NJOKI NJOGU & CO ADVOCATES VS KENYA ALLIANCE INSURANCE CO LTD

REPUBLIC OF KENYA

IN THE HIGH COURT OF KENYA AT MACHAKOS

MISCELLANEOUS APPLICATION NO. 023 OF  2024

NJOKI NJOGU & CO. ADVOCATES ………….. APPLICANT/ADVOCATE

VERSUS

THE KENYAN INSURANCE COMPENY

LTD ……………………………………………….. RESPONDENT/CLIENT

RULING

Introduction:

1. Before me is a Chamber Summons application dated 20/6/2024 by the Applicant seeking orders under paragraph 11 (2) of the Advocates Remuneration Orders:-
2. THAT this court be pleased to review and set aside the ruling of the taxing officer dated 11 June, 2024 in its entirety.
3. THAT the advocate's Bill of Costs dated 29 January, 2024 be taxed afresh.
4. THAT the costs of this application be costs in the cause.
5. The application is supported by the supporting Affidavit of CATHERINE NJOGU sworn on 20/6/2024 and based on the grounds THAT:-
6. The taxing officer erred in principle by failing to take into account the scale of instruction fees prescribed under Schedule 7 1 (c) Of the Advocates Remuneration Order, 2014. Further, the taxing officer failed to give any justification for awarding the lower scale amount prescribed under the said schedule yet the matter was fully defended.
7. The taxing officer erred in principle by taxing off and/or disallowing items number 2, 3, 11 and 49 on grounds that the same are not provided for under the Advocates Remuneration Order, 2014.
8. The taxing officer erred in principle by taxing Off and/or disallowing items number 4, 5, 8, 9, 14, 15, 17, 18, 21, 22, 25, 26, 29, 30, 32,37, 38, 42, 43, 46,47 51, 52, 56, 57 on grounds that the same are not provided for under the Advocates Remuneration Order, 2014.
9. The taxing officer erred in principle by taxing off and/or disallowing items number 6, 7, 10, 12, 16, 19, 23, 27, 31, 33, 34, 35, 39, 40, 44, 45, 48, 49, 53, 54, 58, 53, 54, 58, 59, 60 on grounds that the same are not provided for under the Advocates Remuneration Order, 2014.
10. The application is opposed by the Respondent/Client having filed grounds of opposition dated 26/6/2024as follows:
11. The taxing officer did not commit any error of principle in taxing the items objected to.
12. Other grounds that will set out in the submissions that the client will file in due course.

Facts

1. The Applicant/Advocate represented the client’s insured in Mavko PMCC No. 43 of 2022-Zaina Nduni Maithya v Kamuya Gikuhi & Christopher Issa Kisau, (the case).
2. The application was canvassed through written submissions. The Applicant/Advocate’s submissions are dated 28/6/2024 whilst the Respondent/Clients’s submissions are dated 27/6/2024. In have duly considered the parties’ submissions.

Applicant/Advocate’s submissions

1. The Applicant submitted on 4 issues for determination as below:

a) Whether the Taxing Officer erred in law and in principle and failed to apply her discretion on proper basis in arriving at an unreasonable and inordinately low amount of legal costs/fees with regard to the subject-matter.

7.     That the Taxing Officer did not exercise her discretion judiciously when assessing the instruction fees at a low sum of Kshs.90, 000 as she failed to take into account relevant considerations and thus committed an error of principle. She cited the case of Lucy Waithera & 2 Others vs Edwin Njagi T/A E. K. Njagi & Company Advocates [2017] eKLR, the Court of Appeal stated; -

“It is evident from the aforestated paragraph that the taxing officer exercises a discretionary power in taxing the Bill of Costs. Such power has to be exercised judiciously in that it must be done in accordance with the scale provided in the Remuneration Order, and where discretion is given for variation, justification must be given for such variations. Thus, in a reference one of the reasons that can justify interference with the decision of the taxing officer is if the discretion has not been exercised judiciously. It is trite that the taxing officer’s decision is not exercised judiciously where relevant consideration has not been taken into account, or irrelevant considerations have been taken into account and this would amount to an error of principle.”

