Introduction
1. This Ruling determines the Chamber Summons Application/Reference dated 4th November 2024 by the Respondent/Client seeking to set aside the taxation Ruling dated 22nd October 2024, which had taxed the Advocate-Client Bill of Costs taxed at Kshs. 8,134,100.00.
2. The facts giving rise to the instant application are that Applicant/Advocate filed an Advocate–Client Bill of Costs dated 3rd July 2024 against the Respondent/Client, seeking remuneration (Kshs. 58,014,100.00) for legal services allegedly rendered in connection with a Financing and Development Partnership Deed between Neema Trust Company Limited and Superb Builders Limited.
3. The Respondent opposed the Bill of Costs vide the Grounds of Opposition dated 27 September 2024, contending that no retainer existed, and that the Non Disclosure Agreement (NDA) relied upon by the Advocate was merely a confidentiality instrument, and that any liability for fees lay with the corporate entities rather than her personally.
4. The Bill of Costs was placed before the Taxing Officer, Hon. Chembeni L. Adisa, who on 22nd October 2024 taxed it at Kshs. 8,134,100.00 vide the Ruling dated 22 October 2024. Dissatisfied, the Respondent lodged the instant Reference seeking to set aside the taxation.
5. The Reference was argued by way of written submissions. The Client, through CM Advocates, filed her submissions dated 8th April 2025, whilst the Advocate filed his submissions dated 15th May 2025.
Analysis and Determination
6. I have duly considered the Reference, the response thereto, and the applicable law. I find the following issues as requiring this Court’s determination: -
i. Whether there Existed an Advocate–Client Relationship
ii. Whether the Respondent is Personally Liable for Fees
iii. Whether the Advocate’s Bill of Costs offended Section 48 of the Advocates Act and/or Rule 18 of the Advocates (Remuneration) Order
iv. Whether the Taxing Officer Erred in Principle in Assessing the Bill of Costs
7. The Respondent, through learned counsel, urged the Court to allow the Reference and set aside the taxation, based her arguments on three principal objections: lack of retainer, statutory non-compliance, and error in principle in the assessment of instruction fees.
Whether there Existed Advocate–Client Relationship
8. The Respondent disputed the existence of a retainer. According to the Client, the Non-Disclosure Agreement (NDA) executed on 2nd April 2019 was merely a confidentiality instrument and did not amount to instructions to act. It was argued that the NDA did not contain any operative clause appointing the Advocate to act, nor did it fix remuneration as contemplated under section 45 of the Advocates Act (Cap 16, Laws of Kenya). Counsel emphasized that the burden of proving a retainer lies squarely on the Advocate and cited the case of Makumi Mwangi & Co. Advocates v Chege [2023] KEHC 27252 (KLR), in support of the argument.
9. The Advocate, on the other hand, submitted that the NDA expressly contemplated the provision of legal services by the Advocate to the Respondent. The Advocate relied cited the provisions of the NDA, —stating that “the Advocate can provide legal services sufficient to meet the requirements of the Client from time to time”—was futuristic and aspirational, not operative. Counsel submitted that no instructions were ever issued pursuant to the NDA.
10. It is settled that the jurisdiction of the Taxing Master to entertain & consider an Advocate/Client Bill of Costs is premised on the existence of an Advocate - Client relationship. The Court of Appeal in the case of Wilfred N. Konosi T/A Konosi & Co. Advocates v Flamco Ltd, [2017] eKLR, stated that:
“The nexus between the Advocate and his/her client is the Advocate/Client relationship which springs from instructions by the Client to the Advocate. Absent such relationship, the Taxing Officer would be bereft of jurisdiction to tax a bill”.
11. It therefore follows that the issue of whether or not there was a retainer must first be determined by a Taxing Officer before he embarks on taxing the bill. A determination of whether or not there exists an Advocate-Client relationship is what provides an entry point for a Taxing Officer to tax a Bill of Costs. Where no such relationship exists, the court cannot move an inch with the taxation of the Advocate-Client Bill of Costs.
12. Further, it is equally established by judicial precedent that instructions need not necessarily be in writing. That instructions can be inferred through the parties’ conduct. In Mereka & Company Advocates v Zakhem Construction (Kenya) [2014] eKLR where Ougo J states as follows; -
“From the email correspondence between the parties, the emails dated 2/8/2010 and 25/8/2010 from Albert Zakhem to Mr. Mereka, Mr. Zakhem acknowledges that he had gone through the proposal and further calls for financial proposal which he indicates was not provided in the said proposal. While in the later email he has indicated the extent of the intended project; from these it can implied that the client was agreeable to the process and the steps taken by the advocate in realizing the said project. It would then be superfluous for the client to claim that no instructions had been given or any retainer obtained.
“It is trite law that a retainer need not only be in writing but can be implied from the parties' conduct on this am guided by the case of OHAGA –vs- AKIBA BANK LIMITED [2008] 1 EA 300, where it was held that, “a retainer may be implied where: (i) the client acquiesces in and adopts the proceedings; or (ii) the client is estopped by his conduct from denying the right of the advocate to act or from denying the existence of the retainer; or (iii) the client has by his conduct performed part of the contract; or (iv) the client has consented to a consolidation order.”
