 6,990,221. 34c.Disbursements………… Kshs. 10,409. 00Total ……………… Kshs. 49,683,513. 74The instruction fees due to the applicant is an all- inclusive amount. Therefore, all the other items from items No. 2 to 29 are taxed off in their entirety.”

37. We note that, some of the other main items that the appellant had charged in the Bill of Costs included preparing legal opinion, drawing statutory notices served upon Hashi Energy Limited, Group Finance Energy, Ahmed Harshi Adan, Fatuma Mohamed Issa, Mohamed Ahmed Harshi and Eastern and Southern Africa Trade and Development Bank, receiving and perusing emails from clients, perusing all security documents, writing a letter to the client and perusing global repayment plan. It is very clear from the ruling of the taxing master that all these other items were taxed off; taxed off for the very reason that they did not fall for taxation under paragraph 7. Hence, the taxing master properly addressed her mind to the correct Part, Schedule and paragraph that the appellant was obligated to charge their fees under. Respectfully, we do not agree with the learned Judge that, the parties not having entered into a general agreement, paragraphs 1 to 6 of Part II of Schedule 5 ought to have applied.

38. In the same vein, it follows that the Bill of Costs could not be taxed under Part I of Schedule 5. This paragraph charges “Fees In Respect Of Business The Remuneration Of Which Is Not Otherwise Prescribed Or Which Has Been The Subject Of An Election Under Paragraph 22 Part I- Agreed Hourly Rate” (emphasis ours). Clearly the matter in issue concerned non-contentious debt collection which is not covered under this part. Consequently, the taxing master had no choice but to tax the bill under the correct part of Schedule 5.

39. And having concluded in the foregoing that a general agreement was not a mandatory requirement under paragraph 7, it follows that the appellant was and is entitled to instruction fees pursuant only to this provision. For this reason, we find that the learned taxing master exercised her discretion properly and the superior court erred in interfering with her decision.

40. For the above reasons, we find that the appeal is merited and we accordingly allow it in the following terms:a.That the Ruling of the High Court dated 14th April 2020 and all consequential orders are hereby set aside.b.The taxation of the appellant’s Bill of Costs dated 22nd July 2019 and the decision of the taxing officer in the ruling dated 15th January 2020 and all the consequential orders be and is hereby upheld.c.The respondent shall bear the costs of this appeal.

JUDGMENT OF M’INOTI, JA 1. I have had the advantage of reading in draft the judgment of my sister, the Hon. Lady Justice Ngenye-Macharia. The background to this appeal and the issues therein are splendidly and comprehensively identified and articulated in the said judgment that it is not necessary to rehash them here. The said judgment, with which my sister, the Hon. Lady Justice Omondi agrees, concludes that the Advocate-Client Bill of Costs at the centre of this appeal ought to have been taxed under Schedule 5, Part II, Paragraph 7 of the Advocates Remuneration Order. That is what the taxing officer ruled, a decision which was subsequently reversed on appeal by the High Court. The High Court ruled that the Bill of Costs ought to have been taxed under Scheduled 5, Part II, Paragraph 1 of the said Schedule because the condition for application of Paragraph 7, namely, the existence of a general agreement, was not satisfied.

2. Regretfully, I find myself more persuaded by the reasoning of the High Court. It is common ground that the subject matter of the dispute was non-contentious debt collection and that the advocate and the client had not entered into an agreement to charge in accordance with the scale provided in paragraph 7. As, in my opinion, this appeal turns purely on interpretation of the Advocates Remuneration Order, it is apt to set out verbatim the relevant part of the Order, long as it is:Schedule 5 Fees In Respect Of Business The Remuneration For Which Is Not Otherwise Prescribed Or Which Has Been The Subject Of An Election Under Paragraph 22 Part I—agreed Hourly Rate 1. Fees to be assessed under this Schedule may either be charged in accordance with paragraph 2 of this Part or assessed in accordance with Part II.

2. An advocate may charge his fees at such hourly rate or rates as may be agreed with his client from time to time.

Part II — alternative Method Of Assessment 1. InstructionsSuch fee for instructions as, having regard to the care and labour required, the number and length of the papers to be perused, the nature or importance of the matter, the amount or value of the subject matter involved, the interest of the parties, complexity of the matter and all other circumstances the case, may be fair and reasonable, but so that due allowances shall be given in the instruction fees for other charges raised under this Schedule.

2. Drawing And Perusing, etc. Kshs.

For drawing 250

For engrossing 50

For fair copying 30

For perusing 70

3. AttendanceIn ordinary cases per 15 minutes or part thereof 1,000

On routine telephone calls within Kenya for 15 minutes or part thereof 150 In other cases the taxing officer may increase or diminish the above charges for any special reason.

4. Time EngagedWhere charge is so based in lieu of charges per item of work done per for 15 minutes or part thereof 7,000

5. CorrespondenceLetters 300

Or per folio 200

Receiving and perusing letters 150

Or per folio 70

6. OpinionsFor formal written opinion, such fee as may be reasonable in the circumstances, having regard to the same considerations as set out above for the assessment of instructions, but not less than Kshs. 35,000. Journey From HomeFor every day of not less than seven hours employed in travelling 15,000

Where a lesser time than seven hours is so employed, per hour 2,500 The taxing officer may increase or diminish the above fee for any special reason.

