Kenya National Union of Nurses v Council of Governors, Siaya County PublicService Board, Baringo County Public Service Board,Trans-Nzoia County Public, Service Board, Narok County Public Service Board, Attorney General & Public Service Commission [2022] KEELRC 122 (KLR)

REPUBLIC OF KENYA

IN THE EMPLOYMENT AND LABOUR  RELATIONS COURT AT NAKURU

MISC. APPLICATION NO. 5 OF 2019

KENYA NATIONAL UNION OF NURSES.......................................................CLAIMANT

VERSUS

THE COUNCIL OF GOVERNORS.......................................................1ST RESPONDENT

SIAYA COUNTY PUBLIC

SERVICE BOARD..................................................................................2ND RESPONDENT

BARINGO COUNTY PUBLIC

SERVICE BOARD ................................................................................3RD RESPONDENT

TRANS-NZOIA COUNTY PUBLIC

SERVICE BOARD.................................................................................4TH RESPONDENT

NAROK COUNTY PUBLIC

SERVICE BOARD..................................................................................5TH RESPONDENT

THE ATTORNEY GENERAL FOR

MINISTRY OF HEALTH......................................................................6TH RESPONDENT

PUBLIC SERVICE COMMISSION....................................................7TH RESPONDENT

(BEFORE HON. JUSTICE DAVID NDERITU)

RULING

1.   INTRODUCTION

1.  By way of a Notice of motion dated 2nd April, 2019  the Applicant herein, the law firm of Sifuna & Sifuna Advocates, applied that their Advocate/client bill of costs  dated 1st April, 2019 in regard to legal services rendered in Nakuru ELRC Cause No.169 of 2015 be taxed as           drawn.

2.   Together with the said Notice of motion were filed several  annextures including, of course, the subject   Advocate/client bill of costs.

3.   On 22nd May, 2019 Counsel for both parties, Prof. Sifuna for Applicant and Mr. Karani for the Respondent,  appeared before the taxing officers (Hon.Makau, DR)  and agreed that the matter proceeds by way of written   submissions.

4.  The record shows that the taxing officer delivered her  ruling on 20th August, 2019 in which the bill was taxed at   Kshs.447,500/=. Both parties and their respective     Counsel     were absent during the delivery of the ruling.

5.   On 13th September, 2019 the Applicant authored two  letters to the Deputy Registrar (taxing officer), one seeking  for reasons for the taxation as rendered and the other  asking for typed certified copies of the proceedings and the    ruling on the taxation for purposes of filing a Reference to      a judge.

6.   On 20th September, 2019 the taxing officer responded  and informed the Applicant’s Counsel that the reasons for the taxation were contained in the ruling.

7.  On 7th October, 2019 the Applicant filed a Reference to this court by way of a Chamber Summons application   dated 4th October, 2019.  The said application is expressed  to be brought under paragraph 11(1) of the Advocates  Remuneration Order, 2014 (ARO), the Advocates Act,   and all the other enabling provisions of the law.

8.   The Applicant is seeking that the ruling of the taxing  officer be set aside in its entirety and that upon the  setting aside that this court proceeds to tax the   Advocate/client Bill of Costs afresh.  The Applicant also  prays for costs of the proceedings before the taxing officer  and for this Reference.

9.   The Chamber summons is supported by the affidavit of Prof. Nixon Sifuna, Counsel for Applicant sworn on 4th    October, 2019 with several annextures thereto including  copies of the proceedings and the ruling by a taxing   officer.

10.  The Respondent filed a response by way of a replying affidavit sworn by KARANI O. AGGREY, Advocate for the Respondent on 14th November, 2019.

11.   On 7th November, 2019 Counsel for both parties appeared  before court (Mbaru J) and agreed that this Reference be heard and disposed of by way of written submissions.

12.    However, it appears that the matter went into a lengthy period of dormancy until Counsel for both parties   appeared    before this court on 25th January, 2022 when it   was   agreed that this Reference be heard and disposed of  by way of written submissions.  Counsel for the Applicant   filed his written submissions on 4th February, 2022 and Counsel for Respondent filed on 11th February, 2022.

II.     ISSUES FOR DETERMINATION

13.    This court has dutifully and carefully gone through all the   materials placed before it by the parties and their  respective Counsel as alluded to in Part I above.

14.    The Applicant’s case is that the learned taxing officer  misdirected herself and hence erred in law by failing to   apply the law and principles applicable in taxation of costs  between an Advocate and a client and hence   arrived at the  wrong assessment.

15.    The Applicant further argues that the taxing officer abused   her discretion by failing to give reasons for the taxation   arrived at and failed to consider Applicant’s Counsel two     sets of written submissions and hence arrived at the      wrong decision.

