[2023] KEHC 25739 (KLR)

Rabala & Co. Advocates v Centre for Youth Linkages and Empowerment Programmes & another (Miscellaneous Application 20 of 2019) [2023] KEHC 25739 (KLR) (21 November 2023) (Ruling)

Neutral citation: [2023] KEHC 25739 (KLR)

Republic of Kenya

In the High Court at Kisumu

Miscellaneous Application 20 of 2019

RE Aburili, J

November 21, 2023

Between

Rabala & Co. Advocates

Applicant

and

Centre for Youth Linkages and Empowerment Programmes

1st Respondent

Duncan Mutuku

2nd Respondent

Ruling

1. This ruling determines to the preliminary objection dated 7th February 2023 filed by the respondents herein raising the following issues:a.That the Honourable Deputy Registrar lacks jurisdiction to proceed with taxation of costs in an instance where the parties had agreed on the legal fees and the Client/Respondent has settled the agreed fees in full.b.That the Bill of costs filed herein offend the provisions of Section 45 of the Advocates Act Cap 16. c.That there exists a valid agreement entered into between the applicant and the respondents in respect to legal fees pursuant to section 45 of the Advocates Act, the legal fees of an Advocate where an agreement had been entered into by virtue of the said section should not be subject to taxation and the Bill of Costs ought to be struck out.d.That the applicant’s Bill of Costs field herein be struck off.

2. Before I move on with this matter I am inclined to consider whether this court has, in the first instance, jurisdiction to handle the preliminary objection before it. It is not in doubt that matters purely taxation fall within the jurisdiction of a taxing officer and not the judge.

3. This position has been is now well settled over time. The Court of Appeal in Sharma v Uhuru Highway Development Limited [2001] 2 EA 530, (Akiwumi J.A) dealt with the issue and held that the Judge:“….not being seized of the taxation itself, and there being no appeal or reference to him as provided for by paragraphs 11(1) and 12 of the Advocates (Remuneration) Order from a decision of the taxing Officer who was dealing with the taxation, and the taxation not being a suit filed in the High Court for the recovery of costs, simply had no jurisdiction at all, to hear as he did, the Respondent’s application to strike out. This by itself makes his hearing of and his ruling of 19th May, 2000, of the Respondent’s application a nullity from the word go.’’

4. Waweru J on his part in Donholm Rahisi Stores v East African Portland Cement Limited [2005] eKLR, expressed himself as hereunder: -“Taxation of costs, whether those costs be between party and party or between Advocate and Client, is a special jurisdiction reserved to the taxing officer by the Advocate (Remuneration) Order. The court will not be drawn into the arena of taxation except by way of reference (from a decision of taxation) made under Rule 11 of the Advocates (Remuneration) Order. The present application is not such reference. The application seeks an order that would have the effect of interfering with the special jurisdiction of the taxing officer does nothing beyond taxation of the bill of costs. The consequences of such taxation, for instance recovery of the taxed costs, will be a matter for the court, and the court can at that stage be asked to stay recovery of those costs pending whatever event, say, an appeal against the order granting the costs, or a reference under Rule 11 of the advocates (Remuneration) Order.’’

5. Similarly, Koome, J (as she then was) in Lubulellah & Associates Advocates v Nasser Ahmed T/A Airtime Business Solutions [2010] eKLR found that: -“Formidable opposition was put forth by Counsel; Mr. Mutumbwa relied on his replying affidavit. It was argued that, this court has no jurisdiction to stop taxation before a taxing master. Taxation of Bills of Costs is a special jurisdiction provided for under rule 11 of the Advocates Remuneration Order and it is a preserve of the taxing master. The court can only stay the outcome of the taxation after a reference has been filed but the court cannot enter the realm of taxation and interfere with the jurisdiction of the taxing master.’’

6. Finally, in Kangethe & Mola Advocates v Corporate Insurance Company Limited [2021] eKLR, it was held that:“In this case all I can only add that the Courts in Kenya are hierarchical, the jurisdiction of taxation of costs is vested upon the taxing master who should evaluate the matters placed before him/her and should do so independently. The jurisdiction that is vested in the High Court on the other hand is to deal with a reference emanating from the decisions of the taxing master. The issues of the amount of work done or not done by the advocate which were so eloquently presented by Mr. Issa should be presented to the taxing master. In other words, when defending his client, Mr, Issa should be able to argue the proportionate costs that should be paid to the advocates for the work which was done and which was not done. The high court should not micro manage the taxing master…. The Respondent’s contention that this court lacks jurisdiction to grant the reliefs sought is well founded, given that the taxing Master has not rendered itself to give this court jurisdiction to relook into any grievances by any aggrieved party”

7. It is therefore clear beyond argument that in matters taxation, the Taxing Officer is the one properly clothed with jurisdiction to deal with the matter and unless and until the taxation is complete, the Judge has no business entering the arena of taxation. The powers of the Judge kick in after the decision on taxation has been made. There are off course, exceptions, where there is a dispute on retainer in which event, the matter would be taken before the judge for determination before taxation can take place. In addition, where there is an agreement on fees, the court or taxing master would be devoid of jurisdiction to consider an itemized bill for taxation.

8. The process of taxation must however be distinguished from the process of determining whether or not the Bill of Costs filed is the correct mode of determining fees between the parties.

9. Thus, where for instance, the parties had agreed on their fees, taxation would not arise and where a party in those circumstances purports to tax his costs, it is proper for the party against whom the Bill is filed to object. Such an objection does not constitute taxation and therefore is outside the jurisdiction of the taxing officer. Such a scenario would also occur, as stated above, where a retainer is contested.