7. Debt CollectionIn respect of non-contentious debt collection matters an advocate may enter into a general agreement with a client to charge therefor upon the following inclusive scale in lieu of charging per item for work done, but—a.where not more than one letter of demand has been written the scale shall be reduced by one-half, subject to a minimum fee of Kshs.1, 000; orb.where the letter of demand is followed by the institution of proceedings at the instance of the same advocate the scale does not apply and fee shall be as prescribed in paragraph 5 of this Schedule or under Schedule 6 or Schedule 7 as the case may beWhere the amount of the debt does not exceed Kshs.100,000 10%

Where the amount of the debt exceeds Kshs.100,000but does not exceed Kshs.500,000 Kshs 10,000 plus 5% of the amount over Kshs100,000

Where the amount of the debt exceeds Kshs. 500,000 but does not exceed Kshs. 2,000,000 Kshs 50,000 plus 3% of the amount over Kshs 500,000

Where the amount of the debt exceeds Kshs. 2,000,000 Kshs 100,000 plus 1. 5% of the amount over Kshs 2,000,000Chattels Transfer.For drawing and completing an instrument under the Chattels Transfer Act including all necessary and proper searches, affidavits, stamping and registration—Where the amount secured does not exceed Kshs 50,000 - Kshs.6,000Where the amount secured exceeds Kshs. 50,000 - One half of the scale fee under paragraph (a) of the Second Scale of Schedule 1 adjusted in accordance with the notes to that Schedule.

3. In my view, under Schedule 5 of the Remuneration Order, fees may be charged in two ways. The first is on an hourly rate as agreed between the advocate and the client under Part I of the Schedule. The second is in accordance with the alternative method of assessment provided in Part II of the Schedule. It is common ground that the advocate and the client in this appeal did not agree to charge on hourly rate, so Part I of the Schedule is not applicable. That leaves the alternative method provided for in Part II of the Schedule.

4. Part II of Schedule 5 has several paragraphs that address such distinct items as instructions, drafting and perusals, engaged time, correspondence, opinions, journeys, debt collection and chattels transfer. Paragraph 1 provides the method of calculating instruction fees, followed by charges for the other specific items of work. For its part, Paragraph 7 provides an all inclusive scale for calculating fees for non-contentious debt collection. Subject to satisfying the prescribed condition, the scale in paragraph 7 is supposed to be used “instead” of or as an alternative to charging per item of work.

5. Paragraph 7 of the order, which the majority finds to be the applicable provision in this appeal, reads thus:“In respect of non-contentious debt collection matters an advocate may enter into a general agreement with a client to charge therefor upon the following inclusive scale in lieu of charging per item for work done…”

6. Paragraph 7 allows the advocate and the client to enter into a general agreement to charge on the basis of the inclusive scale provided therein, instead of charging per item as specified in Part II paragraphs 1 to 6.

7. In my view, the critical question is not whether the word “may” in the above paragraph imports a mandatory or discretionary meaning. It is clear enough that the paragraph has left it to the discretion of the advocate and the client to decide whether to enter into a general agreement to charge in accordance with the scale in paragraph 7 or not to adopt that scale. It is equally clear to me that there is a very express and deliberate statutory condition precedent for the application of the scale in paragraph 7 of Part II of the Schedule, namely, the existence of a general agreement between the advocate and the client. In short, the provision does not make it mandatory for the advocate and the client to enter into a general agreement. It leaves it to them to decide. Once they have entered into the general agreement, they can rely on the scale in paragraph 7. If they elect not to enter into the general agreement, they cannot rely on the scale in paragraph 7. In that context, it cannot be contended that the general agreement is a mandatory requirement. All that paragraph 7 says is that to reap the benefits of the scale provided therein, you need a general agreement. In the absence of that general agreement, you cannot rely on paragraph 7 and must charge per item of work under Part II paragraphs 1 to 6.

8. It is important to emphasise that the inclusive scale in paragraph 7 is intended to be used “in lieu of” (instead of) charging per item item of work. To rely on the inclusive scale, the advocate and the client need to have entered into the general agreement required under paragraph 7. If they have not entered into such an agreement, then the Bill of Costs must be charged per item of work.

9. It is contended that because paragraph 7 of Part II of the Schedule specifically relates to non-contentious debt collection, then it is the applicable provision. In other words, the general provisions on calculation of instruction fees and charging the other items of work cannot supplant the specific provision on calculation of fees in non-contentious debt collection. I would readily agree with that logic, but only in so far as a party seeking to rely on paragraph 7 has demonstrated that they have complied with the condition prescribed in that paragraph.

