[2022] KEHC 14419 (KLR)

Mwangi Keng’ara & Company Advocates v Mungai (Miscellaneous Application E317 of 2021) [2022] KEHC 14419 (KLR) (Commercial and Tax) (13 October 2022) (Ruling)

Neutral citation: [2022] KEHC 14419 (KLR)

Republic of Kenya

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

Commercial and Tax

Miscellaneous Application E317 of 2021

WA Okwany, J

October 13, 2022

Between

Mwangi Keng’ara & Company Advocates

Advocate

and

Zipporah Mungai

Client

Ruling

1. This ruling is in respect to two applications; the client’s reference dated November 10, 2021 and the Advocates application dated November 17, 2021. I will consider with the reference first since its outcome with have a bearing on the Advocate’s application.

Application dated November 17, 2021. 2. The client filed the reference dated November 17, 2021 seeking the following orders:-1. The ruling and taxation of the taxing master delivered on October 26, 2021 be set aside.2. The Bill of Costs dated April 29, 2021 be struck out.3. In the alternative that this Honourable Court be pleased to remit the Bill of Costs dated April 29, 2021 for fresh taxation, with directions on the conduct of the taxation.4. The costs of this application be provided for.

3. The application is brought under Rule 11 of theAdvocates Remuneration Order (ARO).

4. The application is supported by the affidavit sworn by the client Ms Zipporah Mungai and is based on the following grounds:-I.The Applicant objects to the assessment of items 1, 14, 15, 16, 17, 18, 19, 20 and 31 of the Bill of Costs dated April 29, 2021. The Taxing Officer fell into an error of principle by failing to appreciate that an incompetent pleading filed before a Court that lacked jurisdiction could not be the basis of a lawful claim for fees under the Advocates Remuneration Order.II.The Taxing Officer fell into an error of principle by holding that he had no jurisdiction to ascertain the lawfulness, competence and validity of the Bill of Costs before him when the same was admittedly founded on an incompetent pleading filed in a Court that lacked jurisdiction.III.The Taxing Officer fell into an error of principle when he found as a matter of fact that the pecuniary jurisdiction of the Subordinate Court was Kshs 20,000,000 and still proceeded to consider the Advocates Bill of Costs dated April 29, 2021 filed in respect of services rendered by the Advocates in Nairobi CMCC No 4671 of 2019 in which the Advocate filed a suit claiming a sum of Kshs 24,051,320. IV.That the Taxing Officer fell into an error of principle when he unilaterally and without an application to that effect being made revised the value of the subject matter from Kshs 24,051,320 to Kshs 20,000,000 in order to confer upon himself the requisite jurisdiction to tax the bill.V.Taxing Officer fell into an error of principle when he failed to appreciate that Nairobi CMCC No 4671 of 2019 was referred to Arbitration for hearing and determination and an Arbitral award having been made, the Taxing Officer was precluded from having recourse to the pleadings for purposes of ascertainment of the value of the subject matter of the claim.VI.The Taxing Officer fell into error of principle when he failed to appreciate the taxing principle propounded in Nairobi Court of Appeal Civil Appeal Number 328 of 2017, Peter Muthoka v Ochieng Onyango Kibet & Ohaga and elevated the decision ofFirst American Bank of Kenya v Shah & another [20021 IEA to a fetish.VII.The Taxing Officer fell into an error of principle when he failed to appreciate that to allow instruction fees in respect of Nairobi CMCC No 4671 of 2019 and allow instruction fees in respect of the Arbitral proceedings arising out of the same subject matter would amount to duplication of fees in respect of one instruction to the great detriment of the client.VIII.That the Taxing Officer fell into an error of principle when he failed to appreciate that no Statement of Defence was filed in Nairobi CMCC No 4671 of 2019 and under schedule 7 (l)(a), the instruction fees if any ought to have been reduced to 65%, that is Kshs 351,000. IX.That the Taxing Officer fell into an error of principle when he found that he had no jurisdiction to deal with the client's Notice of Motion dated 21st May 2021 and instead of referring the same to the High Court, proceeded to dismiss the same.X.The Taxing Officer proceeded on mistaken principles and consequently failed to exercise his discretion judicially as to justify interference by this Honourable Court.