1. It is the Applicant’s submission that the Taxing Officer in the exercise of discretion in determining instruction fees in the matter was required to take into consideration the nature and importance of the matter, the amount involved, the interest of the parties, the general conduct of the proceedings and all other relevant considerations. She referred to Joreth Limited vs Kigano & Associates [2002] eKLR the court stated;

“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 assess 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.”  

1. That the subject matter in this case was specified, it was a personal injury claim where the Plaintiff was awarded the sum of Kshs.1,501, 586/= as damages. It is worth noting that the lower court matter was defended and the same went for full hearing. Further as is evidenced by an email dated 17^th March, 2023 (listed as document number 4 in the Applicant’s list of documents annexed to the Bill of Costs), upon delivery of the judgment, the Advocate was further instructed to file an application seeking for stay orders which application was heard and determined.
2. In view of the factors set out above, the sum of Kshs. 120, 000/= sought by the Applicant for assessment of instruction fees under item No.1 was reasonable and the figure of Kshs.90, 000/= awarded was low as to be unreasonable and an error in principle taking into consideration the work done and the time expended. We urge this honourable court to be guided by the case of Premchand Raichand Ltd and Another –versus- Quarry Services of East Africa Ltd and Another (No. 3) [1972] E. A 162 the court at page 163 stated;

“First, the general level of the remuneration of advocates must be such as to attract worthy recruits to an honourable profession. Secondly, there must, so far as is practicable, be consistency in the awards made, both to do justice between one person and another and so that a person contemplating litigation can be advised by his advocates very approximately, for the kind of case contemplated, is likely to be his potential liability for costs.”

  b) Whether the Taxing Officer erred in law and in principle in taxing off amounts related to service fees.

11.   The Applicant submitted that the fees payable for service of documents are provided for under Schedule 7 (10) which states that; Service

i.) within three kilometres of subordinate court or district registry of the subordinate court Kshs.1,400/=

ii.) for travelling and subsistence expenses incurred by the process server-charge the actual expense incurred

iii.) Where service is by post or by any other mode of substituted service, charge the actual expenses incurred

1. The Applicant submitted that the taxing officer erred in law and in principle by taxing off items number 6, 7, 10, 12, 16, 19, 23, 27, 31, 33, 34, 35, 39, 40, 44, 45, 48, 49, 53, 54, 58, 53, 54, 58, 59, 60 on grounds that the same are not provided for under the Advocates Remuneration Order, 2014. The Applicant prays that this honourable court does allow the said items as drawn as they are reasonable and justified. They urged this honourable court to be guided by the case of Kanu National elections Board & 2 Others vs Salah Yakub Farah (2018) eKLR;

“The discretion vested in the Taxing Master is to allow costs, charges and expenses as appear to him to have been necessary or proper; not those which may objectively attain such qualities, and that such opinion must relate to all costs reasonably incurred by the litigant, which also imports a value judgement as to what is reasonable. The discretion to decide what costs have been necessary or properly incurred is given to the Taxing Master; and not to the Court.”

c.) Whether the Taxing Officer erred in law and in principle in taxing off amounts related to perusals, drawing of pleadings and correspondences.

13.     The Applicant submitted that the taxing officer erred in law and in principle by taxing off items number 4, 5, 8, 9, 14, 15, 17, 18, 21, 22, 25, 26, 29, 30, 32,37, 38, 42, 43, 46,47 51, 52, 56, 57 on grounds that the same are not provided for under the Advocates Remuneration Order, 2014. We humbly pray that this honourable court allow the said items as drawn as they are reasonable and justified

d.) Whether the Taxing Officer erred in law and in principle by failing to increase the instruction fee by 50% as provided for under the Advocates Remuneration Order.

14.    The Applicant submitted that as such, Schedule 7, prescribes how instruction fees for both party and party and advocate and client are to be assessed with Part A setting out different parameters for arriving at party and party costs.

