[2022] KEHC 3092 (KLR)

Mereka & Company Advocates & another v National Social Security Fund Board of Trustees & 2 others (Miscellaneous Civil Application 29 of 2020 & 99 of 1994 (Consolidated)) [2022] KEHC 3092 (KLR) (Civ) (17 June 2022) (Ruling)

Neutral citation: [2022] KEHC 3092 (KLR)

Republic of Kenya

In the High Court at Nairobi (Milimani Law Courts)

Civil

Miscellaneous Civil Application 29 of 2020 & 99 of 1994 (Consolidated)

JK Sergon, J

June 17, 2022

IN THE MATTER OF THE ADVOCATES ACT CAP 16 LAWS OF KENYA AND IN THE MATTER OF TAXATION OF COSTS

Between

Mereka & Company Advocates

Applicant

and

National Social Security Fund Board of Trustees

Respondent

As consolidated with

Miscellaneous Civil Application 99 of 1994

Between

African Planning & Design Consultants

Plaintiff

and

The Sololo Outlets Limited

1st Defendant

Board of Trustees of National Social Security Fund

2nd Defendant

Ruling

1. The instant Chamber Summons Application dated 19th November, 2020 is seeking for orders that;i.The decision of the Taxing Officer delivered on 29th September, 2020 as far as the same relates to taxation of the entire Bill of Costs dated 23rd January, 2020 be set asideii.This Honorable Court be pleased to refer the matter back to the Taxing Officer for re-taxation of the entire Bill of costs dated 23rd January, 2020 and with proper direction thereof.iii.In the alternative to prayer 2 above, the Honorable court be pleased to re-tax the said Bill of Costs dated 23rd January, 2020iv.Costs of this Application be borne by the Respondent.

2. It is premised on the grounds set out on the face of the Application and the depositions of David M. Mereka in the Supporting Affidavit dated and sworn on 19th November, 2020. It is stated that the taxing officer erred in law and principle in;a)Applying the wrong schedule and/or scale and failing to apply the provisions of Schedule V of theAdvocates (Remuneration) Order, 2014 in determining instruction fees thereon.b)Failing in Taxing item 1 to appreciate the true nature of the instructions given by the client to the advocate, the complexity of the matter, the enormous time and skill expended by the advocate and the importance of the matter to the client.c)Failing to use the rule of thumb and to take judicial notice that the advocates letter dated 14th June, 2018 referring to Clause 22 of the Act actually referred to paragraph 22 of the Advocates Remuneration Order 2014 (Rules of the Act) and specifically with respect to an Advocate making an election in taxing its Bill of costs since the letter was in relation to taxation alone. That consequently, the Taxing Officer gave a wrong interpretation of the letter dated 14th June, 2018 and applied the wrong schedule.d)Failing to properly calculate under various items the folios and amounts expended by the advocate in printing, photocopying and service of enormous documents prepared by the advocate/applicant and in failing to take judicial notice that the documents once filed were served on all the parties to the suit;e)Failing to take into consideration the written submissions filed on behalf of the …. Together with the weighty authorities supplied;f)Failing to take into consideration the settlement agreement entered into by the parties and in particular the settlement amount of Kshs. 55, 527, 739 and which ought to have been the basis of the instructions fees in addition to failing to consider the election as aforesaid;

3. The Application is opposed. The Respondent filed grounds of oppositions dated 17th December, 2020 and a Replying Affidavit sworn by Caroline Esendi Rakama Odera on 22nd February, 2021.

4. It is also stated in the grounds of opposition that the Application is misconceived, frivolous, vexatious and an abuse of the process of court and also bad in law. It is stated that the Application is devoid of merit and that the taxing officer did not err.

5. It is stated in the Replying Affidavit that in the ruling of the taxing officer delivered on 29th September, 2020, the Bill of Costs was allowed at Kshs.2,566,194. 25 and that Kshs.899,660. 25 was the balance after deducting Kshs.1,666,534. 00 paid to the Applicant. Further that the Deputy Registrar increased the instruction fees from Kshs.115,790. 69 to Kshs.1,000,000 with reasons espoused in the ruling and that it was not reduced as alleged by the Applicant hence the Taxing Officer was right in arriving at Kshs.11,500,000 under item 1.

