[2021] KEHC 4387 (KLR)

IN THE HIGH COURT OF KENYA

MILIMANI LAW COURTS

COMMERCIAL AND TAX DIVISION

CORAM: D. S. MAJANJA J.

MISC. CIVIL APPLICATION NO. 183 OF 2015

BETWEEN

MWANGI KENGARA AND COMPANY ADVOCATES...................ADVOCATE/APPLICANT

AND

INVESCO ASSURANCE COMPANY LIMITED...........................CLIENT/RESPONDENT

RULING

Introduction and Background

1. This ruling is in respect of the reference brought under Rule 11(2) of the Advocates Remuneration Order (“the Order”) by the Applicant (“the Advocates”) by the Chamber Summons dated 23rd July 2019. It is in respect of the ruling of the Deputy Registrar dated 27th July 2018 following taxation of an Advocate/Client Bill of Costs dated 14th April 2015.

2. The application is supported by the affidavit of Mercy Nduta Mwangi, the registered proprietor of the Advocates’ firm, sworn on 23rd July 2019. It is opposed by the Respondent (“the Company”) through Grounds of Opposition dated 7th October 2020. The reference was canvassed by way of written submissions with the parties advancing their respective positions.

3. It is common ground that the Advocates rendered legal services to the Company in the lower court in defending Milimani CMCC No. 5936 of 2004, George Wahiu Macharia(both suing as Administrators of the Estate of Charles Macharia Wahiu) V David Njau Gitura & Another(“the Suit”).In the bill of costs, the Advocates claimed a total of Kshs 179,621. 12/- for the services rendered to the Company less Kshs. 10,000/- that had already been paid to it. In her ruling dated 27th July 2018, the Deputy Registrar summarised the findings and certified the amount due to the Advocates as follows:

…Items No. 1 to 27 including Instruction fees

and attendance for taxation) - Kshs. 85,144/-

VAT @ 16% - Kshs. 13,623/-

Subtotal - Kshs. 98,767/-

Add Disbursements - Kshs. 2,866/-

Subtotal - Kshs. 101,633/-

Less Amount paid by Client Kshs. 10,000/-

Total - Kshs. 91,633/-

4. Before I proceed to determine the matters in dispute, I note that the Company raised the technical issue that the Reference had been filed out of time and without the leave of court. The Advocates conceded this but demonstrated that they had filed an application to enlarge time for filing the Notice of Objection under Rule 11(1) and that leave to file Reference out of time was granted by the court on 16th January 2019. I have gone through the record and I confirm that indeed leave was granted as stated and the Reference is valid.

5. The Advocates elected, under Para. 22(1) of the Order to tax its fees under the Alternative Method of Assessment, that is, Schedule V Part II of the Order. This is confirmed by the fact that the election was signified on the Bill of Costs served on the Company on 26th March 2015. The main issue falling for determination is whether the Deputy Registrar erred in the manner she taxed off items on Instruction fees under item no. 114; Journeys from home under items number 6, 11, 35, 54, 65, 76, 83, 93, 96, 106 and 110; items number 17, 21, 22, 26, 31, 39, 47, 48, 52, 57, 63, 64, 71, 72, 78, 82, 88, 99, 104, 105, 11, 112 and 119; items number 10, 16, 24, 34,75,118 and 125 in respect of engrossing and; Items number 9, 117 and 168 in respect ofdrawings.

Instruction Fees under item no. 114

6. Para. 1 of Part II, Schedule V sets out the manner in which the instruction fee is to be determined. It states as follows:

Such fee for instructions as, having regard to the case and labour required, the number and length of papers to be perused, the nature and importance of the matter, the amount or value of the subject matter involved, the interest of the parties, the 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 instructions fees for other charges raised under this Schedule.

7. In interfering with discretion of the Deputy Registrar in determination of the instruction fee, this court is guided by the principle that it will not interfere with the discretion of the Taxing Officer unless it is established that the taxing officer has not exercised his discretion judicially, for example, by disregarding factors which he should properly have considered, or considering matters which it was improper for him to have considered or has acted on a wrong principles including by applying the wrong charging schedule (see Joreth Limited v Kigano and Associates [2002] 1 EA 92and First American Bank of Kenya v Shah & Others[2002] 1 EA 64).

