B Mbai & Associates Advocates v Clerk, Kiambu County Assembly & Speaker, Kiambu County Assembly [2017] KEHC 9502 (KLR) | Taxation Of Costs | Esheria

B Mbai & Associates Advocates v Clerk, Kiambu County Assembly & Speaker, Kiambu County Assembly [2017] KEHC 9502 (KLR)

Full Case Text

REPUBLIC OF KENYA

IN THE HIGH  COURT OF KENYA AT NAIROBI

MILIMANI LAW COURTS

JUDICIAL REVIEW DIVISION

MISC. APPL.  35 OF 2015

B. MBAI & ASSOCIATES ADVOCATES…..................................APPLICANT

VERSUS

THE CLERK, KIAMBU COUNTY ASSEMBLY.................1ST RESPONDENT

THE SPEAKER, KIAMBU COUNTY ASSEMBLY.……..2ND RESPONDENT

RULING

1. By a Chamber Summons dated 19th December, 2016, the applicants herein, B. Mbai & Associates Advocates, (hereinafter referred to as “the Advocates”) seek the following orders:

1. That the decision of the taxing officer dated 21/7/2016 on the applicant’s Bill of Costs dated 26/6/2015 be set aside and the said Bill be taxed at such amounts as this honourable court may deem appropriate.

2. That the costs of this application be provided for.

2. According to the applicants, they were instructed by respondents herein to represent the Second respondent in a Judicial Review Application, being Nairobi HC MISC. 456 of 2014, in which the 2nd respondent’s decision not to admit a motion seeking to impeach the Kiambu County Governor (Hon. William Kabogo) was challenged by way of an order of Mandamus and Certiorari. The said judicial review was dismissed on 5th March, 2015 after which the applicant filed an Advocate-Client Bill of Costs dated 26th June, 2015 against the respondents herein for services rendered in the said Judicial Review application.

3. The said Bill, it was averred was drawn in the sum of Kshs 10,074,590/= but was taxed on 21st July, 2016 at Kshs 75,950/=. Dissatisfied with the decision on taxation, the applicant gave notice under paragraph 11(1) of the Advocates (Remuneration) Order on 4th August, 2016 and served the same on 16th August, 2016.

4. It was averred that the taxing officer, by a letter dated 1st November, 2016, received by the applicant on 5th December, 2016 stated that the reasons for taxation were contained in the Ruling of 21st July, 2016.

5. It was the applicants’ case that the learned taxing officer failed to appreciate the nature and importance of the Judicial review application and thus arrived at a wrong estimate of instruction fee (Kshs 50,000/=). She further failed to consider 50% increment as allowed in Advocate-Client Bill of Costs. It was contended that the learned taxing officer erred in failing to award genuine items in the Bill of Costs and in the circumstances arrived at an erroneous estimate of the applicant’s fees hence the same ought to be set aside and substituted with sum(s) as this Court may deem appropriate.

6. It was revealed that the respondents had offered to settle the said Bill of Costs at Kshs 600,000/=.

7. It was submitted on behalf of the applicants that the ruling on the bill was delivered on 21st July, 2016 and the applicant filed a Notice under paragraph 11(1) of the Advocates (Remuneration) Order on 4th August, 2016. Upon receipt of the said Notice the Taxing Officer was under obligation to respond thereto by giving his/her reasons for the decision after which the objector should file the reference within 14 days of the receipt of the reasons. In this case, it was submitted that the applicants received the Taxing Officer’s letter dated 1st November, 2016 on 5th December, 2016 and therefore had up to 19th December, 2016 to file the reference which was filed the same day hence on time. It was therefore submitted that grounds 1, 2 and 6 of the Respondent’s grounds on opposition must fail.

