[2015] KEHC 582 (KLR)

REPUBLIC OF KENYA

IN THE HIGH COURT OF KENYA AT NAIROBI

COMMERCIAL & ADMDIRALTY DIVISION

MISC. CASE NO. 200 OF 2014

IN THE MATTER UNDER ADVOCATES ACT CAP 16 OF THE LAWS OF KENYA

AND

IN THE MATTER UNDER THE ADVOCATE/CLIENT BILL OF COSTS

BETWEEN

RATEMO OIRA & COMPANY ADVOCATES------------APPLICANT

VERSUS

MAGEREZA SACCO LTD--------------------RESPONDENT

ARISING FROM

NAIROBI CO-OPERATIVE TRIBUNAL CASE NO. 525 OF 2011

SAMUEL GACHINI WAHIU & 7 OTHERS---------------------CLAIMANTS

VERSUS

MAGEREZA SAVINGS CO-OP SOCIETY LIMITED-------RESPONDENT

RULING

The Notice of Motion dated 10th July, 2015 was taken out by the Advocates/Applicants. They are seeking for the decision by the Taxing Master of 25th June, 2015 be set aside and the bill of costs be submitted for taxation by another taxing master. The application is based on the grounds in the application and supported by the affidavit of Ratemo Oira sworn on 10th July, 2015.

2. A synopsis of the lengthy supporting affidavit, is that the advocate is aggrieved by the decision of the taxing master to strike out the Applicant’s/Advocate’s client bill of costs. It was the Applicant’s claim that the Deputy Registrar delayed in delivering the aforesaid ruling on the bill of costs. The applicant also faulted the Deputy Registrar for erring in principle in failing to consider the bill of costs dated 8th May, 201 whereby the instruction fees was based on the total value of the Respondent’s properties on LR No. 1870/V/68 along Wetlands Nairobi and LR No. 209/579 along Moi Avenue Nairobi at the estimated value of Kshs. 7,500,000/- and Kshs. 850,000,000/= respectively. It was also the applicant’s contention that Taxing Master also disregarded the advocate’s submissions which were filed in support of their bill of costs. The Applicant further deponed that it had acted for the Respondent in various matters at the Co-operative tribunal which concerned a dispute of the ownership of the two properties aforementioned. That in the foregoing the Applicant was entitled to his fees through taxation. The court was also urged to consider ordering for valuation of the said properties to determine the exact value of the said properties for the purposes of taxation of the Applicant’s bill of costs.

3. The application was opposed by the client/ respondent through the Replying Affidavit by Jane W. Ombongi, the Client’s Chief Executive Officer, sworn on 7th August, 2015. The respondent dismissed the application as one without merit. It was contended that the advocate has been filing a slew of exorbitant and highly exaggerated bills of costs that were rightfully struck out by the taxing master. That the advocate/applicant is undeserving of the sought orders since it is not necessary for a valuation to be done on the respondent’s properties because the value of the subject matter is not in issue. The Respondent reasoned that what is in issue is striking out and /or the dismissal of the bills of costs. That the issue of valuation of the subject property is therefore, an extraneous matter. It was pointed out that a similar request for valuation was made in Misc. Appl. 204 of 2014, but the court found it unnecessary and disallowed it. The Respondent further deponed that the Applicant should have appealed against the decision of the taxing master instead of preferring a reference. Similarly, the Respondent contended that the issue of delay in delivery of the ruling by the taxing master was not a ground for challenging the substance of the ruling and had no bearing on the advocate’s prayers. That further, the Deputy Registrar addressed the issue of deposit in her ruling and found it improper to tax such a flawed bill of costs. It was therefore the Respondent’s position that the application should be dismissed with costs.

4. The application was dispensed through written submissions orally highlighted in court on 16th September, 2015. The applicant, restated the contents of its application. In a nutshell it was the submission of the applicant that the bill of costs was dismissed by the Deputy Registrar without consideration. That the Taxing Master was obliged to tax, the said bill of costs since the client/respondent had filed submissions to the same and even produced receipts as proof of payment. The court was therefore urged to allow the prayers sought. While opposing the application, the Respondent submitted that the grounds advanced by the Applicant were insufficient to warrant the setting aside of the taxing master’s decision. The Respondent argued that the application was actuated by malice and is an abuse of the court process and should be dismissed with costs. That the claim in which the applicant represented the respondent, was declaratory in nature and therefore the issue of value of the Respondent’s properties could not arise. Further, it was argued that the taxing master ably elaborated how the bill was grossly flawed as the same was not drawn to the appropriate scale. That the advocate was seeking and still insists to be paid Kshs. 668,731,801 for representing the client in the cooperative tribunal where the ex-members were seeking to be declared members and therefore entitled to dividends. It was further argued that the Applicant’s assertion that the excess amounts should have been taxed off was admission that the bill of costs was flawed in itself. It was also pointed out that delay in delivering a ruling cannot warrant the setting aside of the ruling. That in the foregoing, the advocate should challenge the merit of the ruling. In view of the foregoing, the Respondent urged the court to dismiss the application with costs.

