Background
1. This application arises from an advocate-client taxation dispute between Wangong’u Ndichu & Company Advocates (the "Applicant/Advocate") and Arima Aurum Investments Limited (the "Respondent/Client"). The dispute stems from the taxation of an Advocate-Client Bill of Costs filed by the Advocate, seeking remuneration for legal services rendered to the Respondent. The core issue in contention is whether the taxed sum of Kshs. 309,850.00 should be upheld or reviewed, or whether judgment should be entered for the Advocate on the Certificate of Costs issued by the taxing officer.
2. The Advocate contends that on 24th October 2023, it received instructions from the Respondent to draft a Joint Venture Agreement (JVA) involving a mining project in Homa Bay County. Pursuant to these instructions, the Advocate prepared the agreement, which was officially handed over to the Respondent on 26th October 2023. On the same day, the Advocate issued a fee note for the services rendered. However, despite repeated demands, the Respondent failed to settle the fee note, prompting the Applicant to file a Bill of Costs dated 4th December 2023, claiming a sum of Kshs. 1,943,699.00. The Bill was drawn under Schedule 5, Part II of the Advocates Remuneration Order, which governs legal fees where no prior written agreement exists between the advocate and the client.
3. The Respondent opposed the Bill of Costs on multiple grounds. It argued that the Bill was based on an imaginary valuation of the subject matter, asserting that the Advocate had exaggerated the complexity and value of the JVA. Additionally, the Respondent claimed that the Advocate had improperly advised it to enter into a Joint Venture Agreement instead of a lease agreement, which was later adopted as the final contract. The Respondent also contested the Advocate’s claim of having spent eleven (11) hours drafting the agreement, insisting that no evidence was presented to support this claim.
4. Upon consideration of both parties’ submissions, Hon. Noelle Kyanya (DR), the Taxing Officer, delivered a ruling on 27th August 2024. In her ruling, the Taxing Officer found that Item 1, which related to receiving instructions, was duplicative of Item 2 (drafting the JVA) and was therefore taxed off entirely. On the issue of time spent drafting the JVA, the Taxing Officer relied on Schedule 5, Part II of the Advocates Remuneration Order, which allows for fees to be charged based on time spent. She taxed the Bill at Kshs. 309,850.00, adjusting some of the drawing and attendance fees in line with the applicable remuneration schedule.
5. Dissatisfied with this outcome, the Respondent filed a Reference Application on 28th August 2024, seeking to stay and set aside the ruling. In the Reference, the Client argued that the Taxing Officer had acted contrary to well-established legal principles by taxing the Bill on the assumption that the Advocate had spent eleven (11) hours drafting the agreement, without any evidentiary basis. The Respondent urged the Court to reassess the fees and adjust the amount taxed to a lower figure.
6. The Client’s application was opposed by the Advocate’s affidavit sworn on 5th November 2024.
7. On its part, the Advocate also filed a Notice of Motion on 3rd October 2024, seeking judgment on the Certificate of Costs issued on 24th September 2024. The Advocate argued that the Taxing Officer’s ruling was final, as the Certificate of Costs had not been set aside or altered by the Court. Further, the Advocate contended that the Respondent had never disputed the existence of a retainer, making the taxed costs enforceable under Section 51(2) of the Advocates Act. The Advocate submitted that the Reference was merely a delaying tactic and urged the Court to enter judgment in its favor for the taxed sum of Kshs. 309,850.00, along with costs of the suit.
8. The matter is now before this Court for determination on whether the Reference Application filed by the Respondent should be allowed or whether judgment should be entered in favor of the Applicant based on the Certificate of Costs. The Application was canvassed through written submissions, with the Advocate’s submissions dated 21st November 2024, while the Client’s submissions are dated 22nd November 2024.
Advocate/Applicant’s Submissions
9. The Advocates filed two sets of submissions, both dated 21st November 2024. In support of its Notice of Motion dated 3rd October 2024, seeking judgment on the Certificate of Costs issued on 24th September 2024. The Advocate submitted that the taxation process was conducted in accordance with the Advocates Remuneration Order and that the Client/Respondent has failed to provide sufficient grounds to warrant a review of the Taxing Officer’s decision.
10. The Applicant submits that the retainer between itself and the Respondent was never disputed, as evidenced by the Respondent’s instructions to draft the Joint Venture Agreement (JVA). It relies on Section 51(2) of the Advocates Act, which provides that where a retainer is not disputed, the court may enter judgment on a Certificate of Costs. The Applicant argues that the Respondent has not provided any evidence to challenge the existence of a valid retainer and, therefore, has no valid grounds to contest the taxed costs.
11. Regarding the Reference, the Advocate submitted that the Application filed by the Respondent is merely a delaying tactic intended to frustrate the Advocate from recovering its rightful fees. The Advocate emphasizes that the Certificate of Costs issued on 24th September 2024 has not been set aside or altered by the court, making it final as to the amount of costs due.