13. However, the burden of proof must be on the Advocate to establish and demonstrate that there was a retainer. See the case of Ochieng Onyango, Kibet & Ohaga Advocates, v Akiba Bank Ltd [2007] eKLR, where the court in agreeing with the decision in the Mereka case (supra), endorsed the position that: “a retainer need not be written, it can be oral and can even be inferred from the conduct of parties. However, if there is no evidence of retainer, except a statement from the Advocate, which a client contradicts, the Court will treat the Advocate as having acted without authority from the client.”
14. In the present case, I note that the NDA, which was annexed as TMM-1 in the Advocate’s Replying Affidavit dated 6 March 2019. I note that the NDA provided in part as follows:
“WHEREAS:
(A) The Client and ALL businesses, firms, companies and entities associated with her and in which she has a proprietary or some other beneficial interest wish to engage the Advocate to provide them with various legal services;
(B) The Advocate can provide legal services sufficient to meet the requirements of the Client from time to time; and
(C) The parties have requested each other to make available, subject to provisions of this Agreement, confidential information concerning the other party or its agents and nominees in the course of dealing.
INTERPRETATION
In this Agreement, unless the context otherwise stipulates, any reference to:
a. “The Client" refers to CECILIA WANJIKU KABUGI of Kenya National Identity Card Number 1912740 and ALL those businesses, firms, companies and entities now and in the future associated with her and in which she has a proprietary or some other beneficial interest.
b. "The Advocate" refers to Thuranira Mwenda Mutunga, MCIArb.
c. “The Party or Parties” means the Client and the Advocate and where the context so admits includes their representatives, successors and assigns respectively.”
15. A scrutiny of the NDA, particularly the portions reproduced in the foregoing paragraphs, reveals that the NDA on its own does not in fact suffice as a retainer. It is, however, probative evidence of the parties’ intention to engage in a professional relationship. In this case, the Advocate produced in evidence drafts of the Financing and Development Partnership Deed and email exchanges (Annex “TMM-2” and “TMM-3”). It is therefore the Court’s view that the NDA, coupled with the email correspondence between the parties, as well as the drafts of agreements, reveals the existence of a retainer.
16. In the premises, guided by the authorities cited above as well as the case of Omulele & Tollo Advocates v Mount Holdings Ltd [2016] eKLR, where the Court of Appeal held that “a retainer need not be in writing; it may be oral or may be implied from the conduct of the parties,” the Court finds that the Advocate, was in this case, duly instructed to render legal services. However, the capacity in which the Respondent engaged the Advocate is to be answered herein below.
Whether the Respondent is Personally Liable for Fees
17. Having found that a retainer existed, the next question is whether the Respondent, in her personal capacity, is liable for the fees claimed, or whether liability lies with the corporate entities for whose benefit the services were rendered.
18. The Respondent submitted that the legal services, if any, were rendered, then the same were for Superb Builders Limited and Neema Trust Company Limited, both duly incorporated companies. According to the Respondent, the Advocate’s attempt to hold her personally liable offends the principle of separate corporate personality, as established in the seminal case of Salomon v Salomon & Co. Ltd [1897] AC 22, where the House of Lords affirmed that a company is a distinct legal person, separate from its shareholders and directors, and that its debts and liabilities are its own.
19. The Advocate on his part argued that the Respondent was the instructing party, and that she expressly engaged him to act not only for herself but also for her associated businesses. The Advocate relied on the wording of the NDA, which defined “Client” to include the Respondent and all businesses in which she had a proprietary interest. He further pointed to email correspondence in which the Respondent allegedly directed him to prepare drafts of the Financing and Development Partnership Deed.
20. Upon weighing the facts of this case as guided by the documentation on record, the Court accepts the Respondent’s assertion that her involvement was purely on the basis of her directorship/shareholding and beneficial partner in the corporate entities (Superb Builders Ltd and Neema Trust Company Ltd). In situations like this, personal liability to bear the fees is not assumed unless there is evidence of an express personal undertaking to pay fees, or circumstances warranting the piercing of the corporate veil.
21. In the present case, the Advocate has not produced any agreement, letter, or undertaking in which the Respondent personally assumed liability for his fees. The NDA, while broad in its definition of “Client,” is not sufficient to override the doctrine of corporate personality. As established in the preceding paragraphs of this Ruling, the NDA is a confidentiality instrument, not by itself evidence of a retainer. The drafts of the partnership deed and related correspondence, while evidence of the work done, do not establish that the Respondent was personally liable to pay for that work.
22. It is an established principle of law under Section 19 of the Companies Act, No. 17 of 2015, that upon incorporation, a company becomes a body corporate with perpetual succession and a common seal, capable of suing and being sued in its own name. The Court of Appeal in Victor Mabachi & Another v Nurturn Bates Ltd [2013] eKLR, confirmed this position and reiterated that:
“This being the case, Mediacom, as a body corporate, is a persona jurisdica, with a separate independent identity in law, distinct from its shareholders, director sand agents unless there are factors warranting a lifting of the veil. Thus in the case of Jones & Another vs. Lipman & Another (1962) 1 W.L.R 833, Russel, J held that if a company was thought to be a mere cloak or sham, a device or a mask which the defendant held to his face, in an attempt to avoid recognition by the eye of equity, the court could grant summary judgment even against the person behind that company.”
23. It therefore follows that the directors and shareholders are insulated from personal liability for company debts, save in exceptional circumstances, and that absent the lifting of the corporate veil, the liability of members is limited to the amount unpaid on their shares, unless otherwise provided. In Multichoice Kenya Ltd v Mainkam Ltd & Another [2013] eKLR, this Court emphasized that contractual obligations entered into by a company bind the company itself, not its directors or shareholders.
