[2022] KEHC 12485 (KLR)

PI Samba & Company Advocates v Buzeki Enterprises Limited (Miscellaneous Application E1099 of 2020) [2022] KEHC 12485 (KLR) (Commercial and Tax) (4 August 2022) (Ruling)

Neutral citation: [2022] KEHC 12485 (KLR)

Republic of Kenya

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

Commercial and Tax

Miscellaneous Application E1099 of 2020

DO Chepkwony, J

August 4, 2022

IN THE MATTER OF: THE ADVOCATES ACT AND IN THE MATTER OF: THE ADVOCATES REMUNERATION ORDER, 2014 (SCHEDULE 5)

Between

PI Samba & Company Advocates

Advocate

and

Buzeki Enterprises Limited

Client

Ruling

1. Before this court are two applications coming up for ruling simultaneously. The first application is by way of a notice of motion application dated August 13, 2021 in which the applicant/advocate seeking a judgment to be entered in her favour in terms of the certificate of taxation dated August 6, 2021. The application is expressed in terms of section 51 (2) Advocates Act, paragraph 7 of the Advocates Remuneration Order, order 51 rule 1 of the Civil Procedure Rules, 2010 and sections 1A, 1B & 3A all of the Civil Procedure Act. It is couched in the following terms;a)Judgement be entered for PI Samba & Company Advocates in terms of the certificate of taxation dated August 6, 2021. b)Interest at the rate of 14% be deemed to have accrued from the date of service of the bill of costs until payment in full.c)A decree be extracted and drawn in terms of the taxed costs and interest.d)Costs of the application.

2. The application is premised on the grounds on its face and supported by the annexed affidavit of Pennynah Samba sworn on August 13, 2021.

3. The client/respondent (herein after referred to as client) in objection to the application dated August 13, 2021 filed a replying affidavit sworn by Zedekiah Kiprop Bundotich on December 21, 2021.

4. In his affidavit the client has deposed that in 2014 parties entered into an advocate-client relationship vide an oral retainer in which they agreed that the advocate would handle both contentious and non-contentious matters on behalf of the client and the advocate would raise a fee note of Kshs 150,000/= each month together with a separate invoice for transport disbursement.

5. The client avers that since the commencement of the retainer, the advocate raised invoices each month and the client duly honoured the same and on that basis, the advocate was not entitled to tax her bill of costs given that she had already been paid for the services rendered.

6. The client deposed that upon being served with the bill of costs the client instructed the advocates on record to defend the client’s interests but due to strenuous financial challenges which the client was facing, there was huge turnover of staff which in turn resulted in significant delays in proper communication between the client and the advocate and in furnishing the advocates with sufficient documentation to defend the bill of costs.

7. The client avers that the fact that there existed a retainer between the parties to the effect that the advocate would be raising monthly invoices of Kshs 150,000/= for work done is confirmed by the fact that the advocate never raised a specific invoice to be paid for the work she did in preparation of the joint- venture agreement.

8. The client deposed that unless given the opportunity to challenge the taxing master’s ruling, it stands to suffer since the advocate will proceed to obtain Judgment against it as per the certificate of taxation dated August 6, 2021.

9. He also avers that the delay in filing the application is not inordinate and neither was it out of indolence on its part.

10. That unless there be an order staying the hearing and determination of the application dated August 13, 2021, the client stands to suffer irreparable loss since the advocate will proceed to obtain judgment against the client as per the certificate of taxation which certifies that the advocate is entitled to Kshs 370,684. 00/=.

11. The advocate/applicant filed a further affidavit sworn by Pennynah Samba on February 1, 2022.

12. The second application was filed by the client and has been brought by way of chamber summons under paragraph 11 (5) of the Advocates Remuneration Order, 2009 and sections 1A, 1B, 3A and 63(e) all of the Civil Procedure Act, article 50 & article 159 of the Constitution. The application seeks for the following orders;a.Spent.b.Spent.c.That the honourable court be pleased to grant the client leave to file a reference out of time to challenge the taxing master's ruling dated July 12, 2021;d.That the honourable court be pleased to grant any other or further orders which it may deem fit and just to grant in the circumstances;e.That each party to bear its own costs of this application.

