[2022] KEHC 11294 (KLR)

Patrick Sagwa Kisia t/a Steg Consultants v Advocates (Miscellaneous Application E1112 of 2020) [2022] KEHC 11294 (KLR) (Civ) (5 May 2022) (Ruling)

Neutral citation: [2022] KEHC 11294 (KLR)

Republic of Kenya

In the High Court at Nairobi (Milimani Law Courts)

Civil

Miscellaneous Application E1112 of 2020

JN Mulwa, J

May 5, 2022

Between

Patrick Sagwa Kisia t/a Steg Consultants

Client

and

Lubulellah & Associates Advocates

Advocate

Ruling

1. Before court for consideration are two applications. The first one is the Client’s Reference brought by way of a Chamber Summons dated November 19, 2021while the second is the Advocates Notice of Motion dated November 25, 2021. The two applications arise from the Deputy Registrar’s ruling of November 5, 2021in respect to the Advocates-Client Bill of Costs dated October 1, 2020.

2. The Client’s Reference was brought under Rule 11 (2) of the Advocates Remuneration Order 2014 and section 3A Civil Procedure Act. It seeks the following orders:a.spentb.The decision of the taxing master made onNovember 5, 2021 taxing the bill of costs dated October 1, 2020 in the sum of Kshs. 3,203,406 be set aside.c.This honorable court be pleased to reassess the fees due on the Advocate-Client Bill of costs dated October 1, 2020taxed at Kshs. 3,203,406. 10 on November 5, 2021and make a finding on the same.d.In the alternative and without prejudice to the foregoing, the costs be taxed afresh before a different taxing master.e.The costs of this application be awarded to the applicant.

3. The application is supported by the client’s affidavit and based on the grounds that the Bill arose from a pending matter being Nairobi HCCC No. 239 of 2014 Patrick Sagwa Kisia t/a Steg Consultants vs Burrel International Limited in which the Client instructed the Advocate to represent him. In the subject suit, the Client, vide his Amended Plaint therein, sought judgment against the defendant therein for a sum of Kshs. 48,701,789. 79 plus interest. However, that the taxing master committed an error of principle by using the figure of Kshs. 62,059,223. 08 sought in the initial Plaint as the value of the subject matter for purposes of calculating instruction fees in the Bill instead of Kshs. 48,701,789. 79 claimed in the Amended Plaint. That he is yet to prove his entitlement to the interest sought since the matter is still pending and hence it cannot be included in the value of the subject matter.

4. That the taxing master committed an error of principle by failing to do the following: correctly apply the principles and formula provided for under Schedule VI of the Remuneration Orderfor assessing the instruction fees; take into account the relevant factors to be considered in assessing instruction fees; exercise the powers and discretion bestowed upon him judiciously.

5. The Advocate responded to this application vide Grounds of Opposition dated 3rd February, 2022. The Advocate contends that the court lacks Jurisdiction to entertain the application and to grant the prayers of stay sought. That the Client has failed to lay any legal or factual basis for the orders sought as he has not demonstrated that either the decision was based on an error of principle, or the fee awarded was manifestly excessive. That the taxing officer took into consideration only relevant factors and legal principles in taxing the bill of costs. That the instruction fees was based on the monetary value of the subject matter of the suit which was aptly disclosed in the Plaint. That the Taxing Master in fact awarded the Advocate less than the basic allowable instruction fees as would have been awarded if based on the monetary sums claimed and pleaded by the Client.

6. That the Client failed to await for the reasons for the taxing master's exercise of discretion in arriving at the instruction fees, before filing this Reference. That the full instruction fees to prosecute or defend a suit are earned the moment a Plaint or Defence is filed and the subsequent progress of the matter is irrelevant to that item of fees. That any errors by the taxing officer as may be found, did not materially affect the assessment. Further, that the matter was extremely complex and entailed the perusal of copious documents coupled with the preparation of the necessary pleadings, correspondences, court and registry attendances, all being time-consuming exercises.