24. Accordingly, I find and hold that the Respondent is not personally liable for the Advocate’s fees. Any liability arising from the retainer lies with Superb Builders Limited and Neema Trust Company Limited, the corporate entities that stood to benefit from the services rendered.
Whether the Advocate’s Bill of Costs offended Section 48 of the Advocates Act and/or Rule 18 of the Advocates (Remuneration) Order
25. The Respondent contended that the Advocate’s Bill of Costs was fatally defective for want of compliance with section 48 of the Advocates Act (Cap 16, Laws of Kenya), which stipulates that no suit shall be instituted by an advocate for recovery of costs until one month after delivery of a bill of costs to the client.
26. According to the Respondent, the Advocate in this case sought to enforce his fees without serving the statutory one-month notice, and that the omission is fatal. Reliance was placed on John Mark Nyaga Kamunyori v Development Bank of Kenya [2007] eKLR, where the Court emphasized that the notice requirement is mandatory before instituting recovery proceedings.
27. The Advocate, on his part, submitted that the Respondent’s reliance on section 48 is misplaced. He argued that the present proceedings concern taxation of a bill of costs, not a suit for recovery. Citing Section 48(3) of the Act, the Advocate maintained that the objection is premature, as taxation is a distinct process from recovery, and the statutory notice requirement is triggered only when an advocate seeks to institute a suit for recovery of costs.
28. Section 48(3) expressly provides that;
“Notwithstanding any other provisions of this Act, a bill of costs between an advocate and a client may be taxed notwithstanding that no suit for recovery of costs has been filed.”
29. Based on the provisions of Section 48(3) of the Advocates Act, this Court agrees with the Advocate’s position. The wording of section 48 is clear: the one-month notice requirement under 48(1) applies to suits for recovery, not to taxation proceedings. The Respondent’s objection under section 48, therefore, fails.
30. The Respondent further argued that the Bill of Costs violated Rule 18 of the Advocates (Remuneration) Order, which prescribes scales of remuneration for certain categories of transactions, including sales, purchases, leases, company formations, trademarks, estates, and patents. It was submitted that the Advocate’s bill did not fall under Schedule 5, Part II, as elected, but should have been taxed under Rule 18, and that the Taxing Officer erred in failing to apply the correct schedule.
31. The Advocate countered the argument, submitting that Rule 18 governs specific categories of transactions, whereas the services rendered in this case were advisory and drafting in relation to a financing and development partnership deed—a transaction not squarely falling within the categories enumerated in Rule 18. He emphasized that paragraph 22 of the Remuneration Order permits an advocate to elect to proceed under Schedule 5, Part II, and that he duly communicated his election to the Respondent by notice dated 25th January 2025. He cited the case of Muri Mwaniki & Wamiti Advocates v Kenya Orient Insurance Ltd [2021] eKLR, where the Court affirmed that the right of election vests in the advocate, not the taxing officer or the client.
32. The Court finds merit in the Advocate’s submission. Rule 18 is confined to specific transactional categories. The work in question—drafting and negotiating a financing and development partnership deed—does not fall neatly within those categories. Paragraph 22 of the Remuneration Order expressly allows an advocate to elect to proceed under Schedule 5, Part II, which provides for assessment based on complexity, importance, and responsibility.
33. Paragraph 22 of the Advocate’s Remuneration Order is clear on the liberty of the Advocate, upon communication in writing to the Client, to elect Schedule 5 as follows:
“(1) In all cases in which any other Schedule applies, an advocate may, before or contemporaneously with rendering a bill of costs drawn as between advocate and client, signify to the client his election that, instead of charging under such Schedule, his remuneration shall be according to Schedule 5, but if no election is made his remuneration shall be according to the scale applicable under the other Schedule.
(2) Subject to paragraph 3, an advocate who makes an election under subparagraph (1) of this paragraph may not by reason of his election charge less than the scale fee under the appropriate Schedule.”
34. In Muri Mwaniki & Wamiti Advocates v Kenya Orient Insurance Ltd [2021] eKLR, the Court (F. Muchemi J) made it clear that where a Notice of Election has been given by the Advocate under paragraph 22 of the Advocates Remuneration Order, the taxing master is bound by the law and has no power to oust an advocate’s election that has been exercised in accordance with the law. The Court held that:
“In this case, I note that the Notice of Election under paragraph 22 (1) of the Advocates Remuneration Order was filed in court and duly served upon the respondent in accordance with the law.
It is apparent from the taxing master’s ruling that the law as set out in paragraph 22 was disregarded in that the applicant’s election was not considered. The court proceeded to tax the Bill of Costs under Schedule VII. The taxing master is bound by the law and has no power to oust an advocate’s election that has been exercised in accordance with the law.”
35. In the present case, the Advocate’s election was properly made and communicated to the Client vide a Notice of Election dated 25th January 2025, Annexure TMM-6 in Applicant/Advocate’s Replying Affidavit dated 6th March 2025. The Taxing Officer was therefore correct to respect that election.
36. Consequently, I find that contrary to the Respondent’s submissions, the Advocate’s Bill of Costs did not violate Rule 18 of the Remuneration Order, as the Advocate properly elected to proceed under Schedule 5, Part II.
