Ngatia & Associates v Interactive Gaming & Lotteries Ltd [2022] KEHC 12026 (KLR)

Ngatia & Associates v Interactive Gaming & Lotteries Ltd (Miscellaneous Civil Application 15 of 2016) [2022] KEHC 12026 (KLR) (3 June 2022) (Ruling)

Neutral citation: [2022] KEHC 12026 (KLR)

Republic of Kenya

In the High Court at Nairobi (Milimani Law Courts)

Miscellaneous Civil Application 15 of 2016

A Mabeya, J

June 3, 2022

Between

Ngatia & Associates

Applicant

and

Interactive Gaming & Lotteries Ltd

Respondent

Ruling

1. Before Court is a Chamber Summons dated September 23, 2021. It is a reference under Rule 11(2) of the Advocate’s Remuneration Order. It seeks several prayers, viz, that the taxing officer’s assessment on the bill of costs dated January 28, 2016 be reviewed or set aside; that this Court taxes the bill at such sum as it deems reasonable and just. In the alternative, the bill be remitted back to be taxed afresh by any other taxing officer apart from Hon. S Githongori.

2. The application is supported by the affidavit of Fredrick Ngatia sworn on September 23, 2021. The applicant’s case is that; sometimes in January 2011, the respondent instructed the applicant to act for Premium Rate Service Provider (PRSP), Pint East Africa Limited, in respect of an impending raid by the police on the PRSP’s premises in connection with the respondent’s public lottery known as “mzalendo bora.”

3. Pursuant thereto, the applicant drew a demand letter dated January 18, 2011 and served it upon the Communications Commission of Kenya (“CCK”). CCK had issued a directive banning the Short Code 6969 which related to the respondent’s public lottery. when, the CCK failed to correct the action complained of the respondent instructed the applicant to file judicial proceedings in respect thereof.

4. The applicant then prepared a judicial review application seeking an order for certiorari to quash CCK’s decision to discontinue the short code, an order of prohibition to stop the CCK from enforcing the discontinuance of the code, and an order of mandamus to compel CCK to reinstate the code. The applicant was about to file the said application when the respondent informed it that the directors of Pint East Africa Limited had left the jurisdiction and that the judicial review application should not be filed.

5. The applicant thereupon demanded for its fees which the respondent failed to settle Prompting the filing of the bill of costs dated January 28,2016. The bill was taxed and by a ruling made on August 13, 2021, Hon S Githongori, assessed the bill at 25,410. 96 out of the sum of Kshs 2,343,289. 50 claimed by the applicant.

6. That prompted the present reference. The applicant contends that the taxing officer erred in finding that the applicant had an obligation to produce documents in support of the bill of costs despite there being no application to that effect by the respondent. That she failed to uphold the principle that an advocate is entitled to reasonable costs for work done and failed to consider the nature, complexity, and importance of the matter and the interest of the respondent.

7. It is also submitted that the taxing officer failed to assess the instruction fees based on Schedule VI of the Advocates (Remuneration) Order. That she considered cases on the issue of retainer when the issue had already been settled by the High Court in its decision of June 15, 2020. That it is therefore just and fair that the decision be reviewed and a reasonable assessment be made on the instructions fees.

8. The respondent opposes the application vide the replying affidavit of Adil Bashir sworn on 28/9/2021. It is contended that the application is defective as it was filed after 21 days of the taxation decision. That Rule 11 of theAdvocates Remuneration Order (“ARO”) demands that an objection to a taxation be made within 14 days of the decision.

9. It is further contended that the applicant’s contention on the absence of an application for production of documents in support of the bill of costs is misplaced as it was the applicant’s obligation to furnish such documents if they existed. That the amount of Kshs 25,410. 96 is reasonable.

10. That the taxing officer gave good reasons for arriving at the instruction fees of Kshs 5,000/= and was justified in increasing it to Kshs 10,000/= on account of time taken to conclude the taxation. That the rest of the items were not contested. On the allegation that the taxing officer did not consider the nature, complexity and importance of the matter, it is contented that those were factors which could only be ascertained from pleadings but none were drawn. That those factors could not be determined from the submissions in support of the bill of costs.

