Mwangi Keng’ara & Company Advocates v Invesco Assurance Company Limited [2016] KEHC 3532 (KLR)

REPUBLIC OF KENYA

IN THE HIGH COURT OF KENYA

AT NAIROBI

MISCELLANEOUS CIVIL APPLICATION NO.555 OF 2013

MWANGI KENG’ARA & COMPANY ADVOCATES …...…….APPLICANT

VERSUS

INVESCO ASSURANCE COMPANY LIMITED ..…….…...RESPONDENT

RULING

1. By a Chamber Summons  dated  21st   August  2014  and brought under the provisions  of Rule  11(2)  of the  Advocates (Remuneration ) Order, the Advocates  Act, Cap 16 Laws of Kenya.

2. The applicant/advocate  brings this reference  seeking orders that  this court do vary the decision of the taxing  officer on instructions  fees delivered on 11th July 2014  and that the said  order be set aside  and the bill  of costs dated  15th July 2013  be remitted  back to the taxing master with  appropriate directions for taxation; and  that costs of the reference   be awarded to the respondent/applicant

3. The application is based on the grounds that:

1. The taxing  master  misdirected  himself in principle   in holding that  instruction fees in the bill of costs  dated  15th July 2013  fell under  Schedule V1(1) L of the Advocates  Remuneration  Order and  not Schedule V1 1(b).

2. That the learned taxing master misdirected himself in principle in finding that the sum of kshs 787,456/20cts was not subject matter of the suit.

3. That the assessment  of instructions  fees at kshs  15,000/- which is below the minimum prescribed  instructions fees  was erroneous  and inordinately law and  not commensurate  with the case and hand .

4. That it is in the interest of justice that the orders sought herein are granted.

4. The Chamber  Summons  was further  supported by the affidavit  of Mercy Nduta  Mwangi  advocate   sworn on  21st  August  2014   wherein  she deposes  that she filed several bills  of costs   in respect of  HCC Miscellaneous Application  430,472,154 and  473 all of 2013 wherein the total sum of fees  claimed  was kshs  787,456/20cts. That in this cause which  was instituted  separate from  the bills of costs, it became   a new  cause of action wherein  the respondent  was contesting  the stated  bills  of costs  on the grounds that  (a)  some of the  bills  were  statute barred;(b)  that the  bills  were premature  and presumptive . That  in view of  the new  cause of action, the advocate  believes  that she  is entitled to  instructions   fees under  schedule  V1 1 (b) as the suit was  clearly brought  by way  of Notice of Motion and not  under Schedule V1 1 (L) as held  by the  taxing master  hence his decision   was wrong  and hence it  ought  to be  set aside/varied  and that  this court do determine  the value of  the subject matter  of the suit  and the proper  schedule  for  assessment  of the instructions fees. That she has followed the procedure laid down   in Rule 11 of the Advocates  Remuneration  Order for the  filing of  References  and that the  reference  has been filed timeously hence  it is  in the interest of justice  that the  orders sought  are granted.

5. The Reference was opposed by the respondent who filed Grounds of Opposition dated 16th November 2015 contending that:

1. The taxing master  considered  all the relevant  factors  including the written submissions  by counsels  and awarded the  objector  a fairly generous  sum.

2. The application is a frivolous and lacks merit and the same should be dismissed with costs.

3. No instructions fee is chargeable on taxation matters.

4. The court  should (sic) interfere  with the decision of the taxing  officer in  questions  solely  of quantum  as that  is an area  where the taxing officer  is more  apt to the job.

5. The  costs should not be allowed to  rise   to such level as to confine  access to court to  the  wealthy  bearing  in mind  that the  costs  arises  from……

6. The taxation of advocate’s instructions fees should avoid any prospect of unjust enrichment, for any particular party or parties.

7. The parties agreed and filed written submissions to dispose of the Reference.  The applicant/advocate/objector filed hers on 4th December 2015 whereas the respondent/client filed on 20th January 2016.