5. I have considered the application, replying affidavit and the rival submissions. Having done so, I take the following view of the matter. I am aware of the principles to bring to bear when dealing with a reference on the decision by the taxing master. Those principles are well settled in a long line of authorities by the Court of Appeal and also the High Court. The High Court is not entitled to upset a taxation merely because in the court’s opinion the amount awarded is high unless the decision of the taxing officer was based on an error of principle or the fees awarded is manifestly excessive. See the case of Thomas James Arthur Vs. Nyeri Electricity undertaking (1961) E.A. page 492where the Supreme Court held:

“Where there has been an error in principle the court will interfere, but questions solely of quantum are regarded as matter with which the taxing officers are particularly fitted to deal and the court will intervene only in exceptional cases”

6. Bearing the above principles in mind, the question that falls for determination is whether the taxing master erred in principle when he struck out the entire bill of costs. The Applicant’s complaint is that mainly, the Deputy Registrar struck out the entire bill without due consideration despite the submissions made by both parties. That, the said Deputy Registrar should have taxed off the excess amounts on the items presented for taxation instead.

7. Before dealing with the merits of the case, it is important to determine the issue raised by the Respondent with regard to whether, the Applicant should have come by way of appeal in challenging the decision of the Taxing Master. When challenging the decision of a Taxing Master,Rule 11 of the Advocates Remuneration Ordercomes to mind. The same provides 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.”

8. From the above provision, it is clear that the only way to challenge the decision of a taxing master is through a reference. The Appellate tribunal is therefore the Judge in Chambers in respect of a taxation ruling. The instant application, challenges the decision of the Deputy Registrar to strike out the advocate’s bill of case. Though the same was brought through a Notice of Motion, instead of a Chamber Summons, I find that it is properly before the court, since this court is enjoined to give substantive justice without undue regard to technicalities.

9. I shall now render an opinion with regard to the issues raised by the Applicant. The first issue that was raised by the Applicant was that the learned taxing master erred in law and in fact in holding that the value of the subject matter was exorbitant, as the same was based on the client’s capital base. In Joreth Limited –vs- Kigano& Associates Civil Appeal No. 66 of 1999 the Court of Appeal held as follows ;-

“We would at this stage point out that the value of the subject matter of a suit for the purposes 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 so ascertainable the taxing officer is entitled to use his discretion to asses such instruction fee as he considers just, taking into account, amongst 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.

That is what CK Njai Esq did when he said:

“As we do not know the capital value of the property in dispute; one I believe is left to determine the matter on the general discretion donated to the taxing officer to tax a bill, based on the importance of the matter to the parties, complexity and the responsibility placed on shoulders of Counsel.”

10. I have looked at the challenged decision of the taxing master made on 16th June, 2015. On the issue of instruction fees, the Deputy Registrar rendered herself as follows;

“The applicant pegged instruction fee on value of the clients capital base which he put at Kshs. 4,400,000,000/=. For that reason he seeks a whooping sum of Kshs. 319,740,000/= as instruction fees.

11. The matter at the tribunal was filed by retirees of the client SACCO. They were heard by the Chairman of the Co-operative Tribunal and a ruling was delivered on 28th February, 2014. The ruling applied to CTC No. 525/2011 for which the applicant has filed another bill of taxation being Miscellaneous 201 /2014.

12. The pleading and ruling do not refer to the value of the capital base of the client. Besides as a shareholder the claimants were only seeking for their specific shares in the SACCO. The asset base of client cannot be basis for which counsel pegs instruction fees.

Instruction fee is pegged on the value of the subject matter as can be determined from the pleadings, settlement or judgment.

13. From the definition of instruction fee it is evidently clear that the capital base of the client is not an issue that was directly litigated upon by the Co-operative Tribunal. The asset base therefore does not assist the court in determining the instruction fee. It is irrelevant.