11. It is further contended that the bill could not be assessed under schedule 6 of the AROsince no instructions were given to the applicant and no pleadings were ever drawn. Not even draft copies of the alleged pleadings were produced. That the taxing officer never revisited nor determined the issue of retainer as claimed, as the issue had already been settled by this court.

12. This court has considered the pleadings, evidence and written submissions filed by each party. The main issue for determination is whether the taxing officer’s decision of August 13, 2021 ought to be reviewed and or set aside.

13. Before determining that issue, there was a preliminary issue that was raised; that the reference is invalid as it was taken out in breach of the rules. That the notice of objection was given 21 days after the decision.

14. Rule 11 of the AROprovides that: -“11. (1)Should any party object to the decision of the taxing officer, he may within fourteen days after the decision give notice in writing to the taxing officer of the items of taxation to which he objects.(2)The taxing officer shall forthwith record and forward to the objector the reasons for his decision on those items and the objector may within fourteen days from the receipt of the reasons apply to a judge by chamber summons, which shall be served on all the parties concerned, setting out the grounds of his objection.(3)Any person aggrieved by the decision of the judge upon any objection referred to such judge under subsection (2) may, with the leave of the judge but not otherwise, appeal to the Court of Appeal.(4)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.”

15. The impugned decision was delivered on August 13, 2021. Time started to run immediately and the notice of objection should have been lodged by the August 27, 2021.

16. The record shows that on August 24, 2021 and September 3, 2021, respectively, the applicant wrote requesting for a copy of the typed ruling with reasons but was not supplied with the same. These letters were produced as ‘FN-1’. The applicant submitted that it only obtained a copy of the ruling on September 9, 2021 and filed the present reference on September 23, 2021.

17. It is noted that the only reason advanced as to the delay was that the applicant had applied for the reasons which were not supplied until 9/9/2021. It is further noted that the applicant did not seek for enlargement of time as provided for under Rule 11 (4) of the ARO.

18. It has been held before that the procedures laid down by the law must be observed and not casually ignored. The present application was brought outside the timelines provided for under Rule 11(1) of the ARO.

19. As regards Rule 11(2) of the ARO, the applicant submitted that when the ruling was being delivered, the taxing officer only read what the bill had been taxed and allowed at and that no reasons were given. However, a reading of the ruling reveals that the taxing officer gave reasons for her findings in depth.

20. In Ahmednassir v National Bank of Kenya Ltd[2006] EA, it was 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.”

21. It is clear that the applicant was not diligent in objecting to the taxation. However, for the interest of justice and since there is no prejudice that has been shown to have been suffered due to that delay, this Court will excuse that delay. It was for less than a month. The parties position had not changed at all. Further, in line with Article 159 of the Constitution the Court will overlook the technicality and proceed to determine the application on merit for the purpose of settling the issues in dispute between the parties.

22. The main issue is whether the taxing officer’s decision of August 13, 2021 should be set aside. The applicant submitted that the taxing officer erred in finding that the applicant had an obligation to produce documents to support his claim for costs. That the taxing officer erred in assessing costs at Kshs 25,410/96 considering the nature of the matter.

23. Because of what I will ultimately determine in this matter, I do not think it appropriate to make a determination on the various issues raised. I will therefore make reference to those issues that lead to my determination.

24. There was complaint that the taxing officer applied the wrong schedule, and should have applied schedule 6 of the ARO. Although the taxing officer had found that there was no evidence of instructions to file a judicial review application, it was incumbent upon her to consider the intention of the respondent. What remedy was the respondent to pursue and on what schedule it would lie.

25. The applicant also submitted that the taxing officer failed to consider other relevant factors. It relied on the case of Joreth Limited Vs Kigano & Associates(2002) Eklr wherein the court laid down the factors to be considered when determining the value of the subject matter for the purpose of taxing a bill of costs. The respondent on the other hand submitted that the nature, complexity and importance of the matter could not have been ascertained as no pleadings were drawn.

