' This ruling is in respect to the application dated 1 st November 2023 wherein the Applicant, Owiti, Otieno & Ragot Advocates, seek the adoption of a Certificate of Costs dated 22nd September 2022, amounting to Kshs. 176,247, as the judgment and decree of the court, with interest at 14% per annum from 28th June 2020 until payment in full. It is the Applicant’s case that the costs arose from professional services rendered in Nyamira HCCA No. 17 of 2015 – Sanganyi Tea Factory Limited vs. Norah Nyaboke, where the advocates were retained by the respondent to institute and prosecute an appeal to its conclusion.
The application, supported by the affidavit of Mr. Kennedy O. Owiti Advocate , who states that the costs have neither been set aside nor altered, remain unpaid, and that no interest has been settled. The advocates claim entitlement to interest from 28th June 2020, being one month after presenting their fee note, and request that the costs of the current application be borne by the client/respondent.
The Respondent opposed the Application through the replying affidavit is sworn by its Legal Officer, Ms. Cheryl Odipo , who confirms that the Applicant, Owiti, Otieno & Ragot Advocates, filed a Bill of Costs dated 15 February 2022 regarding legal services in Nyamira HCCA No. 17 of 2015, which was taxed at Kshs. 176,247/- on 22 September 2022. She avers that the Respondent paid the full taxed amount on 9 April 2024, as evidenced by a remittance advice annexed to the affidavit. The Respondent’s deponent contends that the Applicant’s claim for interest at 14% per annum from 28 June 2020 (date of the fee note) is unfounded in law because, under the Advocates (Remuneration) Order, interest generally runs from the date of taxation unless there was an express prior demand, which did not occur here. She states that any lawful interest could only accrue from 22 September 2022 (taxation date) to 9 April 2024, at the court’s discretion under Section 26(1) of the Civil Procedure Act, and at prevailing court rates. The Respondent maintains it has fully discharged its obligation by paying the taxed costs in full and urges the court to dismiss the claim for interest as without merit.
The Application was canvassed by way of written submissions which I have considered.
The Applicant reiterated the grounds listed in support of the application and submitted that it is entitled to interest on certified costs of Kshs. 176,247 from 28th June 2020 until 9th April 2024, when the respondent finally paid the principal amount. The advocates relied on Section 51(2) of the Advocates Act and Rule 7 of the Advocates Remuneration Order, which allow interest at 14% per annum from one month after delivery of a fee note, provided the claim is made before payment in full. They argued that the final fee note dated 18th May 2020 was delivered to the Respondent on 28th May 2020, but that despite receipt, the Respondent failed to settle, thereby forcing taxation and further proceedings.
The Applicant cited multiple court decisions, including the case of Francis Mwanzia Mulwa vs. Afrisons Export Import Limited & Another [2015] eKLR for the argument that interest accrues from 30 days after delivery of the fee note, not from the date of the certificate of costs. They maintained that the respondent’s two-year delay in settling the bill, only paying in April 2024 without interest, was unjustified. The advocates submitted that this delay caused unnecessary litigation and expenses thus warranting full interest and costs of the application as a fair consequence of the Respondent’s conduct.
The Respondent, on the other hand, submitted that they fully satisfied their obligation by paying the taxed costs of Kshs. 176,247/=, awarded in the ruling of 22nd September 2022, to the Applicant’s account on 9th April 2024, as shown by remittance advice attached to their Replying Affidavit. They contended that this payment discharged all liability, citing case law to show that once taxed costs are paid in full, no further principal or interest can arise unless there was wilful default or an express earlier demand for interest. They stress that the Applicant has provided no evidence to disprove receipt of payment, and that mere unawareness does not negate actual settlement.
On the question of interest, the Respondent submitted that in the absence of a specific and timely demand for interest after delivery of the fee note, and given that the bill was taxed, interest can only lawfully accrue from one month after the date of taxation, not from the date of the fee note. They relied on Rule 7 of the Advocates (Remuneration) Order and related authorities for the argument that interest is not automatic and must be expressly demanded before payment is made. According to the Respondent, since there was no such demand, and the bill was in dispute and taken to taxation, interest, if payable at all, should run from 22nd October 2022 (one month after taxation) at 14% per annum. They calculated that this would amount to a total Kshs. 36,166.85 up to the date of payment on 9th April 2024.
The Respondent maintained that since the taxed costs were fully paid, the Applicant’s claim for interest from June 2020 has no legal basis, and at most, only the calculated Kshs. 36,166.85 could be payable if interest were deemed due. They therefore urged the court to reject the Applicant’s claim as exaggerated and without merit.
Issues for Determination
From the pleadings, affidavits, and submissions, this Court distils the following issues for determination:
Whether the taxed costs awarded on 22nd September 2022 have been fully settled by the Respondent.
Whether the Applicant is entitled to interest on the taxed costs, and if so, from what date such interest should accrue.
At what rate and for what period interest, if any, should be computed.