5. The respondent opposed the application through the replying affidavit of Mercy Nduta Mwangi who states that she represented the client instructed in Milimani CMCC No 4672 of 2019 wherein her application for summary judgment was dismissed after which she lodged an appeal. She further avers that the subject matter of the appeal was a liquidated sum and that there was therefore no error of principle.

6. The reference was canvassed by way of written submissions.

7. I have considered the reference and the rival arguments made by the parties. The main issue for determination is whether the taxing officer erred in principle when taxing the Bill of Costs.

8. It is trite that the court will only interfere with the decision of the taxing Master where there is an error of principle.

9. In Machira & Co Advocates v Magugu [2002] 2 EA Ringera J (as he then was) held that:-“As I understand the practice relating to taxation of bills of costs, any complaint about any decision of the taxing officer whether it relates to a point of law taken with regard to taxation or to a grievance about the taxation of any item in the bill of costs is ventilated by way of a Reference to a judge in accordance with paragraph 11 of the Advocates Remuneration Order.”

10. InJoreth Ltd v Kigano & AssociatesCivil Appeal No 66 of 1999 [2002] 1 EA 92,[2002] eKLR it was held that unless the taxing officer had misdirected himself on a matter of principle, the judge sitting on a reference against the assessment ought not to interfere with the findings. This exception to the general rule was pronounced by Ringera J (as he then was) in First American Bank of Kenya v Shah and Others[2002] EA 64 at 69, as follows:“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.”

11. Similarly, in Kipkorir, Tito & Kiara Advocates v Deposit Protection Fund Board [2005] eKLR the Court of Appeal held as follows:-“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.”

12. The above-cited cases show that the general rule is that the court should not interfere with the findings of the taxing officer unless there is an error in principle.

13. The client contended that the Taxing Master erred in principle in failing to appreciate that the incompetent pleadings filed before a court that lacked jurisdiction could not be a basis for a claim of fees. The client further contended that the Taxing Master made an error in finding that the value of the subject matter was Kshs 2,470,209

14. In a rejoinder, the advocate stated that the Taxing Master erred in principle as the subject matter of the case was a liquidated sum. It was submitted that the Taxing Master used the Memorandum of Appeal as the basis for determining the value of the subject matter of the suit given that there was no judgment or order produced before her.

15. In assessing the instruction fees the taxing master observed that;“I am guided by the decisions above; the advocate is entitled to full instruction fees once instructions are issued. The subject matter of the appeal can be derived from the Memorandum of Appeal filed at 2,470,209. 00 the basic instruction fees is calculated Pursuant to schedule 6 1(B) of the Advocate Remuneration Order 2014as follows:-1st 1000000 kshs 120,0001300,278. 50*2% Kshs 29,404. 18Total 149,404. 18Item 1 is taxed as drawn at Kshs 149,404. 18

16. With regard to instruction fees the court of appeal inJoreth Ltd v Kigano & Associates (2002 )1 EA 92 held that:-“the value of the subject matter for purposes of taxation of a bill of costs ought to be determined from the pleadings, judgment or settlement (if such be the case) but if the same is not ascertainable the taxing officer is entitled to use his discretion to assess such instruction fees as he considers just taking in account, amongst other matters, the nature and the importance of the cause or matter, the interest of the parties, the general conduct of the proceedings ,any direction by the trial judge and all other relevant circumstances.”

