[2022] KEHC 15530 (KLR)

Sherman Nyongesa & Mutubia Advocates v Furncon Limited (Miscellaneous Civil Application E051 of 2021) [2022] KEHC 15530 (KLR) (14 November 2022) (Ruling)

Neutral citation: [2022] KEHC 15530 (KLR)

Republic of Kenya

In the High Court at Mombasa

Miscellaneous Civil Application E051 of 2021

OA Sewe, J

November 14, 2022

Between

Sherman Nyongesa & Mutubia Advocates

Applicant

and

Furncon Limited

Respondent

Ruling

1. Before the court for determination is the chamber summons dated May 17, 2022. It was filed by the law firm of M/s Sherman Nyongesa & Mutubia Advocates (the applicant) pursuant to paragraph 11(1) and (2) of the Advocates (Remuneration) Order seeking that:(a)the ruling on taxation delivered herein on May 4, 2022 be set aside and or varied;(b)In the alternative, the bill of costs dated March 18, 2021 be taxed afresh before another taxing officer;(c)Such orders as to costs be provided for in the application.

2. The application was premised on the grounds that the taxing officer erred and misdirected himself on the issues before him and thereby failed to appreciate that the parties had different instructions and agreements for the provision of legal services; that the taxing officer failed to appreciate the fact that the respondent had admitted to a debt of Kshs 288,628. 76 both in its correspondence and the final submissions; and that the taxing officer failed to appreciate the nature of the dispute and the fact that the bill of costs cut across the 2006, 2009 and 2014 Advocates (Remuneration) (Amendment) Orders.

3. The grounds aforementioned were explicated in the supporting affidavit annexed to the reference, sworn by Mr Wafula Wanjala, Advocate. To augment his averment, at paragraph 5 of the supporting affidavit that the respondent had admitted to owing the applicant someKshs228,628. 76, Mr Wafula annexed a copy of a letter dated July 2, 2021 (marked annexure “WW-3a”). Mr Wafula also averred that the applicant offered separate legal services at different stages and therefore that it was erroneous for the taxing officer to generalize and lump them together into a single item of instructions fees. The different instances were set out at paragraph 8 of Mr Wafula’s affidavit.

4. In a replying affidavit sworn on its behalf by its Managing Director, Mr Solomon Njoroge Kiore, the respondent denied the allegations put forth by the applicant; and averred that the instructions by the respondent to the applicant was only in respect of one case, namely, Mombasa HCCC No 172 of 2004; and therefore that the applicant was under duty to explain how it utilized the monies paid by the respondent on account. According to the respondent, the issue of the sum of Kshs 288,628. 76 that was allegedly admitted by it, the same was the subject of an out of court negotiation which the applicant rejected. Thus, Mr Kiore averred that the applicant cannot blame the taxing officer that the negotiations did not come to fruition. He further posited that the taxation was premature as settlement was imminent, upon account being taken of sums hitherto paid by the respondent.

5. At paragraphs 12, 13, 14 and 15 of the replying affidavit, Mr Kiore reiterated the assertion by the respondent that there was an agreement between the parties on fees for purposes of section 45(6) of the Advocates Act, chapter 16 of the Laws of Kenya; and therefore that the taxation ought not to have proceeded in the first place. He annexed several documents to the supporting affidavit in proof of his averments.

6. Directions were thereafter given on June 7, 2022 that the application be canvassed by way of written submissions. Accordingly, the applicant filed its written submissions on July 28, 2022, raising two issues. Firstly, it was the submission of Mr Wafula that no express or implied fees agreement between the parties was ever made; and added that, since this fact was acknowledged by the taxing officer in his ruling at paragraph 7, the applicant was justified in filing its bill of costs for taxation. He relied on Ondaba & Partners Advocates v Sea Turtle Limited & another [2021] eKLR

7. Secondly, it was the submission of Mr Wafula that the taxing officer erred in basing his ruling solely on the Advocates (Remuneration) (Amendment) Order, 2006, yet the services rendered cut across the 2006, 2009 and 2014 orders. Counsel drew the attention of the court toN. O Sumba & Co Advocates v Piero Cannobio [2017] eKLR and Mereka & Company Advocates v Tau Katungi [2017] eKLR for the proposition that where a suit cuts across more than one remuneration order, the taxing master should assess each service rendered in accordance with the applicable remuneration order. Hence, Mr Wafula urged the court to find that in exclusively applying the 2006 Advocates (Remuneration)(Amendment) Order, and in failing to take into account the sum of Kshs 228,628. 76 that was admitted as owing by the respondent, the taxing officer made an error of principle that warrants the intervention of the court.