8. In their submissions in support of the Reference, the advocate submitted   that the bill of costs were part    of the respondent’s annextures to the Notice of Motion   dated 4th June 2013.  That  the  respondent  having  opted  not to challenge  the advocate’s bill of costs  through  the taxation  cause and instead  filed a  separate  suit to  challenge  the same, however defective  the procedure  adopted by the  respondent  might have  been, it  was  still  a suit and not a  bill  of  costs for taxation under paragraphs 13 and 69 of the Advocates  Remuneration Order  Reliance   was placed  on George Amuga  Sino T/A  Johe Brooks   Consultants Ltd Vs Patrick J.O Geoffrey  D. Yogo t/a  Atieno  Yogo & Company  Advocates  [2012] e KLR  where at page  8 the court is said  to have dealt  with the issue  of whether  a Notice of Motion is a suit and  held that:

“These provisions both the definition of the suit is in Section 2 (supra) and the part of the Remuneration Order.  We have  reproduced  above do persuade  us that   matters commenced   by way of  a Notice  of Motion as the matter before   us  was, is in law  a suit.”

9. That in the above  case the  court dealing  with the issue  of value of the subject  matter of a suit  held that  “ surely, if a client  instructs  an advocate  to claim  a certain  amount  from a defendant, is  the advocate  not expected to strive  to have the client  realize that  amount whether  he succeeds  in doing   so or not  is  another  matter but  that is what  he is instructed  to do and  he  cannot  be  denied the fact that  he worked   to realize  the claim. In our view, his fee would be pegged on that amount and   on the amount that the court later finds due.”

10. The applicant therefore  maintained  that on the  strength of the above authority,  the Notice of  Motion  dated  4th June  2013   was a  suit and  hence the  taxing  officer  was required to assess  instructions fees in  line with  the provisions  of Schedule 6  paragraph I of the Advocates Remuneration Order which  recognizes  the value of  the subject  matter, the applicant  having defended  the Notice of Motion  and filed replying  affidavit  in opposition  thereto. Reliance   was placed on the decision in Joreth Limited V Kigano & Associates [2002] EA 99 where the court held that:-

“ We  would at this stage  point out  that the value of the subject  matter of  a suit for  purposes  of taxation of a bill of costs    ought to be  determined from the pleadings, judgment  or settlement ( if such be  the case) but  if the same   is  not ascertained  the taxing  officer is entitled to use his  discretion   to assess  such instructions  fees as  he considers  just taking  into account, amongst  other thing, the nature  and importance  of the case or matter.”  And that Page 100……”  Instruction fees are an independent and static item, is charged once only and is not affected or determined by the stage the suit has reached.”

11. The applicant also relied on First American Bank of Kenya V Shah & Others [2002] EA 64 where the court held that:

“ The full instructions fees to defend  a suit  was earned  the moment  a defence   was filed  and the  subsequent  progress of  the matter   was not relevant .”

12. Based on the above  decisions  it  was contended  that the  taxing officer   should not  have applied  Schedule  6(1) of the  Advocates Remuneration Order  which  provides that  “ to sue   or defend  in any case  not provided for above;  such sum as may be  reasonable  but not less than  8400;” whereas the correct scale   was  as provided  at paragraph 1 (b)  of Schedule  6  under which a claim of  kshs 787,456. 20 cts  would attract  instructions  fees of shs  77,000/- consequently  the  applicant   beseeched this court  to set aside, vary the taxing  officer’s decision  and allow this  reference  with costs.

13. In the  respondent’s submissions dated  19th January  2016, it  was  contended, while  relying on  all the  6 grounds  of opposition  file herein that the  issues   for determination  were:-

1. Whether there were instructions fees chargeable upon miscellaneous application for taxation of bills.

14. On the above  issue, it  was submitted that no instructions  fees  were chargeable  on taxation of bills proceedings and a party  and party bills  of costs  hence item  1 was  misguided  hence  it should be taxed   off entirely.  Reliance   was placed  on paragraph 13(3) of the Advocates  Remuneration  Order, 2009 which provides:  “ The Bill of Costs shall be filed in a Miscellaneous  Cause  in which Notice  of Taxation  may issue, but no advocate shall be  entitled  to an instructions fee in  respect thereof.”  That  to charge  such a fee would be  in violation of Article  48   of the Constitution which obliges  the state to ensure  access  to justice  for  all persons  and, if  any fees   is required, it shall  be reasonable  and shall not be  reasonable   and shall not  impede  access to justice.  That costs  in taxation  proceedings  are included  in the  certificate  of costs as provided  for under Section 51(2) of  Cap 16  that  “ the  certificate  of  the taxing  officer by whom  any bill has been  taxed  shall,  unless it is  set aside  or altered by the court, be final  as to  amount of the  costs covered  thereby, and the  court may  make such order  in relation thereto as it thinks  fit, including, as in a case  where  the retainer , is not  disputed, an order  that  judgment  be entered for the  sum certified  to be due  with  costs.”