8. According to the applicants pursuant to the proviso (i) to Schedule 6 of the Remuneration Order the Taxing Officer ought to consider inter alia, the nature and importance of the cause and the fact that the matter was dismissed at its preliminary stages does not mean that the applicants did not prepare and do research on the matter or change the nature and the importance thereof. In this case, it was submitted that the subject matter was an impeachment motion against the Governor of Kiambu County hence not a matter to be dismissed as simple or unimportant since such motion, if successful, had far reaching implications to the people of Kiambu County and the taxpayers money if the Governor was impeached and fresh elections held. Therefore the Taxing Master should not have awarded Kshs 50,000/= as instructions fee.

9. With respect to items 2-28, the decision of the Taxing Officer was faulted for not increasing the same by 50% as provided in part B of the Schedule 6 of the Remuneration Order.

10. Regarding item 27, it was contended that the Taxing Officer failed to notice that the Bill was served in Kiambu which is not three kilometres from this Court hence Kshs 1,400/= was inapplicable.

11. The Court was therefore urged to allow the application and alter the decision of the Taxing Officer.

Respondents’ Case

12. In response to the application, the Respondents filed the following grounds of opposition:

1.   That the application as filed is out of time as the same was filed on 19/12/2016; almost 5 months after the Ruling by the taxing officer without leave of court contrary to the provisions of paragraph 11(2) of Advocates (Remuneration) Order.

2.  That the reasons for the taxing master’s decision were contained in the Ruling delivered on 21/7/2016.

3.  That the reasons for the taxing master’s decision have not been attached to the application and therefore the application is fatally defective.

4.  That the honourable taxing officer applied the appropriate principle and schedule in taxing the applicant’s bill of costs taking into consideration the minimum instruction fees under Schedule 7 of the Advocates (Remuneration) Order.

5.  That the matter was not complex or important as alluded by the applicant as it required application of ordinary skill and labour and nothing extra of a legal practitioner.

6.  That ruling and reasons having been read by the honourable taxing master on 21/7/2016, it was incumbent upon the applicants to file their application for review of the award within 14 days which they failed to do.

7. That sufficient reasons have been succinctly set out in the honourable taxing master’s ruling and that this court should not upset the taxation by the taxing master merely because it would have awarded a higher or lower amount unless that taxing master’s decision was based on an error of principle.

8. That items 2-28 in the applicant’ bill of costs were rightfully taxed off and thus taxing master did not err in principle in the said ruling.

9. That the award by the honourable taxing master on instruction fees was fair and reasonable as there was no response or defence filed in Milimani HCC Miscellaneous application No. 450 of 2014. The applicant merely filed a notice of appointment of advocates and nothing more.

10. That the offer on settlement for a sum of Kshs 600,000/= was purely on a without prejudice basis with the view to an amicable settlement prior to taxation of the bill of costs; of which the said offer was declined by the applicant and the same overtaken by events upon taxation.

11. That the application is without merit and that the applicants have failed to prove that the taxing master erred in principle in his ruling and reasons thereof.

13. In their submissions, the Respondents contended that the application was filed out of time contrary to paragraph 11 of the Remuneration Order that the application for reference be filed within 14 days of delivery of the ruling. According to the Respondents the ruling which was delivered on 21st July, 2016 contained the reasons and was delivered in the presence of counsel for the applicant hence there was no justification for not filing the application within time.

14. It was contended that the bill arose from proceedings in Nairobi HCMA No. 456 of 2014 – Republic vs. The Speaker of Kiambu County Assembly ex parte Hon. Joseph Murugami and that the matter was not complex and required nothing extra from a legal practitioner, more importantly as a response was no filed. Therefore the applicable paragraph in determining item 1 on instructions fees is Schedule 6 paragraph 1(j)(i). According to the Respondent therefore the Kshs 50,000/= allowed in respect thereof which was increased by half cannot be faulted.

15. The other items, it was submitted were taxed off for not complying with rule 75(2) of the Advocates Remuneration Order. Items 17-28, of the other hand were not dated contrary to Rule 69 of the Remuneration Order.

16. According to the Respondents the application was fatally defective as the law requires that the decision of the taxing officer be attached to the application which the applicant failed to do.