8. Although no written submissions were filed on behalf of the respondent, the parties were given an opportunity to address the court on September 21, 2022. Mr Wafula reiterated his stance that the taxing officer committed an error of principle in ruling that there was an agreement on fees between the parties; in confining himself to the 2006 Advocates (Remuneration) (Amendment) Order; and in ignoring the admission by the respondent that it owed the applicant Kshs 228,628. 76 by way of unpaid fees.

9. On his part, Mr Kiore, submitted that the respondent faithfully paid the applicant the fees due for services rendered. In his view, the case was not mature for taxation. He took the stance that there was indeed an agreement on fees and therefore that there was no basis for the taxation in the first place.

10. I have given careful consideration to the subject application, its supporting affidavit as well as the written and oral submissions made herein by learned counsel. I have likewise perused the record and the proceedings held herein, particularly the impugned decision of the taxing master, dated May 4, 2022. The brief background to the reference is that the applicant filed an advocate/client bill of costs dated March 18, 2022 for taxation in respect of services rendered by it to the respondent in Mombasa HCCC No 172 of 2004. Along with the bill of costs, the applicant filed a list and bundle of documents, indicative of the specific services billed for. The documents include a copy of the plaint dated June 21, 2004. The bill of costs was taxed by Hon Nyariki,DR, at Kshs 1,325,125/= and a ruling delivered in that regard dated May 4, 2022. The taxing officer proceeded to hold that:“...If this sum has been paid, then the respondents owe the applicant Kshs 16,688. 51 being the balance deducted from the entire sum owed.”

11. That is the decision that the applicant has sought to challenge by way of this reference. Thus, the court was approached pursuant to paragraph 11(1) and (2) of the Advocates (Remuneration) Order, which states 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.”

12. A perusal of the court record shows that the applicant raised its objection to the decision of the taxing officer within the 14 days’ period stipulated in paragraph 11(1) of the Advocates (Remuneration) Order vide a letter date dated May 16, 2022. The applicant thereby asked for reasons for the decision, and in particular, how the figure ofKshs 16,688. 51 was arrived at, to enable the firm lodge a reference. While it is not readily apparent whether a formal response was made to that request for reasons, it is evident that there is a notation dated May 17, 2022 on the face of the applicant’s letter dated May 16, 2022 attributed to the DR, indicating that “The reasons are in the ruling.”

13. It is now trite that where the taxing officer’s ruling contains his reasons for the taxation, there would be no need to insist on compliance with paragraph 11(2) of the Advocates (Remuneration) Order. Hence, in Ahmednasir Abdikadir & Co Advocates v National Bank of Kenya Ltd (2) [2006] 1 EA 5, the Court of Appeal held that:-“…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 sub rule (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.”

14. Similarly, in Evans Thiga Gaturu Advocate v Kenya Commercial Bank Limited[2012] eKLR, Hon Odunga, J (as he then was) took the view, which I agree with, that:“…where there are reasons on the face of the decisions, it would be futile to expect the taxing officer to furnish further reasons. The sufficiency or otherwise is not necessarily a bar to the filing of a reference since that insufficiency may be the very reason for preferring a reference.”

15. I nevertheless hasten to mention that a taxing officer is under obligation to explain how the end result is arrived at. In this instance, the taxing officer simply stated that:“…I find the applicant’s bill of costs not drawn to scale as it is erroneously taxed under the 2014 ARO whereas the matter proceeded under the 2006 ARO regime. The bill of costs is thus taxed at Kshs 1,341,125/-.

16. There was no indication of which items were not drawn to scale, or the taxed off amounts. I consequently reiterate what was stated in by Hon. Ojwang, J. (as he then was) in Republic v Minister for Agriculture & 2 others Ex-Parte Samuel Muchiri W’njuguna & 6 others [2006] 1 KLR 351 that:“… It is necessary to ascertain how she arrived at that figure; for although the judicial review applicant’s firm position is that it was an exercise of lawful discretion which therefore, this court should uphold, the correct perception of the discretion donated by law, I believe, is that such a discretion is only duly exercised when it is guided by transparent, regular, reliable and just criteria…it was necessary to specify clearly and candidly how she exercised her discretion. Discretion, as an aspect of judicial decision-making, it to be guided by principles, the elements of which are clearly stated and which are logical and conscientiously conceived. It is not enough to set out by attributing to oneself discretion originating from legal provision and thereafter merely cite wonted rubrics under which that discretion may be exercised, as if these by themselves could permit of assignment of mystical figures of taxed costs…complex elements in the proceedings which guide the exercise of the taxing officer’s discretion must be specified cogently and with conviction…if novelty is involved in the main proceedings the nature of it must be identified and set out in a conscientious mode….if the conduct of the proceedings necessitated the deployment of a considerable amount of industry and was inordinately time consuming, the details of such a situation must be set out in a clear manner…”

17. That said, it bears repeating that that taxation is a matter best left to the discretion of the taxing master of the court. Hence, the court ought not to interfere with the exercise of that discretion where all indications are that the taxing officer exercised his/her discretion judiciously. Thus, in Premchand Raichand v Quarry Services (No 3) [1972] EA 162 the Court of Appeal for Eastern Africa held thus (per Spry, VP):“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...”