7. On the other hand, the Advocate’s Notice of Motion was brought under section 51 of the Advocates Act; Rule 13A Advocates Remuneration Rules;Section 3A and 63(e) of the Civil Procedure Act and Order 41 Rule 1 of the Civil Procedure Rules. The Advocate seeks the following orders: -1. Thatthe court be pleased to enter Judgment against the respondent on the amount of Kshs. 3,203,406. 10 certified on the Certificate of Taxation herein dated November 17, 2021, together with interest at the rate of 14% per annum from September 30, 2020until payment in full.2. Thata Decree issues in respect of the sum of Kshs. 3,203,406. 10 certified on the Certificate of Taxation dated November 17, 2021, together with interest at the rate of 14% per annum from the September 30, 2020until payment in full, and that the applicant be at liberty to execute for recovery of same in such manner as a Decree of this honourable court.3. Thatthe costs of this application be provided for.

8. The application is supported by the affidavit ofEugene Lubale Lubulellahand premised upon the grounds that the Bill has been taxed and a Certificate of Taxation issued; that the Advocate wishes to proceed and realize the costs taxed by way of execution hence judgment and Decree are required therefrom; and that it is just and fair that the orders sought be granted.

9. In opposition, the Client filed a replying affidavit sworn on December 17, 2021. He averred that by filing the said above Reference application, the Certificate of Taxation automatically stands as challenged and cannot be enforced until the Reference is been heard and determined.

Analysis and Determination 10. Thecourt has carefully analyzed both applications, the affidavits, the parties’ rival arguments and authorities cited. The only issues for determination are:1. Whether there is a competent reference before this court.2. Whether the Advocate’s application is merited.3. Who should bear the costs of the applications.

Whether there is a competent reference before this court? 11. The Advocates contended that this court has no jurisdiction to entertain the instant reference as the Client failed to lodge a Notice of Objection to Taxation within 14 days of the Taxing Master's decision contrary to the mandatory requirements of Rule 11(1) of the Advocates Remuneration Order. The Advocates asserted that compliance with this requirement is not a mere technicality. In the Advocate’s view, the Client’s conduct of circumventing the process by filing a substantive Reference without first taking the essential step of lodging a Notice of Objection to Taxation is akin to a litigant proceeding to file a Record of Appeal before filing a Notice of Appeal which is the instrument that invokes the appellate jurisdiction of the court.

12. Further, the Advocates faulted the Client for filing the instant reference before sending a request for reasons to the Deputy Registrar/Taxing Master and waiting to receive a response thereto. To the Advocate therefore, the Reference should be struck out as it is incompetent and fatally defective. The Advocate relied on the following cases Tranquility Development Limited v Andrew Barney Khakula t/a J.S. Khakula & Co Advocates(2017) eKLR, Matiri Mburu & Chepkemboi Advocates v Occidental Insurance Company Limited (2017) eKLR, Machira & Co Advocates v Arthur K. Magugu & Margaret Wairimu Magugu[2012] eKLR andDaly & Figgis & Company Advocates v Karuturu Networks Ltd &another(2009) eKLR.

13. On the other hand, the Client submitted that the provisions of Rule 11(1) of the Advocates Remuneration Order are not couched in mandatory terms. He submitted that the notice of objection envisaged under Rule 11 can take varied forms as long as the intention to object is well spelt out. In his view therefore, the jurisdiction of this honourable court has been correctly invoked by filing a valid and proper reference.

14. The procedure for challenging the results of a taxation is provided under Rule 11 of the Advocates Remuneration Order which stipulates as follows: -1. Should any party object to the decision of the taxing officer, he may within fourteen days after the decision give notice in writing to the taxing officer of the items of taxation to which he 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.3. Any person aggrieved by the decision of the judge upon any objection referred to such judge under subsection (2) may, with the leave of the judge but not otherwise, appeal to the Court of Appeal.4. The High Court shall have power in its discretion by order to enlarge the time fixed by subparagraph (1) or subparagraph (2) for the taking of any step; application for such an order may be made by chamber summons upon giving to every other interested party not less than three clear days’ notice in writing or as the Court may direct, and may be so made notwithstanding that the time sought to be enlarged may have already expired.”

15. It is not in dispute that the Client did not file the Notice of Objection to taxation contemplated under Rule 11(1) above but instead jumped straight into filing the Reference under Rule 11(2). The Client’s justification for the same is that this was not a mandatory requirement. I find this argument erroneous because it is the said Notice that sets in motion the jurisdiction of this court to deal in taxation disputes. In OJSC Power Machines Limited, Trancentury Limited, and Civicon Limited (Consortium) v Public Procurement Administrative Review Board; Kenya Electricity Generating Company Limited & another (Interested Parties) [2019] eKLR Nyamweya J. aptly stated that:“The provisions of Rule 11 of the Advocates’ Remuneration Order contemplate a notice in writing requesting for reasons of the Taxing Officer’s decision on taxation of specified items of the Bill of Costs, and upon receipt thereof, an application commonly referred as a reference to a judge, setting out the grounds of objection to the taxation. The 1st Interested Party did not dispute that no such notice was given to the Taxing Officer. It is my view that even though the requirement of giving notice to the Taxing Officer of items objected to is not couched in mandatory terms, it is necessary for purposes of ensuring the necessary timelines are observed, and that such references are filed and heard timeously.”