16.    The Applicant further urges that the taxing officer erred in   failing to apply Value Added Tax (VAT) on all the   items   taxed as the same should apply to the global taxed   amount.

17.  On the other hand, the Respondent has urged this court not   to disturb the findings of the taxing officer and hence   dismiss the Reference with costs.  The Respondent argues  that the taxing officer proceeded on established legal principles and arrived at the right decision on all the items.

18.    In view of the foregoing, this court considers the following  to be the issues for determination in this Reference:-

(i)      Should this court set aside the ruling of the   taxing officer delivered on 20th August, 2019?

(ii)    If (i) above is in the affirmative, what orders  should this court issue?

(iii)   Costs.

III.    TAXATION AND ORDERS

19.    The Applicant has raised seven (7) specific items that they feel were not properly handled by the taxing officer. Those items are in pages 2 and 5 paragraphs 5 and 20 of  the Applicant’s Counsel written submissions.  It is those  items, the issue of VAT, together with the additional one- half    based on Schedule VIB of the ARO that this   Reference is all about.

20.    Although Counsel for Applicant complained that the ruling  was delivered ex-parte and or without notice, I see no prejudice occasioned as the Applicant was able to take   action within reasonable time, and in any event within the 14 days provided for under rule 11(1)of the ARO vide a  letter dated 13th September, 2019.

21.  However, in the above mentioned letter the Applicant’s Counsel did not inform the taxing officer which items they were objecting to. Nonetheless, the taxing officer   responded and informed Counsel to obtain the reasons  from the ruling.

22.   Taxing officers are court officers appointed to carry out taxation of costs on matters that are not necessarily being heard before them (See Rule 10of theARO).  For example Nakuru ELRC 169 of 2015 was heard and determined by Radido J but the taxation of costs must  have been done by taxing officer and not the judge.

23.    The reason why this court has stated what it has in the    above paragraph is to illustrate that when a Reference is made to a judge it is not an appeal in the traditional sense.   It is more or less in the nature of a review or revision of  the ruling of the taxing officer in regard of some of the   items taxed or all of them.

24.    However, under Rule 11 (3)of theARO a party who is  dissatisfied with the decision of a judge in a Reference   such as this one has to proceed to the Court of Appeal by way of an appeal and the law and rules on appeals in that court shall apply thereto accordingly.

25.    In the circumstances, the Applicant is asking this court to revisit and if pleased review revise the decision of the  taxing officer in respect of the items specified above.    That is the jurisdiction and territory of this court in this  Reference.

26.  This court shall now proceed to examine each of the items   complained of. However, before doing so, and for  avoidance of repetition, it    may be necessary for this  court to determine the second issue at this stage so that   where this court disagrees with the findings of the taxing officer this court is able to remedy the same there and    then.

27.    This court is in agreement with the sentiments of Munyao Sila   J in Masore Nyang’au & Co Advocate Vs. Kensalt   Limited (2019) eKLRwherein the learned judge stated that   in case a judge finds that the taxing officer erred in   taxation the judge has three options.  The judge can remit  the bill back for taxation by the same or another taxing officer or the judge may tax the bill.

28.    There is emphasis also that a judge should not interfere with the decision of the taxing officer unless it is clear that the officer erred in law or departed from established  principles and hence arrived at the wrong decision.

29.    None of the parties or their respective Counsel has   informed the court whether the party and party costs were  taxed or agreed in Nakuru ELRC 169 of 2015.  Such    information or material if placed before this court would   have been important and helpful as party and party costs  have a bearing in determining the Advocate/client costs  - See the holding of Waweru Jin Kenya Tea  Development Authority Vs. J.M. Njenga & Co.  Advocates (2011) eKLRand Murgor JA in Otieno  Ragot & Co. Advocates Vs. Kenya Airports Authority  (2021) eKLR.

30.    This court has carefully gone through the two page  ruling by the learned taxing officer delivered on 20th   August, 2019 and with respect makes the following   observations.

31.    In her ruling the learned taxing officer clearly indicated that   she had read and considered the written submissions by Counsel for both parties.  She also indicated that she looked into and considered the contents of the mother file being Nakuru ELRC 169 of 2015.  However, the ruling is  short on the import and the impact of the written   submissions and the contents of the mother file on her          ruling.

32.  For example the following questions find no answer in the  ruling of the taxing officer. What were the prayers/remedies sought for in ELRC 169 of 2015 and  how did that impact the award in taxation?   Given that the   monetary value of the subject matter could not be assessed     in the main cause, what factors or considerations informed  the decision of the taxing officer in making the awards that   she made?  How complex or novel were the issues in that cause?  How much effort and research was necessary in  dealing with the issues in that cause? Were the party and   party costs taxed and what was the import thereof on the    awards made in the taxation subject of this Reference?

