Nairobi City County v Munikah & Co. Advocates [2023] KEHC 23225 (KLR)

Nairobi City County v Munikah & Co. Advocates (Miscellaneous Application E011 of 2019) [2023] KEHC 23225 (KLR) (Commercial and Tax) (4 October 2023) (Ruling)

Neutral citation: [2023] KEHC 23225 (KLR)

Republic of Kenya

In the High Court at Nairobi (Milimani Commercial Courts Commercial and Tax Division)

Commercial and Tax

Miscellaneous Application E011 of 2019

FG Mugambi, J

October 4, 2023

IN THE MATTER OF OBJECTION TO ADVOCATE-CLIENT BILL OF COSTS UNDER RULE 11 OF THE ADVOCATES REMUNERATION ORDER, 2009ANDIN THE MATTER OF A REFERENCE ARISING FROM TAXATION OF COSTS IN THE ORIGINAL NAIROBI RESIDENT MAGISTRATES' COURT CIVIL SUIT NO. 2 OF 2003

Between

Nairobi City County

Applicant

and

Munikah & Co. Advocates

Respondent

Ruling

1. The dispute before the Court emanates from instructions given to the respondent by the defunct City Council of Nairobi, the applicant herein, in the year 2002. The instructions were to recover land rates owed to the applicant by the Ministry of Lands amounting to Kshs 1,473,338,860. The respondent filed RMCC No 2 of 2003 City Council of Nairobi v The Attorney General for Commissioner of Lands vide a plaint dated December 31, 2002, in a bid to undertake the recovery.

2. The Attorney General filed an amended defence and counterclaim for Kshs 13,299,015,074/= dated February 8, 2008 to which the applicant filed an amended plaint and a reply to the counter claim on February 18, 2008. A preliminary objection filed by the applicant in opposition to the counter claim was allegedly upheld dismissing the counter claim. A consent is also said to have been filed, compromising the suit.

3. The applicant filed an advocate-client bill of costs on October 13, 2006 in Misc. Application 1146 of 2006 for costs arising from RMCC No 2 of 2003. The same was taxed at Kshs 60,712,373/= vide the certificate of taxation dated January 16, 2007. This amount was settled by the applicant and is not in issue in these proceedings.

4. The bone of contention is a subsequent advocate-client bill of costs dated May 25, 2011 filed in Misc. Application 247 of 2011. The bill of costs sought to recover costs of the counterclaim in RMCC No 2 of 2003. According to the respondent the bill of costs was taxed by consent at Kshs 498,757,315. 28 plus interest and a certificate of taxation dated August 7, 2012 issued.

5. The advocate filed a Notice of Motion application dated August 24, 2017 seeking the adoption of the certificate of taxation as a judgment of the Court under Section 51(2) of the Advocates Act. The application was heard and the certificate was adopted vide a judgment delivered on October 30, 2017 for Kshs 847,887,435. 97 with costs and interest. This is what brought about the application of March 6, 2019, now before the Court.

6. The application, by way of a Chamber Summons, was brought under sections 1A,1B and 3A of the Civil Procedure Act Cap 21 Laws of Kenya, Order 50 rule 5 of the Civil Procedure Rules 2010 and rule 11(1) and 11(4) of the Advocates Remuneration Order 2009. It seeks to stay the execution of the certificate of taxation issued on August 7, 2012 and to enlarge time for filing of a reference.

7. The application was supported by an affidavit and supplementary affidavit both sworn by David Oseko, the Acting County Attorney with the applicant, on March 6, 2019. It was opposed by way of a replying affidavit sworn by Samson Masaba Munikah, the respondent, on March 22, 2019. Both parties filed their written submissions as directed by the Court.

The Preliminary Objection

8. Prior to the determination of this application, the respondent filed a Notice of Preliminary Objection dated September 20, 2021, contesting the jurisdiction of this Court. It is a well settled principle of law that jurisdiction is everything and as held inOwners of the Motor Vessel “Lillian S” V Caltex Oil (Kenya) Ltd[1989] eKLR, it befalls on me to first establish whether this Court is bestowed with the jurisdiction to entertain the present application. If not, I must then down my tools without further ado.