16. Further, in Matiri Mburu & Chepkemboi Advocates v Occidental Insurance Company Limited [2017] eKLR, Meoli J. while confronted with a similar situation noted that:4. Paragraph 11 (1) of the Remuneration Order requires a party seeking reasons for a taxation decision to give notice of the items of taxation to which the party objects which requirement was evidently not complied with in this case. Until the reasons sought under Paragraph 11 (2) of the Remuneration Order, are furnished the period of 14 days as contemplated therein does not begin to run…6. In my own view the provisions of paragraph 11 of the Remuneration Order serve several purposes. Firstly the requirement that a party seeking reasons gives notice of items objected to, serves to narrow down the issues, and secondly, give notice to the adverse party and the taxing master of his objection. Thus the taxing master, adverse party and ultimately the reference court in their respective roles can focus on the specific matter objected to rather than entire bills of costs, which often run into several pages.7. The objective is obvious: the expeditious disposal of taxation disputes. Thus compliances with the requirements of paragraph 11 of the Remuneration Order is not a mere technicality that can be pushed aside peremptorily as the applicant appears to suggest. The provisions ofarticle 159 (2) (d) of the Constitution were not intended to overthrow procedural or technical requirements, but to guard against “undue regard” to procedural technicalities in the administration of justice.”

17. From the above authorities, it is evident that the notice of objection required to be given to the Taxing Officer by a dissatisfied party is not just a mere technicality but a mandatory step in challenging the decision of a Taxing Officer. In the premises, I hold no doubt that the Client did not properly invoke this Court’s jurisdiction to address or determine the issues raised in the Reference filed herein. The Reference is therefore incompetent, incurably defective and a non-starter. For that reason, the court will not venture into the merits of the Reference as it is hereby struck out.

Whether the Advocates application is merited 18. Having found that there is no competent Reference filed by the Client herein, it follows that there is no ground for setting aside or altering the decision of the Taxing Officer of November 5, 2021. Section 51(2) of the Advocates Act which gives this court the mandate to enter judgment for the costs recovered provides:“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 covered thereby, and the court may make such order in relation thereto as it thinks fit, including, in a case where the retainer is not disputed, an order that judgment be entered for the sum certified to be due with costs."

19. In Lubulellah & Associates Advocates v N K Brothers Limited[2014] eKLR the court stated as follows-“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...”

20. Given that the Certificate of Taxation dated November 17, 2021 has not been set aside by this court, the court hereby enters judgment in favour of the Advocate as against the Client for the sum of Kshs. 3,203,406. 10.

21. As regards interest on the taxed costs, the Advocate submitted that the same should be awarded at the rate of 14% per annum from September 30, 2020. Rule 7 of the Advocates Remuneration Order stipulates as follows regarding the interest chargeable:“An advocate may charge interest at 14% per annum on his disbursements and costs, whether by scale or otherwise, from the expiration of one month from the delivery of his bill to the client, providing such claim for interest is raised before the amount has been paid or tendered in full.”

22. According to the Affidavit of Service on record, the Advocate-Client Bill of Costs dated October 1, 2020 was served on the Client on October 7, 2020. The one month envisaged in Rule 7 of the Advocates Remuneration Order lapsed on November 7, 2020. Interest will therefore accrue on the certified costs from November 7, 2020.

Who should bear the costs of the applications? 23. As regards costs, this court is guided by the well settled principle under section 27 of the Civil Procedure Act that costs follow the event, unless there are special circumstances demonstrated to persuade the court to depart from the said principle. None has been so demonstrated. In the premises, the Advocate being the successful party herein is hereby awarded costs of both the Reference dated November 22, 2021 and the application dated November 25, 2021.

Orders accordingly.DATED SIGNED AND DELIVERED AT NAIROBI THIS 5TH DAY OF MAY 2022. J.N. MULWAJUDGE.