Whether the Taxing Officer Erred in Principle in Assessing the Bill of Costs
37. The Respondent challenged the taxation on the ground that the Taxing Officer misdirected herself in principle, both in the choice of schedule under the Advocates (Remuneration) Order and in the quantum of instruction fees allowed. It is argued that the officer failed to apply the principles laid down in Joreth Ltd v Kigano & Associates [2002] 1 EA 92, namely that the value of the subject matter must be determined from the pleadings, judgment, or settlement, and that where such value is indeterminate, discretion must be exercised cautiously. The Respondent submits that no pleadings, judgment, or settlement existed in this case, and that no substantive work was done, hence the award of over Kshs. 8 million was manifestly excessive.
38. The Advocate, on the other hand, maintained that he properly elected to proceed under Schedule 5, Part II of the Advocates (Remuneration) Order, which permits assessment based on the complexity, importance, and responsibility of the matter. He points out that paragraph 22 of the Remuneration Order vests the right of election in the advocate, not the taxing officer or the client, and that he duly communicated his election to the Respondent. Again, he relied on among others the case of Muri Mwaniki & Wamiti Advocates v Kenya Orient Insurance Ltd [2021] eKLR, where the Court affirmed that the taxing officer must respect the advocate’s election.
39. Counsel further submitted that the transaction in question was complex and of significant value, involving multiple corporate entities and substantial financing arrangements, and that the award was fair and reasonable.
40. As pointed out above, the taxing officer in this case did in fact proceed under Schedule 5, Part II, consistent with the Advocate’s election. That choice was legally sound. However, the exercise of discretion must be guided by established principles. In Kipkorir, Titoo & Kiara Advocates v Deposit Protection Fund Board [2005] eKLR, the Court of Appeal held that a judge will not interfere with taxation unless satisfied that the taxing officer erred in principle. An error in principle arises where relevant factors are ignored, irrelevant factors are considered, or the award is manifestly excessive or inordinately low.
41. In the present case, the taxing officer appears to have anchored the instruction fee primarily on the contemplated scale of the transaction rather than the actual work demonstrated. While drafts of the partnership deed were produced, there is no evidence that the transaction was consummated, nor that the Advocate was the sole or principal architect of the deal. The Respondent’s assertion that other firms were involved was not addressed. The officer did not sufficiently weigh the stage reached, the extent of duplication, or the absence of pleadings or settlement from which subject matter value could be derived. This constitutes an error in principle.
42. The jurisprudence in Ratemo Oira & Co Advocates v Magereza Sacco Society Ltd [2019] eKLR is instructive. There, the Court of Appeal held that where a transaction aborted at an early stage, instruction fees must reflect the minimal work done, not the potential value of the transaction. The Court stated that:
“It is clear beyond doubt that the only work done by the appellant was preparation of sale and transfer documents, which was not executed by the respondent. It is also clear that the respondent instructed the appellant to undertake sale/purchase transaction, which aborted. No deposit was paid to the appellant, making it manifest that transaction aborted in its preliminary stage. That means that the appellant’s scope and nature of work was minimal and in the early stages of the transaction while we underscore the importance of the services rendered by the appellant, we do not think, it suffered substantial or any loss in the amount determined by the taxing master and upheld by the High Court. There was no error or mistake committed by both courts and we entirely agree both courts exercised their discretion properly and appropriately”
43. Similarly, in Kenya Airports Authority v Otieno, Ragot & Company Advocates [2023] KESC 104 (KLR), the Supreme Court emphasized that discretion must be exercised judiciously where subject matter value is indeterminate. The taxing officer’s reliance on the contemplated scale, without adequate consideration of the actual work, was therefore a misdirection.
44. Accordingly, while the choice of schedule was correct, the quantum allowed was excessive relative to the demonstrated contribution. The taxation cannot, therefore, be allowed to stand as is. The proper course is to set aside the award and remit the matter for fresh taxation, with directions that the officer considers the actual work done, the stage reached, and the involvement of other counsel, so that instruction fees reflect the Advocate’s discrete contribution rather than the potential magnitude of the transaction.
Disposition
45. Accordingly, the Court is persuaded that the taxation must be set aside. The appropriate course is to remit the matter for fresh taxation, with liberty to the Advocate to amend or re-file the bill against the proper corporate clients.
46. In undertaking a fresh taxation, the taxing officer must consider:
i. The actual work done, including drafts prepared and correspondence exchanged.
ii. The stage reached in the transaction, noting that it was aborted before completion.
iii. The involvement of other counsel, to avoid duplication and double-counting.
iv. The complexity and responsibility of the matter, calibrated to the Advocate’s discrete contribution rather than the potential magnitude of the project.
47. On costs, the Court notes that both parties have succeeded only in part. In the circumstances, I direct that each party bear their own costs of the reference, with costs of taxation to be determined in the fresh proceedings.
48. This matter having been consolidated with HCCMISC 536/2024, HCCMISC 538/2024, HCCMISC 539/2024, HCCMISC 540/2024, HCCMISC 542/2024, this Ruling shall apply accordingly.