17. They therefore prayed that the application be dismissed with costs.

Determinations

18. I have considered the foregoing and this is the view I form of the matter.

19. The procedure for the challenge of the results of taxation is provided under Paragraph 11 of the Advocates (Remuneration) Order which provides that:

(1) Should any party object to the decision of the taxing officer, he may within fourteen days after the decision give notice in writing to the taxing officer of the items of taxation to which he objects.

(2) The taxing officer shall forthwith record and forward to the objector the reasons for his decision on those items and the objector may within fourteen days from the receipt of the reasons apply to a judge by chamber summons, which shall be served on all the parties concerned, setting out the grounds of his objection.

20. In this case there is a copy of the Notice issued pursuant to paragraph 11(1) received by the Court on 4th August, 2016 which was within 14 days from the date of the decision. By a letter dated 1st November, 2016, the Taxing Officer informed the applicant that the reasons were contained in the ruling and the applicant was informed that the same was available. That letter is however indicated to have been received by the applicants on 5th December, 2016.

21. With respect to the need to ask for reasons before instituting a reference, this Court expressed itself in Evans Thiga Gaturu Advocate vs.Kenya Commercial Bank Limited [2012] eKLR as follows:

“That brings us to the question of what happens, as the client alleges in this case, where no reasons are given. First, and foremost, the above provisions presuppose that in delivering their decisions on taxation, the taxing officers only pronounce the results of the taxation without the reasons behind them. In most cases, the court is aware that, taxing officers, in their decisions on taxation do deliver comprehensive rulings which are self-contained thus obviating the necessity to furnish fresh reasons, thereafter. In such circumstances it would be foolhardy to expect the taxing officer to redraft another “ruling” containing the reasons. In my view, this is another provision that requires to be looked into afresh. I do not see the reason why the taxing officer cannot be at the time of making his decision to do so together with the reasons therefor.”

22. In my view there is no magic in requiring the Taxing Officer to furnish reasons before making a reference. However, if the applicant decides to wait for a formal response from the Taxing Officer to the Notice before proceeding, he cannot be faulted for doing so. Accordingly I find that the reference was filed within time.

23. The Respondents contended the omission to exhibit the decision of the Taxing Officer  rendered the application fatally defective. The Respondent however cited no provision in support of this robust submission and I am aware of none. Accordingly, that objection fails.

24. The circumstances under which a Judge of the High Court interferes with the taxing officer’s exercise of discretion are now well known. These principles are, (1) that the 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 manifestly excessive as to justify an inference that it was based on an error of principle; (2) it would be an error of principle to take into account irrelevant factors or to omit to consider relevant factors and, according to the Order itself, some of the relevant factors to  be taken into account include the nature and the importance of the cause or matter, the amount or value of the subject matter involved, the interest of the parties, the general conduct of the proceedings and any direction by the trial judge; (3) if the Court considers that the decision of the Taxing Officer discloses errors of principle, the normal practise is to remit it back to the taxing officer for reassessment unless the Judge is satisfied that the error cannot materially have affected the assessment and the Court is not entitled to upset a taxation because in its opinion, the amount awarded was high; (4) it is within the discretion of the Taxing Officer to increase or reduce the instruction fees and the amount of the increase or reduction is discretionary; (5) the Taxing Officer must set out the basic fee before venturing to consider whether to increase or reduce it; (6) the full instruction fees to defend a suit are earned the moment a defence has been filed and the subsequent progress of the matter is irrelevant to that item of fees; (7) the mere fact that the defendant does research before filing a defence and then puts a defence informed of such research is not necessarily indicative of the complexity of the matter as it may well be indicative of the advocate’s unfamiliarity with basic principles of law and such unfamiliarity should not be turned into an advantage against the adversary. These principles were stated in the case of First American Bank of Kenya vs. Shah and Others [2002] 1 EA 64.