18. The decision was applied in Republic v Ministry of Agriculture(supra), in which Hon Ojwang, J then proceeded to restate that:“The 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 manifestly excessive as to justify an inference that it was based on an error of principle.”

19. From the grounds of objection raised by the applicant, the response thereto and the written submissions filed by learned counsel, two issues arise in this reference for my consideration. The first manifests itself as a technical objection to the reference on the ground that there was an agreement on fees between the parties and therefore that the taxation was unwarranted; the second is whether the taxing officer committed an error of principle in terms of the applicable Advocates (Remuneration) (Amendment) Order and in not taking into account sums admitted by the respondent as owing to the applicant.(a)On whether there was an agreement fixing remuneration of counsel:[20] Section 45(1) of the Advocates Act, chapter 16 of the Laws of Kenya provides that: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. Further to the foregoing, subsection (6) of the above provision is explicit that:“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 section 48. ”

22. The fact therefore that the applicant’s bill of costs dated March 18, 2021 was taxed is in itself proof enough that the taxing officer was not satisfied that there was an agreement fixing the fees payable by the respondent to the applicant. Indeed, the taxing officer had occasion to consider this assertion by the respondent and ruled out the existence of such an agreement. Here is what he had to say on the issue of the alleged fees agreement:“I have made reference to the documents produced as proof. While from the several correspondences it can be easily interpreted that parties had a consent on the manner of payment, the correspondences themselves keep overriding each other thus making it difficult to pick out the agreement. I will accordingly proceed to tax the bill.”

23. I have looked at the bundle of correspondence attached to the replying affidavit and, like the taxing officer, I am unable to conclude that the parties entered into an agreement fixing the amount of remuneration payable by the respondent to the applicant for services rendered. Accordingly, the taxing officer cannot be faulted for proceeding with the taxation as he did.

(b) On the applicable Advocates (Remuneration) Order: 24. A look at the advocate/client bill of costs dated March 18, 2021 shows that it is in respect of Mombasa HCCC No 172 of 2004: Bamburi Cement Limited v Furncon Limited and that, although the suit was filed in 2004, the services in issue were rendered between June 21, 2004 and April 27, 2020, going by the supporting list and bundle of documents filed on March 22, 2021 by the applicant. I note though that, although in the list of documents filed by the applicant in support of the bill indicates that the applicant filed a notice of appointment of advocates on June 18, 2012, there appears to be no such document in the bundle. Since the plaint dated June 21, 2004 was filed by a firm of advocates, namely, M/s Buyuka Obonyo & Company Advocates, the applicant could only have filed a notice of change of advocates for purposes of order 9 rule 5 of the Civil Procedure Rules, which stipulates that:A party suing or defending by an advocate shall be at liberty to change his advocate in any cause or matter, without an order for that purpose, but unless and until notice of any change of advocate is filed in the court in which such cause or matter is proceeding and served in accordance with rule 6, the former advocate shall, subject to rules 12 and 13 be considered the advocate of the party until the final conclusion of the cause or matter, including any review or appeal.”

25. That being the case, the applicant was obliged to charge the instructions fees in accordance with the prevailing Advocates (Remuneration) (Amendment) Order at the time of institution of the suit. This is because paragraph 62A of the Advocates Remuneration Order, 1962, is explicit that:(1)Where there has been a change of advocates or more than one change of advocates, the advocate finally on record shall draw a single bill for the whole matter in respect of which costs have been awarded.(2)On taxing the bill the taxing officer shall take into account the following principles, that the bill shall not be larger than if a single advocate had been employed and that the party taxing the bill shall not obtain indemnity for costs which he has not paid.(3)The bill shall be accompanied by a certificate setting out the dates during which all advocates acted, together with all agreements for remuneration made with them, all sums paid to them for costs and whether those sums were paid in full settlement.”

26. Accordingly, in First American Bank of Kenya v Shah and others[2002] 1EA 64 the court held:-“Though the issue of when an advocate became entitled to the instruction fee was the subject of apparently conflicting appellate decisions, the better position was that the instruction fee was an independent and static item, not affected by the stage a suit had reached.”