15. The respondent maintained that  any costs  due to the  advocates   was included  in the taxed  amount as costs  of the  proceedings; and that the  chamber summons  is not a  pleading  to be the basis for determination of instructions  fees;  and that  the subject matter  was  the party and party  bill of costs  which had already   been taxed.  Further, that taxation must come to an end and costs incurred   should not be a basis for yet another bill of costs.  The respondent  relied on the decision in Nyangito  &Company Advocates  V  Doinyo  Lessos  Creameries  Ltd [2014] e KLR where G.V. Odunga  J outlined  the circumstances  under which the High Court  interferes with the  taxing  officer’s  exercise of  discretion .  That in this case the taxing officer was correct in using   the schedule that he used in arriving at his discretion as the sum of shs 15,000/-.  It   was also  submitted that  it  was   an abuse of  court  process for the applicant to  change instruction  fees as per item  1 of the bill of costs and that   this application is  aimed at   unjust   enrichment  by the advocate  hence prejudicing  the respondent client   and hence the  Reference  should be  dismissed  with costs.

16. I have carefully considered the Reference  herein  by  the  advocate Mwangi  Kengara  & Company Advocates  whose  proprietor  is  Mercy Nduta, the same advocate who swore an affidavit in support, the grounds, grounds  of opposition by the respondent  client  INVESCO Assurance  Company Ltd  and the parties’ respective  written submissions and authorities  relied on by  both parties.

17. The genesis of this dispute/Reference  is that on 4th June  2013  the respondent  herein  who is  the client and main applicant  filed a Notice of Motion seeking  orders to stay of taxation of  the applicant/advocate’s bills of costs against the  client  in the following matters;

HCC Miscellaneous 154/2013

HCC Miscellaneous 430/2013

HCC Miscellaneous 472/2013

HCC Miscellaneous 473/2013

HCC Miscellaneous 524/2013

HCC Miscellaneous 493/2013

3.   An order consolidating all the bills of costs for good order   and case management.

4.  that the court do find that  in HCC Miscellaneous  430/2013, 472/2013,154/2013, 473/2013 the cases subject matter   of the bills   were still ongoing  and the respondent/advocate   was still on  record for  client and  therefore  bills  were  premature.

5.   That some bills were statute barred.

a) The advocate do render  a statement  of account on all the matters  she had filed d   bills of costs  and thereafter  accounts be  taken into establish  what is due if  at all to the advocate.

b) The bills had been filed under Schedule 9 of Advocate Remuneration Order without the respondent giving the applicant notice to elect    to proceed   under the schedule.

6.    The court determines and gives directions.

7.    Costs on the cause.

18. That application dated  4th June  2016   was vehemently  opposed by   the advocate/respondent who filed   an elaborate  replying  affidavit on  7th June  2013  attaching  all the bills  of costs; some payments  received  from the client, fee notes rendered  and several correspondence   between  the parties  hereto together with instructions notes  among others.  The said application was canvassed by way of written submissions.

19. The matter  initially  came up under  certificate  of urgency  before Honourable Waweru J on  5th June  2013  duty judge  who  observed  that “The application ought to have been made  in one of those  other matters.  Permitting it to proceed here can only cause confusion or other mischief.”

20. The Learned Judge then directed the client to serve the advocate for   interpartes mention on 10th June 2013.  On the latter date, the mater was again set for mention on 20th June 2013.  On 20th June   2013 both parties appeared - Miss Mwangi for respondent and Mrs Omoro for applicant.  The respondent  Miss Mwangi  asked the court  to strike out  the application and indeed  the court did   strike out  the applicant  with costs  to the respondent  advocate on account that there  was  a similar HC  Miscellaneous  Application No. 524  of 2013   ( No. 18  on the cause list   of that day).