9. The respondent argues that the application before the Court raises pertinent issues that ought to have been dealt with on appeal at the appropriate time and not in this Honourable Court. Since this Court had already pronounced itself and issued a judgment and decree on the certificate of taxation dated August 7, 2012, it was therefore functus officio.

10. Section 51(2) of the Advocates Act contemplates a process of challenging a certificate of taxation by way of a reference. It is not disputed that no reference was filed in Misc. Application 247 of 2011, leaving the Court with no option but to enter judgment against the applicant, under the circumstances. In Lubulellah & Associates Advocates V N K Brothers Limited, [2014] eKLR the Court noted, and I concur, that:“The law is very clear that once a taxing master has taxed the costs, issued a certificate of costs and there is no reference against his ruling or there has been a ruling and a determination made and not set aside and/or altered, no other action would be required from the court save to enter judgment.”

11. That said, I would categorize the judgment of the court emanating therefrom as a default judgment having been entered in default of the respondent filing a reference. In such cases, even the Civil Procedure Rules anticipate that judgments made in default can be set aside where sufficient cause is shown, as is the case under section 51(2) of the Advocates Act.

12. A reference has now been filed which seeks for the Court to re-examine the facts and the evidence which were not before the Court then, and to set aside the certificate of taxation. This is an inherent jurisdiction that the Court enjoys, where sufficient reason has been demonstrated by an applicant. I would under the circumstances disagree with the submission of the respondent that by having rendered a judgment, the Court was functus official.

13. I refer to the holding inJersey Evening Post Limited v Al Thani, [2002] JLR 542 at 550 to the effect that:“A court is functus when it has performed all its duties in a particular case. The doctrine does not prevent the court from correcting clerical errors nor does it prevent a judicial change of mind even when a decision has been communicated to the parties. Proceedings are only fully concluded, and the court functus, when its judgment or order has been perfected. The purpose of the doctrine is to provide finality. Once proceedings are finally concluded, the court cannot review or alter its decision; any challenge to its ruling on adjudication must be taken to a higher court if that right is available.” (emphasis mine).

14. This view is further supported by section 3A of the Civil Procedure Act vesting in the courts inherent power to make any orders as may be necessary for the ends of justice or to prevent abuse of the process of the court. This power has now been broadened by the introduction in 2009 of overriding objectives in sections 1A & 1B of the Civil Procedure Act and in 2010 by article 159 of theConstitution.

15. This view is also in deference with the Court of Appeal in Kenya Power & Lighting Company Limited V Benzene Holdings Limited T/A Wyco Paints, [2016] eKLR that this inherent jurisdiction is a residual intrinsic authority which the court may resort to in order to put right that which would otherwise be an injustice.

16. I have looked at the issues raised in the reference and I am satisfied that there are weighty and pertinent issues raised. This is one deserving case where the inherent jurisdiction must be exercised in order to facilitate a just determination of the questions before Court.

17. The second ground raised goes to the form of the application, for being inconsistent with rule 11 of the Advocates Remuneration Order (ARO). Rule 11(2) requires the taxing officer to provide an objector with reasons for his decision. It also stipulates the procedure for giving of a notice and for obtaining such reasons. Judicial pronouncements demonstrate that failure to comply with rule 11(2) is not an incurable defect and for good reason.

18. In Ahmed Nassir V National Bank of Kenya Ltd[2006] E.A the Court held that:“Although rule 11(1) of the Advocates Remuneration Order stipulates that any party who wishes to object to the decision of the Hon. Taxing Officer should do so within 14 days, after the said decision and thereafter file his reference within 14 days from the date of receipt of the reasons, where the reasons for the taxation on the disputed items in the bill are already contained in the considered ruling, there is no need to seek for further reasons simply because of the unfortunate wording of sub-rule (2) of rule 11 of the Advocates Remuneration Order demands so. The said rule was not intended to be ritualistically observed even when reasons for the disputed taxation are already contained in the formal and considered ruling.”