49. It is so ordered.
SIGNED, DATED, and DELIVERED IN VIRTUAL COURT THIS
18TH DECEMBER 2025
ADO MOSES
JUDGE
In the presence of: -
C/A – Allan
.…………..for the Advocate/Applicant
….………. for the Respondent
1. This Ruling determines the Chamber Summons Application/Reference dated 4th November 2024 by the Respondent/Client seeking to set aside the taxation Ruling dated 22nd October 2024, which had taxed the Advocate-Client Bill of Costs taxed at Kshs. 8,134,100.00.
2. The facts giving rise to the instant application are that Applicant/Advocate filed an Advocate–Client Bill of Costs dated 3rd July 2024 against the Respondent/Client, seeking remuneration (Kshs. 58,014,100.00) for legal services allegedly rendered in connection with a Financing and Development Partnership Deed between Neema Trust Company Limited and Superb Builders Limited.
3. The Respondent opposed the Bill of Costs vide the Grounds of Opposition dated 27 September 2024, contending that no retainer existed, and that the Non Disclosure Agreement (NDA) relied upon by the Advocate was merely a confidentiality instrument, and that any liability for fees lay with the corporate entities rather than her personally.
4. The Bill of Costs was placed before the Taxing Officer, Hon. Chembeni L. Adisa, who on 22nd October 2024 taxed it at Kshs. 8,134,100.00 vide the Ruling dated 22 October 2024. Dissatisfied, the Respondent lodged the instant Reference seeking to set aside the taxation.
5. The Reference was argued by way of written submissions. The Client, through CM Advocates, filed her submissions dated 8th April 2025, whilst the Advocate filed his submissions dated 15th May 2025.
Analysis and Determination
6. I have duly considered the Reference, the response thereto, and the applicable law. I find the following issues as requiring this Court’s determination: -
i. Whether there Existed an Advocate–Client Relationship
ii. Whether the Respondent is Personally Liable for Fees
iii. Whether the Advocate’s Bill of Costs offended Section 48 of the Advocates Act and/or Rule 18 of the Advocates (Remuneration) Order
iv. Whether the Taxing Officer Erred in Principle in Assessing the Bill of Costs
7. The Respondent, through learned counsel, urged the Court to allow the Reference and set aside the taxation, based her arguments on three principal objections: lack of retainer, statutory non-compliance, and error in principle in the assessment of instruction fees.
Whether there Existed Advocate–Client Relationship
8. The Respondent disputed the existence of a retainer. According to the Client, the Non-Disclosure Agreement (NDA) executed on 2nd April 2019 was merely a confidentiality instrument and did not amount to instructions to act. It was argued that the NDA did not contain any operative clause appointing the Advocate to act, nor did it fix remuneration as contemplated under section 45 of the Advocates Act (Cap 16, Laws of Kenya). Counsel emphasized that the burden of proving a retainer lies squarely on the Advocate and cited the case of Makumi Mwangi & Co. Advocates v Chege [2023] KEHC 27252 (KLR), in support of the argument.
9. The Advocate, on the other hand, submitted that the NDA expressly contemplated the provision of legal services by the Advocate to the Respondent. The Advocate relied cited the provisions of the NDA, —stating that “the Advocate can provide legal services sufficient to meet the requirements of the Client from time to time”—was futuristic and aspirational, not operative. Counsel submitted that no instructions were ever issued pursuant to the NDA.
10. It is settled that the jurisdiction of the Taxing Master to entertain & consider an Advocate/Client Bill of Costs is premised on the existence of an Advocate - Client relationship. The Court of Appeal in the case of Wilfred N. Konosi T/A Konosi & Co. Advocates v Flamco Ltd, [2017] eKLR, stated that:
“The nexus between the Advocate and his/her client is the Advocate/Client relationship which springs from instructions by the Client to the Advocate. Absent such relationship, the Taxing Officer would be bereft of jurisdiction to tax a bill”.
11. It therefore follows that the issue of whether or not there was a retainer must first be determined by a Taxing Officer before he embarks on taxing the bill. A determination of whether or not there exists an Advocate-Client relationship is what provides an entry point for a Taxing Officer to tax a Bill of Costs. Where no such relationship exists, the court cannot move an inch with the taxation of the Advocate-Client Bill of Costs.
12. Further, it is equally established by judicial precedent that instructions need not necessarily be in writing. That instructions can be inferred through the parties’ conduct. In Mereka & Company Advocates v Zakhem Construction (Kenya) [2014] eKLR where Ougo J states as follows; -
“From the email correspondence between the parties, the emails dated 2/8/2010 and 25/8/2010 from Albert Zakhem to Mr. Mereka, Mr. Zakhem acknowledges that he had gone through the proposal and further calls for financial proposal which he indicates was not provided in the said proposal. While in the later email he has indicated the extent of the intended project; from these it can implied that the client was agreeable to the process and the steps taken by the advocate in realizing the said project. It would then be superfluous for the client to claim that no instructions had been given or any retainer obtained.
“It is trite law that a retainer need not only be in writing but can be implied from the parties' conduct on this am guided by the case of OHAGA –vs- AKIBA BANK LIMITED [2008] 1 EA 300, where it was held that, “a retainer may be implied where: (i) the client acquiesces in and adopts the proceedings; or (ii) the client is estopped by his conduct from denying the right of the advocate to act or from denying the existence of the retainer; or (iii) the client has by his conduct performed part of the contract; or (iv) the client has consented to a consolidation order.”