21. It  was  upon that order of  Honourable Waweru J striking  out the Notice of Motion  that originated  this file  that Miss Mwangi advocate/ respondent  filed her  bill of  costs dated  15th July 2013 on 17th July 2013  which she  called party and party bill of costs  under Schedule  VI of  and  providing there under item No. 1  as “ 6th June  2013   to instructions  fees to defend the suit  herein  instituted  by way of Notice of  Motion dated  4th June  2013  wherein  the total value of the subject  matter is  kshs  787,456/20cts  kshs  77,000. ”

22. The whole  bill of costs   was totally kshs 87,355. 00 and drawn by Mwangi Kengara and Company Advocates  who  also took  out and  served  a Notice of Taxation upon  the Respondent/client’s advocates  Maina Njuguna & Company Advocates; who vigorously opposed  the bill  of costs  and particularly  item No. 1  on instructions  fees contending  that it  was not  chargeable  because the  bill  was  from a Miscellaneous Application and not  a suit, among  other grounds  contained  in their replying  affidavit  sworn  by Paul Gichuhi  legal Manager of  the client  sworn on 10th February 2014.

23. As  expected, that  bill  was considered by  the taxing  officer Honourable  A.K. Ndungu  Deputy Registrar ( as  he then  was) on 29th May 2014   who eventually rendered  his decision on 11th July 2014  with a finding that by the  client  electing  to commence  the completely  new  proceedings  when other  similar  proceedings   were  pending  as observed by Honourable  Waweru J, the Notice of Motion   was a suit  within the  meaning of  Section 5(2)  of the Civil Procedure Act.  He then proceeded to tax the bill of costs and awarded instructions fees under schedule VI (1) (L) at shs 15,000 as being reasonable.  He allowed all other items   as charged.  The entire bill of costs was taxed at shs 25,355.

24. It is the above ruling on taxation which the advocate was aggrieved by as a result of which she filed   this Reference giving reasons.  From the rival positions considered above.  The main and sole borne of contention is the instructions fees allowed; and whether   it ought to have been charged or awarded in the first instance place and if so, under what schedule and paragraph.

25. The applicant  argues and maintains  that the  taxing officer  erred when  he ordered that  the basic instructions  fees  for the application (Notice of Motion)  as struck out  by Honourable  H. Waweru J  was  awarded  under Schedule  VI 1(L)  of the Advocate Remuneration Order; since the  Notice of Motion in question  was an  independent  proceeding(suit)  as defined  under Section 2 of the Civil Procedure Act.  On the other hand, the  respondent contends  that instructions s fees in this matter as struck out by Hon Waweru J ought  not to  have been  awarded  and that  if any  was awardable, in any event, then the  same  was  indeed  under Schedule  VI 1 (L) of Advocate Remuneration Order since there was  no substantive  claim made for the award of shs 787,456. 20 contained  in the various  bills of costs  filed  in other  proceedings.

26. This court  nonetheless notes that  the respondent did not  file any  Cross –Reference  contesting  the award  on the instructions  fees under  ScheduleV1(1)( L) of the Advocates Remuneration Order.  That notwithstanding, this court has been urged to determine whether the instructions fees ought to have been awarded by the Taxing officer or at all in the circumstances of this case. According to the applicant, she was entitled to the instructions fees under a different paragraph of schedule 6. On the other hand, the respondent client claims that the advocate is seeking to unfairly enrich herself and that the exorbitant fees sought would inhibit access to justice.

27. So then, was the applicant advocate strictly entitled to instructions fees in the matter of this nature?  Without   rewriting  what the  parties have placed  before me, I have carefully analyzed  the  filed Notice of  Motion, the replying  affidavit  and subsequent  appearances  made on record .  I note that the applicant firm of advocates has its proprietor as Mercy Nduta Mwangi t/a Mwangi Kengara & Company Advocates.  In her  replying affidavit  dated ( sworn on  7th June  2013  in response  to the Notice of  Motion dated  4th June  2013  under certificate  of urgency, she deposes  at paragraph (1)  thereof as follows:

“1) THAT I am the proprietor of the respondent herein and as such am competent to swear this affidavit.

At paragraph 4, she deposes that: 4. “It is true that my firm   was retained by the applicant to represent its insured’s interest   in the cases giving   rise to taxations listed as No. 2 (1) to (V1) in the Notice of Motion.”

