1. Before this 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 1/11/2024 filed by the Advocate.
Client’s Application
2. The Client’s application is a chamber summons filed pursuant to section 1A, 1B, 3A of the Civil Procedure Act, order 50 rule 6 of the Civil Procedure Rule and 2010 and Rule 11 (2) of the Advocates (Remuneration) Order 2009.
3. The Client prayed for the following orders:
“ 1. Spent
2. The Honourable Court be pleased to vacate and or set aside in its entirety the Ruling and or reasoning of the Honourable C. L. Adisa, Deputy Registrar, dated and delivered on 14th October 2024, taxing the Advocate-Client Bill of Costs dated 11th July 2024, at Kshs. 3,716,060/= and tax the matter afresh or refer the matter for fresh taxation before a Taxing Master.
3. THAT the costs of this Application be provided for.”
4. The grounds of the application were that the Deputy Registrar, in a ruling delivered on 14/10/2024, taxed the Advocate-Client Bill of Costs dated 11/7/2024 at Kshs. 3,716,060/=. The Client contended that the Deputy Registrar misdirected herself in law, particularly concerning items 1 and 33 of the Bill of Costs, by erroneously applying Schedule 1, First Scale of the Advocates Remuneration Order, despite the Advocate not representing neither the vendor nor the purchaser in the transaction.
5. Further, the Client argued that the Deputy Registrar failed to consider the Client’s written submissions, ignoring the binding Supreme Court decision in the case of Kenya Airports Authority v Otieno Ragot and Company Advocates (Petition E011 of 2023) [2024] KESC 44 (KLR) (2 August 2024) (Judgment), and exercised discretion improperly under Rule 16 of the Advocates Remuneration Order.
6. Additionally, the Client stated that a request for reasons for the ruling was made but remained unanswered and that unless the orders sought are granted, it will suffer irreparable and substantial loss, and no prejudice will be occasioned to the Advocate if the application is allowed.
7. In opposition to the application, the Advocate filed a replying affidavit sworn on 1/11/2024 by himself. According to the Advocate, the Deputy Registrar misdirected herself in law in assessing items 1, 29, 30, and 33 of the Bill of Costs and submitted that these should be vacated and taxed afresh.
8. He argued that the Deputy Registrar failed to consider his Notice of Election, which elected taxation under Schedule V of the Advocates Remuneration Order rather than Schedule I. This, he asserted, was an error as the election of Schedule V should have been upheld, and a fee of Kshs. 5,631,250/- ought to have been taxed.
9. Further, the Client contended that the Taxing Master overlooked key considerations under Schedule V, including the complexity of the matter, the number and length of documents perused, and the value of the subject matter, which was Kshs. 225,000,000/-. He maintained that taxation under Schedule I resulted in an assessment below the legally mandated scale fee.
10. The Advocate also averred that the Deputy Registrar failed to apply Rule 7 of the Advocates Remuneration Order, which entitles an Advocate to charge interest at a rate above 12% on unpaid legal fees. He averred that interest should be awarded on the taxed amount from the date of service of the Bill of Costs on 12/7/2024, until full settlement.
11. In addressing the Client’s reliance on Supreme Court Petition No. E011 of 2023 (Kenya Airports Authority v Otieno Ragot & Co. Advocates), the Advocate asserted that the case is distinguishable, as it pertains to instances where the value of the subject matter is indiscernible, which is not applicable here since the value was explicitly stated in the Sale Agreement.
12. The Advocate further contended that the Deputy Registrar’s ruling contained sufficient reasoning, negating the necessity for a further written explanation under Rule 11(2) of the Advocates Remuneration Order.
13. Lastly, the Advocate averred that the Client failed to demonstrate substantial or irreparable loss, while he continues to suffer financial prejudice due to the delayed payment of legal fees. Accordingly, the Advocate prayed for the dismissal of the Client’s reference application with costs.
Advocate’s application:
14. The Advocate filed an application dated 1/11/2024 seeking an order to vacate the taxation of the Deputy Registrar, specifically items number 1, 29,30 and 33.
15. The grounds of the application are similar to those mentioned in the Advocate’s replying affidavit as mentioned above.
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 as highlighted below.
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 officer are that matters of quantum of taxation belong in the province and competence of a taxing master, and that the High Court, on a reference, should be slow to interfere. See 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 11/07/2024 seeking a total sum of Kshs. 7,131,042 as Advocate-Client costs emanating from what the Advocate stated to be costs relating to the Sale of Land Reference Number 1870/X/38 Jayant Rajkinat Archaya - to – Medina Palm Developers Limited.
21. By a Ruling dated 14th October 2024, the Deputy Registrar taxed the Bill of Costs under Schedule 1 of the Advocates Remuneration Order at a total sum of Kshs.3,716,060/, out of which, a sum of Kshs. 3,087,500 was in respect of the Instructions fee. The subject matter value was placed at Kshs. 225,000,000/- by the taxing master.
22. The Client argued that the taxing master misdirected herself in law in arriving at a decision that is untenable in law in terms of items numbers 1 (instructions fees) and 33 (VAT) of the Bill of Costs.
23. From the record, I note that the taxing master in her ruling dated 14/10/2024 found that schedule 1 of the Advocates Remuneration Order was applicable and ruled as follows: -
“Taking into account the nature of the claim herein and the work done, I find Schedule 1 to be applicable.”