8. The Advocates complain that in determining the instruction fee, the Deputy Registrar erred in principle and in law in failing to establish the value of the subject matter and exercise her powers under Rule 75(1) before proceeding to tax off Kshs. 24,739. 50 from item no. 114 for instruction fees and awarded a sum that is lower than the scale fees provided under comparable schedules for the same work and in particular Schedule 7 Part B. The Advocates submit that the Deputy Registrar’s ruling does not indicate how she arrived at the sum of Kshs. 30,000/- neither did she determine the value of the subject matter. The Advocates contend that it charged instruction fees of Kshs. 54,739. 50/- for a value of a subject matter of Kshs. 824,654/- which was quantified in the Plaintiff’s claim in the suit.

9. In response, the Company submitted that the amount taxed off took consideration of the relevant Order,work done and that the choice of the Advocates’ value of the subject matter was subject to proof which was not provided at the taxation. The Company adds that this court has no jurisdiction to entertain the issue raised herein at this stage as the Deputy Registrar has already rendered her reasoning on the item and the allegation that no reason was given is a contradiction.

10. In the decision on instruction fees, the Deputy Registrar stated, in part, that:

The Instruction fees under Schedule V is calculated based on among other factors, the nature or importance of the matter, the amount or value of the subject matter involved. In this case, considering the nature of the subject matter and the value of the subject matter, the applicant’s instruction fee is allowed at Kshs. 30,000/-….

11. The Deputy Registrar, save for citing the provision of the Order applicable, did not state the value of the subject matter or elucidate the other factors that led to the conclusion that Kshs. 30,000. 00 was appropriate as instruction fees. This amounts to an error of principle as was stated in Republic v Commissioner of Domestic Taxes ex. p Ukwala Supermarkets Ltd and Others NRB HC Misc. Appl. No. 319 of 2015 [2018] eKLR, where the court noted that, “the Taxing Officer ought to disclose what informed the decision to tax the costs in one way as opposed to another.” Likewise, in Republic v Minister for Agriculture and 2 Others ex parte W’Njuguna and 6 Others NRB HC Misc. Appl. No. 621 of 2000 [2006] eKLR the court emphasized the necessity to give reasons for arriving at a conclusion as follows:

It is necessary to ascertain how she arrived at that figure; for although the judicial review applicant’s firm position is that it was an exercise of lawful discretion which therefore, this court should uphold, the correct perception of the discretion donated by law, I believe, is that such a discretion is only duly exercised when it is guided by transparent, regular, reliable and justcriteria… and

[I]t was necessary to specify clearly and candidly how she exercised her discretion… it is not enough to set by attributing to oneself discretion originating from legal provision and thereafter merely cite wonted rubrics under which that discretion may be exercised, as if these by themselves could permit assignment of mystical figures of taxed costs …

12. I therefore find and hold that the Deputy Registrar committed an error of principle which warrants the court’s interference on the item of instruction fees. I am tempted to return the matter back for taxation but I am of the view that given the nature of the matter and the length of time it has taken to dispose of it, I think judicial time and costs to parties would be minimized if the matter were concluded. In taking this road, I am heartened by the dicta of Ringera J., in First American Bank of Kenya Ltd v Gulab P Shah & Others [2002] 1 EA 64 where he stated that:

I have asked myself whether I should remit the bill back to the taxing officer with directions that she should determine the instruction fees … I am convinced in my mind that that would be a waste of judicial time in the circumstances of this case. I would also saddle the parties with further unnecessary costs. I think the just course of action in this matter is for this court to exercise its discretion in a reference on taxation to determine the matter with some finality.

13. From the particulars given in the Bill of Costs, the Advocates were instructed to defend the Company’s insured’s driver in NBI MILIMANI CMCC NO. 5936 of 2004, wherein he had been sued for damages under the Law Reform Act and the Fatal Accidents Act. The Plaintiff quantified its claim under the Law Reform Act at Kshs. 70,000. 00, Kshs. 662,368. 00 under the Fatal Accidents Act, Funeral Expenses at Kshs. 62,826. 99 making a total of Kshs. 794,648. 00 plus costs of the suit being Kshs. 30,000. 00 making the total claim Kshs 824,000. 00.

14. The Advocates pegged the value of the subject matter on the quantification given by the Plaintiff as indicative of the value thereof. The Advocates did not deal with the matter to completion but as Advocates on record, they are entitled to full instruction fees for defending the matter (see First American Bank of Kenya Ltd v Gulab P Shah & Others (Supra)). In dealing with ascertainment of the subject matter, the Court of Appeal in Joreth Ltd v Kigano & Associates NRB CA Civil Appeal No. 66 of 1999 [2002] eKLR observed as follows:

We would at this stage point out that the value of the subject matter of a suit for the purpose 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 discretionto assess such instruction fee as he considers just, taking into account, among other matters, the nature and 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.

