1. Before the court for determination are two reference applications, the first to be filed is the application dated 29/10/2024 by the Client, while the second is the one dated 7/11/2024 filed by the Advocate.
Clients Application:
2. The Client’s reference prays for an order of this Court vacating and setting aside, in its entirety, the ruling of the deputy registrar, dated and delivered on 14/10/2024, taxing the Advocate-Client Bill of Costs dated 8/7/2024 at Kshs. 17,984,503/= and tax the matter afresh or refer the matter for fresh taxation before a Taxing Master.
3. The Application is supported by an affidavit sworn on the same date by ALFERD ARUNGA, a Legal Officer of the Client/Applicant. The basis of the application is that the Deputy Registrar misdirected herself in law, particularly concerning Items 1, 3, and the unnumbered Item on VAT of the Bill of Costs, rendering the decision untenable.
4. According to the Client, the Deputy Registrar failed to consider the Client’s comprehensive submissions opposing the Bill of Costs and also failed to appreciate that the matter, the subject of the taxation, is related to several other cases with the same subject value. The related matters, according to the Client, were:
i. HCCOMMMISC/E556/2024 arising out of HCCOMMIN/E092/2021;
ii. HCCOMMMISC/E557/2024 arising out of HCCOMMIN/E093/2021;
iii. HCCOMMMISC/E558/2024 arising out of HCCOMM/E106/2022;
iv. HCCOMMMISC/E559/2024 arising out of COACA/E215/2022; and
v. HCCOMMMISC/E560/2024 arising out of COACAPPL/E004/2022.
5. The Client stated that in all the above listed matters, the Deputy Registrar erroneously used the same subject value of Kshs. 949,705,000/- despite their close relationships, thereby reaching an erroneous conclusion.
6. It was further the Client’s position that the Deputy Registrar in taxing the Bill of Costs failed to take into account the Kshs. 2,320,000/-, which the Advocate had expressly admitted to having received from the Client.
7. Further that the Deputy Registrar failed to appreciate that the entire crux of the underlying dispute was a frivolous and unsubstantiated suit without supporting evidence, and the fact that the underlying suit was withdrawn by the plaintiffs even before a pre-trial conference had been completed, and that no hearing had taken place at all.
8. Additionally, the Client argued that the Deputy Registrar disregarded a binding Supreme Court decision in Supreme Court Petition No. E011 of 2023 (Kenya Airports Authority v. Otieno Ragot & Company Advocates) and failed to consider fees already paid and acknowledged in related matters. The exercise of discretion in taxing item 1, 3 and Unnumbered Item on VAT was allegedly unreasonable, unclear, and legally unsound, with the Registrar considering irrelevant issues while ignoring critical ones.
Advocate’s application
9. The Advocate’s application is the amended chamber application dated 7/11/2024 brought under Sections 1A, 1B, and 3A of the Civil Procedure Act and Rule 11(2) of the Advocates (remuneration) Order 2009. In the Application, the Advocate sought the following orders:
“1. The Honorable Court be pleased to vacate and or set aside the Ruling and reasoning of the Honorable C. L. Adisa, Deputy Registrar dated and delivered on 14th October 2024, specifically Items 3 and the unnumbered item on VAT and to tax the matter afresh and thereafter award interest which was not granted despite being prayed for.
2. That the costs of this Application be provided for.”
10. The grounds for the application included allegations that the Deputy Registrar misdirected herself in law when taxing the Bill, leading to an incorrect decision on VAT and interest.
11. The Advocate contended that the Registrar did not correctly apply the provisions of the Advocates’ Remuneration Order, particularly regarding the instruction fees, which should have been increased by 50% in accordance with the provisions of Part B of the 6th Schedule to the Advocates Remuneration Order.
12. The Advocate further contended that the Taxing Master erroneously failed to award interest as per Rule 7 of the Advocates’ Remuneration Order, thereby subjecting the Advocate to financial prejudice.
13. Additionally, the Advocate asserted that each of the matters referred to in the Client's submission are distinct and that a miscellaneous application for taxation ought to be filed in each of the files and taxed separately.
14. It was further the Advocate’s submissions that the Deputy Registrar was right in not applying the decision of the Supreme Court in Petition No. E011 OF 2023 (Otieno Ragot & Co. Advocates), since the same is distinguishable and relates to a situation where the value of the subject matter is not discernible from the pleadings.
15. The Advocate argued that in the interest of justice and fairness, the court should grant the prayers sought, allowing for a fresh taxation of the disputed items and awarding interest accordingly.
