Kamunyori & Company Advocates v Mully Children’s Faily Trust Registered Trustees [2016] KEHC 8471 (KLR)

REPUBLIC OF KENYA

IN THE HIGH COURT OF KENYA AT NAIROBI

MILIMANI LAW COURTS

MISC. 936 OF 2010

B E T W E E N:

KAMUNYORI & COMPANY ADVOCATES..…….....…………...  APPLICANT

Versus

MULLY CHILDREN’S FAILY TRUST

REGISTERED TRUSTEES ……………….…………….......... RESPONDENT

R U L I N G

1. The Application before me seeks review of a taxation.  It is a long running matter and this is the fourth such application on the same file.  The Parent Suit is High Court Case No 388 of 2004 .  The Bill of Costs has been amended and re-amended the first version being dated 30th September 2010 and the final version (“Further Amended Bill of Costs) being dated 4th September 2012.  The Applicant is an Advocate who practices under the name of Kamunyori & Company Advocates.  The Respondent is a body corporate incorporated under the Trustees (Perpetual Succession) Act 1964 Laws of Kenya.  The Respondent was the Third Defendant in Civil Suit No388 of 2004(“the Parent Suit”).  The Applicant acted for the Respondent until it became apparent after amendment of the Plaint that he may be required to be a witness at which point he retired.  The Retainer was in place from 30th August 2004 and the Hearing of the Main Suit commenced on 30th  July 2008.    By all accounts the Parties were on good terms during that period.

2. The Application is filed on 16th October 2014 was dated 14th October 2014 and served upon the Respondent on 17th October 2014.   The Application asks the Court to review the Taxing Master’s Ruling and award on the issue of the amount of the payments made by the Client to the Advocate and how they are calculated. The Orders sought by the Application are that:

(1)The decision of the taxing officer to tax the Further Amended Bill of Costs dated 4th September 2012 at Kshs 80,842/- as contained in her Ruling dated 10th September 2014 be set aside

(2)The Honourable Court awards a fees of KShs 296,482/= in respect of the said Further Amended Bill of Costs which is inclusive of the amount of  Kshs 216,000/- the taxing officer erroneously found as having been paid to the applicant

(3)The costs of this application be provided for.

3. The Grounds on which the Applications relies are set out thus:-

“a. THAT the taxing officer erred in finding that the application herein had been paid Kshs 342,000/= which included two contested amounts that is Kshs.201,000/ and Kshs. 15,000/=  totaling Kshs. 216,000/=

b. THAT the taxing officer erred in ignoring the Applicant’s Submission with regard to the alleged payments of the two amounts

c. THAT the taxing officer erred in not requiring the Respondent to prove strictly that the sum of Kshs.216,000/= aforesaid in respect of the subject matter at hand ie HCCC No 388 of 2004

d. THAT the taxing officer erred in ignoring the principle that he  who alleges must prove, which meant that it was for the Respondent to prove and it should have proved the allegation that the payment of the said amount was in respect of  HCCC No. 388 of 2004 had  been  paid.

e. THAT the taxing officer erred in finding “that the unexplained   payment of Kshs.216,000/= was in respect of the said suit…” .

At the end of the Chambers Summon there is a manuscript annotation reading “if any Party so served does not attend at the time and place above mentioned the court shall proceed to issue such orders as it shall deem fit to grant).” It should be mentioned that that annotation is virtually illegible.

4. The Application is supported by the Affidavit of John Kirk Nyaga Kamunyori sworn on 14th October 2014.  After setting out the background, At paragraph 5 the Applicant says; “THATafter various submissions and Rulings both by two taxing officers and a High Court Judge, I was required to make a Submission dated 19th June 2013 that illustrated inter alia, the amount that I am sure had been paid to me in respect of my acting for the Respondent in HCCC 388of 2004”.  A copy of that Submission is exhibited at A2.  At Paragraph B the Applicant sets out the payments that were referable to the Parent Suit, they amount to Kshs 126,000/=.  The Applicant also explains that he worked for the Respondent on other matters.  By way of comparison the Applicant also sets out the payments referred to by the Respondent.  Those amount to Kshs 950,519/=.

