[2018] KEHC 5017 (KLR)

REPUBLIC OF KENYA

IN THE HIGH COURT OF KENYA AT NAIROBI

JUDICIAL REVIEW MISCELLANOUS APPLICATION NO. 41 OF 2016

NAIROBI CITY COUNTY……………..……….…CLIENT/ APPLICANT

VERSUS

PROF TOM OJIENDA ASSOCIATES……….ADVOCATE/ RESPONDENT

RULING

The Applications

1. Prof. Tom Ojienda and Associates (hereinafter “the Advocates”) filed an Advocate -Client Bill of Costs herein on 9th August 2016, that was dated 8th August 2016. The said Bill of Costs was in relation to services rendered by the Advocates to the Nairobi City County, (hereinafter “the Client), in High Court Petition No. 268 of 2014 –Douglas Ngenge Irungu vs The Speaker of National Assembly and 47 Other County Assembly Speakers(hereinafter “the Original Petition). After hearing the parties, the Bill of Costs was taxed at Kshs 17,522,496/=, in a ruling dated and delivered on 6th March 2017 by the Taxing Master. The Taxing Master also issued a Certificate of Taxation against the Client dated 28th April 2017.

2. On 26th April 2017, the Client filed the first application that is the subject of this ruling, by way of Chamber Summons dated 20th April 2017, which was filed pursuant to the provisions of paragraph 11(2) of the Advocates (Remuneration) Order and sections 1A, 1B and 3A of the Civil Procedure Act and was seeking the following orders:

(a) That pending the hearing and final determination of the application, there be a stay of execution in respect to the taxed costs awarded to the Respondent.

(b) That the Taxing Master’s decision in respect of item 1 of the Respondent’s Bill of Costs dated 8th August 2016 taxing instruction fees at Kshs 10,000,000 be and is hereby set aside.

(c) The court do make an appropriate reduced award in place of the instruction fees or give directions as to taxing of the said item by another taxing master.

(d) That cost of the application be provided for.

3. The application was supported by a supporting affidavit sworn on 20th April 2017 by Jacob Ngwele, the Clerk of the Client. The grounds for the application in summary, were that the Taxing Master failed to disclose which schedule of the Advocates Remuneration Order she applied in determining the instruction fees, and that she had to determine the basic instruction fees first before determining whether to increase or decrease the same. In addition, that the Taxing Master erred in finding that the issue of other instructing clients did not arise and that the Client should bear the burden of the taxed Bill alone.

4. Further, that the Taxing Master erred in law and fact by failing to appreciate the principles that guide the taxation of Advocates-Clients Costs in matters of public interest. In particular, that the Taxing Master failed to show how she applied the relevant factors while determining the instruction fees, and failed to identify the important constitutional questions she stated in the ruling that were raised by the parent file.

5. Lastly, that the Taxing Master erred in principle by awarding instruction fees without considering the work done, nature of the case, the interests of the parties in the matter and general conduct of the parties in the matter, and by awarding instruction fees that were inordinately high as to amount to an injustice. That she also failed to consider the submissions by the Client’s counsel.

6. The Advocates responded to the said application by way of a replying affidavit sworn on 6th July 2017 by its Managing Partner, Prof. Tom Ojienda SC, wherein he stated that the Advocate represented the Client in a very contentious constitutional Petition, and also got instructions from the Client, and therefore had a right to tax a bill of costs that was purely against the Client without including any other of its clients. He attached a copy of the instruction letter from the Client. Further, that they received separate instructions from the County Assemblies, and are entitled to charge separate bills for each of its clients.

7. According to the Advocates, the Taxing Master was entitled to use her discretion to assess the instruction fees as she considered just, taking into account relevant factors as the subject matter was unascertainable, and that the taxing master considered all these factors in her ruling. The Advocates were also of the view that the Client had not complied with Rule 11 of the Advocates Remuneration Order, as its letters to the Deputy Registrar seeking reasons for the taxation did not meet the requirements of the notice required to be given under the said Rule, as they did not state the items they were not satisfied with. Lastly, that the Client had not shown sufficient loss and reason to merit a stay of execution of the taxed costs.