10. That the Taxation Officer has no jurisdiction to determine issues of retainer was appreciated by Azangalala, J (as he then was) in City Finance Bank Limited v Samuel Maina Karanja T/A Maina Karanja & Co. AdvocatesNairobi (Milimani) HCCC No 132 of 2004 in which the learned Judge expressed himself as follows:“In my view the Advocates Remuneration Order is a complete code in itself if instructions are admitted to have been given where the dispute is between the client and his or her advocate. However, where it is alleged that an Advocate acted without instructions, different principles apply and the Advocates Remuneration Order is not adequate in the circumstances. The Plaintiff in the present case alleges that it never instructed the Defendant to provide certain services. If it turns out to be true then the dispute goes beyond the Advocates Remuneration Order.”

11. The Court of Appeal in Joreth Limited v Kigano & Associates [2002] 1 EA 92 at 99 made it clear that the Taxing Officer whilst taxing his bill of costs is carrying out his functions as such only and that he is an officer of the Superior court appointed to tax bills of costs. The position was adopted by Waweru, J in the case of Abincha & Co Advocates v Trident Insurance Co Ltd [2013] eKLR where he held that:“Those issues were raising one fundamental issue, to wit, whether there were any costs due to the Advocate that the Taxing Officer could tax? I hold that it was an issue that could only be determined by a Judge. It is the kind of issue that the Taxing Officer, with the consent of both parties, should have referred to the opinion of the High Court. Only after determination of that fundamental issue by the High Court, that is, whether or not there were any costs due to the Advocate that could be taxed, would the bill of costs be referred back to the Taxing Officer for taxation, if it is found that there were costs that were due to the Advocate. I therefore hold that even the Taxing Officer of the Court did not have jurisdiction to hear and determine the main prayers of the notice of motion dated 20th February 2012. ”

12. It therefore follows that where an issue arises that does not concern the taxation, the Taxing Officer lacks the competence to deal with the same and the procedure is to refer the matter to the Judge for determination after which, depending on that determination, the Taxing Officer may continue with the matter.

13. In this case, the issue is whether or not Respondents’ costs arising from the legal services offered by the applicant/advocate to the respondents ought to be a subject of taxation. That in my view is a matter outside the taxation process and can only be dealt with by the Judge. Accordingly, I find that this Court has jurisdiction to entertain and determine this matter.

14. The respondents herein have referred this court to section 45 of the Advocates Act as the relevant legal provision. Therefore, the determination of this matter revolves around the application of the provisions of section 45 of the Advocates Act to the facts of this case. The said section provides as hereunder:(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”.……..(6)Subject to this section, the costs of an advocate in any case where an agreement has been made by virtue of this section shall not be subject to taxation nor to section 48.

15. The above provisions are clear that where there is a valid agreement under the aforesaid provision, the Advocates costs are not to be subjected to taxation. In other words, in that event the Advocate is barred from presenting his bill of costs for taxation. That was the position in Sifa International v Board of Trustees NSSF [2018] eKLR, where it was held as follows: -“The law firm has deposed in the replying affidavit that the agreement reached on 6. 8. 2010 was binding on both parties. It is my considered view again that it is not open for the advocate to do and a fresh bill of costs merely on account of the demand for the refund being demanded by the applicant. His fee note dated 11th June 2010 was construed to contain the entire costs for services rendered. Once the same was negotiated and agreed, the final figure reached then became the fees due and payable. The advocate seems to want to rely on this agreement and ran away from it at the same time…The demand letter does not in my view vitiate the agreement reached between the parties on 6th August 2010 in respect of that bill…The parties having compromised the fee note of 11th June 2010 are bound by the terms of that agreement thus calling the application of the provisions of section 120 of the Evidence Act into play. For this reason, I am persuaded to find in favour of the applicant that the bill of costs dated 7th December 2016 violates the principle of estoppel by deed...”

16. The issue of validity of agreements between advocates and clients with respect to remuneration was dealt with by Ochieng, J (as he then was) in Ahmednasir Abdikadir & Co. Advocates vs. National Bank of Kenya Limited (2) [2006] 1 EA 5 in which the learned Judge held that reading of section 45(1) of the Advocates Act reveals that the agreements in respect of remuneration would be valid and binding on the parties thereto provided that the agreements were in writing and signed by the client or his agent duly authorised in that behalf.

17. In this case, the respondents/clients produced a retainer agreement between themselves and Donald Odhiambo Rabala dated the 4th October 2017 which provides for payment of the legal fees. It provides in part that:3. Payment: The Client shall pay to the Attorney the legal fee of Kshs. 450,000 upon the execution of this agreement in acknowledgement of receipt for which the Attorney shall issue the requisite receipts properly dated and endorsed. The rest of the fees will be paid at the beginning of every quarter at the standard rate of Kshs. 150,000 per month which can be translated to quarterly payment of Kshs. 450,000 which should be paid 5th day on the quarter month. The Attorney will charge no more than rate quoted above throughout the duration of the matter, unless otherwise agreed in writing by Client. The obligations of the parties as hereinafter stated shall take effect immediately upon the signing of this Agreement subject to renewal by mutual consent at the end of the period.

18. To constitute a valid and binding agreement for the purposes of section 45 of the Advocates Act, it is expressly provided that the same must be in writing and signed by the client or his agent duly authorized in that behalf.

19. In this caser the retainer agreement between the parties herein is duly signed by both parties. In my view, that agreement is unequivocal. Consequently, I find merit in the Preliminary Objection dated 7th February 2023. I allow it and proceed to strike out the advocate’s Bill of Costs dated 14th February, 2019 and all consequential orders pursuant to the said bill of costs.

20. Each party to bear their own costs of the Application for taxation and the preliminary objection.

21. This file is closed

DATED, SIGNED AND DELIVERED AT KISUMU THIS 21ST DAY OF NOVEMBER, 2023R.E. ABURILIJUDGE