Analysis and Determination
1. Settlement of Taxed Costs
It was not in disputed that the Bill of Costs dated 15th February 2022 was taxed at Kshs. 176,247/= on 22nd September 2022. The Respondent produced uncontroverted evidence, namely a remittance advice dated 9th April 2024, confirming payment of the entire taxed amount. The Applicant has not provided evidence to challenge the authenticity of this payment. In Lubullelah & Associates Advocates vs. N.K. Brothers Ltd [2014] eKLR , it was held that once payment of taxed costs is made in full, the client’s obligation is discharged unless there is proof of wilful default or concealment. Accordingly, I find that the taxed costs have been fully settled.
2. Entitlement to Interest and Applicable Date
Rule 7 of the Advocates (Remuneration) Order provides that: -
An advocate may charge interest at 14% per annum on his disbursements and costs, whether taxed or not, from the expiry of one month from the date of delivery of his bill to the client, provided that such claim for interest is raised before the amount has been paid or tendered in full.
From the wording of the above provision and the decisions in Omondi Tello Advocates vs. Mount Holdings Ltd [2016] eKLR and Otieno Ragot & Co. Advocates vs. Kenindia Assurance Co. Ltd [2020] eKLR , it is clear that payment of interest is not automatic and that a specific demand must be made before payment in full. Statute and case law is also clear that where the bill is disputed and referred to taxation, interest normally accrues from the date of taxation, or one month thereafter, unless an earlier enforceable agreement or demand is shown.
In the present case, the Applicant has not presented any letter or communication to the Respondent to show that it specifically demanded interest prior to the full payment. I further note that the matter was subjected to taxation, signalling that the fee note was not accepted as binding.
Consistent with the decision in D. Njogu & Co. Advocates vs. Kenya National Capital Corporation [2006] eKLR , I find that once a bill is reduced through taxation, interest should be computed from the actual or “correct” fee amount established through taxation.
I therefore find that any interest payable should accrue from 22nd October 2022, one month after the date of taxation.
3. Rate and Period of Interest
Under Rule 7, the maximum permissible interest rate is 14% per annum, but the Court still retains discretion, under Section 26(1) of the Civil Procedure Act, to award interest at a lesser rate, depending on the circumstances.
In the instant case, the taxed sum is Kshs. 176,247/=. Applying 14% per annum from 22nd October 2022 to 9th April 2024 (535 days) yields interest of Kshs. 36,166.85 which accords with the Respondent’s own computation. I find the said amount to be reasonable in the circumstances of this case.
Conclusion and Orders
Having regard to the foregoing findings, observations, submissions, statutory provisions, and case law, I make the following final orders:
The taxed costs of Kshs. 176,247/=, as shown in the Certificate of Costs dated 22nd September 2022, are deemed settled in full as of 9th April 2024.
The Applicant is entitled to interest on the taxed costs at 14% per annum from 22nd October 2022 to 9th April 2024, amounting to Kshs. 36,166.85.
The total sum payable under this ruling is Kshs. 36,166.85 as interest.
Each party shall bear its own costs of the present application.
Orders accordingly.
'
The application, supported by the affidavit of Mr. Kennedy O. Owiti Advocate , who states that the costs have neither been set aside nor altered, remain unpaid, and that no interest has been settled. The advocates claim entitlement to interest from 28th June 2020, being one month after presenting their fee note, and request that the costs of the current application be borne by the client/respondent.
The Respondent opposed the Application through the replying affidavit is sworn by its Legal Officer, Ms. Cheryl Odipo , who confirms that the Applicant, Owiti, Otieno & Ragot Advocates, filed a Bill of Costs dated 15 February 2022 regarding legal services in Nyamira HCCA No. 17 of 2015, which was taxed at Kshs. 176,247/- on 22 September 2022. She avers that the Respondent paid the full taxed amount on 9 April 2024, as evidenced by a remittance advice annexed to the affidavit. The Respondent’s deponent contends that the Applicant’s claim for interest at 14% per annum from 28 June 2020 (date of the fee note) is unfounded in law because, under the Advocates (Remuneration) Order, interest generally runs from the date of taxation unless there was an express prior demand, which did not occur here. She states that any lawful interest could only accrue from 22 September 2022 (taxation date) to 9 April 2024, at the court’s discretion under Section 26(1) of the Civil Procedure Act, and at prevailing court rates. The Respondent maintains it has fully discharged its obligation by paying the taxed costs in full and urges the court to dismiss the claim for interest as without merit.
The Application was canvassed by way of written submissions which I have considered.
The Applicant reiterated the grounds listed in support of the application and submitted that it is entitled to interest on certified costs of Kshs. 176,247 from 28th June 2020 until 9th April 2024, when the respondent finally paid the principal amount. The advocates relied on Section 51(2) of the Advocates Act and Rule 7 of the Advocates Remuneration Order, which allow interest at 14% per annum from one month after delivery of a fee note, provided the claim is made before payment in full. They argued that the final fee note dated 18th May 2020 was delivered to the Respondent on 28th May 2020, but that despite receipt, the Respondent failed to settle, thereby forcing taxation and further proceedings.