10. In my view, to apply paragraph 7 in the absence of an agreement between the advocate and the client is to completely ignore the condition precedent for the application of paragraph 7 and the deliberate use of the words “in lieu of”. It amounts to doing great violence to the clear words and intent of the paragraph. It will mean that whether or not an advocate and a client have entered into an agreement to charge under the scale in paragraph 7, that scale must apply to them the moment it is clear that the issue in dispute involves non-contentious debt collection. This then begs the question, why does the paragraph specifically require a general agreement if that agreement counts for nothing? I am persuaded that for paragraph 7 to apply in lieu of paragraphs 1 to 6, there must be a general agreement. Conversely, in the absence of a general agreement, paragraphs 1 to 6 must apply in lieu of paragraph 7.

11. It is a well established principle of statutory interpretation that meaning and intent are to be gleaned objectively from the language used and that a court cannot adopt a cannon of interception that otherwise renders otiose clear words of the statute or the instrument under interpretation. I would adopt, in this regard, the words of Hoffman LJ in Attorney General of Belize v. Belize Telecom Ltd.[2009] 2 All ER 1127 that:“[t]he court has no power to improve upon the instrument which it is called upon to construe, whether it be a contract, a statute or articles of association. It cannot introduce terms to make it fairer or more reasonable. It is concerned only to discover what the instrument means. However, that meaning is not necessarily or always what the authors or parties to the document would have intended. It is the meaning which the instrument would convey to a reasonable person having all the background knowledge which would reasonably be available to the audience to whom the instrument is addressed ... It is this objective meaning which is conventionally called the intention of the parties, or the intention of Parliament, or the intention of whatever person or body was or is deemed to have been the author of the instrument.” (Emphasis added).

12. It is not suggested in this appeal that the requirement of an agreement in paragraph 7 leads to an illogical outcome or that it results in a mischief that must be remedied by ignoring the prescribed condition precedent.

13. For the above reasons, the parties in this appeal having elected not to enter into the agreement contemplated by paragraph 7 of Part II of Schedule 5 of the Remuneration Order, that paragraph was not applicable and the Advocate-Client Bill of Costs ought to have been taxed per item under paragraphs 1 to 6 of Part II of the 5th Schedule, as held by the High Court. Accordingly, I would dismiss the appeal with costs to the respondent. However, as Omondi and Ngenye-Macharia, JJA. are of a different view, the outcome is that this appeal is allowed in the terms proposed by Ngenye-Macharia, JA. It is so ordered.

JUDGMENT OF OMONDI, J.A. 1. I have had the benefit of reading in draft, the judgment of Ngenye, J.A, and confirm that indeed the main issue for determination is whether the learned Judge erred in setting aside the ruling of the taxing master on the basis that she ought to have applied paragraphs 1 to 6 of Part II of Schedule 5 of the Advocates Remuneration Order instead of paragraph 7, in taxing the appellant’s Bill of Costs. The subject matter was non-contentious in nature, which means that the applicable provision is found at paragraph 7 of Part II in Schedule 5 of the Advocates Remuneration Order. In particular is the provision that Paragraph 7 addresses debt collection as follows:In respect of non-contentious debt collection matters an advocate MAY (emboldened for emphasis) enter into a general agreement with a client to charge therefor upon the following inclusive scale in lieu of charging per item for work done.

2. It is apparent that there was no general agreement or any agreement between the parties herein as to the fees to be charged. What we need to resolve is whether it was mandatory for the client and advocate to have a general agreement, failure to which paragraph 7 would be rendered inapplicable; or whether a general agreement was not mandatory in the circumstances.

3. The whole contestation revolves around use of the word “MAY” and the import or significance of such a term. Can the word MAY be clothed in such a context as to be construed as being mandatory, so that the failure to comply with the provision being interpreted, would invalidate what was done in contravention of the provision? The rule in interpreting a statute is in the language itself, which when clear and unambiguous in its ordinary status, conveys a clear and conclusive meaning, unless there is an express legislative intention to the contrary.

4. The definition given in Black's Law Dictionary, 9th Edition, for the word “may” includes: "to be permitted to, to be a possibility, or confers discretion to admit; and is in contradistinction to the use of the word “shall” which postulates a mandatory requirement. For purposes of clarity, I do not think the use of the word MAY is elusive or ambiguous. I take note that Paragraph 7, (a) & (b), use the word “shall”, and I am in agreement with Ngenye, J.A, that in using ‘may’ and ‘shall’ in the same provision, the Legislature intended to convey a different meaning. Indeed, it cannot be said that it was the intention of the Legislature to have parties enter into a general agreement for every non-contentious debt collection matter; otherwise, it would have used the word “shall” as opposed to “may”. I have no hesitation in concluding that the word ‘may’ can only connote a discretionary mandate.

5. I entirely agree with the reasoning and conclusion arrived thereat and have nothing useful to add.

DATED AND DELIVERED AT NAIROBI THIS 8TH DAY OF DECEMBER 2023. G.W. NGENYE-MACHARIA..................................JUDGE OF APPEALK. M’INOTI..................................JUDGE OF APPEALH. A. OMONDI..................................JUDGE OF APPEALI certify that this is a true copy of the originalSIGNEDDEPUTY REGISTRAR