Submissions
16. The Applications were canvassed by way of written submissions. The Advocate filed two sets of submissions, both dated 7th November 2024, one in support of his reference and the other in opposition to the Client's application. The Client’s submission is dated 20th November 2024.
17. The parties’ submissions essentially restated their respective positions as highlighted in the applications. It is therefore not necessary to reproduce the same; suffice to say that I have carefully read and considered the same in this Ruling.
Analysis and Determination.
18. I have carefully read and considered both applications, the responses, and the parties’ submissions supporting their respective positions.
19. The principles that guide this Court when considering a reference from the decision of a taxing as are stated in the case of Peter Muthoka & another v Ochieng & 3 others [2019] eKLR, where the Court of Appeal held: -
“It is not lost to us … that matters of quantum of taxation properly belong in the province and competence of taxing masters. They fall within their discretion and so the High Court upon a reference will be slow to interfere with them. It is not a wild and unaccountable discretion, however, because it is at its core and by definition a judicial discretion to be exercised, not capriciously at a whim, but on settled principles. When it is shown that there was a misdirection on some matter resulting in a wrong decision, or it is manifest from the case as a whole that the discretion was improperly exercised, resulting in mis-justice, to borrow the holding in MBOGO -vs- SHAH (Supra), then the decision though discretionary, may properly be interfered with. See also ATTORNEY GENERAL OF KENYA -vs- PROF. ANYANG’ NYONG’O & 10 OTHERS, EACJ App. No. 1 OF 2009.”
20. From the record, I note that the Advocate filed an Advocate-Client Bill of Costs dated 8/7/2024 in respect of HCCCOM E976/2021, in which the Advocate defended the Client in a suit where the Client had been sued for, among others, a claim of general damages in the sum of Kshs. 1,000,000,000 and special damages of Kshs. 50,000,000/=.
21. By a ruling delivered on 14/10/2024, the Deputy Registrar taxed the bill of costs at a total sum of Kshs. 17,984,503/-, of which a sum of Kshs. 15,450,000/- was attributable to instruction fees. The period covered was between 21st December 2021, to 2nd October 2023.
22. The Client in its application has disputed the taxing master’s findings on Items 1 &3 and the unnumbered Item on VAT. The Advocate, on the other hand disputed the assessment on instruction fees (Item 3), VAT, and the taxing master’s failure to award interest.
23. On Item 1, the Client argued that the sum of Kshs. 25,000 given by the taxing master on account of documents received and perused was on the higher side and did not take into account that the same documents were involved in five (5) other related matters (HCCOMMIN E092/2021; HCCOMMIN E092/2021; HCCOMM/E106/2022; COACA/E215/2022; and COACAPPL/E004/2022), which have been separately taxed.
24. I have perused the Bill of Costs in question and considered the above argument by the Client. I agree with the Advocate’s submissions that the Client’s position cannot, in law, be correct. Each of the cases cited above is separate and distinct and required the duty, industry, and attention of the Advocate. I concur with the decision of Musyoka J in the case of Dr. Vincent Ogutu t/a Visiongate Eye Care Consultant v JP Makokha & Company, Advocates (Miscellaneous Application E067 of 2022) [2024] KEHC 745 (KLR) (2 February 2024) where the court stated that:
“The starting point should be with pointing out that when it comes to Advocate-client bills of costs, and also party and party bills of costs, the court assesses costs and fees in each court file, or court case, separately. The court proceeds on the principle that instructions are given for each individual matter…”
25. With the above in mind, and taking into account that assessments of costs is within the discretion of the trial master, I do not find any error on the part of the taxing master in awarding a sum of Kshs. 25,000 on account of Item 1 of the Bill of Costs.
26. On Item 3, the Client alleged that the instruction fees of Kshs. 15,450,000/- as assessed by the taxing master was astronomically high and did not take into account that the claim by the Plaintiff against it was not substantiated, and that the same was withdrawn even before pre-trial conferences had been completed. The Client, citing the provisions of Schedule 6 Rule 1 (b) of the Advocates Remuneration Order, submitted that the instructions fees ought to be 75% of the fees chargeable under item 1(b).
27. Citing the decision in the Supreme Court Petition No. E011 of 2023 between Kenya Airports Authority and Otieno Ragot & Company Advocates, the Client urged this Court to interfere with the taxation of the instruction fees by the Taxing Master, arguing that in their view, the sum of Kshs. 2,320,000/- already paid and admitted by the Advocate ought to suffice as instructions fees.