25. Further it has been held that the Court should interfere with the decision of the Taxing Officer where there has been an error in principle but should not do so in questions solely of quantum as that is an area where the Taxing Officer is more experienced and therefore more apt to the job; the court will intervene only in exceptional cases and multiplication factors should not be considered when assessing costs by the Taxing Officer or even the Judge on appeal; the costs should not be allowed to rise to such level as to confine access to court to the wealthy; a successful litigant ought to be fairly reimbursed for the costs he had to incur in the case; the general level of remuneration of Advocates must be such as to attract recruits to the profession; so far as practicable there should be consistency in the awards made; every case must be decided on its own merit and in every variable degree, the value of the suit property may be taken into account; the instructions fees ought to take into account the amount of work done by the advocate, and where relevant, the subject matter of the suit as well as the prevailing economic conditions; one must envisage a hypothetical counsel capable of conducting the particular case effectively but unable or unwilling to insist on the particular high fee sometimes demanded by counsel of pre-eminent reputation; then one must know that what fee this hypothetical character would be content to take on the brief; clearly it is important that advocates should be well motivated but it is also in the public interest that cost be kept to a reasonable level so that justice is not put beyond the reach of poor litigants.

26. Further guidance if necessary may be obtained in the case of Joreth Limited vs. Kigano & Associates [2002] 1 EA 92 at 99 where the Court of Appeal held that the value of the subject matter for the purposes of taxation of a bill of costs ought to be determined from the pleadings, judgement 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 the 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. It is however not really in the province of a Judge to re-tax the bill and if the Judge comes to the conclusion that the taxing officer has erred in principle he should refer the bill back for taxation by the same or another taxing officer with appropriate directions on how it should be done. The Judge ought not to interfere with the assessment of costs by the Taxing Officer unless the officer has misdirected himself on a matter of principle. In principle the instruction fee is an independent and static item, is charged once only and is not affected or determined by the stage the suit has reached. The Taxing Officer whilst taxing his bill of costs is carrying out his functions as such only. He is an officer of the Superior court appointed to tax bills of costs.

27. In Republic -vs- Minister for Agriculture & 2 Others Ex-Parte Samuel Muchiri W’njuguna & 6 Others (2006) eKLR Ojwang, J (as he then was) expressed himself inter aliaas follows:

“The taxation of costs is not a mathematical exercise; it is entirely a matter of opinion based on experience. A Court will not, therefore, interfere with the award of a taxing officer, particularly where he is an officer of great experience, merely because it thinks the award somewhat too high or too low; it will only interfere if it thinks the award so high or so low as to amount to an injustice to one party or the other…The 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 manifestly excessive as to justify an inference that it was based on an error of principle. Of course it would be an error of principle to take into account irrelevant factors or to omit to consider relevant factors. And according to the Advocates (Remuneration) Order itself, some of the relevant factors to take into account include the nature and importance of  the case or matter, the amount or value of the subject matter involved, the interest of the parties, the general conduct of the proceedings and any direction by the trial judge. Needless to state not all the above factors may exist in any given case and it is therefore open to the taxing officer to consider only such factors as may exist in the actual case before him. If the court considers that the decision of the taxing officer discloses errors of principle, the normal practice is to remit it back to the taxing officer for reassessment unless the Judge is satisfied that the error cannot materially have affected the assessment…A taxing officer does not arrive at a figure by multiplying the scale fee, but places what he considers a fair value upon the work and responsibility involved…Since costs are the ultimate expression of essential liabilities attendant on the litigation event, they cannot be served out without either a specific statement of the authorising clause in the law, or a particularised justification of the mode of exercise of any discretion provided for…The complex elements in the proceedings which guide the exercise of the taxing officer’s discretion, must be specified cogently and with conviction. The nature of the forensic responsibility placed upon counsel, when they prosecute the substantive proceedings, must be described with specificity. If novelty is involved in the main proceedings, the nature of it must be identified and set out in a conscientious mode. If the conduct of the proceedings necessitated the deployment of a considerable amount of industry and was inordinately time-consuming, the details of such a situation must be set out in a clear manner. If large volumes of documentation had to be classified, assessed and simplified, the details of such initiative by counsel must be specifically indicated – apart, of course, from the need to show if such works have not already been provided for under a different head of costs…”