1. As pertains to party and party costs, the role of the taxing officer was clearly spelt out by this Court, the case of Peter Muthoka & another vs Ochieng & 3 others [2019] eKLR thus;

“It is only where the value of the subject matter is neither discernible nor determinable from the pleadings, the judgment or the settlement, as the case may be, that the taxing officer is permitted to use his discretion to assess instructions fees in accordance with what he considers just bearing in mind the various elements contained in the provision we are addressing. He does have discretion as to what he considers just but that discretion kicks in only after he has engaged with the proper basis as expressly and mandatorily provided: either the pleadings, the judgment or the settlement. He has no leeway to disregard the statutorily commanded starting point. And we think, with respect, that the starting point can only be one of the three. It is not open to the taxing officer to choose one or the other or to use them in combination, the provision being expressly disjunctive as opposed to conjunctive. It is also mandatory and not permissive.” (emphasis ours)

1. The above makes it clear that the starting point for determining the instruction fees for party and party costs under Part A is by considering either, the pleadings, the judgment or the settlement, whereafter, the taxing officer is at liberty to exercise his or her discretion to arrive at a just decision.
2. Schedule 7 Part B on the other hand makes it patently clear that instruction fees for advocate and client costs will be one-half of the party and party costs prescribed, or as ordered by a court or agreed upon by the parties. In addition, from a further introspection of Schedule 7, it is instructive that whereas Part A allows for the exercise of discretion to increase or reduce the instruction fees, under Part B no provision was made for any further exercise of discretion to increase or reduce the advocate’s fees once the one-half formula is applied to the instruction fees ascertained in Part A. It therefore stands to reason that Part B, being Advocate and client costs cannot be ascertained independently unless and until Part A is determined, since the instruction fees in Part B is an arithmetical computation derived from the instruction fees in the party and party costs determined in Part A. The Applicant relies on the case of George Arunga Sino vs Patrick J.O & Geoffrey D.O. Yogo T/A Otieno

Yogo & Co. Advocates [2012] eKLR to support the proposition that once there has been a determination under schedule VI A, the minimum fee chargeable is that fee increased by one-half, and that there is no discretion in applying the increment as Schedule VI B is framed in mandatory terms.

They urged this honourable court to so find.

Respondent/Client’s Submissions

1. The Respondent/Client submitted that this court has jurisdiction to disturb the taxing officer's ruling only if it is shown that she committed an error of principle.
2. The foregoing position finds support in the case of Republic v Kenyatta University & Another Ex-parte Wellington Kihato Wamburu [2018] eKLR where the court held as follows-

"It is a well-established principle of review that the exercise of the Taxing Master's discretion will not be interfered with 'unless it is found that he has not exercised his discretion properly, as for example, when he/she has been actuated by some improper motive, or has not applied his/her mind to the matter, or has disregarded factors or < > ></></></><><> >><>><>></><><>< ></></><><>...  ></></><><>< >></><>< ></><>... > >> ><><><>" > ></></><><>> ><>“I have no doubt in stating that in pleadings or judgment where amount of money is indicated it is one of the factors to be taken into account amongst other factors but not as the sole factor in determining instruction fees in a matter before a Taxing Officer. the Taxing Officer in addition to other factors is required to consider the pleadings as a whole, the proceedings, other fees duly allowed < > ></></></><>> > ><><>><>< >>> (></><><><>"...  ></></></><><>></><><>< ></></><><><>...></><>< ></></><><>><>></><><>Analysis and Determination

1. I have considered the pleadings, the court record, the rival written submissions, the cited authorities and the relevant provisions of law and I find the single issue for determination is whether the decision of the Taxing Officer contained in a ruling delivered on 11/6/2024 should be set aside in its entirety.
2. The principles of setting aside the decisions of a Taxing Officer were well established in the cases of Premchand Raichand Limited & Another vs Quarry Services of East Africa Limited and Another [1972] E.A 162, First American Bank of Kenya vs Shah and Others (2002) EA 64 and Joreth Ltd vs Kigano and Associates (2002) 1 EA 92. These includes:-

a. That there was an error of principle

b. The fee awarded was manifestly excessive or is so high as to confine access to the court to the wealthy

c. That the successful litigant ought to be fairly reimbursed for the costs he has incurred

d. That so far as practicable there should be consistency in the award.

9.      In First American Bank of Kenya Vs Shah and Others [2002] E.A.L.R 64 AT 69, the court held as follows;

“First, I find that on the authorities, this 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 so manifestly excessive as to justify an inference that it was based on an error of principle”.