5. At paragraph 6 of the Supporting Affidavit the Applicant said, in relation to the  payments alleged that, “the applicant (ie myself) cannot place cheques number 00450 for Kshs15,000. 00 and Number 101828 for Kshs201,000/=.  However the burden is on the respondent to prove that they were paid as a part of legal fees in connection of the subject matter of this taxation – Civil Suit No 388 of 2004.  It is manifest that the respondent has misinformed your honour in connection with cheques numbered (i)-(v) above and the cash payment numbered (vi) above, and the same must be said of these two cheques (for Kshs 201,000/= and Kshs.15,000/= respectively), unless the respondent convincingly proves otherwise.”

6. It was following those Submissions that the Hon Deputy Registrar gave her Ruling of 10th September 2014.  The Applicant quotes from the Ruling in his Affidavit and exhibits a copy.

7. The Respondent filed a Replying Affidavit sworn on 2nd November 2014 by Charles Mutua Mulli, the Chief Executive and founder of the Respondent.  He says that he is advised by his Advocates that the application is without merit.   He also complains that this is the fourth reference in this taxation and it is proving expensive.  He says that the sums in question of Kshs 201,000/= and Kshs 15,000/= were indeed paid and were made specifically with reference to the Parent Suit.  He explains that the Parties had a cordial relationship and the Advocate would attend a meeting at his office and then receive a payment by cheque.  He does not say whether that process applied to all the matters being handled by the Applicant or only in relation to the Parent Suit.    He again asserts that the two payments referred to were paid in relation to the Parent Suit and he Exhibits a copy of  Cheque No 101828 in the sum of Kshs 201,000/= dated 6th September 2010  and a letter dated  11th May 2007 entitled simply “REF:  PAYMENT OF LEGAL FEES”.

8. The Respondent in its Replying Affidavit states that the Application is without merit and raises a challenge to award because the taxing officer had allowed the claim for costs in items 136 – 183 which had not been expressly ordered by the Judge previously.  The Affidavit exhibits a copy of the Ruling of Hon Mr Justice Kimondo.  In his Ruling dated 2nd May 2014 the Learned Judge directed the Deputy Registrar to reconsider her previous award on three points.  He said:

“I thus set aside the award by the taxing master on a very narrow review as follows (emphasis added):

a) The taxing master shall not re-open the question of value of the subject matter.

b) The review shall be limited to a consideration whether the advocate had been paid Kshs201,000/= or had been paid a sum of Kshs1,196,519/= as per the respondents affidavit in reply.  In short, should the respondent be granted credit from sums paid?  Should the applicant refund some monies to the respondent?

c) The taxing master shall not re-open taxation on any item not raised by any of the parties.  In that regard, the only items remitted for reconsideration are:

Getting up fees.

1) Items 2, 27, 29, 32, 86, 94, 99, 103, 105, 107, 112, 124, 143, 156, 159, 162, 173

2) Reconsider items 136 to 183 regarding the reference to the High Court noting that the High Court did not expressly award costs” (paragraph 8, pages 7-8).

9. Therefore,  it  is  clear  from  the  above  that  the  Learned Judge  placed  limitations  upon  the  role  of  the  taxing  officer  and  also  on  the  subject  matter  to be  addressed,   In her Ruling following that Direction, the named taxing officer, in relation to Item 136-183, ruled that; “ I note that in the ruling dated 21st February 2012 no costs were awarded.  However the Judge did not expressly order that no costs should be awarded – costs follow the event.  Section 27 of the Civil Procedure Act applies.  Therefore item 136 to 183 remain as taxed by myself.”  She then goes on (page 6) to deal with the issue of payments to the Applicant.  She said “I consider the evidence before me and I held that Kshs126,000/= was paid,  I now have to make a finding whether the advocate had been paid Kshs201,000/= or whether he was paid Kshs1,196,519. 60/=.  She then set out the amounts averred to have been paid by the Respondent which added up to Kshs1,076,519. 60/=,She even recognised that there was an element of double counting in relation to the sum of Kshs120,000/= which explained the discrepancy between the evidence and the sum of Kshs1,196,519/= originally claimed to have been paid by the Respondent.

