Kamundi & another (Practising as M/s Kinyua Muyaa & Company Advocates) v African Marine & General Engineering Co Ltd [2022] KEHC 17100 (KLR) | Limitation Of Actions | Esheria

Kamundi & another (Practising as M/s Kinyua Muyaa & Company Advocates) v African Marine & General Engineering Co Ltd [2022] KEHC 17100 (KLR)

Full Case Text

Kamundi & another (Practising as M/s Kinyua Muyaa & Company Advocates) v African Marine & General Engineering Co Ltd (Miscellaneous Civil Application E109 of 2021) [2022] KEHC 17100 (KLR) (13 May 2022) (Ruling)

Neutral citation: [2022] KEHC 17100 (KLR)

Republic of Kenya

In the High Court at Mombasa

Miscellaneous Civil Application E109 of 2021

MN Mwangi, J

May 13, 2022

Between

F Kinyua Kamundi

1st Applicant

DT Muyaa

2nd Applicant

Practising as M/s Kinyua Muyaa & Company Advocates

and

African Marine & General Engineering Co Ltd

Respondent

Ruling

1. M/s Kinyua Muyaa & Company Advocates (hereinafter applicants) filed their bill of costs dated March 25, 2021 for taxation before the Deputy Registrar. The respondent/client (hereinafter respondent) filed a Notice of Preliminary Objection dated June 21, 2021 raising the following grounds-i.That the bill of costs dated March 25, 2021 as filed is fatally and incurably defective in law and as such cannot stand or be ventilated before this Honourable Court;ii.That the Honourable Court lacks jurisdiction to hear, entertain or determine this instant bill of costs in its entirety for the reasons that the instant bill of costs (sic) is time barred and offends the provisions of Section 4(1)(a) of the Limitation of Actions Act;iii.That the Honourable Court lacks jurisdiction to determine the instant bill of costs by virtue of the provisions of Section 5 of the Civil Procedure Act, which bars the Honourable Court from trying all suits whose cognizance, is either expressly or impliedly barred;iv.That we invite the Honourable Court to take judicial notice of the fact that Judgment in the primary suit being High Court Admiralty Claim Number 14 of 2012 African Marine & General Engineering Co Ltd vs The Owners of the MV “Kairos” was delivered on February 27, 2013;v.That the respondent/client is vested with the capacity to raise this Preliminary Objection as provided by Order 2 Rule 9 of the Civil Procedure Rules;vi.That the bill of costs against the respondent/client is frivolous and vexatious and to allow it would be tantamount to allowing an abuse of the Court process; andvii.That we pray that the applicants’ bill of costs dated March 25, 2021 be struck out with costs and interest to the respondent/client.

2. The Court gave directions for the Preliminary Objection to be dispensed with through the filing of written submissions. The applicants’ submissions were filed on June 24, 2021 by the law firm of Kinyua Muyaa & Company Advocates, while the respondent’s submissions were filed on October 28, 2021 by the law firm of Anne Wamithi & Company Advocates.

3. Mr Gathu, learned Counsel for the respondent submitted that Admiralty Claim Number 14 of 2012 African Marine & General Engineering Co Ltd vs The Owners of the MV “Kairos” was summarily determined and delivered on February 27, 2013 in favour of the respondent but despite the Judgment being in its favour, no amount awarded nor costs had been recovered, hence the last cause of action on record in respect of the matter was February 27, 2013.

5. He submitted that pursuant to Section 4(1) of the Limitation of Actions Act and for the purposes of determining whether the bill of costs is time barred, time ordinarily starts running from when the Court delivers its Judgment, and in this case, Judgment having been delivered on February 27, 2013, then the applicants’ cause of action accrued upon delivery of the said Judgment. He submitted that the bill of costs in issue ought to have been filed within 6 years from February 27, 2013.

6. To support his submissions, Mr Gathu relied on the case of Martin Mugambi Mithega v Invesco Assurance Company Ltd[2019] eKLR, where the Court stated that time begins to run after entry of Judgment where no appeal is preferred.

7. He further submitted that the payment referred to by the applicants was in respect to execution proceedings and that the said payment was made after the time allowed for the filing of a bill of costs had lapsed, hence the applicant cannot be allowed to seek solace under Section 23 of the Limitation of Actions Act. Mr Gathu stated that the execution proceedings referred to by the applicants do not hinder the time within which to file a bill of costs from running as execution proceedings can go on for years. To buttress his arguments, Mr Gathu cited the decision in Maina Njuguna & Associates v Chege Gichuru t/a Exodus Transporters [2017] eKLR.