33.    It is the view of this court that had the taxing officer   considered all the above parameters, which were in any  event relevant and paramount in the taxation, she most likely should have arrived at a different decision on the  items complained of by the Applicant.

34.    The Applicant has also raised the two issues of VAT not  applied to the entire sum of taxed costs and also the failure    by the taxing officer not to increase the taxed amount by  one-half as required under Schedule VIB of the ARO.  Again, and with respect to the learned taxing office,  these are two very important issues that cannot be wished    away or ignored all together.

35. It is for the reasons stated above that this court holds that  there are good and sound legal grounds for disturbing the    findings of the taxing officer as contained in the ruling delivered on 20th August, 2019. However, this court shall    only interfere with the specific items complained of by the  Applicant as both the parties have no issues with the other  items in the bill as taxed, unless this court finds good legal  grounds of doing so.

36.    Further, to save on time and avoid further unnecessary   delay in having this matter concluded, this court shall   proceed to tax the bill based on the materials placed before  the court and specifically the written submissions by  Counsel for both parties.

III.    FEES ON INSTRUCTIONS

37.   The Applicant prayed for a sum of Kshs.3,580,000/= as instructions fees in the bill. The taxing officer awarded    Kshs.300,000/= taxing off the balance.  The Applicant takes the view that Kshs.300,000/= is too little under   that head and insists on the sum of Kshs.3,580,000/=.  The    states that they forwarded their feenote/invoice dated 22nd August, 2015 to the Respondent and that a local   purchas Order (LPO) was raised.  However, this court notes that the said LPO was not executed by the Respondent, as per the copy exhibited in co by the  Applicant. No agreement has been produced by either    party, or moreso the Applicant, to indicate that the said  fees was agreed upon.  Therefore, this court has to evaluate  and tax that item to arrive at a fair and reasonable amount.

38. This court has looked at the pleadings filed in Nakuru   ELRC 169 of 2015 and the court notes that the prayers  sought were mainly declaratory in nature.  For avoidance  of doubt the said prayers were to the effect that:-

(i)  1st Respondent to implement resolution of inter- governmental forum relating to E.S.P health/ workers.

(ii)    2nd, 3rd, 4th and 5th Respondents to confirm all  health workers employed by County governments on contract under (E.S.P).

(iii)   2nd, 3rd, 4th and 5th Respondents to pay arrears due   to the nurses and other health workers.

(iv)   2nd, 3rd, 4th and 5th Respondents promote all E.S.P  Health staff who completed three years.

(v)     6th and 7th Respondent put in place viable   measures to protect health staff on secondment to Counties.

(vi)   Any other relief.

(vi)   Costs.

39.    Equally, the judgment by Radido J in that cause to a large   extent gave declaratory and directional orders.  This is not  to say that matter was not complex in its own right.  Matters concerning county governments are novel for the  fact that devolution is a fairly new phenomenon in Kenya. The law in this area is evolving and jurisprudence is bound to be created in almost every new cause filed.

40.    Unless in a moribund lawfirm a good lawyer must always  research in every matter he/she handles to give the best  legal services to a client.  However, although the value of    the subject matter in the main cause may not be ascertained from the pleadings, and it is not in dispute that indeed the Applicant took instructions and filed defence, attended court and filed other necessary papers,  including written submissions, the cause was not the most complex as Counsel for Applicant seems to suggest. The   orders granted in the judgment speak for themselves.

41. However, it is the view of this court that the sum of Kshs.300,000/= awarded by the taxing officer was  inordinately low for instructions fees in a matter of this   nature. Nonetheless, the defence filed by the Applicants  for and on behalf of the 4th Respondent (the Respondent   herein) in Nakuru ELRC 169of2015 does not point   towards a very complex matter.

42.    In the circumstances, this court shall set aside the sum of  Kshs.300,000/= awarded by the learned taxing officer and  substitute therefor a sum of Kshs.500,000/= as instructions   fees.

IV.   GETTING UP FEES

43.    Getting up fees is chargeable under Schedule VIA part 2of theARO.  It should not be less than one-third of the   instructions fees.  This court shall award the same at one- third of the instructions fees, hence Kshs.500,000 X 1/3 =  166,667/=.  This court finds no reason to award the same    beyond the minimum one-third of the instructions fees.

44.    The above two items, instructions fees and getting up fees,     are the two major items complained of and the court          shall now consider the other items as hereunder.

45.   The court notes that item 3 in the bill was either  overlooked or not considered in the total sum of  Kshs.1,075/=.  The same is hereby allowed.