8. On 4th May 2017, the Advocates also filed an application by way of a Notice of Motion dated 3rd May 2017, which is the second application that is the subject of this ruling. The Advocates seek the following orders in the said application:

(a) That the Court be pleased to enter judgment for the Applicant against the Respondent for the sum of Kenya shillings seventeen million hundred and twenty-two thousand four hundred ninety-six (Kshs. 17,522,496).

(b) That the Applicant be allowed to execute the judgment herein against the Respondent, Nairobi City County Assembly.

(c) That the costs of this application be provided for.

9. The application was supported by an affidavit sworn on 3rd May 2017 by Prof. Tom Ojienda , and was based on the grounds that the Taxing Master has issued a Certificate of Taxation herein in favour of the Advocates against the Client for the sum of Kshs 17,522,496/= in respect of legal services. Further, that the Advocates sent their bills to the Client on 16th September, 2016, and are therefore entitled to charge interest at 14% per annum as per the Advocates (Remuneration) Order from 16th October 2016, one month from the date the Advocates tendered the bill to the Client, until payment in full.

10. In addition, that the Client has not complied with the Advocates’ demands for payment, and that there were no outstanding issues left for the determination herein. Therefore, that it is therefore fair, just and equitable that the Advocates’ application be granted in the interest of justice.

11. The Client’s counsel stated during the hearing of the applications that they would respond to the Advocates’ application in their submissions.

The Determination

12. The parties were directed to file submissions on the two applications. The Client’s Advocates, Makallah Theuri & Company Advocates filed submissions dated 25th July 2017, while the Advocates filed two sets of submissions; the first set was dated 6th July 2017 and was in opposition to the Client’s application dated 20th April 2017, while the second set dated 6th June 2017 was in support of their application dated 2nd May 2017.

13. A preliminary issue that needs to be clarified by the Court is whether the Client’s application is properly before this Court. The Advocate in this respect stated the Client filed its application two months after the ruling on taxation was delivered, when Rule 11 of the Advocates Remuneration Order requires them to file a Notice of Objection within 14 days of the items they wish to object to. Further, that the Client’s letters dated 15th March 2017 and 7th March 2017 to the Deputy Registrar did not satisfy the requirements of Rule 11.

14. The Client on the other hand submitted that they did write to the Taxing Master requesting for reasons for the decision on 16th March 2017 which was not responded to, and again on the 7th April 2017 which was received and not responded to. That out of caution, they filed the reference without the reasons, and was conscious of the fact that equity does not aid the indolent but the vigilant. They submitted that there are various conflicting decisions of the High Court on the question on whether a party must wait for reasons or can file the reference notwithstanding the furnishing of the reasons provided for by Rule 11(2) of the Advocates Remuneration Order, and submitted that the reference is properly before court.

15. However, that in the event that the Court finds that its jurisdiction was not properly invoked, the Client prayed that the Court to have regard to the overriding principles enshrined 159 (2) (d) of the Constitution, and to exercise its inherent powers and enlarge time for filing a reference under Rule 11(4) of the Advocates Remuneration Order.

16. The procedure for the challenge of a taxing master's decision is provided under Rule 11 of the Advocates Remuneration Order which provides as follows:

“(1) Should any party object to the decision of the taxing officer, he may within 14 days after the decision give notice in writing to the taxing officer of the items of taxation to which the objects.

(2) The taxing officer shall forthwith record and forward to the objector the reasons for his decision on those items and the objector may within fourteen days from the receipt of the reasons apply to a judge by chamber summons, which shall be served on all the parties concerned, setting out the grounds of his objection.”

17. From the foregoing, it is clear that the reasons for the decision are to be sought for by way of a notice within 14 days of the decision of the taxing officer, and the reference is to be filed within 14 days of receipt of the reasons. In the present case, the record shows that the Client wrote a letter dated 15th March 2017 to the Deputy Registrar of the Judicial Review Division who was the Taxing Master, indicating their dissatisfaction with the ruling delivered on 6th March 2017 and seeking reasons for the said ruling delivered. It is thus evident that they were objecting to the entire ruling. The letter bears a stamp of receipt at the Judicial Review Division on 16th March 2017, and was thus filed within the 14 days of the said ruling. A similar letter dated 7th April 2017 from the Client is also on record.