13. However, the burden of proof must be on the Advocate to establish and demonstrate that there was a retainer. See the case of Ochieng Onyango, Kibet & Ohaga Advocates, v Akiba Bank Ltd [2007] eKLR, where the court in agreeing with the decision in the Mereka case (supra), endorsed the position that: “a retainer need not be written, it can be oral and can even be inferred from the conduct of parties. However, if there is no evidence of retainer, except a statement from the Advocate, which a client contradicts, the Court will treat the Advocate as having acted without authority from the client.”
14. In the present case, I note that the NDA, which was annexed as TMM-1 in the Advocate’s Replying Affidavit dated 6 March 2019. I note that the NDA provided in part as follows:
“WHEREAS:
(A) The Client and ALL businesses, firms, companies and entities associated with her and in which she has a proprietary or some other beneficial interest wish to engage the Advocate to provide them with various legal services;
(B) The Advocate can provide legal services sufficient to meet the requirements of the Client from time to time; and
(C) The parties have requested each other to make available, subject to provisions of this Agreement, confidential information concerning the other party or its agents and nominees in the course of dealing.
INTERPRETATION
In this Agreement, unless the context otherwise stipulates, any reference to:
a. “The Client" refers to CECILIA WANJIKU KABUGI of Kenya National Identity Card Number 1912740 and ALL those businesses, firms, companies and entities now and in the future associated with her and in which she has a proprietary or some other beneficial interest.
b. "The Advocate" refers to Thuranira Mwenda Mutunga, MCIArb.
c. “The Party or Parties” means the Client and the Advocate and where the context so admits includes their representatives, successors and assigns respectively.”
15. A scrutiny of the NDA, particularly the portions reproduced in the foregoing paragraphs, reveals that the NDA on its own does not in fact suffice as a retainer. It is, however, probative evidence of the parties’ intention to engage in a professional relationship. In this case, the Advocate produced in evidence drafts of the Financing and Development Partnership Deed and email exchanges (Annex “TMM-2” and “TMM-3”). It is therefore the Court’s view that the NDA, coupled with the email correspondence between the parties, as well as the drafts of agreements, reveals the existence of a retainer.
16. In the premises, guided by the authorities cited above as well as the case of Omulele & Tollo Advocates v Mount Holdings Ltd [2016] eKLR, where the Court of Appeal held that “a retainer need not be in writing; it may be oral or may be implied from the conduct of the parties,” the Court finds that the Advocate, was in this case, duly instructed to render legal services. However, the capacity in which the Respondent engaged the Advocate is to be answered herein below.
Whether the Respondent is Personally Liable for Fees
17. Having found that a retainer existed, the next question is whether the Respondent, in her personal capacity, is liable for the fees claimed, or whether liability lies with the corporate entities for whose benefit the services were rendered.
18. The Respondent submitted that the legal services, if any, were rendered, then the same were for Superb Builders Limited and Neema Trust Company Limited, both duly incorporated companies. According to the Respondent, the Advocate’s attempt to hold her personally liable offends the principle of separate corporate personality, as established in the seminal case of Salomon v Salomon & Co. Ltd [1897] AC 22, where the House of Lords affirmed that a company is a distinct legal person, separate from its shareholders and directors, and that its debts and liabilities are its own.
19. The Advocate on his part argued that the Respondent was the instructing party, and that she expressly engaged him to act not only for herself but also for her associated businesses. The Advocate relied on the wording of the NDA, which defined “Client” to include the Respondent and all businesses in which she had a proprietary interest. He further pointed to email correspondence in which the Respondent allegedly directed him to prepare drafts of the Financing and Development Partnership Deed.
20. Upon weighing the facts of this case as guided by the documentation on record, the Court accepts the Respondent’s assertion that her involvement was purely on the basis of her directorship/shareholding and beneficial partner in the corporate entities (Superb Builders Ltd and Neema Trust Company Ltd). In situations like this, personal liability to bear the fees is not assumed unless there is evidence of an express personal undertaking to pay fees, or circumstances warranting the piercing of the corporate veil.
21. In the present case, the Advocate has not produced any agreement, letter, or undertaking in which the Respondent personally assumed liability for his fees. The NDA, while broad in its definition of “Client,” is not sufficient to override the doctrine of corporate personality. As established in the preceding paragraphs of this Ruling, the NDA is a confidentiality instrument, not by itself evidence of a retainer. The drafts of the partnership deed and related correspondence, while evidence of the work done, do not establish that the Respondent was personally liable to pay for that work.
22. It is an established principle of law under Section 19 of the Companies Act, No. 17 of 2015, that upon incorporation, a company becomes a body corporate with perpetual succession and a common seal, capable of suing and being sued in its own name. The Court of Appeal in Victor Mabachi & Another v Nurturn Bates Ltd [2013] eKLR, confirmed this position and reiterated that:
“This being the case, Mediacom, as a body corporate, is a persona jurisdica, with a separate independent identity in law, distinct from its shareholders, director sand agents unless there are factors warranting a lifting of the veil. Thus in the case of Jones & Another vs. Lipman & Another (1962) 1 W.L.R 833, Russel, J held that if a company was thought to be a mere cloak or sham, a device or a mask which the defendant held to his face, in an attempt to avoid recognition by the eye of equity, the court could grant summary judgment even against the person behind that company.”
23. It therefore follows that the directors and shareholders are insulated from personal liability for company debts, save in exceptional circumstances, and that absent the lifting of the corporate veil, the liability of members is limited to the amount unpaid on their shares, unless otherwise provided. In Multichoice Kenya Ltd v Mainkam Ltd & Another [2013] eKLR, this Court emphasized that contractual obligations entered into by a company bind the company itself, not its directors or shareholders.