28. While remitting the matter for fresh taxation the learned Judge in the above matter gave the following guidelines:

1. the proceedings in question were purely public-law proceedings and are to be considered entirely free of any private-business arrangements or earnings of the tea production sector;

2. the taxation of advocates’ instruction fees is to seek no more and no less than reasonable compensation for professional work done;

3. the taxation of advocates’ instruction fees should avoid any prospect of unjust enrichment, for any particular party or parties;

4. so far as apposite, comparability should be applied in the assessment of advocate’s instruction fees;

5. objectivity is to be sought, when applying loose-textures criteria in the taxation of costs;

6. where complexity of proceedings is a relevant factor, firstly, the specific elements of the same are to be judged on the basis of the express or implied recognition and mode of treatment by the trial judge;

7. where responsibility borne by advocates is taken into account, its nature is to be specified;

8. where novelty is taken into account, its nature is to be clarified;

9. where account is taken of time spent, research done, skill deployed by counsel, the pertinent details are to be set out in summarised form.

29. I however agree that the Taxing Officer ought to disclose what informed the decision to tax the costs in one way as opposed to another. I therefore agree with the decision in Republic -vs- Minister for Agriculture & 2 Others Ex-Parte Samuel Muchiri W’njuguna & 6 Others (2006) eKLR that:

“… It is necessary to ascertain how she arrived at that figure; for although the judicial review applicant’s firm position is that it was an exercise of lawful discretion which therefore, this court should uphold, the correct perception of the discretion donated by law, I believe, is that such a discretion is only duly exercised when it is guided by transparent, regular, reliable and just criteria…”

30. And that:

“…it was necessary to specify clearly and candidly how she exercised her discretion… it is not enough to set by attributing to oneself discretion originating from legal provision and thereafter merely cite wonted rubrics under which that discretion  may be exercised, as if these  by themselves could permit of assignment of mystical  figures of taxed  costs…complex  elements  in the proceedings which guide the exercise of the taxing officer’s discretion must be  specified cogently and with conviction…if novelty is involved  in the  main proceedings  the nature of it  must be identified and  set out in a conscientious mode….if the  conduct of the proceedings necessitated the deployment of a considerable  amount of industry and was inordinately  time consuming, the details of such a situation  must be  set out in a clear manner…”

31. I is clear from the decision of the Taxing Officer that the Taxing Officer was alive to the factors to be taken into account in taxing bills of costs and set the same out. In her view the factors which would have justified enhancement of the instructions fees we non-existent. In this case, the Taxing Officer found that the basic instructions fees payable was Kshs 45,000. 00. As was held in First American Bank of Kenya vs. Shah and Others [2002] 1 EA 64, the Taxing Officer must set out the basic fee before venturing to consider whether to increase or reduce it. The taxing officer however did set out the basic fee and was aware of the principles guiding taxation of costs. She proceeded to award the applicant Kshs 50,000. 00 in respect of instructions fees. In Opa Pharmacy Ltd vs. Howse & Mcgeorge Ltd Kampala HCMA No. 13 of 1970 (HCU) [1972] EA 233, it was held:

“Whereas the taxing officer is given discretion of taking into account other fees and allowances to an advocate  in respect of the work to which instructions fees apply, the nature and importance of the case, the amount involved, the interest of the parties, general conduct of the proceedings and all other relevant circumstances and taking any of these into consideration, may therefore increase the instruction fees, the taxing officer, in this case gave no reason whatsoever for doubling the instruction fee. Had the taxing officer given his reasons at least there would be known the reason for the inflation. As it is he has denied the appellant a reason for his choice of the figure, with the result that it is impossible to say what was in the taxing officer’s mind. The failure to give any reason for the choice, surely, must, therefore, amount to an arbitrary determination of the figure and is not a judicial exercise of one’s discretion.”