18. The only record of a response by the said Deputy Registrar that is on record is a letter dated 25th April 2017 indicating that a copy of the ruling and reasons were collected by someone from the Client’s advocates on record. The Client subsequently then filed their reference on 26th April 2017, one day later. Therefore, for purposes of filing a reference, time started to run from the date of the letter of the Deputy Registrar of 25th April 2017, which letter was in essence the response by the said Deputy Registrar to the request for reasons by the Client. The Client was therefore within the 14 days period specified in Rule 11(2) of the Advocates Remuneration Order when it filed it application on 26th April 2017.

19. The Client was also justified to rely on the reasons stated in the ruling for its reference, for reasons that this was the direction given by the Deputy Registrar in her letter of 25th April 2017, and as there was thus no need to request for any further reasons as held in the case of Ahmednasir Abdikadir & Co. Advocates v National Bank of Kenya Ltd (2) (2006) 1 EA 5,where it was opined as follows:

“Although rule 11 (1) of the Advocates Remuneration Order stipulates that any party who wishes to object to the decision of the taxing officer, should do so within 14 days after the said decision and thereafter file his reference within 14 days from the date of the receipt of the reasons. Where the reasons for the taxation on the disputed items in the Bill are already contained in the considered ruling, there is no need to seek for further reasons simply because of the unfortunate wording of subrule (2) of rule 11 of the Advocates Remuneration Order demands so. The said rule was not intended to be ritualistically observed even when reasons for the disputed taxation are already contained in the formal and considered ruling.”

20. I accordingly find that the Client’s application dated 20th April 2017 and filed on 26th April 2017 is properly on record for the foregoing reasons.

21. On the outstanding issues, the main substantive issue arising from the Client’s application is whether the Taxing Master erred in the taxation of item 1 on the instruction fees in the Bill of Costs dated 8th August 2016, and if so, if the said taxation of the item should be set aside. A resolution of this issue will largely determine the second issue raised by the Advocates’ application, which is whether judgment should be entered on the basis of the Certificate of Costs issued by the Taxing Master.

22. The Client in this regard referred the Court to the principles of varying or setting aside a Taxing Master’s decision as set out in the cases of First American Bank of Kenya vs Shah and Others (2002) EA 64 and Joreth Ltd vs Kigano and Associates (2002) 1 EA 92, that the Taxing Master’s judicial discretion can only be interfered with when it is established that the there was an error of principle, that the fee awarded is manifestly excessive for such an inference to arise, and where discretion is exercised capriciously and in abuse of the proper application of the correct principles of law.

23. Further, that that Client objected to being made to bear the entire cost of the subject Advocate-Client Bill of Costs on the basis that the Advocates were appointed by the 47 county assemblies who were the 4th to 50th Respondents in the original Petition, and entered appearance through a notice of appointment dated 23rd June 2014 and filed on the 23rd June 2016. In addition, that the taxing master overlooked the fact that the Advocates filed submissions on behalf of the 4th, 8th, 11th, 13th, 17th, 21st, 24th, 25th, 26th, 29th, 31st, 32nd, 35th, 36th, 43rd, 44th and 46th Respondents in the original Petition, and that no separate pleadings were filed on behalf of each Speaker of the respective County Assemblies. Therefore, that the question that arises is whether the Advocate is allowed under the law to bill his several clients separately, when the pleading filed were global and on behalf of all his clients.

24. The Client’s counsel urged that the Advocates did not place any evidence before the taxing master to demonstrate that it’s only the Client who had not paid for services rendered hence the need to tax the bill as against it, and therefore the provisions of Rule 62 of the Advocates Remuneration Order ought to have been invoked. It was contended that the by overlooking the provisions of Rule 62, the Taxing Master proceeded to tax on wrong principles.

25. It was the Client’s further submission that the original Petition did not raise any personal issues on behalf of the Petitioners and was presented on behalf of the public interest. They relied on the case of Republic v Minister for Agriculture & 2 Others ex-parte Samuel Muchiri W’Njuguna & 6 Others[2006] eKLR, where the court laid down the general principles on taxation of public interest matters. Further, that that the Taxing Master in her ruling did not indicate what she considered to be the subject matter, and therefore her assessment of the fees the Advocates were entitled to cannot be said to have been exercised on the correct principles of law. In addition, that the suit was never heard on merit, and that to award the sum of Kshs 10,000,000/= as instruction fees is so excessively high as to amount to an application of wrong principles in assessing the same.