28. Owing to the wrong findings on the instruction fee, the Client submitted that the taxing master’s finding on VAT equally needs to be reviewed.
29. It is settled that the subject matter of the suit in issue should be determined first, and then the value thereof determined. It is equally settled that the value of the subject matter can be determined from the pleadings, judgment, or settlement fo the parties. In Kenya Airports Authority v Otieno Ragot and Company Advocates (Petition E011 of 2023) [2024] KESC 44 (KLR) (2 August 2024) (Judgment), the Supreme Court, while concurring and approving the Court of Appeal decision in Peter Muthoka & Another vs. Ochieng & 3 Others, Civil Appeal No. 328 of 2017; [2019] eKLR stated that:
“56. Equally, the Court of Appeal in considering the issue of how the value of a subject matter can be determined in Peter Muthoka & Another vs. Ochieng & 3 Others, Civil Appeal No. 328 of 2017; [2019] eKLR, stated as follows:
“It seems to us quite plain that the basis for determining subject matter value for purposes of instruction fees is wholly dependent on the stage at which the fees are being taxed. Where it happens before judgment, it is the pleadings that form the basis for determining subject value. Once judgment has been entered, and for what seems to us to be an obvious reason, recourse will not be had to the pleadings since the judgment does determine conclusively the value of the subject matter as a claim, no matter how pleaded, gets its true value as adjudged by the court.
Where, however, a suit is settled, then, from a literal and practical reading of the provision, the subject matter value must be sought by reference, in the first instance, to the terms of the settlement. Just as one would not start with the pleadings in the face of a judgment, it is indubitable that one cannot start with the pleadings where there is a settlement.”
30. In this case, it is a common ground between parties that the pleadings were clear that the claim against the Client was for, among others, a claim of general damages in the sum of Kshs. 1,000,000,000 and special damages of Kshs. 50,000,000/=. Guided by the above Supreme Court decision cited above, I concur with the finding by the Taxing Master that the subject matter value was Kshs. 1,050,000,000/-.
31. However, given the fact that the suit was withdrawn and did not proceed to full trial, I agree with the Client’s submissions that the instructions fees ought to have been charged at 75% of the fees chargeable. Consequently, the taxed figure of Kshs. 15,450,000 ought to have been taxed at (Kshs. 15,450,000/- X .75) = Kshs. 11,587,500/-.
32. On the Claim by the Advocate to have the instruction fees increased by 50%, I am equally guided by the Kenya Airports Authority v Otieno Ragot and Company Advocates (supra) where the Apex Court held that it is within the discretion of the Taxing Master to either apply or not apply the same. The Court at Paragraph 66 of the Judgment stated that: -
“66. Looking at Part B, which provides in part that the minimum fees as between an advocate and client shall be the fees prescribed in Part A increased by one-half, it is clear that in assessing Advocate-Client costs/fees under Part B, including instruction fees therein, the Taxing Officer is required to take into account Part A. As to whether this means that such a Taxing Officer is simply to increase the instruction fees determined/ascertained in Part A by one-half or 50%, we are not persuaded in the least. “
33. Further, the advocate’s request for a 50% increase in instruction fees under Schedule 6B was never pleaded in the Bill of Costs but was instead introduced in submissions. It is trite law that submissions are not pleadings and cannot be used to introduce new claims. The same is hereby disallowed on that account. In any event, it was a matter within the discretion of the taxing officer and this court finds no basis of interfering with the same. See the Supreme Court decision in Petition No. E011 of 2023, Kenya Airports Authority v. Otieno Ragot & Company Advocates were the Court stated that:
“Bearing the above in mind, we find that the proper interpretation of Schedule VI Part B is that in assessing fees thereunder, including instruction fees, a Taxing Officer is required to exercise his/her discretion guided by the prescribed scale of fees in Part A. To our minds, that does not mean, as the impugned majority judgment found, that a Taxing Officer is simply to apply the mathematical formula to the instruction fees ascertained in the taxed Party-Party costs. Failure to evaluate a disputed item under taxation and determine it judiciously is contrary to the clear provisions of Rule 16 of the Advocates Remuneration Order. Besides, a Taxing Officer being a judicial officer exercising a judicial mandate cannot be said to be performing such mandate mechanically or merely as a formality.”
