Kibuchi & Company Advocates v Kenindia Assurance Company Limited [2022] KEHC 498 (KLR)

Kibuchi & Company Advocates v Kenindia Assurance Company Limited (Miscellaneous Application 705 of 2018) [2022] KEHC 498 (KLR) (Civ) (5 May 2022) (Ruling)

Neutral citation: [2022] KEHC 498 (KLR)

Republic of Kenya

In the High Court at Nairobi (Milimani Law Courts)

Civil

Miscellaneous Application 705 of 2018

CW Meoli, J

May 5, 2022

Between

Kibuchi & Company Advocates

Applicant

and

Kenindia Assurance Company Limited

Respondent

Ruling

1. Kibuchi & Co. Advocates (the Applicant) filed a Bill of Costs dated December 14, 2018 against Kenindia Assurance Company Limited (the Respondent). When the bill of costs came up for taxation, the Respondent raised a preliminary objection grounds that the bill was statute-barred, having been filed outside the limitation period prescribed in Section 4(1) of the Limitation of Actions Act as Advocate’s bill arose from a contract for professional services rendered in Nairobi CMCC No. 10563 of 2005, (hereafter the primary suit) which suit was finalized on October 23, 2008 ; and that the taxation proceedings herein are an abuse of the process of the court.

2. The preliminary objection was argued of by way of written submissions. The Respondent’s counsel contended that the relationship between the advocate and the client herein was created through a retainer agreement that the said contract for service was enforceable within six years after completion of the work as provided under Section 4(1) the Limitations of Actions Act. Citing several decisions including Abincha & Company Advocates v Trident Insurance Company Limited [2013] eKLR, Akide & Company Advocates v Kenindia Assurance Co. Ltd [2017] eKLR and Migos Ogamba & Co. Advocates v Kenindia Assurance Co. Ltd [2021] eKLR counsel reiterated that judgment in the primary suit was entered on October 23, 2008 but the Applicant only filed the bill of costs on December 20, 2018, some ten years after the primary suit was concluded. It was counsel’s submission that the bill of costs is therefore statute barred and ought to be dismissed with costs.

3. Counsel for the Applicant in opposing the preliminary objection cited the decision in Galaxy Paints Company Limited v Falcon Guards Limited Court of Appeal Case No. 2019 of 2018 in arguing that the objection raised by the Respondent is a mere technicality raised to defeat the claim by the Applicant. He cited Mukhisa Biscuits Manufacturing Co. Ltd v West End Distributors Limited on the nature of a true preliminary objection. Counsel asserted that since the conclusion of the primary suit, the Applicant had sent several demand letters to the Respondent for settlement of fees, without eliciting payment. That the cause of action herein accrued afresh when the final demand made to the Legal Manager of the Respondent dated January 30, 2018 was acknowledged by the Respondent. Thus, the bill of costs was filed within the time prescribed by statute. In support of the foregoing counsel cited the decision in Shah & Parekh v Kenindia Assurance CompanyMisc. 110 of 2018. He stated that the Applicant should not be denied the fruits of their labour.

4. The court has considered the parties’ respective submissions in respect of the preliminary objection. In Mukisa Biscuits Manufacturing Company Ltd v West End Distributors[1969] EA 696, Law J. A. stated that:“So far as I am aware, a preliminary objection consists of a point of law which has been pleaded or which arises by clear implication out of pleadings, and which if argued as a preliminary point, will dispose of the suit. Examples are objection to jurisdiction of the court, a plea of limitation or a submission that the parties are bound by the contract giving rise to the suit to refer the matter to arbitration…...A preliminary objection is in the nature of what used to be a demurrer: It raises a pure point of law which is argued on the assumption that all the facts pleaded by the other side are correct. It cannot be raised if any fact has to be ascertained or if what is sought is the exercise of judicial discretion. The improper raising of preliminary objections does nothing but unnecessarily increase costs and, or occasion, confuse the issues, and this improper practice should stop.”

5. In the case of Oraro v Mbaja [2005] KLR 141, Ojwang J (as he then was) reiterated the foregoing by stating that:“A preliminary objection correctly understood is now well defined as and declared to be a point of law which must not be blurred by factual details liable to be contested, and in any event, to be proved through the process of evidence. Any assertion which claims to be a preliminary objection, yet it bears factual aspects calling for proof, or seeks to adduce evidence for its authentication is not, as a matter of legal principle, a true preliminary objection which the court should allow to proceed.Where a court needs to investigate facts; a matter cannot be raised as a preliminary point…. Anything that purports to be a preliminary objection must not deal with disputed facts, and it must not itself derive its foundation from factual information which stands to be tested by normal rules of evidence.”

6. The Respondent’s preliminary objection is premised on Section 4(1) of the Limitation of Actions Act, which states as follows:-“The following actions may not be brought after the end of six years from the date on which the cause of action accrued—(a)actions founded on contract;(c)actions to enforce an award;(d)actions to recover a sum recoverable by virtue of a written law, other than a penalty or forfeiture or sum by way of penalty or forfeiture;(e)actions, including actions claiming equitable relief, for which no other period of limitation is provided by this Act or by any other written law.”