24. Accordingly, I find and hold that the Respondent is not personally liable for the Advocate’s fees. Any liability arising from the retainer lies with Superb Builders Limited and Neema Trust Company Limited, the corporate entities that stood to benefit from the services rendered.
Whether the Advocate’s Bill of Costs offended Section 48 of the Advocates Act and/or Rule 18 of the Advocates (Remuneration) Order
25. The Respondent contended that the Advocate’s Bill of Costs was fatally defective for want of compliance with section 48 of the Advocates Act (Cap 16, Laws of Kenya), which stipulates that no suit shall be instituted by an advocate for recovery of costs until one month after delivery of a bill of costs to the client.
26. According to the Respondent, the Advocate in this case sought to enforce his fees without serving the statutory one-month notice, and that the omission is fatal. Reliance was placed on John Mark Nyaga Kamunyori v Development Bank of Kenya [2007] eKLR, where the Court emphasized that the notice requirement is mandatory before instituting recovery proceedings.
27. The Advocate, on his part, submitted that the Respondent’s reliance on section 48 is misplaced. He argued that the present proceedings concern taxation of a bill of costs, not a suit for recovery. Citing Section 48(3) of the Act, the Advocate maintained that the objection is premature, as taxation is a distinct process from recovery, and the statutory notice requirement is triggered only when an advocate seeks to institute a suit for recovery of costs.
28. Section 48(3) expressly provides that;
“Notwithstanding any other provisions of this Act, a bill of costs between an advocate and a client may be taxed notwithstanding that no suit for recovery of costs has been filed.”
29. Based on the provisions of Section 48(3) of the Advocates Act, this Court agrees with the Advocate’s position. The wording of section 48 is clear: the one-month notice requirement under 48(1) applies to suits for recovery, not to taxation proceedings. The Respondent’s objection under section 48, therefore, fails.
30. The Respondent further argued that the Bill of Costs violated Rule 18 of the Advocates (Remuneration) Order, which prescribes scales of remuneration for certain categories of transactions, including sales, purchases, leases, company formations, trademarks, estates, and patents. It was submitted that the Advocate’s bill did not fall under Schedule 5, Part II, as elected, but should have been taxed under Rule 18, and that the Taxing Officer erred in failing to apply the correct schedule.
31. The Advocate countered the argument, submitting that Rule 18 governs specific categories of transactions, whereas the services rendered in this case were advisory and drafting in relation to a financing and development partnership deed—a transaction not squarely falling within the categories enumerated in Rule 18. He emphasized that paragraph 22 of the Remuneration Order permits an advocate to elect to proceed under Schedule 5, Part II, and that he duly communicated his election to the Respondent by notice dated 25th January 2025. He cited the case of Muri Mwaniki & Wamiti Advocates v Kenya Orient Insurance Ltd [2021] eKLR, where the Court affirmed that the right of election vests in the advocate, not the taxing officer or the client.
32. The Court finds merit in the Advocate’s submission. Rule 18 is confined to specific transactional categories. The work in question—drafting and negotiating a financing and development partnership deed—does not fall neatly within those categories. Paragraph 22 of the Remuneration Order expressly allows an advocate to elect to proceed under Schedule 5, Part II, which provides for assessment based on complexity, importance, and responsibility.
33. Paragraph 22 of the Advocate’s Remuneration Order is clear on the liberty of the Advocate, upon communication in writing to the Client, to elect Schedule 5 as follows:
“(1) In all cases in which any other Schedule applies, an advocate may, before or contemporaneously with rendering a bill of costs drawn as between advocate and client, signify to the client his election that, instead of charging under such Schedule, his remuneration shall be according to Schedule 5, but if no election is made his remuneration shall be according to the scale applicable under the other Schedule.
(2) Subject to paragraph 3, an advocate who makes an election under subparagraph (1) of this paragraph may not by reason of his election charge less than the scale fee under the appropriate Schedule.”
34. In Muri Mwaniki & Wamiti Advocates v Kenya Orient Insurance Ltd [2021] eKLR, the Court (F. Muchemi J) made it clear that where a Notice of Election has been given by the Advocate under paragraph 22 of the Advocates Remuneration Order, the taxing master is bound by the law and has no power to oust an advocate’s election that has been exercised in accordance with the law. The Court held that:
“In this case, I note that the Notice of Election under paragraph 22 (1) of the Advocates Remuneration Order was filed in court and duly served upon the respondent in accordance with the law.
It is apparent from the taxing master’s ruling that the law as set out in paragraph 22 was disregarded in that the applicant’s election was not considered. The court proceeded to tax the Bill of Costs under Schedule VII. The taxing master is bound by the law and has no power to oust an advocate’s election that has been exercised in accordance with the law.”
35. In the present case, the Advocate’s election was properly made and communicated to the Client vide a Notice of Election dated 25th January 2025, Annexure TMM-6 in Applicant/Advocate’s Replying Affidavit dated 6th March 2025. The Taxing Officer was therefore correct to respect that election.
36. Consequently, I find that contrary to the Respondent’s submissions, the Advocate’s Bill of Costs did not violate Rule 18 of the Remuneration Order, as the Advocate properly elected to proceed under Schedule 5, Part II.