28. Again  when filing the party and party  bill of costs  subject of this reference under Schedule V1  which bill is dated   15th July  2013   following  the striking  out of the  respondent’s/applicant’s  application which originated  this  file dated  4th June  2013, the  Bill of Costs  between party and  party is  filed by the firm  of Mwangi Kengara and Company Advocates. The same law firm   received notices of taxation issued by the Deputy Registrar on 13th November 2013.  It is the  same firm that filed  written  submissions  in support of party to party  bill of costs  dated  16th July  2013  on 18th February  2014  urging the court to award  them instructions fees of shs  77,000 based on the principal  sum of  787,456/20cts  being  the value of  the subject  matter.

29. Without venturing  into whether  or not this   was a ‘suit’ ‘proceeding’ or not, capable of attracting  instructions  fees under Schedule  V1  of the Advocates Remuneration  Order, in my view, the  most important  question  for determination in this matter is whether an advocate  who represents  himself  or herself  (firm)  in a suit or cause or  matter  would  if successful be entitled  to charge  under the party and party bill of costs advocates  instructions  fees.

30. In this case, Item 1 on the  party to party  bill of costs  gives  a type of  service  as  “ To  instruction fees to defend the  suit herein instituted   by way  of a Notice of Motion dated  4th June  2013  wherein  the total  value of  the subject  matter  is kshs   787,456/20cts.”

31. The “suit’ which the advocate was defending was a matter against herself as an advocate. Thus, the applicant herein  who was the respondent  in the struck out  Notice of Motion is a firm of advocates and  counsel representing  the firm is the proprietor  thereof -  Ms Mercy Nduta  Mwangi.

32.  Therefore, to answer that important question as to whether an advocate who is self represented or prose litigant would be entitled to advocates instructions fees, I must first establish the purpose of the instructions   fees regime.  It is not in  dispute that instructions  fees under the Advocates Remuneration  Order is  charged by  advocates   whether in  party to party  bills of costs or in advocate/client  bill of costs. The applicant  advocate in this case  had acted d for her clients  the respondent  in cases against third parties and she  did file her several bills  of costs  wherein she  charged legal fees and sought  for their taxation prompting  the respondent  client  to institute  the proceedings against her, subject   of this file.  The advocate  proprietor  of her law  firm  has acted  for herself  in the entire  process of litigation against her client herein  and as a party to the proceedings  and seeking  to protect her  own interests. That being  the case, should  she be heard  to be asking  for advocates instructions  fees as   though  she   was acting  for a client or a different party in her own  cause?

33. In my humble view, whereas a successful party to proceedings would be  entitled to costs of  the suit  or cause  as the case may be, whether  such party  is an advocate  or any other  litigant, such costs, where  the party is representing themselves as is in this case, would be party and party bill of costs and would only be limited to  disbursements  and or court attendance  and not instructions fees. This is what emerges clearly from the arguments and documents presented in this case.

34. The above position is nonetheless inapplicable  where an advocate  instructs  another advocate  to represent  him in  a matter, for parties  are entitled  to the right  to be represented by advocates of their  own choice. If an advocate chooses to resent oneself in a matter, then they automatically waive the right to advocates instructions fees since  a self  represented  or prose  advocate  does not  act in the capacity  of  an  advocate  representing  (self) advocate.  He or she acts as a party to proceedings like any other ordinary litigant and in my view, to hold that they are entitled to charge advocates instructions fees is indeed to say that advocates should be permitted to unfairly enrich themselves. A party to the suit is defined by Black’s Law Dictionary 8th Edition as

“1. One who takes part in a transaction?

2. One by or against whom a law suit is brought.”

35.  In the instant case, the advocate Mercy Nduta Mwangi T/A Mwangi Keng’ara & Company Advocates was dragged before this court by her client the Respondent, as a party vide an application dated 4th June, 2013 whose details I have provided in this ruling.  She did not engage an advocate to represent her in the matter which was struck out in her favour.  If she had so hired an advocate to act for her in the matter, or if the matter had concerned her seeking to recover costs from her client for the services rendered, then that other advocate or the applicant herein would, in filing his/her bill of costs under party and party or advocate/client bill of costs, as the case may be, be entitled to charge instructions fees. The advocate Mercy Nduta Mwangi having elected to represent herself in this matter, there is no distinction between her and any other ordinary litigant who chooses not to engage  counsel.