13. The application is grounded on the reasons stated on its face and supported by the sworn affidavit of Zedekiah Kiprop Bundotich dated December 3, 2021.

14. In response to the application the Advocate filed a replying Affidavit sworn by Pennynah Samba on September 15, 2021 detailing the reasons for objecting to the application.

15. On December 8, 2021, parties were directed to canvass the two applications by way of written submissions. Both parties filed their respective submissions in respect to both applications.

16. This matter came up for highlighting of submissions on May 17, 2022 and both parties highlighted their respective submissions which this court has put into consideration.

Analysis and Determination 17. I have considered the advocate’s notice of motion application dated August 13, 2021 and the client’s chamber summons application dated December 3, 2021, the affidavits and the written submissions alongside the oral submissions by both parties during the hearing together with the cited authorities. The issues arising for determination before this honourable court are;a)Whether there was a retainer between the parties.b)Whether the client has made out a case to warrant grant of the leave sought.c)Whether this matter is res judicata.d)Whether the client has met the threshold for grant of stay of execution.

18. In determining these issues, this court is guided by the provisions of the Advocates Remuneration Orderunder paragraph 11(1) and (2) which provides that;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.

19. The advocate/applicant being dissatisfied by the ruling of the taxing master delivered on July 12, 2021 preferred this reference for determination before this honourable court.

20. On the first issue with regard to the question of retainer, section 45 of the Advocates Act provides guidance for this court in determining the issue. The said section provides as follows;1. Subject to section 46 and whether or not an order is in force under section 44, an advocate and his client may-(a)before, after or in the course of any contentious business, make an agreement fixing the amount of the advocate’s remuneration in respect thereof;(b)before, after or in the course of any contentious business in a civil court, make an agreement fixing the amount of the advocate’s instruction fee in respect thereof or his fees for appearing in court or both;(c)before, after or in the course of any proceedings in a criminal court or a court martial, make an agreement fixing the amount of the advocate’s fee for the conduct thereof, and such agreement shall be valid and binding on the parties provided it is in writing and signed by the client or his agent duly authorized in that behalf.”……

21. In the case of Omulele & Tollo Advocates v Mount Holdings Limited [2016] eKLR, the Court of Appeal held;“Retainer encompasses the instructions given to an advocate as well as the fees payable, it can be written, it can be oral and can even be inferred from the conduct of the parties.”

22. The same definition was reiterated in the case of Stephen Aluoch K’opot t/a K’opot & Company Advocates v Cornel Rasanga Amoth [2017] eKLR, where the High Court said that;“A retainer is the basis of a relationship between the advocate and client. Such a relationship may be oral or in writing, express or implied. It is not necessary that retainer be in writing. The purpose of section 45(1) of the Advocates Act is to regulate remuneration agreements between advocates and clients. It does not limit the nature of agreement that may be entered into between advocate and client for the provision of legal services.”

23. In the above mentioned authority, the court distinguished the terms retainer and retainer agreement and stated that;“From the foregoing it should thus be clear that the presence of a retainer is what in turn gives rise to the retainer agreement. In other words, only when the engagement and the terms thereof have been agreed upon, can the same e reduced into writing. It also follows that for the retainer agreement to be valid and binding; the same must have been put in writing and signed by the client or his agent. It is therefore erroneous as submitted by counsel for the respondent that retainer and retainer agreement mean one and the same thing.”

24. Now turning to the instant case before court, there is no dispute that there indeed existed a relationship between the parties. However, the only issue that needs to be determined by this court is whether a retainer and retainer agreement refer to one and the same thing in order to oust the jurisdiction of the taxing master.

25. From the cited authorities, the court clearly distinguished the terms retainer and retainer agreement, thus in the absence of a retainer agreement, the advocate/applicant was entitled to institute a bill of costs before the taxing officer for determination to recover her legal fees in the matter.

26. The next question for determination is whether the advocate/applicant represented the client/respondent in the transaction. The respondent submitted that the applicant’s role in regard to the transaction was only limited to following up on disbursements of funds sought to be borrowed and did not involve prequalification brief, providing the borrower necessary proposal to back the funds, drafting the facility documents and advising the client as alleged by the advocate/applicant.

27. Upon perusal of the court record, I note that there are several documents in the bundle of documents presented by the Advocate/Applicant and several letters regarding the transaction.