Instruction fees

1. The Applicant faults the Taxing Officer for failing to take into account the scale of fees prescribed under Schedule 7 1 (c) of the Advocates Remuneration Order 2014 and further for failing to give any justification for awarding the lower scale amount prescribed under the said Schedule yet the matter was fully defended.
2. In her ruling the taxing officer stated that the taxation arose from a lower court matter in Mavoko PMCC No. 43 of 2022 and the applicable Advocates Remuneration Order is for 2014 Schedule 7.
3. For item 1 on instructions fees, the taxing officer appreciated that subject matter is specified as Ksh.1,501,586. She went ahead to cite the cases of Joreth Ltd v Kigano & Associates Civil Appeal No. 66 of 1999 (2002) 1 EA 92, (2002) eKLR, Jeremiah Muku v Methodist Church in Kenya Trustees Registered & Another (2015) eKLR and Premchand Raichand Limited & Another vs Quarry Services of East Africa Limited and Another [1972] E.A 162, First American Bank of Kenya vs Shah and Others (2002) EA 64.
4. Based on the foregoing cases, the taxing officer taxed item 1 at Kshs.90,000/=.
5. It is trite law that in ascertaining instruction fees, the taxing officer should be guided by the following:
6. The nature and importance of the cause or matter;
7. The amount or value of the subject matter involved;
8. The interest of the parties;
9. The complexity of the matter;
10. The seriousness preparation involved (the general conduct of the proceedings).
11. In this court’s view, the value of the subject matter was known being specified as Ksh.1,501,586. Under Schedule 7 1 (c) the chargeable fees for the value between Kshs.1,000,000 -Kshs.2,000,000 is Kshs.90,000/= on the lower side and Kshs.120,000/= on the higher side. The suit was duly defended to the end, the taxing officer did not state why she assessed the instruction fees herein on the lower scale.
12. The ‘’Note” under Schedule 7, 1, clearly states that;

“The “Lower Scale” shall be applied in all cases where no defence or other denial has been filed and the “Higher Scale” shall be applied in all other cases”

1. This court therefore finds that the taxing officer in awarding the instruction fees on the lower scale committed an error of principle which this court must interfere with. Accordingly, the instruction fees under item 1 of Kshs.90,000/= assessed by the taxing master is set aside and in place thereof substituted by Kshs.120,000/= as instruction fees.

Perusal, copies, drawing, attendance other than before court, correspondences, journey to court.

1. The taxing officer taxed off the above listed items stating that there was no provision for the same.
2. The client in their submissions argue that the Advocate did not provide any supporting documents in support of the items the reason why they were taxed off. This court disagrees with the Client’s submission as the ruling did not talk of lack of supporting documents.
3. This court observes that the taxing master did not specify the particular items referred to and errored in making a blanket finding. This court will therefore refer the Advocate-Client Bill of Costs dated 25th January 2025 before another Taxing Officer other than Hon. V. Ochanda. DR for re-taxation of items on perusal, copies, drawing, attendance other than before court, correspondences, journey to court.
4. This Court will not interfere with items 41, 50 taxed at Kshs.2,100/=, items 46 taxed at Kshs.3,000/=, item 61 taxed at Kshs.1,400/=.
5. In the ruling, the taxing officer appears to have taxed item 55 twice. First at Kshs.1,000/= and secondly at Kshs.1,400/=.  This Court will confirm the assessment of item 55 at Kshs.1,400/=.
6. Accordingly, this court makes the following orders:
7. The instructions fees of Kshs.90,000/= under item 1 is set aside and substituted with Kshs.120,000/=.
8. Item 55 is assessed at Ksh.1,400/=.
9. Taxation on items 41, 50, 61 will not be interfered with, the same is confirmed.
10. The Advocate-Client Bill of Costs dated 25th January 2024 will be placed before another Taxing Officer other than Hon. V. Ochanda, DR for re-taxation of items on perusal, copies, drawing, attendance other than before court, correspondences, journey to court.
11. It is so ordered.

RULING WRITTEN, DATED & SIGNED AT MACHAKOS THIS 5TH MARCH 2025

        NOEL I. ADAGI

            JUDGE

DELIVERED VIRTUALLY VIA TEAMS COURT AT MACHAKOS THIS 5TH MARCH  2025