15. In this case there was no judgment or settlement, the Taxing Officer would be entitled to look at the quantification given by the Plaintiff to the Advocates or to quantification given by the Advocates to the Client. On the other hand, the Advocates in its counteroffer to the Plaintiff’s Advocates in the letter dated 12th May 2006 proposed that a case for loss of dependency under the Fatal Accidents Act had not been made out in view of the age of the deceased, proposed Kshs. 50,000. 00 for loss of expectation of life and Kshs. 3,000. 00 for pain and suffering both claims under the Law Reform Act.

16. Considering that both sides were likely to exaggerate their negotiating positions, I think a sum of Kshs. 500,000. 00 as the value of the subject matter would be reasonable. This is a straightforward claim for damages for negligence hence I would adopt a fee similar to that charged under Part B of Schedule 7 of the Order bearing in mind that under Para. 22(2) of the Order, “an advocate who makes an election under subparagraph 10 may not by reason of his election charge less than the scale fee under the appropriate schedule.”

17. In this case, under the applicable Advocates Remuneration Order, 1997, the fees for a claim not exceeding Kshs. 500,000. 00 is Kshs 30,000. 00 in a defended case. Consequently, the amount for instruction fee is affirmed.

Journeys from home under items number 6, 11, 35, 54, 65, 76, 83, 93, 96, 106 and 110

18. Under Schedule V, an advocate is entitled to recompense under the rubric, “JOURNEY FROM HOME”. The fee prescribed for every day of not less than seven hours employed in travelling, the Advocate is entitled to Kshs. 15,000. 00 and where a lesser time than seven hours is so employed per hour, the amount is Kshs. 2,500. 00. he subject items in the Bill of Costs are in respect of journeys to and from the City Center tTo Milimani Commercial Court when a time of 1 hour was spent on travelling. On these items, the Deputy Registrar stated that the same is taxed off for “want of particulars. The purpose of the journeys is not specified. It is also noted that the date of each of these items is repeated in the immediate subsequent Item. This is duplication.”

19. I do not find any reason to interfere with this decision by the Deputy Registrar as indeed the purposes of the said journeys were not specified and she found the same to be duplicated. For example, in Item No. 6 the Advocates state, “To journey from City Center to Milimani Commercial Court when a time of 1hr was employed in travelling to and fro.” Although the Advocates have gone on to explain the details in the submissions, the particulars in the Bill of Costs as filed must be sufficient and self-explanatory on its face before the Taxing Officer can have recourse to the documents filed. It must be recalled that the purpose of the Bill of Costs is to notify the Client the basis of its claim for fees. I decline to interfere with the Deputy Registrar’s discretion.

Attendances under Items number 17, 21, 22, 26, 31, 39, 47, 48, 52, 57, 63, 64, 71, 72, 78, 82, 88, 99, 104, 105, 11, 112 and 119

20. In taxing off these items, the Deputy Registrar noted that attendances envisaged by paragraph 3 of theOrder are court attendances and not otherwise, therefore the attendances to post mail, deliver letters were not chargeable and taxable under this heading. I find no fault in the Deputy Registrar’s reasoning that “attendances” under the Order refers to court attendances and therefore, there is no reason for this court’s interference with this holding. However, I can only add that “attendances” as per the said Paragraph 3 of the Order also includes telephone calls within Kenya.

Engrossing under items number 10, 16, 24, 34, 75,118 and 125

21. Under these items, the Deputy Registrar held that the engrossing rates provided by the 1997, 2006 and 2014 Orders were Kshs. 24, Kshs. 33/- and Kshs. 50/- respectively and that the Order does not charge per folio but rather the amount is fixed. Indeed, there is nowhere in the Order that states that engrossing is computed per folio as contended by the Advocates and I do not find any error of principle by the Deputy Registrar in applying a flat rate rather than multiplying the same with the number of folios.

Drawings under Items number 9, 117 and 168

22. The Deputy Registrar applied the same rationale and reasoning in computing fees for engrossing in holding that the Orderprovides a flat rate irrespective of folios and I fail to find anything that compels her to compute the same based on the number of folios therefore she exercised her discretion judiciously.

Conclusion

23. For the reasons I have set out above, I do not find any merit in the Applicant/Advocates’ Reference dated 23rd July 2019. It is dismissed but with no order as to costs.

DATED andDELIVERED at NAIROBIthis 13th day of AUGUST2021.

D.S. MAJANJA

JUDGE

Court Assistant: Mr M. Onyango

Ms Mwangi instructed by Mwangi Keng’ara and Company Advocates for the Advocates/Applicant.

Ms Mutua instructed by Gichuki Kingara and Company Advocates for the Client/Respondent.