7. The Respondent’s preliminary objection is premised on Section 4(1) of the Limitation of Actions Act, which states as follows: -“The following actions may not be brought after the end of six years from the date on which the cause of action accrued—(a)actions founded on contract;(c)actions to enforce an award;(d)actions to recover a sum recoverable by virtue of a written law, other than a penalty or forfeiture or sum by way of penalty or forfeiture;(e)actions, including actions claiming equitable relief, for which no other period of limitation is provided by this Act or by any other written law.”

8. First, it is pertinent to state that a preliminary objection based on limitation is not a technicality but a matter that goes to the root of the Court’s jurisdiction; no court has jurisdiction to hear a matter that is time barred. The Court of Appeal in Thuranira Karauri v Agnes Ncheche[1997] eKLR held that:“We do not understand how the Judge could proceed with the trial without finally determining such an important point of jurisdiction and it is pointed out that as a general rule, a point or issue of limitation of time goes to the root of jurisdiction which this Court should determine at the first instance. Subsequently, that where a suit is time barred, the same is incompetent and consequently a court has no jurisdiction to entertain such suit”.

9. In seeking to determining whether the bill of costs was filed out of time the court must also determine when the cause of action arose. There is no dispute that the advocate’s claim for costs is based on the contract for professional services between them and the client. The enforcement of such a contract by way of an action is therefore subject to the limitation period as set out in section 4(1) (a) of the Limitation of Actions Act and the Applicant’s claim being one based on contract ought to have been filed by way of a bill of costs or otherwise, within a period of six years upon the accrual of the cause of action at the completion of the work.

10. This court agrees with the sentiments of Waweru J. in Abincha & Co Advocates v Trident Insurance Co Ltd [2013] eKLR to the effect that:“As already seen, any claim or action for an advocate’s costs is subject to the statute of limitation. As already seen also, time begins to run from the date of completion of the work or lawful cessation of the retainer. Time does not begin to run from the date of delivery of the bill! Section 48(1) of the Advocates Act therefore cannot offer any defence against limitation…I therefore hold that any of the various bills of costs filed by the Advocate more than six years after completion of the work which he was retained by the Client to do, or after the lawful termination of the retainer in respect of such work, is statute-barred by virtue of section 4(1) (a) of the Limitation of Actions Act.”“Even if the statute of limitation did not apply to the Advocate’s bills of costs (and clearly it does!) the Advocate having presented what appeared to be a final fee note upon completion of each brief, and the same having been paid by the Client who then proceeded to archive or destroy its related files, the Advocate is estopped in law and in equity from turning around, between 8 and 11 years later as the case may be, to raise “final” bills of costs”

11. The foregoing accords with Halsbury’s Laws of England, 4thEdition,Volume 28 at Paragraph 879 where it is stated concerning when time starts to run that:“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 of items included in the bill are statute-barred, the solicitor may recover in respect of the balance.”

12. The judgment in the primary suit in respect of which the Applicant had received instructions from the Respondent to defend was delivered on October 23, 2008 and that was the date of completion of work. The Applicant did not file the bill of costs until December 20, 2018, some ten years after the primary suit was concluded. Sections 23 (3) and 24 (1) of the Limitations Actwhich the Applicant has called to his aid are of no avail in this case. An acknowledgement of debt as envisaged in the sections and pursuant to the provisions of 25(5) is the equivalent of an admission of debt. According to Black’s Law Dictionary, Tenth Edition an acknowledgement of debt is:“Recognition by a debtor of the existence of a debt. An acknowledgement of debt interrupts the running of prescription”.The Applicant’s submission in this regard was that by the fact of the Respondent “acknowledging the receipt of the letter dated above (i.e. January 30, 2018), there was a fresh accrual of the right of action against the Respondent…”. This proposition is contrary to the clear provisions of sections 23, 24 and 25 of the Limitation of Actions Act. The said provisions do not contemplate the mere act of acknowledgement of receipt of a demand letter to be acknowledgement of the debt claimed by such letter. Secondly, the proposition conjures absurd outcomes where a mere acknowledgement of receipt of a demand letter would be construed as synonymous with an acknowledgment by the recipient, of the debt claimed by such letter; and a defence against the plea of limitation.

13. The facts in the case of Shah & Parekh v Kenindia Assurance Company Limited cited by the Applicant are distinguishable from those in the instant matter, in that in the former case, an acknowledgement of debt in keeping with section 23(3) and 24(1) and (2) of the Limitation of Actions Act had been communicated in writing to the Advocate and payment made on the acknowledged debt. The Applicant cannot therefore seek succour in that decision in this instance and the argument that a fresh cause of action had accrued in January 2018 therefore falls flat on its face.

14. In the result, the court finds that the preliminary objection raised by the Respondent has merit and it is hereby upheld. The Applicant’s bill of costs is time barred and therefore incompetent by dint of the provisions of section 4(1) (a) of the Limitation of Actions Act. A taxing master would have no jurisdiction to entertain the bill of costs dated December 14, 2018. Accordingly, the bill of costs is hereby struck out with costs to the Respondent.

DELIVERED AND SIGNED ELECTRONICALLY AT NAIROBI ON THIS 5Th DAY OF May 2022C. MEOLIJUDGEIn the presence of:For the Applicant: N/AFor the Respondent:Ms. AbokC/A: Carol