46.    On item 4, drawing defence and making three copies   thereof, the taxing officer awarded Kshs.1,100/=.  The     Applicant has not advanced any reason as to why this   court should interfere with the same and it is hence left  undisturbed. The same applies to item 5 as no   justification is given for the Kshs.5,000/=  prayed for.  The   sum of Kshs.3,500/= awarded is in my view adequate.

47.  Item 6 is allowed as drawn at Kshs.5,000/= in view of the bulky pages involved in that document. Item 7 is not  indicated as to what amount is claimed in the bill and hence no award is made.  Items 8, 9, and 10 are allowed at  Kshs.1075/=,  Kshs.1,100/=,  and Kshs.75/= respectively.

48.  Items 11, 12, 13, 14, and 16 are on court attendance wherein the taxing officer awarded a sum of Kshs.2,300/=  per attendance making a total of Kshs.13,800/= for six  appearances.

49.  With respect, the learned taxing officer misdirected herself on this issue.  Nakuru ELRC 169 of 2015 was heard and          determined at Nakuru ELRC yet the Applicant has an  office located at KitaleinTransnzoia County.  The   taxing officer failed to appreciate that besides the actual  court appearance the Applicants incurred travelling and possibly accommodation costs due to the long distance to   and from the court station.

50.  It is clear that the taxing officer approached the bill as if it  was a party and party bill of costs wherein only actual court attendance fees should be charged.  A party to a    cause who hires a lawyer out of town who has to cover a  long distance to attend court assumes the responsibility of   compensating the lawyer for the time spent on the road and incidental costs including meals and accommodation    if the lawyer spends the night outside his usual abode.  It is   wrong in principle to assume that such a lawyer is not  entitled to recover such costs.

51. Although the Applicant failed to clearly indicate that the  sum prayed for of Kshs.20,000/= per attendance was to cater for travelling and other incidental expenses, the  taxing officer ought to have put into consideration that aspect.  The road distance between Nakuru and Kitale is  about 225 Kilometres.

52.    It is the considered view of this court that the sum of  Kshs.20,000/= claimed per attendance is on the higher side as there are no particulars given by the Applicant. However, the sum of Kshs.2,300/= awarded based strictly on the actual court appearance is inordinately low.

53.    Doing the best that this court can do and exercising my discretion I find that an award of Kshs.10,000/= per  attendance is fair and reasonable in the circumstances.  It  is important to note that the main cause was heard  and   determined close to five years ago when the cost of living was a bit lower than it is today due to inflation.

54.   This court has hence taxed the bill and awarded as per the  schedule attached which forms part of this ruling.

55.   It is the considered view of this court that while VAT is applicable to the gross amount awarded, the one-half  addition awarded under Schedule VIB of the ARO only applies to fees awarded to the lawyer.  It would not make any logical sense to add one-half on actual disbursements such as court fees paid as that would amount to unlawful   and unjust enrichment on the part of the lawyer. This   explains the approach taken by this court schedule  attached.

V.    COSTS

56.  This Reference has partially succeeded and in the interest of justice each party shall bear own costs both for the   proceedings before the taxing officer and before this court.

VI.  DISPOSAL

57.  In final disposal of this Reference the Applicant’s Advocate/client bill of costs dated 1st April, 2019 is taxed at  Kshs.1,287,789/=.  This amount shall attract interest   at   court rates from the date of this ruling till payment in full.

DATED, SIGNED, AND DELIVERED VIRTUALLY AT   NAKURU THIS 26TH DAY OF APRIL, 2022.

.................................

DAVID NDERITU

JUDGE

SCHEDULE ON TAXATION

ITEM AMOUNT

(KSHS) AMOUNT AWARDED

(KSHS) AMOUNT TAXED

OFF

1. 3,580,000 500,000 3,808,000

2. 1,000,000 166,667 833,333

3. 1,075 1,075 -

4. 5,000 1,100 3,900

5. 5,000 3,500 1,500

6. 5,000 5,000 -

7. - - -

8. 1,075 1,075 -

9. 1,100 1,100 -

10. 75 75 -

11. 20,000 10,000 10,000

12. 20,000 10,000 10,000

13. 20,000 10,000 10,000

14. 20,000 10,000 10,000

15. 20,000 10,000 10,000

16. 20,000 10,000 10,000

SUB TOTAL                                                 KSHS.  …..   739,592

ADD½PER SCHEDULE

VIB OF ARO                                                KSHS. ……   369,796

17. 75                                                                             75 -

18. 75                                                                             75 -

19. 75                                                                             75 -

20. 75                                                                             75 -

21. 475                                                                         475 -

TOTAL  …………………………………………………KSH     1,110,163

ADD 16% VAT………………………………………..KSHS…    177,626

GRAND TOTAL ………………………………………KSHS    1,287,789

……………………….

DAVID NDERITU

JUDGE