12. The Applicant further argues that the Taxing Officer exercised her discretion judiciously and in accordance with established legal principles. The decision to tax the Bill at Kshs. 309,850.00 was based on a fair assessment of the work done, and the Respondent has failed to demonstrate any error of principle to justify interference by the court. The Applicant relies on the case of First American Bank of Kenya v Shah & Others [2002] 1 EA 64, where the court held that interference with a taxing officer’s decision is only warranted where the decision is based on an error of principle or the awarded costs are so excessive as to constitute an injustice.
13. In response to the Respondent’s claim that the Advocate did not spend 11 hours drafting the JVA, the Applicant asserts that the assessment of time spent was properly considered under Schedule 5, Part II of the Advocates Remuneration Order, which allows for fees to be charged based on time engaged. The Advocate maintains that the complexity and nature of the agreement justified the time claimed and that the Client has not provided any evidence to dispute this assessment beyond mere allegations.
14. The Applicant/Advocate concludes by urging the court to dismiss the Reference Application with costs and to enter judgment in its favor for the taxed amount of Kshs. 309,850.00, as stated in the Certificate of Costs. The Applicant submits that granting the Respondent’s request for a review of the taxation would be contrary to the principles of fairness and justice, as it has not demonstrated any legal basis for setting aside the Taxing Officer’s ruling.
Client/Respondent’s Submissions
15. The Respondent, in support of its Reference Application dated 28th August 2024, submitted that the taxation of the Advocate’s Bill of Costs was based on erroneous principles and that the amount awarded was excessive and unjustified.
16. The Respondent argues that the Taxing Officer wrongly assessed the time spent by the Advocate in drafting the Joint Venture Agreement (JVA) at 11 hours, despite there being no evidence to support this claim. The Respondent submits that no time records, breakdowns, or detailed justifications were provided by the Advocate to substantiate the claim that the drafting of the JVA took 11 hours. It relies on the case of Kenya Ports Authority v Base Titanium Limited (Miscellaneous Civil Application 82 of 2020) [2021] KEHC 8741 (KLR) (26 February 2021) (Ruling) where the Court stated that the number of hours cannot be picked from the air, but that a taxing officer should be guided by objective evidence of time spent when assessing fees under Schedule 5, Part II of the Advocates Remuneration Order.
17. Further, the Respondent submits that the subject matter of the JVA was exaggerated to justify a higher fee. It argues that the Advocate misrepresented the complexity of the agreement in order to inflate the amount charged. The Respondent states that the JVA was ultimately abandoned in favor of a simple lease agreement, which was drafted separately and at no additional cost. The Respondent contends that the Advocate had initially misadvised it to pursue a JVA instead of a lease agreement, which resulted in unnecessary legal work.
18. Additionally, the Respondent submits that the Taxing Officer failed to consider the proportionality of the costs awarded in relation to the work done. It contends that the amount of Kshs. 309,850.00 is excessive for the drafting of a 10-page agreement, which required minimal legal research or complexity. The Respondent argues that the taxation should have been subjected to a more reasonable and objective assessment based on the nature and scope of work done.
19. In conclusion, the Respondent urges the Court to set aside the Taxing Officer’s ruling, reassess the costs due, and adjust the amount downward to reflect a reasonable fee for the services rendered. It argues that the Reference Application is not a delaying tactic, but rather a genuine effort to correct an unfair taxation decision. The Respondent further submits that the Applicant’s Notice of Motion seeking judgment on the Certificate of Costs should be dismissed, as the Certificate is not final where a valid Reference has been filed.
Analysis And Determination
20. Having carefully considered the pleadings, the submissions of the parties, the evidence on record, and the applicable law, the primary issues for determination are:
i. Whether the Reference Application filed by the Respondent meets the legal threshold for setting aside the Taxing Officer’s ruling dated 27th August 2024.
ii. Whether the Applicant is entitled to judgment on the Certificate of Costs issued on 24th September 2024.
Whether the Reference Application meets the legal threshold for setting aside the Taxing Officer’s ruling
21. The Respondent has challenged the Taxing Officer’s ruling on the grounds that the award was excessive and was based on an erroneous assumption that the Advocate spent 11 hours drafting the Joint Venture Agreement (JVA) without providing sufficient proof. The Respondent further contends that the Taxing Officer erred in assessing the legal fees under Schedule 5, Part II of the Advocates Remuneration Order, instead of charging per folio under Rule 2.
22. The principles governing the setting aside of a Taxing Officer’s decision are well established. In First American Bank of Kenya v Shah & Others [2002] 1 EA 64, Ringera J (as he then was) 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.”
23. Similarly, in Premchand Raichand Ltd & Another v Quarry Services of East Africa Ltd & Another (No. 3) [1972] E.A. 162, the Court laid down the following principles for taxation of costs:
“(i) Costs should not be allowed to rise to such a level as to confine access to the courts to the wealthy;
(ii) A successful litigant ought to be fairly reimbursed for the costs he has had to incur;
(iii) The general level of remuneration of Advocates must be such as to attract recruits to the profession; and
(iv) So far as practicable there should be consistency in the awards made.”