19. The upshot of this is that that the preliminary objection is devoid of merit on both grounds. I now turn to the substantive application.

20. The applicant prays for leave to enlarge time for filing of a reference. The power of the court to enlarge time is wide and unfettered. It is a principle of law that the applicant must demonstrate good and sufficient reasons why he or she was unable to bring the appeal within the set timelines. Rule 11(4) of the AROprovides that:“The High Court shall have power in its discretion by order to enlarge the time fixed by subparagraph (1) or subparagraph (2) for the taking of any step; application for such an order may be made by chamber summons upon giving to every other interested party not less than three clear days’ notice in writing or as the Court may direct, and may be so made notwithstanding that the time sought to be enlarged may have already expired.”

21. This jurisdiction is further buttressed by Order 50 rule 6 of the Civil Procedure Rules which stipulates that:“Where a limited time has been fixed for doing any act or taking any proceedings under these rules, or by summary notice or by order of the court, the court shall have power to enlarge such time upon such terms (if any) as the justice of the case may require…”

22. In tandem with these provisions is the Supreme Court’s decision in Nick Salat V Independent Electoral & Boundaries Commission & 7 Others, (2014) eKLR. The Court pronounced itself as follows:“Discretion to extend time is indeed unfettered but it’s incumbent upon the applicant to explain the reasons for delay in making the application for extension and whether there were extenuating circumstances that could enable the Court to exercise discretion in favour of the applicant.”

23. The respondent argues that there has been an inexcusable delay of seven (7) years between the date of the certificate of taxation issued in August 2012 and this application that was brought in March 2019. I have equally taken note of the explanation given by the applicant for the delay in filing the reference. The applicant states that the delay was occasioned by the need to carry out proper investigations which had to await a change of guard at the Nairobi County.

24. The applicant states that the investigations had unearthed the loss of colossal sums of public money through double taxation of costs in the matter herein. The applicant denies that it was indolent and asks that the Court grants the enlargement of time because the reference raises pertinent issues of public interest.

25. I have carefully considered all the arguments presented by the parties. I am alive to the fact that each 5-year electoral cycle notably comes with a change of administration of public offices as alluded to by the applicant. The fact that this transition may have contributed to the delay is regrettable but also tenable. I have also considered the fact that the applicant herein has remained steadfast and actively engaged in litigation in this particular matter and as such I would not exactly say that it has been indolent in seeking its rights.

26. The application prima facie discloses pertinent and arguable issues as to why the reference should be admitted and heard on its merits. The circumstances under which the two certificates of taxation were issued remains a curious one. So too is the question as to whether an Advocate is entitled to raise two bills of costs in the same matter, involving a claim and counterclaim, and have these taxed at separate times. There is a further issue as to whether the payment made in July 2019 was in full and final settlement of the applicant’s liability or was a part payment.

27. I am equally alive to the fact that the reference relates to a colossal sum of public funds which continue to accrue interest. The amount owing stood at Kshs 847,887,435. 97 as at March 6, 2019, when this application was filed.

28. This amount excludes an amount of Kshs 250,000,000/- which the applicant had paid to the respondent in July 2019. These are all compelling reasons to grant the orders sought.

Determination 29. The upshot of this is that I find merit in the application dated March 9, 2019. The same is granted in the following terms:

i.That the execution of the Certificate of Taxation issued on August 7, 2012 and subsequent orders be and is hereby stayed;ii.That the time for filing of a reference against the decision of the Taxing Officer dated August 7, 2012 herein is enlarged;iii.That the costs of the application shall be in the cause.

DATED, SIGNED AND DELIVERED IN NAIROBITHIS 4TH DAY OF OCTOBER 2023F. MUGAMBIJUDGEHCCOMM MISC E011 OF 2019 RULING Page 22