24. Schedule 1, first scale of the Advocates Remuneration Order provides as follows:
“SCHEDULE 1
FIRST SCALE
1. SCALE FEES ON SALES AND PURCHASES AFFECTING LAND REGISTERED IN ANY REGISTRY
Vendor's Advocate and Purchaser's Advocate
The scale fee shall be calculated cumulatively on the basis of the consideration or value of the subject matter as follows— (i) from Kshs. 1 to Kshs. 5,000,000, 2% of the consideration or the value of the subject matter or Kshs. 35,000 whichever is higher. (ii) from Kshs. 5,000,001 to Kshs.100,000,000, the fee prescribed in (i) plus 1.5% of the balance. (iii) from Kshs.100,000,001 to Kshs. 250,000,000, the fee prescribed in (ii) plus 1.25 % of the balance. (iv) from Kshs. 250,000,001 to Kshs.1,000,000,000, the fee prescribed in (iii) plus 1% of the balance (v) in respect of an amount where the consideration or value is more than Kshs.1,000,000,000, the fee set out in (iv) plus 0.1% of the balance.”
25. It is evident from the record that the matter involved a sale transaction between the vendors of a piece of land, who were known as JAYANT RAJNIKANT CHARYA and PUNITA JAYANT ACHARYA. They sold the land to MEDINA PALM DEVELOPMENT LIMITED. The Client’s part in the sale agreement was that of a Chargee, and its agent only executed the Consent and Release part of the agreement.
26. It is evident therefore that the Client did not execute the Sale Agreement either as a vendor or purchaser and the provisions of Schedule 1, First Scale do not apply in assessing the instruction fees.
27. It follows, therefore, that the purchase price agreed between the vendors and the purchaser of Kshs. 225,000,000/= cannot be the basis of the Advocate’s claim for computation of his fees.
28. Further, it is this Court’s position that the elective process under Paragraph 22(1) of the ARO, which allows for the setting of a minimum legal fee, is equally not applicable in this case since it presupposes the applicability of Schedule 1. In my view, the appropriate provision ought to have been Part II of Schedule 5, which provides a more flexible framework for determining fees. This part stipulates that fees is to be decided by considering several factors, including the care and labor required, the complexity of the matter, the length and nature of the documents involved, and the overall importance and value of the subject matter.
29. From the evidence on record, it is clear that the Advocate's involvement in the transaction was minimal, and the legal matters at hand were neither complex nor novel. The transaction itself was contained in a brief Sale Agreement of only ten pages, highlighting the straightforward nature of the matter. Given these circumstances, it stands to reason that the legal fees should be modest and proportionate to the simplicity of the services rendered.
30. Rule 16 of the ARO offers further guidance, granting discretion to the Taxing Officer to allow such costs as are deemed necessary or proper for achieving justice or defending the rights of any party. This rule also cautions against the allowance of costs that are incurred unnecessarily or as a result of over-caution, negligence, or unusual expenses. The discretion provided here is crucial in ensuring that costs awarded are justifiable and prudent, tailored to the specifics of the case at hand. The Rule proves that:
“16. Discretion of taxing officer
Notwithstanding anything contained in this Order, on every taxation the taxing officer may allow all such costs, charges and expenses as authorized in this Order as shall appear to him to have been necessary or proper for the attainment of justice or for defending the rights of any party, but, save as against the party who incurred the same, no costs shall be allowed which appear to the taxing officer to have been incurred or increased through overcaution, negligence or mistake, or by payment of special charges or expenses to witnesses or other persons, or by other unusual expenses”
31. Furthermore, the Supreme Court of Kenya, in its ruling in Supreme Court Petition No. E011 of 2023 between Kenya Airports Authority and Otieno Rago & Company Advocates (supra) emphasized that the determination of what constitutes reasonable costs must be made on a case-by-case basis. The Court upheld principles that are vital in assessing costs under the Advocates Remuneration Order, such as ensuring access to justice for all, not just the wealthy; fairly reimbursing successful litigants; maintaining a level of remuneration that attracts capable individuals to the legal profession; and striving for consistency in the awards made.
32. Guided by these principles and the specifics of the current case, it is the finding of this court that the fees of Kshs. 3,087,500/- as assessed by the taxing master was, in the circumstances of the case, high and excessive.
33. Taking into account the straightforward nature of the subject transaction and guided by the Supreme Court in the Otieno Ragot Case, I am of the view that a sum of Kshs. 1,000,000/- in instruction fees would be fair and just. I hereby award the same in place of the sum of Kshs. 3,087,500/- assessed by the taxing master.
34. With regards to items no.29 AND 30-the Advocate claimed Kshs. 25,200 for calls, Kshs. 300,000 for attending meetings and Kshs. 75,000 for journeys. However, the Advocate failed to substantiate these figures and did not provide supporting evidence. I therefore find that the claim should be taxed off.
35. 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"
36. 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.
37. 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.
38. Accordingly, I allow the Client’s reference and hereby set aside the tax master’s ruling of 14th October 2024 on the Advocate’s Bill of Costs dated 11th July 2024, but only to the extent that the sum of Kshs. 3,087,500/- awarded in respect of instructions fees (Item 1) is hereby set aside and substituted with a sum of Kshs. 1,000,000/-. Items 29 and 30 are taxed off.
39. 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.
40. 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.
41. The Advocate’s Reference filed herein is hereby dismissed.
42. On costs, since the Client’s reference has only partially succeeded, I order that each party to meet their respective costs.
43. It is so ordered.
SIGNED, DATED, and DELIVERED IN VIRTUAL COURT
THIS 15TH DAY OF MAY 2025
ADO MOSES
JUDGE
In the presence of:
Moses – Court Assistant.