27. I am therefore not persuaded by the applicant’s assertions at paragraph 8 of its supporting affidavit that it was entitled to charge separate items of instructions fees. I find succor in this posturing in N. O Sumba & Co Advocates v Piero Cannobio [2017] eKLR, in which it was held that:The question at hand is which Advocates Remuneration Order was applicable. In order to put to rest the applicant’s assertion that a wrong Remuneration order was applied and to further establish whether or not this court may interfere with the taxation decision it is important to answer the question of which Advocates Remuneration Order was applicable. The applicable Advocates (Remuneration) Order for the purpose of ascertaining instruction fees would be that which was operational at the time of filing suit. In the bundle of documents annexed to the supporting affidavit there is the amended plaint dated April 9, 2014 indicating the date of the original plaint as December 3, 2009 clearing the air on the particular year of filing of the initial suit. The taxation officer indicated that, “The remuneration order l will tax with is the Advocates (Remuneration) Order 2009 as at when the suit was first filed in the lower court” The latest Advocates (Remuneration) Order 2014 which came into effect under legal notice (LN) 45/2014 indicates that there were previous amendments introduced by other legal notices amongst them LN 35/2014, LN50/2009 and LN159/2006. The LN50/2009 established the advocates (Remuneration) (Amendment) Order 2009. Therefore, the 2009 order did exist.”

28. In the premises, it is plain that, in confining the subject taxation to the Advocates (Remuneration) (Amendment) order of 2006, when there was a previous order in force when the suit was instituted, vide legal notice No 550 of December 11, 1997, and when the items comprising the applicant’s bill of costs cut across the period between 2004 and 2020, the taxing officer committed an error of principle that warrants the setting aside of his ruling dated May 4, 2022.

(c) On the admitted debt of Kshs. 288,628. 76: 29. The applicant made heavy weather of the fact that the respondent expressly admitted that it owed it fees in the sum ofKshs 288,628. 76; and that it is therefore appalling that in the final analysis the taxing officer awarded it a paltry Kshs 16,688. 51 as the fees due on its bill of costs. I have no hesitation in rejecting this argument for the simple reason that the penultimate paragraph of the ruling dated May 4, 2022 shows that the bill was taxed at Kshs 1,341,125/=. The taxing officer then concluded his ruling by stating that:“If this sum has been paid, then the respondents owe the applicant Kshs 16,688. 51 being the balance deducted from the entire sum owed.”

30. There is therefore a sense in which the decision was not definitive in so far as it was dependent on further proof of payments made prior to the taxation.

31. In the result, it is my finding that the applicant has made out a good case for the setting aside of the taxation undertaken by Hon Nyariki, DR. Having come to that conclusion, it would follow that the next best course of action is to refer this matter for re-taxation. This is in line with the decision of the Court of Appeal in Joreth Ltd v Kigano & Associates [2002] eKLR thus:“…it is not really in the province of a judge to retax the bill. If the judge comes to the conclusion that the taxing master has erred in principle, he should refer the bill back for taxation by the same or another taxing officer with appropriate direction on how it should be done. It was stated by the predecessor of this court in the case of Steel Construction & Petroleum Engineering (EA) Ltd v Uganda Sugar Factory Ltd(1970) EA 141 per spry JA at page 143:“Counsel for the appellant submitted, relying onD’Souza v Ferao [1960] EA 602 andArthur v Nyeri Electricity Undertaking [1961] EA 492 that although a judge undoubtedly has jurisdiction to re-tax a bill himself, he should as a matter of practice do so only to make corrections which follow from his decision and that the general rule is that where a fee has to be re-assessed on different principles, the proper course is to remit to the same or another taxing officer. I would agree that, as a general statement, that is correct, adding only that it is a matter of juridical discretion.”

32. Similarly, in Truth Justice & Reconciliation Commission v Chief Justice of the Republic of Kenya & another [2014] eKLR, the principle was reiterated that:(25)“…(3) if the court considers that the decision of the taxing officer discloses errors of principle, the normal practice is to remit it back to the taxing officer for reassessment unless the judge is satisfied that the error cannot materially have affected the assessment…”

33. Consequently, the orders that commend themselves to me, and which I hereby grant, are as hereunder:(a)That the ruling on taxation delivered herein on May 4, 2022 be and is hereby set aside;(b)That the applicant’s bill of costs dated March 18, 2021 be taxed afresh before another taxing officer other than Hon Nyariki, DR in accord with the guidelines given herein;(c)Each party to bear own costs of the reference.It is so ordered.

DATED, SIGNED AND DELIVERED VIRTUALLY AT MOMBASA THIS 14TH DAY OF NOVEMBER, 2022. .............................OLGA SEWEJUDGE