26. In addition, that even though the Taxing Master in her ruling mentioned the factors that guided her in arriving at the instruction fees, the ruling makes no reference of how she has applied those principles to the current taxation, nor the weighty constitutional issues the original Petition raised. It was the Client’s view that the original Petition did not require more than the ordinary diligent industry of the Client.

27. Lastly, that the failure by the taxing Master to indicate the Schedule of the Advocates Remuneration Order she relied on to assess instruction fees was a non-judicious exercise of discretion, and the Client relied on the decision in Kipkorir Titoo & Kiara Advocates vs Deposit Protection Fund Board(2005) e KLR for this position. Reliance was also placed on the decisions in Kenyariri & Associates Co. Advocates vs Salama Beach Hotel & 3 Others(2017) e KLRand Nyangito & Co Advocates vs Doinyo Lessos Creameries Ltd [2014] eKLR, for the submission that the correct Schedule that ought to have been applied is Schedule 6(1).

28. The Advocates on their part submitted that the guiding principle is that when an Advocate is instructed to sue or defend a suit, he or she becomes entitled to instruction fees, as stated in the case D. Njogu & Company Advocates v Panafcon Engineering limited,(2006) e KLR as cited in Nguruman Limited v Kenya Civil Aviation Authority & 3 Others[2014] eKLR. Further, that the Advocates produced before the Court an instruction letter dated 23rd June, 2014 which was specifically from the Client and not from the Speakers Forum. Therefore, that the Advocates were specifically appointed by the Client and the letter does not state any other County Assembly.

29. According to the Advocates, Rule 62 of the Advocates Remuneration Order therefore does not apply, and that the discretion to decide whether the party bringing the Bill of Costs can file separate Bill of Costs is with the Taxing Master, who in this case stated that it would be presumptive to conclude that the Advocates Bill of Costs dated 8th August, 2016 was being taxed in a manner to make the Client pay the costs of the other parties being represented by the Advocates. Reliance was placed in this regard on the case of Desai Sarvia & Pallan Advocates v Tausi Assurance Company Limited[2015] eKLR.

30. The Advocates urged that the law states that if the subject matter is unascertainable from the pleadings, judgments or settlement, the taxing master is entitled to use his/her discretion to access such instruction fee as he/she considers just, and cited the Court of Appeal decision in Joreth Ltd v Kigano & Assoc Civil Appeal No. 66 of 1999in this regard. Further, that the Taxing Master stated in her ruling that she assessed the instruction fees based on the nature, the interest and the importance of this cause to the parties and the general conduct of the proceedings, which is the criteria that Schedule 6(1) (j) of the Advocates (Remuneration) Order clearly states that Constitutional matters and petitions should be taxed in accordance with.

31. On the orders of stay sought by the Client, the Advocates submitted that the decision whether to grant stay or not is a discretion of the court and urged this Court not to grant the same, as the taxed costs cannot be stayed since the Advocates have not converted the Certificate of Costs into a judgment, and therefore is at the moment unable to execute it without a viable decree from the court as provided for under section 51 (2) Advocates Act.Reliance was placed on the case of Nyamogo and Nyamogo Advocates v Mwangi(2008) 1 E.A 283 (CAK) for this position.

32. The Advocates also submitted on the issue of whether judgment should be entered on the taxed costs. They submitted that the only reason that a court of law cannot enter judgment on a Certificate of Costs is if the same has been set aside or altered, or where there is an issue with retainer, none of which he claimed has happened at the instant case. The Advocates in this regard relied on the cases ofDally and Figgis Advocates v Homelex Limited (2013) eKLR andEvans Thiga Gaturu Advocate vs Kenya Commercial Bank Ltd (2012) eKLR.Reliance was also placed on section 51(2) of the Advocates Act and the decision in Ahmednasir Abdikadir & Company Advocates vs National Bank of Kenya Limited, (2007) e KLR, on this Courts power to enter judgment in the Advocates’ favour on the taxed costs, and on Rule 7 of the Advocates Remuneration Order for the interest on the said costs at 14 % until payment in full.