28. This court’s attention has been brought to letters dated January 5, 2018, a demand letter by the advocate/applicant dated February 7, 2018, a letter dated February 26, 2018 and one dated December 13, 2017 and addressed to the Kenya Revenue Authority which clearly prove that the advocate/applicant acted for the client/respondent in the transaction in question.

29. This position is also confirmed from the several email correspondences between the advocate/applicant, the client/respondent and the firm of M/S Kisilu & Company Advocates. It is clear from the emails that the advocate/applicant was heavily involved in the transaction and did not only involve disbursements of funds as alleged by the client/respondent.

30. In regards to the issue of leave to file a reference out of time, this court is guided by the provisions of paragraph 11 of the Advocates (Remuneration) Orderwhich states 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)……………………………………………….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.”

31. In light of paragraph 11(4) of the Advocates Remuneration Order above, this court has discretion to enlarge time under paragraph (1) and (2) of the Advocates Remuneration Order once the party seeking extension of time satisfies the court that he/she indeed he deserves exercise of such discretion.

32. In the instant case, the taxing masters ruling was delivered on July 12, 2021 and the instant proceedings were commenced on December 3, 2021, which is approximately 4 months after the delivery of the ruling.

33. The principles guiding courts in exercising discretion in an application to enlarge time were clearly set out by the Supreme Court in the case of Salat v Independent Electoral & Boundaries Commission & 7 others [2014] eKLR, where the court stated that:“Discretion to extend time is indeed unfettered but it’s incumbent upon the applicant to explain the reasons for delay in making the application for extension and whether there were extenuating circumstances that could enable the court to exercise discretion in favour of the applicant. In doing so the following principles are applicable thus:i)Extension of time is not a right of a party. It is an equitable remedy that is only available to a deserving party.ii)A party who seeks for extension of time has the burden of laying a basis to the satisfaction of the court.iii)Whether the court ought to exercise discretion to extend time, is a consideration to be made on a case to case basis.iv)Whether there is a reasonable reason for the delay, which ought to be explained to the satisfaction of the court.v)Whether there would be any prejudice suffered, the respondent if the extension was granted.vi)Whether, the application had been brought without undue delay andvii)Whether in certain cases, like election petitions, public interest ought to be a consideration for extending time.”

34. What I gather from the above authority is that the extension of time is not a right of a party and is only available to a deserving party on providing evidence for the delay in bringing the application within the timelines as set out in paragraph 11 (1) and (2) of the Advocates Remuneration Order.

35. The applicant has alluded to the fact that the bill of costs was filed at a time when the client/applicant was encountering severe financial challenges due to the impact of corona virus pandemic on its business. As a result of this there was huge turn overs of staff which caused delays in the advocates being furnished with relevant documents to defend the bills of costs and also challenges in giving proper instructions to the advocates.

36. It should be noted that the timelines set out under paragraph 11 (1) and (2) of the Advocates Remuneration Order are very strict and this court can only exercise its discretion on proper and tangent reasons being advanced. The client was prompted to filing the current application upon the advocate having filed the application dated August 13, 2021 seeking to have the certificate of taxation dated August 6, 2021, entered as a judgment of this court.

37. To my mind the client/ applicant has not met the threshold as set out in the Supreme Court decision in the case of Salat v Independent Electoral & Boundaries Commission & 7 others (supra) for this court to exercise its discretion under paragraph 11(4) of the Advocates Remuneration Order.

38. In short, the client/applicant has not been able to explain the inordinate delay in bringing the current application, hence he is not deserving of the exercise of this court’s discretion in its favour.

39. Having found that the client/applicant’s application for leave to extend time is not merited, I find no reasons why the court should delve and determine the rest of the issues.

40. In the circumstances, and based on the foregoing reasons, the application dated December 3, 2021 is not merited and is hereby dismissed with costs. On the other hand, the advocates application dated August 13, 2021 allowed as prayed.

41. Orders accordingly

DELIVERED VIRTUALLY, DATED AND SIGNED AT NAIROBI THIS 4TH DAY OF AUGUST, 2022. DO CHEPKWONYJUDGEIn the presence of:M/S Samba for the advocate/ applicant.M/S Mwamba for client/ respondent.Court Assistant Sakina