6. It is further stated that the Applicant rightfully conceded that the matter was not complex nor did it involve in depth research as the pertinent issue was on privity of contract with no novel concepts outside the purview of normal litigation.

7. It is contended that the taxing officer correctly interpreted the Applicant’s letter of 14th June, 2018 and applied schedule 6 of the Remuneration Order and as such, did not err in law and principal for not applying Schedule V of the Remuneration Order.

8. Further that the Applicant did not give the Respondents the notice of election under Schedule V as pursuant to paragraph 22(1) of the Advocates Remuneration Order.

9. It is further stated that the Taxing Officer could only use evidence and/or documents filed in support of the Bill and not to look for documents and correctly tax the items that were not supported by evidence.

10. The Respondent further submits that there is no settlement for Kshs.55,527,739. 00 as alleged by the Applicant but a judgment of Kshs.10,979,069. 00 plus the Value Added Tax and interests and as such the taxing officer correctly used the judgment figure as a basis in arriving at the instruction fee. The Respondent postulates that the Reference is lacking in merit and the same should be dismissed.

11. By consent of parties, this Application was canvassed by way of written submissions which I have read and considered.

12. The decision of a taxing officer is discretionary and this power can only be interfered with if the reference meets the conditions set out in Nyangito &Co. Advocates vs Doinyo Lessos CreameriesLtd [2014] eKLR, where Odunga J laid out the principles as follows:-“That the 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 manifested excessive as to justify an inference that it was based on an error of principle;a)It would be an error of principle to take into account irrelevant factors or to omit to consider relevant factors and, according to the Remuneration Order itself. Some of the relevant factors to be taken into account include the nature and importance of the cause or matter, the amount or value of the subject matter involved; the interests of the parties, the general conduct of the proceedings and any direction by the trial Judge;b)If the court considers that the decision of the taxing officer discloses errors of principle, the normal practice is to remit it back to the taxing officer for reassessment unless the Judge is satisfied that the error cannot materially have affected the assessment and the court is not entitled to upset a taxation because in its opinion.”

13. Similarly in Kipkorir, Tito & Kiara Advocates vs Deposit Protection Fund Board [2005] eKLR the Court observed;“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.”

14. It is the Applicants contention that the taxing officer should have breathed life to its letter of 14th June, 2018 and note that the Applicant indicated schedule instead of paragraph in reference to the notice of election.

15. Paragraph 22(1) of the Advocates Remuneration Order reads as follows;‘In all cases in which any other schedule applies an advocate may, before or contemporaneously with rendering a bill of costs drawn as between advocate and client, signify to the client his election that, instead of charging under such schedule his remuneration shall be according to Schedule V, but if no election is made his remuneration shall be according to the scale applicable under the other schedule.’

16. The Applicant’s letter that is purported to notify the Respondent of election reads in part;“...In the meantime, we wish to advise you that we shall charge our fees under Clause 22 of the Advocate’s ActCap 16 Laws of Kenya in view of the complexity of the matter, attendances and the length of time the matter has taken.”

17. My reading of this letter speaks of a notice of election safe for the word Clause. Article 159(2) of the Constitution of Kenya, 2010 and Sections 3A and 1A of the Civil Procedure Act Cap 16 Laws of Kenya introduced the oxygen principle so that justice can be served expeditiously and without undue technicalities. I understand the Applicant in his letter to mean that paragraph 22 and not clause 22 as indicated. This letter was sufficient notice to the Respondent that due to the complexity of the matter and the time it had taken, the Applicant elected to use schedule v.

18. In this regard, the taxing officer erred in not reading life into this letter and considering the form rather than the substance.

19. Having found that the taxing officer erred in ignoring the notice of election for want of form, I do hereby find that the Application is merited and is allowed thus giving rise to issuance of the following ordersa)The decision of the taxing officer of 29/9/2020 is set aside.b)The matter to be placed before another taxing officer for re-taxation.c)Each party to bear own costs.

DATED, SIGNED AND DELIVERED ONLINE VIA MICROSOFT TEAMS AT NAIROBI THIS 17TH DAY OF JUNE, 2022. ……………………….J. K. SERGONJUDGEIn the presence of:……………………………. for the Advocate/Applicant……………………………. for the Client/Respondent