34. Regarding the claim for getting-up fees, it is evident from the record that the proceedings were determined by affidavit evidence and written submissions, with no witnesses called and no oral hearing conducted. As such, Schedule 6(3) of the Advocates Remuneration Order (ARO) does not apply, and the claim must be disallowed. I align with the decision in the case of C.N Kihara & Company Advocates v Maendeleo Ya Wanawake Organization (MYWO) [2021] eKLR, in which G.V. Odunga J (as he then was), stated as follows:-
“58.…………., it is clear under Schedule 6 paragraph 2 of the Advocates Remuneration Order, 2014 that no fees is chargeable for getting up and preparing for trial until the case is confirmed for hearing and in case where the case is not heard, the taxing officer must be satisfied that the case has been prepared for trial."
35. Additionally, on the facts of this case, I also associate with the finding of the court in the case of Kerio Valley Development Authority v Nathan M. Pala t/a Muhatia Pala Auctioneers & 2 others (Miscellaneous Civil Application 348 of 2015) [2023] KEHC 24850 (KLR) (3 November 2023) (Ruling) where the court in declining to award getting up fees stated as follows:
“In this case, besides already finding that the instruction fee ought to have been assessed under the paragraph in Schedule 6 tiled “matters arising during proceedings” which would therefore not attract getting up fees, since the Notice of Motion was withdrawn at an early stage, I am also not satisfied that the matter required extensive preparation for trial so as to merit or justify an award of getting up fees.”
36. In any event, there was no certification by the Court for the payment of the same. See the case of Narok County Government v Kemboy Law Advocates (Miscellaneous Application E010 of 2023) [2024] KEELC 4497 (KLR) (3 June 2024) (Ruling) where the Court Stated that; -
“The Court’s understanding of the above provision of the Advocates (Remuneration) (Amendment) Order, 2014 is that getting up fees is actually payable to an Advocate but only if the same is certified by the Court based on the extend and difficulty of the work down in lodging and handling the Appeal.
Consequently, a Taxing Officer can only award getting up fees if there is a certification by the Appellate Judge that such an Appeal was of a difficult nature in its preparation and subsequent prosecution to warrant the getting up fee.”
37. On the claim by the Advocate that the taxing master erred by failing to award interest. The Client, on the other hand, submitted that in the instant case, the Advocate is not entitled to the interest since there was no claim of interest by the Advocate in its Bill of Costs or fee note as required under Rule 7. The Rule proves as follows:
“7. Interest may be charged
An advocate may charge interest at 14 per cent 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, provided that such claim for interest is raised before the amount of the bill shall have been paid or tendered in full"
38. I have looked at the Bill of Costs dated 11th July 2024 by the Advocate and note that the Advocate did not include a charge for interest at 14% (or even the 12%) per annum in the Bill of Costs. Interest, having not been claimed in the Bill of Costs, the subject of reference, the issue cannot therefore be taken up on appeal in the current proceedings.
39. Accordingly, guided by the above, and taking into account that the award of interest was a matter within the discretion of the taxing master, I find and hold that the taxing officer did not err in failing to award interest.
40. The upshot of the above is that I find that the taxing officer wrongly exercised her discretion when considering the Bill of Costs dated 14th October 2024, only insofar as the Instructions Fees are concerned. The Client’s application dated 29th October 2024 is therefore allowed, but only to that extent. The Advocate’s Application dated 7th November 2024 is unsuccessful and is hereby dismissed.
41. I fully associate with the holding in the case of First American Bank of Kenya Ltd v Gulab P. Shah & 2 others [2002] eKLR, where the court observed that it would be a waste of judicial time and costs to remit back a bill of costs to the taxing officer with directions that they should determine the instructions fees.
42. Consequently, the Ruling dated 14th October 2024 by the taxing master is hereby set aside, but only in relation to Item 3 thereof and the unnumbered Item on VAT, which are hereby referred back to the taxing master for reassessment.
43. Accordingly, I allow the Client’s reference but only to the extent that the Instructions fees in HCCCOM No. E976 of 2021, which was taxed at Kshs. 15,450,000/- is hereby set aside and substituted with an award by this Court of Kshs. 11,587,500/-.
44. The rest of the items, save for the resultant VAT (which will have to be recomputed by the taxing master taking into account the reduced instructions fees), are hereby upheld.
45. The Deputy Registrar of this court, being the taxing master, is directed to reissue an amended Certificate of Costs in terms of the reduced amounts in instructions fees, and also to recompute the resultant VAT.
46. The Advocate’s application dated 7th November 2024 is hereby dismissed.
47. On costs, since the Client’s reference has only partially succeeded, I order that each party to meet their respective costs.
48. It is so ordered.
SIGNED, DATED, and DELIVERED IN VIRTUAL COURT
THIS 15TH DAY OF MAY 2025
ADO MOSES
JUDGE