Otieno Ragot & Co. Advocates v Kenindia Assurance Co. Ltd [2021] KEHC 7469 (KLR)

REPUBLIC OF KENYA

IN THE HIGH COURT OF KENYA AT KISUMU

MISC. CIVIL APPLICATION NO. 204 OF 2018

OTIENO RAGOT & CO. ADVOCATES.................APPLICANT/ADVOCATE

VERSUS

KENINDIA ASSURANCE CO. LTD............................RESPONDENT/CLIENT

RULING

The application dated 20th July 2020 is for the adoption of the Certificate of Costs as a judgment of the court, together with interest thereon at 14% per annum from 30th November 2017, until payment in full.

1. The Applicant also sought the costs of the application.

2. It is common ground that the Advocate/Client Bill of Costs was taxed on 27th June 2019, in the sum of Kshs 280,721/97.

3. However, on 27th February 2020, the parties set aside the Certificate of Costs in the sum of Kshs 280,721/97, and mutually agreed that the costs be in the sum of Kshs 200,000/=.

4. The Applicant indicated, on the face of its application that;

“(f) The Respondent has neither settledthe said sum of Kshs 200,000. 00 astaxed, nor paid any interest thereonwhich has accrued on the same.”

5. However, by the supplementary affidavit sworn by JUDE RAGOT Advocate, the Applicant stated that the Respondent had paid Kshs 200,000/= on 28th May 2020.

6. The Respondent submitted that the Applicant was not entitled to claim any interest on the taxed costs because the said costs had been paid in full before the application herein was filed in court.

7. The Respondent cited the provisions of Rule 7of the Advocates Remuneration Order to back its position: the said rule reads as follows;

“An advocate may charge interest at14 per cent per annum on hisdisbursements and costs, whether byscale or otherwise, from expiration ofone month from the delivery of his billto the client, provided such claim forinterest is raised before the amount ofthe bill has been paid or tendered infull.”

8. According to the Respondent, the entitlement to charge interest would accrue when 30 days had lapsed after the advocate delivered a bill to his client, and if the client had not yet settled it.

9. The Applicant’s position was that it was entitled to claim interest because it had delivered the Proforma Invoice to the client on 31st October 2017.  Therefore, as the period of 30 days lapsed before the client had settled the Invoice, the Applicant submitted that it was entitled to interest from 30th November 2017.

10. By a letter dated 11th December 2019, which was annexed to the Supplementary Affidavit of Advocate Jude Ragot, the Applicant stated thus, in relation to Rule 7 of the Advocates Remuneration Rules;

“The ‘bill’ as contemplated in thatprovision has been interpreted inseveral decisions of different courtsto be the final fee note served upon aclient to settle, for purposes ofdetermining the date of computationof interest.”

11. I hold the considered view that that statement is accurate.

12. In this case the advocate had not delivered the FINAL FEE NOTEto the Client on 31st October 2017.  What the advocate delivered on that date was a PROFORMA INVOICE.

13. As I held in the case of OTIENO RAGOT & CO. ADVOCATES Vs WINAM CHEMISTS LIMITED, MISC. CIVIL CASE NO. 54 OF 2019;

“7. In so far as the document whichwas sent by the Applicant was aProforma Invoice, it can be deemedto be an advance description ofwhat the Applicant intended tocharge.

8.  A proforma invoice does not giverise to any legal obligations uponthe person to whom it is addressed.

9. Secondly, the proforma invoice doesnot give rise to any legal obligationsupon the person who sent it.

10.   In constrast, an Invoice is deemed tobe an asset for the person who sentit.  Upon the basis of an invoice, thetax authority becomes entitled todemand payment of tax.

14. I therefore reiterate that although a Proforma Invoice may look like an invoice or a bill, it is not one.

15. In this case, the bill was sent by the advocate after the advocate and the client had entered into a consent, through which the costs was reduced from Kshs 280,721/97.

16. Accordingly, as the “Bill”was sent under the cover of the letter dated 11th December 2019, I find that the interest was payable on the costs from 10th January 2020.

DATED, SIGNED and DELIVERED at KISUMU This 21st day of April 2021

FRED A. OCHIENG

JUDGE