8. Mr K Kamundi, learned Counsel for the applicants submitted that vide a letter dated March 28, 2013, the applicants informed and advised the respondent that they had obtained a Judgment in their favour and that the next step would be to apply for appraisement and sale of the Motor Vessel Kairos. He stated that in response thereto, through a letter dated September 17, 2018, the respondent instructed the applicants to proceed with the execution process in order to secure payments of the amount owed to the respondent in Admiralty Claim Number 14 of 2012 African Marine & General Engineering Co Ltd Vs The Owners Of The Mv “kairos”. Mr K Kamundi further referred this Court to pages 47, 63 and 64 of the applicants’ affidavit in support of the bill of costs, which contained the letters dated August 31, 2018 and November 20, 2018, wherein, the respondent expressed appreciation for the services rendered by the applicants, and the respondent went further to provide the applicants with documents in support of their claim.

9. On the issue of part payment, he submitted that vide a letter date January 8, 2020, the respondent informed the applicants that it would make a payment of Kshs 100,000/= for the applicants to take further action towards execution of its claim, and to make good its undertaking He stated that the respondent issued a cheque to the applicants for the sum of Kshs 100,000/= Mr. Kinyua argued that the payment of the Kshs 100,000/= was an acknowledgment of indebtedness and part payment.

10. He submitted that the part payment of Kshs 100,000/= on the January 8, 2020 was effected after the respondent accepted the explanation in the letter of December 18, 2019, from its insurer ICEA LION General Insurance Company limited, found at page 62 of the applicants’ affidavit in support of the bill of costs, wherein the insurer stated that it was the respondent that was responsible for payment of legal fees in the Admiralty Claim Number 14 of 2012.

11. In a bid to prove that part payment and acknowledgment of the debt revived the applicants’ claim, Mr K Kamundi referred the Court to PART (III) (B) of the Limitation of Actions Act, under Section 23(3) of the Limitation of Actions Act, which states that where a right of action has accrued to recover a debt or other liquidated pecuniary claim, and the person liable or accountable acknowledges the claim or makes part payment of it, the right accrues on and not before the date of acknowledgment or last payment.

12. He contended that since the respondent acknowledged and admitted the debt on January 8, 2020 and paid a deposit of Kshs 100,000/=, the applicants’ cause of action accrued on January 8, 2020 and the same was not statute barred.

13. It was further contended that the amount as per the Judgment in the primary suit, Admiralty Claim Number 14 of 2012, grows day by day in the sum of US$ 224. 50 as well as interest up to the date the Judgment dissipates. He indicated that the amount stood at USD 1,734,715. 00 as at March 25, 2021. He stated that since the retainer agreement between the parties had not been withdrawn, the applicants’ claim for legal fees being a liquidated claim, can be ascertained with reference to any particular date up to February 26, 2025 when the Judgment dissipates.

Analysis And Determination 14. This Court has considered the grounds laid out in the Notice of Preliminary Objection, the written submissions filed by the parties and the authorities relied upon. The sole issue for determination is if the bill of costs is statutorily time barred.

15. There is no dispute that the applicants were the Advocates on record for the respondent in Admiralty Claim Number 14 of 2012 and that Judgment was delivered on February 27, 2013, plus costs and interest. Having established an Advocate-Client relationship between the applicants and the respondent, this Court holds that the relationship between the parties was contractual in nature. Under Section 4(1)(a) of the Limitation of Actions Act, actions founded on contract may not be brought after the expiry of six years from the date of the accrual of the cause of action. As such, in this case, any action by any of the parties against the other arising from the said contractual relationship ought to have been brought within six (6) years of the termination of their relationship or from the date on which the cause of action accrued.

16. In Abincha & Co Advocates vs Trident Insurance Co Ltd Misc Application No 527 of 2011, the Court stated as follows-“An advocate’s claim for costs would be based on the contract for professional services between him and his client. It would be a claim in contract. An action to recover such costs would be subject to the limitation period set out in Section 4 (1) (a) of the Limitation of Actions Act”.

17. In a contract for the provision of legal services, for purposes of computation of time, time begins to run from the date of termination of the Advocate’s retainer or on execution of the assigned tasks or on completion or conclusion of the cases forming the basis of the claim for costs. This legal position was expounded in Kenya Orient Insurance Limited v Oraro & Company Advocates, Misc Cause No 701 of 2012, wherein the Court noted that the following words from the learned authors of Halsbury’s Laws of England, 4th Edition, Vol. 28 paragraph 879, would enable the Court to apply the prescriptions of the limitation period set out in Section 4(1)(a) of the Limitation of Actions Act-“Solicitor’s Costs. In relation to continuous work by a solicitor, such as the bringing and prosecuting or defending an action;“1. If a solicitor sues for his costs in an action, the statute of limitation only begins to run from the date of termination of the action or of the lawful ending of the retainer of the solicitor;2. If there is an appeal from the judgment in the action, time does not begin to run against the solicitor, if he continues to act as such, until the appeal is decided;3. If judgment has been given and there is no appeal, time runs from the judgment, and subsequent items of costs incidental to the business of the action will not take the earlier items out of the statute.In respect of miscellaneous work done by a solicitor, time under statutory limitation begins to run from the completion of the whole of each piece of work.A solicitor cannot sue a client for costs until the expiration of one month after delivery of a signed bill, but nevertheless time runs against a solicitor from the completion of the work and not from the delivery of the bill. If some only of items included in the bill are statute-barred, the solicitor may recover in respect of the balance.” (emphasis added).