33. I have considered the parties pleadings and arguments on the taxation of, and setting aside of the item on instruction fees in the Advocates’ Bill of Costs dated 8th August 2016, and on whether judgment should be entered on the taxed costs. The applicable principles on setting aside of taxed costs are that a Court cannot interfere with the taxing officer’s decision on taxation unless it is shown that the decision was based on error of principle, or the fee awarded was manifestly excessive as to justify interference. These legal parameters were laid down in First American Bank of Kenya Vs Shah and Others [2002] E.A.L.R 64 at 69 by Ringera J. (as he then was) who delivered himself thus;

“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”.

34. These principles reiterate the position of the Court of Appeal in Joreth Ltd vs Kigano & Associates, (2002) 1 EA 92, where the said Court held that a taxing master in assessing costs to be paid to an advocate in a bill of costs was exercising her judicial discretion and that such judicial discretion can only be interfered with when it is established that the discretion was exercised capriciously, and in abuse of proper application of the correct principles of law, or where the amount of fees awarded by the taxing master is excessive to amount to an error in principle.

35. Specifically as regards the taxing of instruction fees in public interest cases, the following guidelines were provided by Ojwang J. (as he then was) in Republic vs. Ministry of Agriculture & 2 Others Ex parte Muchiri W’Njuguna & 6 Others, (2006) e KLR :

“ 1. the proceedings in question were purely public-law proceedings and are to be considered entirely free of any private-business arrangements or earnings of the tea production sector;

2. the taxation of advocates’ instruction fees is to seek no more and no less than reasonable compensation for professional work done;

3. the taxation of advocates’ instruction fees should avoid any prospect of unjust enrichment, for any particular party or parties;

4. so far as apposite, comparability should be applied in the assessment of advocate’s instruction fees;

5. objectivity is to be sought, when applying loose-textures criteria in the taxation of costs;

6. where complexity of proceedings is a relevant factor, firstly, the specific elements of the same are to be judged on the basis of the express or implied recognition and mode of treatment by the trial judge;

7. where responsibility borne by advocates is taken into account, its nature is to be specified;

8. where novelty is taken into account, its nature is to be clarified;

9. where account is taken of time spent, research done, skill deployed by counsel, the pertinent details are to be set out in summarised form.

36. These guidelines were also applied by Odunga J. in Nyangito & Co Advocates vs Doinyo Lessos Creameries Ltd [2014] eKLR,and the learned Judge in addition also held that the taxing officer must first recognize the basic instructions fee payable before venturing to consider whether to reduce or increase it.

37. In the present application, the Clients and Advocates’ counsel have differed on the application of Rule 62 of the Advocates (Remuneration) Order to the subject Advocates Bill of Costs, and both submitted that the applicable law on the taxing of the item on instruction fees in the Advocates-Client Bill of Costs dated 8th August 2016 is Schedule 6(1)(j) of the Advocates (Remuneration) Order. However, the Taxing Master in her ruling dated 6th March 2017 did not indicate what Rules or Schedule of the Advocates Remuneration Order she applied in taxing the instruction fees.

38. I will reproduce the Taxing Master’s findings and reasons for the taxation of the instruction fee in this regard, for full appreciation of this omission:

“Having perused the parent file Pet. 268 of 2014 and having perused the bill of costs, submissions for the Applicant as well as supplementary list of documents of the Applicant and having perused the submissions by Respondent, the taxing officer states as follow:-

That there is no doubt in my mind that the Petition was touching on very pertinent constitutional issue and that though the Petition was filed by an individual against officers in the county assemblies, the issues in discussion were ones to impact on the general public.

Secondly and most importantly, the taxing officer lays emphasis on the instructions letter dated 23rd June 2014 which read in part.

“This is therefore to instruct you to proceed with the matter and enter appearance and defend the Speaker of Nairobi City County Assembly”

This is evidence that indeed the Applicant herein had express instructions to act on behalf of the County Assembly of Nairobi and defend its Speaker. It is therefore, the courts considered opinion that when dealing with the advocate – client bill of costs, the issue of any other Respondent in the main petition save for the 4th Respondent should not even arise as it is neither here nor there.