10. When  the  matter   came  up  for  Oral  Submissions  before  me  on  28th November, 2014,  the   Parties   were  finally  in  agreement  that  the Award  should be  set aside,  although  they  differ  in  on  what are the reasons.  The Respondent  submits  that  the Application is  defective  because   the  Court  cannot  simply  replace  the award made   by  the  Deputy  Registrar  with a  different  award.

11. As  to  applicable  principles,  the  first  question  to ask  is whether  the  Court  can  and  should  interfere with  the  decision  of  the  taxing  officer.  In  First   American  Bank  of  Kenya  -vs- Shah  and  Others (2002) EA 64  Hon.  Ringera  J. ( as  he  then  was)  set  out  the  principle  at  p.69  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  interference  that  it was based  on  an  error  of  principle.”

12. In  relation  to the  two  items  in dispute  the  Taxing  Master  set  out  her  decision   making  process  very  clearly. First  in  relation  to the  costs  of  the  reference  she  held. “With  regard  to  item 136  to  183  the  Judge  directed  me  to  reconsider  those  items  noting  that  the  High  Court  did  not  expressly  award  costs.  The applicant argued that Section 27of  the Civil Procedure Act applies.  That  since  the  Court  did not  order  that  costs  should be  awarded  costs  should  follow  the  event…I  note  that  is (sic)  the ruling  dated 21st  February, 2012  no  costs  were  awarded.   However,  the  Judge   did  not   expressly   order  that  no  costs  should  be awarded-  costs  follow  the  event.  Section 27 of  the Civil Procedure Act applies.  Therefore   item 136 to 183   remain as taxed by me. ”

13. With  respect  to that  reasoning,   I cannot   see  any   reason  or  grounds  to  interfere  with  that   decision.  The learned   Judge  had  the  opportunity  to clarify  his  order  in  his  ruling dated  21st February, 2012  by his  Ruling dated  2nd  May, 2013.  He  did not say  that  item  should  be  omitted,  he  simply  said  it  should  be  reconsidered  and  it  was.   He did not say he meant that neither Party should receive its costs.   In  those  circumstances,  the  Deputy Registrar  was free  to  exercise  her  discretion  and  she  did  so  by  applying  Section 27  of  the  Civil  ProcedureAct.  Section  35 of  the  Evidence  Act  provides: Admissibility of documentary   evidence as to   facts in issue.

(1) In any  Civil  Proceedings  where   direct oral  evidence  of  a fact  would  be  admissible,  any  statement  made  by  a  person  in a document  and  tending  to  establish  that  fact  shall, on  production  of  the  original   document,  be  admissible  as  evidence  of  that  fact  if  the  following  conditions  are satisfied,  that  is  to  say;

(a) If  the  maker  of  the  statement  either

(i) had  personal  knowledge  of  the  matters  dealt  with  by  the  statement,  or

(ii) where the  document  in question  is  or  forms  part of  a  record purporting  to  be  a continuous  record,  made  the  statement (in  so  far as  the  matters  dealt  with  thereby  are  not  within  his  personal knowledge)  in the  performance  of  a duty  to record  information supplied  to  him  by a  person  who  had,  or  might  reasonably  be  supposed  to have,  personal  knowledge  of  those  matters, and

(b) If   the  maker  of  the  statement  is  called  as  a  witness  in the  proceedings;

Provided  that  the  condition  that  the  maker  of  the  statement  shall be called  as  a witness  need  not  be  satisfied  if  he  is  dead,  or  cannot  be  found,  or  is  incapable of  giving  evidence,  or  if  his  attendance  cannot  be  procured  without  an  amount  of  delay  or  expense  which  is  the circumstances  of  the  case  appears  to the  court  unreasonable.