26. On this point, I disagree with the respondent. From the demand letter alone, it was enough to decipher that the matter at hand was not a simple one. Considering the nature of the seriousness and commercial consideration involved, the taxing officer ought to have considered other relevant factors. Moreover, by the time an advocate drafts and serves a demand letter, a lot of work is undertaken. For example, the advocate must have met with the client, undertaken in-depth research on the subject matter before settling down to draft a demand letter. Time and professionalism must be put into by the time of the preparation of the demand letter.

27. A reading of the demand letter in this matter reveals that the respondent’s matter was not a simple one. The dispute revolved around the discontinuance of the use of short code 6969 by the CCK on the basis that the respondent had failed to take out a separate license to provide Content Services. Of course, the respondent disputed this fact. It contended that the license did not state when and how approval of the particular service to be offered ought to be sought, and neither did it state the implications of default to seek such approval. The respondent through its advocate thus contended that the proper practice was to offer Premium Rate Services without advance approval as long as the CSP license was in place. The respondent also complained that it was not given an opportunity to be heard before its short code was discontinued.

28. Without even delving further into the matter, it is clear that the respondent’s case was complex and involved technicalities and concepts that needed extreme expertise and research skills. The demand letter quoted several laws and sections on which the respondent on in assailing CCK’s assault. The respondent benefited from the applicant’s expertise, and the remuneration should have matched such benefit.

29. This turns me to the issue of the value of the claim. The demand letter dated January 18, 2011 alluded to the value at the issue of hand. Paragraph 2 thereof read: -“Our client notes that following your aforesaid unlawful decision, you proceeded to direct the Mobile Phone Operators to un-plug our client from the network with the result that our client and IGL suffered massive financial losses and irreparable reputational damage given the huge public interest surrounding the lottery. Our client thus finds your demand for compliance with the directive irrational and grossly unreasonable after you have unlawfully written to the operators to discontinue the code hence effectively terminating the lottery.”

30. The inference from the foregoing is that not only was the matter serious, it also had a high commercial and social value in as far as the lottery was canceled. The respondent also contended that CCK’s action had caused it reputational damage given the huge public interest in the lottery. The registrar ought to have taken into consideration these factors, as well as its seriousness and complexity.

31. In this regard, the Court is of the view that courts ought to award remuneration which not only appreciate the expertise of the profession, but also encourages others to join it. An award of Kshs 25,410/= grossly undervalued the applicants work.

32. In Frenchard Rinchand & Another – Vs – Quary Services of East Africa Africa Limited and Others (1972) E.A 162, the Court of Appeal stated at pg163, thus: -“We would add two other considerations. First, the general level of the remuneration of Advocates must be such as to attract worthy recruits to an honourable profession.Secondly, there must, so far as is practicable, be consistency in the awards made, both to do justice between one person and another and so that a person contemplating litigation can be advised by his advocates very approximately what, for the kind of cause contemplated, is likely to be his potential liability for costs”

33. In Joreth Ltd v Kigano & Associates (2002) 1 EA the Court of Appeal held: -“The value of the subject matter 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 ascertainable the taxing officer is entitled to use his discretion to assess such instruction fees as he considers just taking in account, amongst other matters, the nature and the importance of the cause or matter, the interest of the parties, the general conduct of the proceedings, any direction by the trial judge and all other relevant circumstances.”

34. The above authorities speak for themselves on how to treat Advocates’ Services. I say no more.

35. In this regard, I find that the decision of the taxing master in awarding instruction fees of Kshs 10,000/= was made in error, and this justifies interference by this Court. The Chamber Summons dated September 23, 2021 is meritorious and is allowed. The Taxing Master’s decision of August 13, 2021 is hereby set aside. The bill of costs is remitted back to be taxed afresh by a different taxing master.It is so ordered.

DATED AND DELIVERED THIS 3RD DAY OF JUNE, 2022. A. MABEYA, FCIArbJUDGE