18. It is the applicants’ submission that the respondent has continued to engage its legal services in a bid to ensure that the Judgment in its favour has been executed. To establish their claim, the applicants relied on the letters dated September 17, 2018, and November 20, 2018.

19. As stated earlier, termination of the action (entry of Judgment) in a case which an Advocate is instructed to act on behalf of a client is one of the instances, which signals the end of a retainer and sets in motion the computation of time for purposes of limitation of actions. In this case, Judgment was entered on February 27, 2013. Computation of time for the purposes of limitation of actions started running on the day of the Judgment. The applicants have argued that there was continuous work from the respondent in relation to execution of the Judgment delivered on February 27, 2013, which means that the retainer agreement between the parties has not been withdrawn.

20. InMaina Njuguna & Associates v Chege Gichuru t/a Exodus Transporters [2017] eKLR, when the Court was faced with a similar situation, the Advocate argued that there was continued work from the client. The Court held as follows -“It is my view, that when the author speaks of “subsequent items of costs incidental to the business of the action” the author is referring to items such as execution proceedings. The author is quite categorical that such items, coming as they do after entry of judgment, will not take the earlier items out of statute. In other words, the Statute of Limitations will begin to run upon entry of judgment and any instructions given thereafter incidental to the action will not amount to “continuous” work related to the bringing of the suit.”

21. This Court is persuaded by the above decision by a Court of concurrent jurisdiction which emphasizes that instructions as to execution proceedings are incidental to the action and that they do not amount to continuous work related to bringing of the suit. In the end, it is my finding that computation of time for the purposes of limitation of actions in this matter started running on the 27 February, 2013. It is immaterial that execution proceedings are pending.

22. The applicants also argued that the respondent acknowledged their claim and because of the acknowledgment, the respondent made a part payment of Kshs 100,000/= towards settlement of the legal fees owed. Further, that the respondent having acknowledged and made a part payment of the legal fees owed in essence revived their statute barred claim as provided under Section 23(3) of the Limitation of Actions Act. The said Section states as follows -“where a right of action accrued to recover a debt or other liquidated pecuniary claim (sums owed to the advocate) and the person liable or accountable acknowledges the claim or makes payment in respect of it, the right accrues on and not before the date of acknowledgement or the last payment.”

23. I have considered the alleged acknowledgment and part payment as evidenced in the letters dated December 18, 2019 and January 8, 2020. Looking at the aforementioned letters, it is worth noting that in the letter dated December 18, 2019, the respondent was informed by its insurer that since it did not appoint the applicants to act for it in Admiralty Claim Number 14 of 2012, then the insurer should not be involved in payment of legal fees for the dispute. In the letter dated January 8, 2020, the respondent stated that the payment of Kshs 100,000/= was for the purpose of progressing the matter since the MV Kairos was continuing to diminish. Nevertheless, the respondent maintained that the payment was not an admission of liability as the respondent’s position was that the obligation lay with their insurer, and as such, payment was based on fruitful discussions with the respondent’s Managing Director, and it was agreed that payment was made to get the matter moving forward.

24. Having considered the letter dated January 8, 2020, I hold that the said letter was not in any way an acknowledgment of debt by the respondent. If anything, the respondent made it clear that the payment was not an acknowledgment of debt, but it was for the sole purpose of moving the matter forward.

25. It is my finding that the payment of the 100,000/= did not constitute part payment of the debt and the respondent did not acknowledge the debt owed to the applicant, but was solely for the purposes of execution proceedings as can be deduced from the correspondence between the applicants and the respondent. It is my considered view therefore that the provisions of Section 23(3) of the Limitation of Actions Act cannot come to the aid of the applicants.

26. In the said circumstances, the respondent’s Preliminary Objection was well taken I hold that the bill of costs dated March 25, 2021, and filed in Court on April 29, 2021, between the applicants and the respondent in their roles as the Advocates and client respectively, in respect of services rendered in Admiralty Claim Number 14 of 2012 African Marine & General Engineering Co Ltd Vs The Owners Of The Mv “kairos” was based on a contract between the respondent and applicants and it was filed after the expiry of 6 years from the date of Judgment delivered on February 27, 2013. The said bill of costs is therefore statutorily time barred by virtue of Section 4(1)(a) of the Limitation of Actions, Act Cap 22 Laws of Kenya. The said bill of costs is hereby struck out with costs to the respondent.It is so ordered.

DATED, SIGNED and DELIVERED at MOMBASA on this 13th day of May, 2022. Ruling delivered through Teams Online Platform.NJOKI MWANGIJUDGEIn the presence of:Ms Muyaa for the Advocates/applicantsMr. Gathu for the respondent/clientMr. Oliver Musundi – Court Assistant.