14. In  relation  to  the  issue  of  payments  received   by  the  Advocate,  the  Hon.  Deputy Registrar said. “ Justice  Kimondo  in his  Ruling dated  21st February,2012  stated  that  there  was  no  proper  evidence  before  the   taxing  master to  confirm  that  the  said  amount  of  Kshs1,196,519. 60/=,  was  paid.  The Ruling by Hon. Njora was set aside.  I considered   the evidence before me and held that Kshs 126,000/=, was paid.  I  now   have  to make  a finding  whether  the advocate  has  been  paid  Kshs201,000/= or whether he was paid  Kshs1,195,519. 60/-.” She then set out the evidence of payments before her.  In  relation  to the  payment of  Kshs 201,000/=,  it  is  recorded  clearly  that  it was  a  payment  made on  6th  September 2010  by  cheque  number; 101828  and  the  purpose  of  payment  was “ not  disclosed .” After  setting  out  in  tabular form,  the  Parties  respective  evidence  and  position,  namely  that  on  the  Applicant’s  case,  the  sum  of   Kshs126,000/=  was  paid,  and  on  the  Respondent’s  case  that  sum  of  Kshs1,076,519. 60/=,  was paid.  She  recorded  the  discrepancy  between Kshs1,196,519. 60/=  originally  put  forward  and  Kshs1,076,519. 60  was   the  double  counting  of  the  figure of  Kshs120,000/=  from  the  letter  dated  24th September 2005.   At page 8 of her Ruling the Hon. Deputy Registrar   says,

“I have very carefully evaluated the evidence of payment.  The  amount  paid   with  respect  to  HCC  No. 388  of  2004are as follows;

Total Kshs126,000/=. The amounts not accounted for…  Kshs 216,000/=.  The rest of the payments were for other matters.  It  would  have been  helpful  if  the  letter  forwarding  the  cheques  to the  advocate  had  specifically  described  the  matter for  which  legal  fees   and  professional  fees  had been  paid.”Having  stated  that  the  evidence  is lacking,  she  then  went  on  to say: “ Having  said  so, I  find  that  the  unexplained   payments  of  Kshs216,000/=  were  in  respect  of  said  suit.”  That  amount  plus  the  amount  of  Kshs126,000/=, confirmed   as  having  been paid in the  parent suit  adds  up to  Kshs342,000/-.  The   Respondent  has  not  produced  any  accounting  records  that  could  and  would  have assisted  the  taxation.

15. Having  said  that  the  sum  of  Kshs216,000/=,  was  not accounted  for, and  that  further  evidence  would  have  been  helpful,  the  Hon.  Deputy  Registrar  makes  the  quantum  leap  to  finding  that  nevertheless  those  sums  are attributable  to  the  parent file.  That  means  she  made  a  finding  that (a)  they  were paid  and  ( b)  received  in  relation  to  the  parent  suit.  She then goes on to decide that the correct treatment is a straightforward addition.  The  Hon. Deputy Registrar   does  not  explain  why,  given  there  was  a  dispute,  she  preferred  the  evidence  of  the  Respondent  over  the  evidence  of  the   Applicant. Section 107 of the   Evidence Act Cap 86  provides under the heading;  “Burden of proof.”

(i) Whoever   desires   any   court  to  give   judgment  as  to   any  legal  right  or  liability  dependent  on  the  existence  of  facts  which  he  asserts  must  prove  that  those  facts   exist.

(ii) When   a  person is  bound  to  prove  the  existence  of  any  fact it  is said  that  the  burden  of  proof  lies  on  that  person.

16. In  this  case,  on  the  question  of  payments  made to  the  Advocate,  the  Client/ Respondent  relies  on  documentary  evidence  filed  by  the  Respondent.   The  taxing  officer  noted  that  there  were  payments  that  could  not  conclusively  be  attributed  to  the  parent suit. She then went on to find that issue proved in the opposite.  How can a lacuna  in  the  evidence  one  minute  become  a  proven  fact  in the  next ?  That is an illogical outcome.

17. Further,  the  Deputy  Registrar  then proceeded  to  simply   add  the  two  figures.  She did  not  address  her  mind  to whether   there  was  any  duplication  in  relation  to  payments  said  to be made – as  she  had  done  in  relation  to the  schedule of  payments.   In  the  circumstances  it  cannot  be  certain  that  she  discounted  that  possibility.

18. In  the  circumstances,  I have  no  hesitation  in  finding  that  the  Deputy  Registrar  did  misdirect  herself  on a  matter  of  principle  on  the  law  of  evidence   in  placing  reliance  on  allegations  of  payment  which   have  not  been  proved  before  her.   I therefore set aside   the Ruling in that limited aspect.