32. The principles guiding taxation were similarly reiterated by the Court of Appeal of Uganda in Makula International vs. Cardinal Nsubuga & Another [1982] HCB 11 where the Court pronounced itself as follows:

“The taxing officer should, in taxing a bill, first find the appropriate scale fee in schedule VI, and then consider whether the basic fee should be increased or reduced. He must give reasons for deciding that the basic fee should be increased or decreased. When he has decided that the scale should be exceeded, he does not arrive at a figure which he awards by multiplying the scale fee by a multiplication factor, but places what he considers a fair value upon the work or responsibility involved. Lastly, he taxes the instruction fee, either by awarding the basic fee or by increasing or decreasing it.”

33. In the case of Paul Ssemogerere & Olum vs. Attorney General- Civil Application No.5 of 2001 [unreported] the Court held:

“In our view, there is no formula by which to calculate the instruction fee. The exerciseis an intricate balancing act whereby the taxing officer has to mentally weigh the diverse general principles applicable, which sometimes, are against one another in order to arrive at the reasonable fee. Thus while the taxing officer has to keep in mind that the successful party must be reimbursed expenses reasonably incurred due to the litigation, and that advocates, remuneration should be at such level as to attract recruits into the legal profession, he has to balance that with his duty to the public not to allow costs to be so hiked that courts would remain accessible to only the wealthy. Also while the taxing officer is to maintain consistency in the level of costs, it is settled that he has to make allowance for the fall, if any, in the value of money. It is because of consideration for this intricate balancing exercise that taxing officer's opinion on what is the reasonable fee, is not to be interfered with lightly. There has to be a compelling reason to justify such interference.”

34. I wish to disabuse the notion that the Taxing Officer ought to have taken into account the offer which was made by the Respondents during negotiations. To my mind that is not one of the factors enumerated in the Advocates Remuneration Order. Taxation of costs is a judicial process which is not determined by the positions taken by the parties or not as costs, as stated hereinabove, is not meant to penalize the losing party but to compensate the successful party for the trouble taken in prosecuting or defending the suit.

35. Whereas this Court may well have arrived at a different figure had it been presiding over the taxation, it is trite that a Court will not, therefore, interfere with the award of a taxing officer, particularly where he is an officer of great experience, merely because it thinks the award somewhat too high or too low; it will only interfere if it thinks the award so high or so low as to amount to an injustice to one party or the other. Here the award was well within the range prescribed under the Remuneration Order and the discretion whether or not to increase or reduce the same was clearly that of the Taxing Officer. Whereas I appreciate that a matter seeking to impeach a Governor is not a small matter, in this case the Taxing Officer found as a fact that the applicants herein had not even responded to the application by the time the proceedings were terminated. That clearly was a relevant factor since as already indicated above costs re not meant to penalize the losing party but to compensate the successful party for the trouble taken in prosecuting or defending the suit. That is the main consideration in the taxation of costs.

36. With respect to the other items and having considered the decision of the Taxing Officer as well as the submissions by the ex parte applicants I am not satisfied that there was any error in principle in the decision of the Taxing Officer. The applicants however contend that the said figures ought to have been increased by 50% pursuant to Part B of Schedule 6 of the Remuneration Order. That part is entitled Advocate and Client Costs and provides as hereunder:

As between advocate and client the minimum fee shall be –

(a) the fees prescribed in A above, increased by 50%; or

(b) the fees ordered by the court, increased by 50%; or

(c) the fees agreed by the parties under paragraph 57 of this order increased by 50%; as the case may be, such increase to include all proper attendances on the client and all necessary correspondences.

37. It is therefore clear that as between advocate and client, the party and party costs, whether as prescribed, ordered by the Court or agreed by the parties to be increased by 50%. It follows that the Taxing Officer ought to have increased the fees by 50%.

38. In the result I vary the Taxing Officer’s order on taxation and substitute her figure with the sum of Kshs 113,925. 00.

39. Each party will bear own costs of this reference.

40. It is so ordered.

Dated at Nairobi this 3rd day of November, 2017

G V ODUNGA

JUDGE

Delivered in the absence of the parties.

CA Ooko