36. In the persuasive case, Kisumu HCC 47/2011 Charles Lutta Kasamani T/A Kasamani & Company Advocates Vs Patrick  Johnson  Okwaro & Geoffrey  Denis Oluoch T/A Otieno Yogo & Company Advocates [2015] e KLR H.K. Chemitei J faced with a similar scenario  as in the present case held  inter alia:

“ My  understanding  is that the spirit of the Remuneration  Order  was to reward  a party who  has expended resources in  hiring an advocate  by being  reimbursed, so to speak, what  he has spent.” However,  when a party   takes it   upon himself  to file or defend  a suit then  he cannot in my  humble view  ask for costs  except  the usual disbursement which he expended  but not  instructions fees. In essence, he has not retained anybody to represent him.  He is representing  himself and any effort he  has expended   on the case in the form of research  and the usual  trouble of going through  in litigation has been done by himself.”(Emphasis added).

37. The Learned  Judge  in the above  case ordered  that the plaintiff  advocate   was only entitled to  such costs  and disbursements that he had  incurred, not  instructions fees. I wholly agree with the Learned Hon Justice Mi Chemitei J decision in the above case for I find it to be good law.  It is for  that reason that I am  in agreement  with the respondent/client’s advocate’s submissions that the applicant/advocate   was not,  for purposes of this matter,  wherein she was a party, thus, “one by or against whom a suit is brought, ” and not an advocate claiming for  her costs of representing  her client, entitled  to instructions  fees.  She was nonetheless entitled to other costs of disbursements.

38.  Although the issue of the advocate representing oneself would not be entitled to instructions fees was not one of the arguments made by the respondent who maintained that the applicant herein was not entitled to instructions fees but for different reasons, in Barclays Bank of Kenya  Ltd  V Patriotic  Guards  Ltd [2015] e KLRthe Court of Appeal made it clear that:

“…................It is  also  trite law  that a point of law   can be raised  at any stage  even on appeal even  though  not  raised before  the court of  first instance.  The court  can also  on its own  motion raise a point of law  at any point and make a determination  based on  the same  even where  such  point has  not been canvassed  by the parties.  The learned  judge did not therefore  do anything  outrageous  by raising   the issue of  non compliance  with Regulation  79  of the Table  A  of the Companies  Act  and acting on it.”

39.  In this case, the main issue raised by the respondent is whether the applicant advocate was entitled to advocate’s instructions fees. It then proceeded to give reasons other than the reason that I have provided that instructions fees are in any event meant to compensate a party for expenses paid to its advocate. In this case, the advocate did not instruct any external advocate to represent her or her firm in defending the application filed by the respondent/ client dated 4/4/2013 as reproduced in this ruling. Accordingly, the advocate fell in the genre of a party acting in person. However, as the respondent  herein  did not  file any  cross reference  to the Reference  herein challenging  the already  awarded  and  crystallized costs, I decline to  interfere  with the awards  already made by the taxing officer.

40.  In the end, I find that the reference by the advocate as filed challenging the award of Kshs 15,000 as basic instructions fees in this matter, which instructions fees as awarded I find gratuitous since an advocate cannot instruct oneself, lacks merit for the reasons that I have supplied above and in abundance.

41. It therefore  follows that  I need not  delve into  the issues  of whether or not  the Notice of Motion dated  4th June  2013  was or  was not a suit and or under what paragraph of Schedule 6 of the Advocates Remuneration Order it ought to have been brought as  determination of those issues  will  not make any difference. Accordingly, I dismiss the application/Chamber Summons/Reference filed by the advocate/applicant dated 21st august, 2014.

42.  Costs follow the event.  However, in this case, in order to bring to an end this ever widening and unnecessary litigation between the advocate and her client the respondent/applicant INVESCO Assurance Company Ltd, I hereby order that each party bear their own costs of the Reference.

Dated, signed and delivered in open court in Nairobi this 13th day of July 2016.

R.E. ABURILI

JUDGE

In the presence of:

Misos Mwangi advocate /applicant

N/A for the Respondent

Court Assistant: Adline