19. The   Applicant  then  argues  that  the  Court  should  replace  the  Deputy  Registrar’s Ruling  and  finding  with  one of  its  own.  The Respondent complains of delay and numerous applications.  At  page  71  of First  American Bank  of  Kenya  -vs-  Shah  2002   supra   Hon. Ringera  Judge (as  he  then  was)  said  “ … I  have  asked  myself  whether   I  should  remit  the  bill  back  to the taxing  officer  with   directions  that  she  should  determine  the  instructions  fees  and  then  consider  not  increasing  it as  there   are  no factors  to warrant   increase.   I  am convinced  in  my  mind  that  that  would  be a  waste  of  Judicial  time  in the  circumstances  of  this case.  It would also saddle the parties with further unnecessary costs.   I  think  the  just  course  of  action  in this  matter  is  for  this  court  to exercise  its  discretion  in reference  on  taxation  to determine  the  matter  with  some  finality.  I  should  therefore  determine  the basic   instruction  fees  to  defend a claim  for  Kshs105,247,351. 35/=  and vary   the  order  on taxation  accordingly.”

19. In  Kamunyori & Co. Advocates   -vs-  Development  Bank  of  Kenya Limited  Misc Application No. 975of 2003, Hon. Ochieng  Judge  dealt  with  a  similar  issue  on  a  referral  on  the  taxation.  He   said, “  Had  it been  the  only  issue  for  consideration,  I  would  have  proceeded  to  calculate  the  instruction  fee,  instead  of  referring  the  Bill  back  to  another  taxing  officer,  for  taxation.

But  in  this case,  the  taxing  officer  has  not  expressed  any  view  on  the  clients  submission  to the  effect  that  the  advocate  was  only  entitled  one- half  of  the  instruction  fee..”

20. In  this  case  two separate  taxing  officers  have  dealt  with the  issue  of  the amount  of  payments  made  by  the  Client  to the  Advocate.  In  the  first  Ruling  the  taxing  officer  found  the  figure  of  Kshs1,195,519. 60/=  was  paid.  That  was  set  aside  on  review  on  the  basis that  she  misdirected  herself.  The matter was referred back.  That  referral  gave  the  Respondent  leave (with  the  knowledge  that  its  evidence  was  considered  inadequate),  to  make  an  application  and  file  additional,  clear  and  cogent  evidence  going  to  the  issue.  Apart  from  swearing  an  Affidavit   to  introduce  the  documents  into  evidence,  nothing  further  was   done.  The  Applicant  did  amend  its  Bill  of  Costs  on  4th September, 2012.    Yet  again the  matter  was taxed  by  a different  officer  and  again  it  was  referred  to  Justice  Kimondo  who  provided   guidance  to  the  Respondent  that  the  issue  turned  on  the  evidence  that  it  had  filed .  The   Respondent did   not file additional evidence on that issue.  It  is  safe  therefore  to  assume  that  there  is  no further  evidence  available.  In the words of the taxing officer. “ It  would  have  been  helpful  if  the  letter  forwarding  the  cheques  to the  advocate  had  specifically  described  the  matter  for  which   legal  fees  and  professional  fees  had  been  paid.”  That suggests that the evidence was not   probative.  In  the  circumstances,  that  figure  of  Kshs 216,000/=  cannot  be  said  to have  been  proved.

21. The  Respondent  complains  of  the  repeated  referrals  and  the  fact  that the    matter   has  been  back  and  forth four  times.  The  Respondent  is  not  without  fault  in  this regard  as  cognet  evidence  would  have  clarified  the  issue.  Given  that  there  is  only  one  issue  to be  resolved  and  the  age  of  this  case  indicates that   the  interests  of  justice  will  be  served  by  an early  resolution,  I  take  the  course  recommended  by  Justice  Ringera  and set  aside  the  award  and replace it with the  sum  of  Kshs296,842/= ( 80,842/=+216,000/=).

22. As  costs  follow  the  event  unless  there is no good  reason  to  order  otherwise,  I  allow  the  application  with  costs.

DATED:   27TH   JANUARY, 2016

Ruling delivered in Open Court after matter listed for a second time and there was no appearance.

SIGNED AND DELIVERED AT NAIROBI THIS 8th DAY OF February 2016.

FARAH  S. M.  AMIN

JUDGE.

In the Presence of;

Court  clerk:  Joseph  Kabugi

No Appearance for   Applicant.

No Appearance for   Respondent.