Whether the Taxing Officer Erred in Principle in Assessing the Bill of Costs
37. The Respondent challenged the taxation on the ground that the Taxing Officer misdirected herself in principle, both in the choice of schedule under the Advocates (Remuneration) Order and in the quantum of instruction fees allowed. It is argued that the officer failed to apply the principles laid down in Joreth Ltd v Kigano & Associates [2002] 1 EA 92, namely that the value of the subject matter must be determined from the pleadings, judgment, or settlement, and that where such value is indeterminate, discretion must be exercised cautiously. The Respondent submits that no pleadings, judgment, or settlement existed in this case, and that no substantive work was done, hence the award of over Kshs. 8 million was manifestly excessive.
38. The Advocate, on the other hand, maintained that he properly elected to proceed under Schedule 5, Part II of the Advocates (Remuneration) Order, which permits assessment based on the complexity, importance, and responsibility of the matter. He points out that paragraph 22 of the Remuneration Order vests the right of election in the advocate, not the taxing officer or the client, and that he duly communicated his election to the Respondent. Again, he relied on among others the case of Muri Mwaniki & Wamiti Advocates v Kenya Orient Insurance Ltd [2021] eKLR, where the Court affirmed that the taxing officer must respect the advocate’s election.
39. Counsel further submitted that the transaction in question was complex and of significant value, involving multiple corporate entities and substantial financing arrangements, and that the award was fair and reasonable.
40. As pointed out above, the taxing officer in this case did in fact proceed under Schedule 5, Part II, consistent with the Advocate’s election. That choice was legally sound. However, the exercise of discretion must be guided by established principles. In Kipkorir, Titoo & Kiara Advocates v Deposit Protection Fund Board [2005] eKLR, the Court of Appeal held that a judge will not interfere with taxation unless satisfied that the taxing officer erred in principle. An error in principle arises where relevant factors are ignored, irrelevant factors are considered, or the award is manifestly excessive or inordinately low.
41. In the present case, the taxing officer appears to have anchored the instruction fee primarily on the contemplated scale of the transaction rather than the actual work demonstrated. While drafts of the partnership deed were produced, there is no evidence that the transaction was consummated, nor that the Advocate was the sole or principal architect of the deal. The Respondent’s assertion that other firms were involved was not addressed. The officer did not sufficiently weigh the stage reached, the extent of duplication, or the absence of pleadings or settlement from which subject matter value could be derived. This constitutes an error in principle.
42. The jurisprudence in Ratemo Oira & Co Advocates v Magereza Sacco Society Ltd [2019] eKLR is instructive. There, the Court of Appeal held that where a transaction aborted at an early stage, instruction fees must reflect the minimal work done, not the potential value of the transaction. The Court stated that:
“It is clear beyond doubt that the only work done by the appellant was preparation of sale and transfer documents, which was not executed by the respondent. It is also clear that the respondent instructed the appellant to undertake sale/purchase transaction, which aborted. No deposit was paid to the appellant, making it manifest that transaction aborted in its preliminary stage. That means that the appellant’s scope and nature of work was minimal and in the early stages of the transaction while we underscore the importance of the services rendered by the appellant, we do not think, it suffered substantial or any loss in the amount determined by the taxing master and upheld by the High Court. There was no error or mistake committed by both courts and we entirely agree both courts exercised their discretion properly and appropriately”
43. Similarly, in Kenya Airports Authority v Otieno, Ragot & Company Advocates [2023] KESC 104 (KLR), the Supreme Court emphasized that discretion must be exercised judiciously where subject matter value is indeterminate. The taxing officer’s reliance on the contemplated scale, without adequate consideration of the actual work, was therefore a misdirection.
44. Accordingly, while the choice of schedule was correct, the quantum allowed was excessive relative to the demonstrated contribution. The taxation cannot, therefore, be allowed to stand as is. The proper course is to set aside the award and remit the matter for fresh taxation, with directions that the officer considers the actual work done, the stage reached, and the involvement of other counsel, so that instruction fees reflect the Advocate’s discrete contribution rather than the potential magnitude of the transaction.
Disposition
45. Accordingly, the Court is persuaded that the taxation must be set aside. The appropriate course is to remit the matter for fresh taxation, with liberty to the Advocate to amend or re-file the bill against the proper corporate clients.
46. In undertaking a fresh taxation, the taxing officer must consider:
i. The actual work done, including drafts prepared and correspondence exchanged.
ii. The stage reached in the transaction, noting that it was aborted before completion.
iii. The involvement of other counsel, to avoid duplication and double-counting.
iv. The complexity and responsibility of the matter, calibrated to the Advocate’s discrete contribution rather than the potential magnitude of the project.
47. On costs, the Court notes that both parties have succeeded only in part. In the circumstances, I direct that each party bear their own costs of the reference, with costs of taxation to be determined in the fresh proceedings.
48. This matter having been consolidated with HCCMISC 536/2024, HCCMISC 538/2024, HCCMISC 539/2024, HCCMISC 540/2024, HCCMISC 542/2024, this Ruling shall apply accordingly.
49. It is so ordered.
SIGNED, DATED, and DELIVERED IN VIRTUAL COURT THIS
18TH DECEMBER 2025
ADO MOSES
JUDGE
In the presence of: -
C/A – Allan
.…………..for the Advocate/Applicant
….………. for the Respondent