The Applicant seeks Kshs 45,200,000/= as instruction fee to defend the main petition whereas the nature of the Petition raises important constitutional issues, it is the considered opinion of the taxing officer that Kshs 45,200,000/= is highly exaggerated and exorbitant.

It is true as the Applicant puts it in his submissions that there is no formula to be used by a taxing master to arrive at a precise figure but it is important to appreciate that a minimum figure has been set by the law as discretion in increasing or decreasing the instruction fees as long such discretion in exercised judicially and within the principles of reasonableness.

The following factors are considered by the taxing office when exercising her discretion;

a) Nature and importance of matter

b) Amount or value of subject matter

c) Interest of the parties

d) General conduct of the parties

e) Complexity of the issues raised and novel points of law

f) Volume of documents involved

The taxing officer is also guided by the pronouncement of the court in Premchand Raichand Ltd –vs- Quarry Services Of East Africa Ltd

“that

a) Costs be not allows to rise to such a level to confine access to the courts to the wealthy

b) 9(sic) successful litigant ought to be fairly reimbursed for the costs that he has had to incur…”

Considering all the above factors, the taxing officer awards Kshs 10,000,000/= (ten million) as instructions fees.

Item 1 is therefore, taxed at Kshs 10,000,000/= while Kshs 35,200,000 is taxed off.”

39. I therefore find that while the taxing master did give reasons why she found the Advocate-Client Bill of Costs to be properly before the Court, and took into account relevant factors, the omission to indicate the Rules and Schedule of the Advocates Remuneration Order that she relied upon, and that guided her decision to tax the instruction fees was a material error of principle. This is more so given that the Taxing Master acknowledged that there is a minimum fee allowed by law, but did not indicate the said minimum fee, nor relate the relevant factors she took into account to the taxed instruction fees, so as to explain the difference between the allowed minimum fee if any, and the taxed instruction fees.

40. This particular error of principle was the subject of the Court of Appeal decision in Kipkorir Titoo & Kiara Advocates vs Deposit Protection Fund Board (supra) , where it was held as follows:

“We have no doubt that if the taxing officer fails to apply the formula for assessing instructions fees or costs specified in schedule VI or fails to give due consideration to all relevant circumstances of the case particularly the matters specified in proviso (1) of schedule VIA, (1) that would be an error in principle. And if a judge on reference from a taxing officer finds that the taxing officer has committed an error of principle the general practice is to remit the question of quantum for the decision of taxing officer (see – D'Sonza v Ferrao [1960] EA 602. The Judge has however a discretion to deal with the matter himself if the justice of the case so requires(see Devshi Dhanji Naran Patel (No. 2) [1978] KLR 243. ”

41. In the circumstances, this Court is also unable to make a finding whether or not the taxed instruction fees were excessive, and the said fees thus appear to be arbitrary. In the premises I find that the Chamber Summons dated 20th April 2017 by the Client is merited, and that the issues raised in the Advocates Notice of Motion dated 3rd May 2017 are consequently rendered moot, as the taxed costs and Certificate of Costs the Advocates are relying upon for the judgment sought in the said application may be altered as a result of the findings in the foregoing.

42. I accordingly order as follows:

1. The Taxing Master’s decision in respect of item 1 of the Advocate Client Bill of Costs dated 8th August 2016 taxing instruction fees at Kshs 10,000,000/= be and is hereby set aside.

2. The Advocate-Client Bill of Costs dated 8th August 2016 shall be remitted to another Taxing Master in the Judicial Review, Constitutional and Human Rights Division of the High Court at Nairobi, for the re-taxation of item 1 only.

3. Each party shall meet their respective costs of the Client’s Chamber Summons dated 20th April 2017 .

4. The Advocates’ Notice of Motion dated 3rd May 2017 is hereby struck out with no orders as to costs.

43. Orders accordingly.

DATED AND SIGNED AT NAIROBI THIS 3RD DAY OF AUGUST 2018

P. NYAMWEYA

JUDGE