14. From the above findings, it is easy to discern the Taxing Master’s thought process. She correctly found that the value of instruction fees can be determined from the pleadings or settlement. She further went into the rigors of defining what subject matter is, which is an issue directly litigated upon and which the court needs to give a determination on. She correctly held that the capital base of the client was not an issue that was directly litigated upon by the Co-operative Tribunal and can therefore not assist the court in determining the instruction fee.

15. I have also perused the Advocate/Client Bill of Costs dated 8th May, 2014. The same reveals that indeed the Applicant pegged his instruction fee on the capital base and value of the two pieces properties of the client/respondent coming to Kshs. 319, 740,000/= which in my view was manifestly excessive and erroneous. As such, the Taxing Master cannot be faulted for her findings on the matter of instruction fees.

16. Further, in my view the complexity of a case is not essentially determined by the value of the subject matter in terms of the amount of money involved in the litigation. It may well be that the amount of money involved may be high but the issue may be a very minor legal issue. I fail to see the complexity of the case that was before the Co-operative Tribunal, as the same was an ordinary dispute between members of the Respondent Co-operative Society.

17. I am therefore in agreement with the Client/Respondent herein that the matter was not of a complex nature to warrant the figure sought by the applicant/ advocate as instruction fees. As for the issue, of valuation of the properties known as Mageso Court L.R No. 1870/V/68 and Mageso Chambers on LR No. 209/579 Nariobi, I find that the same was an extraneous issue. This court has no jurisdiction in ordering for the valuation of the same when adjudicating on the issues of costs.

18. I now turn to the second issue of whether the Taxing Master should have taxed off the items that were presented in the Bill of costs. There is a general caveat on judicial review of quantum of taxation. The court will only interfere where there is a clear error of principle or the sums awarded are either manifestly high or low as to lead to an injustice. This last element was well explained in PremchandRaichand Ltd & Another –vs- Quarry Services of East Africa Limited & Others (No. 3) (1972) E.A 162

“The taxation of costs is not a mathematical exercise; it is entirely a matter of opinion based on experience. A court will not, therefore, interfere with the award of a taxing officer, and particularly where he is an officer of great experience, merely because it thinks the award somewhat too high or too low: it will only interfere if it thinks the award so high or so low as to amount to an injustice to one party or the other”

19. Having this in mind, it is vital to point out that in law, the Deputy Registrar is the Taxing Master and in that capacity, it is his/her duty to Tax the Bills of Costs pursuant to the court’s decrees. She/he is assumed to have great experience and expertise on taxation matters. In the impugned decision, the Deputy Registrar noted the bill was grossly flawed. She rendered herself as follows;

“The advocate herein did not use the applicable remuneration orders when he drafted the bill. The Advocate Remuneration is a guide as to the amounts that ought to be charged……”

20. The bill before me is highly exaggerated. From instruction fee to the fee to attend registry to disbursements. The fees are exorbitant.

An example is Item 20 where the applicant charged Kshs.200,000/= to draw a defence. The fee for four folios is Kshs. 735/=

For attendance in court the maximum appearance before a Judge is Kshs. 10,080/=. The applicant charged Kshs. 319,740/= for attendances at the tribunal in item 108,110 among others.

21. Under rule 77 of the A R O , where more than one sixth of bill excluding court fees is to be taxed off, the taxing may disallow such taxation.

A look at a bill presented herein, it is patent that same was to be taxed more than the prescribed one sixth and thus amenable to be disallowed.

22. I find that the Taxing Master was right in holding that the Bill of Costs is erroneous both in law and fact. There was a complete misapprehension of the applicable provisions of the Advocate’s Remuneration Order to the case and as a result the figures arrived were manifestly excessive and exorbitant. The Taxing Master duly explained this. The bill of costs could not be cured by amendment and was hence a prime candidate for striking out. It would be wrong for this court to order for reinstatement of the same, as this would be an exercise in futility. After all, the applicant/advocate is still at liberty to present a bill for taxation that was compliant to the Remuneration order.

23. Accordingly, and for reasons stated above, the Applicant’s application dated 10th July, 2015 be and is hereby dismissed with costs to the Client/ Respondent. The Orders /Ruling herein applies to HC. MISC. 201 of 2014.

Dated, signed and delivered in court at Nairobi this 23rd day of October, 2015.

C. KARIUKI

JUDGE