17. In the instant case, I note that the advocate filed an appeal pursuant to instructions given to her by the client. I have perused the Memorandum of Appeal and I note that the value of the subject matter could be ascertained. I therefore find that the correct schedule to tax the instruction fees was schedule 6 1 (b) of the Advocates Remuneration Order which provides that:-(b)To sue in any proceedings described in paragraph(a)where a defense or other of liability is filed; or to have an issue determined arising out of inter-pleader or other proceedings before or after suit; or to present or oppose an appeal where the value of the subject matter can be determined from the pleadings, judgment or settlement between the parties and—That value exceeds But does not exceed KshsKshs - 500,000 75,000500,000 750,000 90,000750,000 1,000,000 120,0001,000,000 20,000,000 fees as for Kshs 1,000,000 plus an additional 2%.Over 20,000,000 Fees as for 20,000,000 plus an additional 1. 5%.

18. In view of the foregoing, I find that the Taxing Master applied the correct schedule for taxing the instruction fees. The value of the subject matter could be ascertained from the Memorandum of Appeal. The client has not denied that she instructed the advocate to file an appeal and I therefore find that the advocate deserves the legal fees. I do not find any error in principle in ascertaining the instruction fees as the amount is also not too high to amount to unjust enrichment.

19. In the upshot I find that the application dated November 10, 2021 lacks merit and I therefore dismiss it with costs to the respondent.

Application dated November 1, 2021 20. Through the application dated November 17, 2021 the Advocate seeks the following orders for:-1. Entry of judgment against the client/respondent in favor of the applicant for a sum of Kshs 832,566/= as awarded in the Certificate of Taxation dated November 15, 2021. 2.Interest on the taxed costs of Kshs 832,566 at the rate of 14% per annum with effect from June 26, 2021 until payment in full.3. That the costs of this Application be awarded to the Advocate/ Applicant.

21. The application is supported by the affidavit of the advocate Mercy Nduta Mwangi and is based on the following grounds:-i.That the Applicant's Advocate/Client costs were taxed on 5th/ 11/2021 at a net sum of Kshs 832,566/=.ii.That the Applicant complied with Rule 7 of the Advocates Remuneration (Amendment) Order, when she issued to the Client a notice to levy interest on unpaid Legal fees at the rate of 14% per annum until payment in full.iii.That the Applicant has been denied the use of her lawfully earned fees and it is only fair and just that interest be awarded on the taxed costs at the prescribed rate of 14% per annum until payment in full.iv.That, a demand to pay the taxed costs and interest was issued to the Respondent on October 26, 2021 to no avail.v.That this honourable court has the power to enter judgment and award interest as prayed herein.

22. The client opposed the application on the basis that she had filed a reference to set aside the certificate of taxation.

23. The main issue is whether judgment should be entered against the respondent/client in terms of the Certificate of Taxation.

24. Section 51(2) of the Advocates Act stipulates as follows:-“The certificate of the taxing officer by whom any bill has been taxed shall unless it is set aside or altered by the court, be final as to the amount of the costs recovered thereby; and the court may make such order in relation thereto as it thinks fit, including where the retainer is not disputed, an order that judgment be entered for the sum certified to be due with costs.”

25. InLubulellah & Associates Advocates v N K Brothers Limited [2014] eKLR the court observed that:-“The law is very clear that once a taxing master has taxed the costs, issued a Certificate of costs and there is no reference against his ruling or there has been a ruling and a determination made and not set aside and/or altered, no other action would be required from the court save to enter judgment. An applicant is not required to file suit for the recovery of costs. The certificate of costs is final as to the amounts of the costs and the court would be quite in order to enter judgment in favour of the Applicant against the Respondent herein for the taxed sum indicated in the Certificate of Taxation that was issued on November 25, 2012. ”

26. This court has already found that there was no error of principle in taxing the bill of costs. I find that the advocate’s application is merited and I therefore allow it as prayed.

DATED, SIGNED AND DELIVERED VIRTUALLY AT NAIROBI THIS 13TH DAY OF OCTOBER 2022. W. A. OKWANYJUDGEIn the presence of: -Ms Mwangi got Advocate.Mr. Masese for Client.Court Assistant- Sylvia