The Applicant cited multiple court decisions, including the case of Francis Mwanzia Mulwa vs. Afrisons Export Import Limited & Another [2015] eKLR for the argument that interest accrues from 30 days after delivery of the fee note, not from the date of the certificate of costs. They maintained that the respondent’s two-year delay in settling the bill, only paying in April 2024 without interest, was unjustified. The advocates submitted that this delay caused unnecessary litigation and expenses thus warranting full interest and costs of the application as a fair consequence of the Respondent’s conduct.
The Respondent, on the other hand, submitted that they fully satisfied their obligation by paying the taxed costs of Kshs. 176,247/=, awarded in the ruling of 22nd September 2022, to the Applicant’s account on 9th April 2024, as shown by remittance advice attached to their Replying Affidavit. They contended that this payment discharged all liability, citing case law to show that once taxed costs are paid in full, no further principal or interest can arise unless there was wilful default or an express earlier demand for interest. They stress that the Applicant has provided no evidence to disprove receipt of payment, and that mere unawareness does not negate actual settlement.
On the question of interest, the Respondent submitted that in the absence of a specific and timely demand for interest after delivery of the fee note, and given that the bill was taxed, interest can only lawfully accrue from one month after the date of taxation, not from the date of the fee note. They relied on Rule 7 of the Advocates (Remuneration) Order and related authorities for the argument that interest is not automatic and must be expressly demanded before payment is made. According to the Respondent, since there was no such demand, and the bill was in dispute and taken to taxation, interest, if payable at all, should run from 22nd October 2022 (one month after taxation) at 14% per annum. They calculated that this would amount to a total Kshs. 36,166.85 up to the date of payment on 9th April 2024.
The Respondent maintained that since the taxed costs were fully paid, the Applicant’s claim for interest from June 2020 has no legal basis, and at most, only the calculated Kshs. 36,166.85 could be payable if interest were deemed due. They therefore urged the court to reject the Applicant’s claim as exaggerated and without merit.
Issues for Determination
From the pleadings, affidavits, and submissions, this Court distils the following issues for determination:
Whether the taxed costs awarded on 22nd September 2022 have been fully settled by the Respondent.
Whether the Applicant is entitled to interest on the taxed costs, and if so, from what date such interest should accrue.
At what rate and for what period interest, if any, should be computed.
Analysis and Determination
1. Settlement of Taxed Costs
It was not in disputed that the Bill of Costs dated 15th February 2022 was taxed at Kshs. 176,247/= on 22nd September 2022. The Respondent produced uncontroverted evidence, namely a remittance advice dated 9th April 2024, confirming payment of the entire taxed amount. The Applicant has not provided evidence to challenge the authenticity of this payment. In Lubullelah & Associates Advocates vs. N.K. Brothers Ltd [2014] eKLR , it was held that once payment of taxed costs is made in full, the client’s obligation is discharged unless there is proof of wilful default or concealment. Accordingly, I find that the taxed costs have been fully settled.
2. Entitlement to Interest and Applicable Date
Rule 7 of the Advocates (Remuneration) Order provides that: -
An advocate may charge interest at 14% per annum on his disbursements and costs, whether taxed or not, from the expiry of one month from the date of delivery of his bill to the client, provided that such claim for interest is raised before the amount has been paid or tendered in full.
From the wording of the above provision and the decisions in Omondi Tello Advocates vs. Mount Holdings Ltd [2016] eKLR and Otieno Ragot & Co. Advocates vs. Kenindia Assurance Co. Ltd [2020] eKLR , it is clear that payment of interest is not automatic and that a specific demand must be made before payment in full. Statute and case law is also clear that where the bill is disputed and referred to taxation, interest normally accrues from the date of taxation, or one month thereafter, unless an earlier enforceable agreement or demand is shown.
In the present case, the Applicant has not presented any letter or communication to the Respondent to show that it specifically demanded interest prior to the full payment. I further note that the matter was subjected to taxation, signalling that the fee note was not accepted as binding.
Consistent with the decision in D. Njogu & Co. Advocates vs. Kenya National Capital Corporation [2006] eKLR , I find that once a bill is reduced through taxation, interest should be computed from the actual or “correct” fee amount established through taxation.
I therefore find that any interest payable should accrue from 22nd October 2022, one month after the date of taxation.
3. Rate and Period of Interest
Under Rule 7, the maximum permissible interest rate is 14% per annum, but the Court still retains discretion, under Section 26(1) of the Civil Procedure Act, to award interest at a lesser rate, depending on the circumstances.
In the instant case, the taxed sum is Kshs. 176,247/=. Applying 14% per annum from 22nd October 2022 to 9th April 2024 (535 days) yields interest of Kshs. 36,166.85 which accords with the Respondent’s own computation. I find the said amount to be reasonable in the circumstances of this case.
Conclusion and Orders
Having regard to the foregoing findings, observations, submissions, statutory provisions, and case law, I make the following final orders:
The taxed costs of Kshs. 176,247/=, as shown in the Certificate of Costs dated 22nd September 2022, are deemed settled in full as of 9th April 2024.
The Applicant is entitled to interest on the taxed costs at 14% per annum from 22nd October 2022 to 9th April 2024, amounting to Kshs. 36,166.85.
The total sum payable under this ruling is Kshs. 36,166.85 as interest.
Each party shall bear its own costs of the present application.
Orders accordingly.
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