24. This Court fully aligns itself with these principles, as they strike the necessary balance between ensuring that Advocates receive just compensation for professional services rendered while safeguarding against excessive legal fees that may impede access to justice. I must emphasize that taxation of costs is not a mechanical computation but a judicial exercise of discretion that considers fairness, proportionality, and legal precedent.
25. A litigant dissatisfied with the decision of a Taxing Officer bears the burden of proving that an error of principle was committed. It is not sufficient to merely allege that the costs are excessive. The Respondent has not demonstrated how the Taxing Officer’s ruling was based on an erroneous legal principle. The Court must be slow to interfere with the discretion of a Taxing Officer unless there is a clear case of misdirection or injustice arising from arbitrary or whimsical taxation. As was held in Mwakio, Kirwa & Company Advocates v County Public Service Board Bome & Joshua Terer [2022] KEELRC 834 (KLR) that in a reference Application under Rule 11 of the Advocates Remuneration Order, an Applicant must demonstrate that the Taxing Officer made an error in principle. Mere dissatisfaction with the taxed amount does not warrant the Court’s interference unless it is shown that the decision was based on an incorrect application of the law.
26. In this case, I find no evidence that the Taxing Officer exercised her discretion improperly, or committed an error in principle in the taxation process. She carefully considered the complexity of the JVA, the applicable schedule of the Advocates Remuneration Order, and the time engaged by the Advocate before arriving at the taxed amount. The Respondent’s assertion that the JVA was later abandoned does not negate the fact that legal services were rendered and that the work done must be remunerated. The same applies to the Client’s argument that the Advocate did not demonstrate that they spent 11 hours doing the work. This Court therefore finds no justification for setting aside the Taxing Officer’s ruling. Accordingly, the Reference Application is dismissed.
Whether the Applicant is entitled to judgment on the Certificate of Costs issued on 24th September 2024
27. The Applicant seeks judgment under Section 51(2) of the Advocates Act, which provides that:
“The certificate of the taxing officer by whom any bill has been taxed shall, unless it is set aside or altered by the court, be final as to the amount of the costs thereby, and the court may make such order in relation thereto as it thinks fit, including, in a case where the retainer is not disputed, an order that judgment be entered for the sum certified to be due with costs.”
28. The position of the law is crystal clear. Once a Certificate of Costs has been issued and the retainer is not disputed, the Court has no reason to decline to enter judgment in favor of the Advocate. Section 51(2) of the Advocates Act allows the client to dispute the retainer. However, where no dispute is raised regarding the retainer, the court has no basis for refusing to enter judgment on a duly taxed Certificate of Costs. Onuko & Associates vs Brollo Kenya Ltd (Milimani Misc. Application No. 1465 of 2002 Nyamu, J expressed himself as follows:
“The wording of the sub-section is clear as to when judgment can be entered by the court. Judgment under this section can only be entered where there is proof of a retainer and the retainer is not disputed. The sub-section does not in my opinion entitle an Applicant to a judgment in any other situation. This is clear from the reading of Section 45 which deals with retainer”.
29. This principle was further reaffirmed in Lubulellah & Associates Advocates v N. K. Brothers Limited [2014] eKLR, where the Court stated:
“The law is very clear that once a taxing master has taxed the costs, issued a Certificate of costs and there is no reference against his ruling or there has been a ruling and a determination made and not set aside and/or altered, no other action would be required from the court save to enter judgment. An applicant is not required to file suit for the recovery of costs. The certificate of costs is final as to the amounts of the costs and the court would be quiet in order to enter judgment in favour of the Applicant against the Respondent herein for the taxed sum indicated in the Certificate of Taxation.”
30. Further, Rule 7 of the Advocates Remuneration Order entitles an Advocate to interest at 14% per annum from the date of taxation until payment in full. The rationale behind this provision is to discourage clients from withholding Advocates’ fees and to ensure that legal professionals are compensated in a timely manner. The Court sees no reason to deny the Applicant this statutory right.
Disposition
31. For the foregoing reasons, this Court makes the following orders:
i. The Reference dated 28th August 2024 by the Respondent/Client is hereby dismissed in its entirety.
ii. The Advocate’s/Applicant’s Notice of Motion dated 3rd October 2024 is allowed.
iii. Judgment is hereby entered for the Applicant in the sum of Kshs. 309,850.00 as per the Certificate of Costs dated 24th September 2024.
iv. Interest shall accrue on the taxed amount at 14% per annum from 27th August 2024 (the date of taxation) until payment in full.
v. The Client shall bear the costs of both the Reference and the Advocate’s Application.
32. It is so ordered
SIGNED, DATED, and DELIVERED IN VIRTUAL COURT
THIS 20TH DAY OF MARCH 2025
ADO MOSES
JUDGE
In the presence of:
Moses – Court Assistant