[2022] KEHC 14422 (KLR)

Madhav Bhalla Tia Taibjee & Bhalla Advocates LLP v Otieno Okeyo & Co. Advocates (Miscellaneous Application E885 of 2021) [2022] KEHC 14422 (KLR) (Commercial and Tax) (13 October 2022) (Ruling)

Neutral citation: [2022] KEHC 14422 (KLR)

Republic of Kenya

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

Commercial and Tax

Miscellaneous Application E885 of 2021

WA Okwany, J

October 13, 2022

Between

Madhav Bhalla Tia Taibjee & Bhalla Advocates LLP

Applicant

and

Otieno Okeyo & Co. Advocates

Respondent

Ruling

1. The applicant herein is aggrieved by the decision by the taxing master dated November 22, 2021 and especially with respect to the instruction fees and getting up fees applicable while taxing the third party's party and party bill of costs dated February 25, 2021 and filed the application dated December 2, 2021 seeking the following orders:-i.Spentii.That this honourable court does hereby order the setting Aside of the ruling by the honourable taxing master dated November 22, 2021 pursuant to the third party's party and party bill of costs dated February 25, 2021. iii.That this honourable court does hereby order the reassessment of Items one (1), two (2) and three (3) of the bill of costs dated February 25, 2021 accordingly.iv.That this honourable court does hereby give further and consequential orders as it may deem fit and expedient.

2. The application is supported by the affidavit of Mr Madhav Bhalla advocate who avers that following the delivery of judgment in favour of the defendant/applicant herein on February 21, 2020 the third party was also awarded the costs of defending the Third-party proceedings. He states that the third-party advocates then filed a party and party bill of costs dated February 25, 2021 claiming the total sum of kshs 1,572, 355/= as against the defendant/applicant.

3. It is the applicant’s case that the taxing master erred in law and in fact by erroneously concluding, in the face of the clear and contrary record of the plaintiff s pleadings ,that the value of the subject matter in the suit was kshs 36,000,000/= instead of kshs 10,150,000/=.

4. According to the applicant, the plaintiff ’s claim against the defendant was not to be paid kshs 36,000,000 but rather, the rendering of an account for the said sum of kshs 36,000,000. For this argument, the applicant referred to the Black’s Law Dictionary (6thEdition)which describes an “Account rendered” as an account made out by the creditor and presented to the debtor for his examination and acceptance. When accepted, it becomes an account stated.

5. The applicant noted that the defendant provided an account for the sum of kshs 20, 000,000/= that the law firm had received from the plaintiff s which amount the Court upheld. The applicant submitted that such a rendering of accounts in relation to the defendant's advocates handling of the transaction involving his clients (the plaintiff s), cannot be deemed to constitute a specific demand for a specific amount of money. The applicant’s deponent maintained that the taxing master erroneously based her opinion on the value of the subject matter of kshs 36,000,000 as stated in the Third party Notice as opposed to the actual sum of kshs 10,150,000 that the plaintiff used in computing the applicable instruction and getting up fees.

6. The applicant argued that the amount taxed and awarded by the taxing master under Items (1), (2) and (3) of the Third party's party and party bill of costs especially with respect to Instructions and getting up fees were therefore both excessive and way above the correct limits provided in the advocate Remuneration order for an ascertained value of the subject matter.

7. The respondent opposed the reference through the replying affidavit of Mr Fredrick Okeyo, advocate and Managing Partner in the respondent law firm, who avers that the application is bad in law unsustainable and should be dismissed with costs to the Respondent. He further avers that the applicant’s prayer against the Third party was for indemnity for kshs 36,000,000/- allegedly entrusted to him by the plaintiff s.

8. The respondent submitted that the application does not meet the standards set in law for interfering with the discretion of the taxing master and further, that the party and party costs are purely costs within the suit which should be taxed and challenged within the suit. According to the respondent, the law and practice does not allow a litigant, as the applicant herein, to sue the advocate of the Third Parties in the subject Originating Summons in challenging costs awarded to the Third Parties in the suit in which the advocate was not a party per se.

9. The respondent argued that it has wrongly been sued in these proceedings as the Respondent was not awarded any costs against the applicant. The respondent maintained that the application is bad in law, is completely misconceived, based on misapprehension of the law and is an extreme abuse of the Court

10. I have carefully considered the application, the respondent’s response and the submissions by counsel. The main issue for determination is whether the application/reference is merited.

11. A perusal of the record reveals that the impugned ruling emanated from Civil Case No 441 of 2012 (OS) where the parties werePatrick Ayisi Ingoi & Florence Nzoera Mulama v Madhav Bhalla t/a Taibjee Bhalla advocates as defendant; and Mahmood Khan alias Kaka Mahmood Khan and Dina Mahmood Khan as the 1st and 2nd Third party. The court held as follows in awarding costs to the Third party in the said suit: -“As to the third party proceedings, I hold them to have been wholly unnecessary. No claim or indemnity flowed from the Third Parties to the defendants. At most the Third Parties would have made good witnesses for the advocate, as indeed the testimony of the 1st Third party proved to be. The advocates should have simply called them as witnesses or sought Court summons to attend as witnesses. It was unnecessary to burden them with the costs of defending third party proceedings. Those costs must be met by the defendant. Those are the orders of the Court.”

12. As I have already stated in this ruling, the respondent herein represented the Third party in the Originating Summons and the taxation that is the subject of challenge is in respect to taxation of the costs awarded to the Third party as party and party costs. It is clear to me that the respondent herein, was not a party to the primary suit (OS) that gave rise to the taxation and was therefore not awarded costs as against the applicant.

13. Having regard to the above stated uncontested facts regarding the parties to the Originating Summon, this court is at a loss as to the reason for the inclusion of the respondent to these proceedings yet the taxation in question was not in respect to advocate/Client costs but rather, to the party and party costs due to the Third party and not his advocate and should have therefore been challenged within the OS in question.

14. For the above reasons, I agree with the respondent’s submissions that this application is misconceived and is fit for striking out with costs. However, even assuming that this was a challenge on an advocate/client bill of costs, I find that the application does not meet the threshold set for challenging an advocate/client costs as the Third party notice contained prayers to account for kshs 36, 000,000/=, in which case, the taxing master cannot be said to have erred in adopting the said sum as the basis for assessing the Instructions and getting up fees.

15. I find that that the taxing master considered all the relevant matters placed before her in the said taxation in determining the value of subject matter before arriving at the impugned decision.

16. Consequently, I strike out the instant application with costs to the respondent.

DATED, SIGNED AND DELIVERED VIRTUALLY AT NAIROBI THIS 13THDAY OF OCTOBER 2022. W. A. OKWANYJUDGEIn the presence of: -Mr. Okeyo for Respondent.Mr. Ng’ang’a for applicantCourt Assistant – Sylvia