P.M. Wamae & Company Advocates v Ntoitha M’mithiaru [2016] KEHC 1346 (KLR)

REPUBLIC OF KENYA

IN THE HIGH COURT OF KENYA

AT NAIROBI

JUDICIAL REVIEW DIVISION

MISCELLANEOUS CIVIL APPLICATION NO.  1 OF 2016

IN THE MATTER OF THE APPELLATE JURISDICTION ACT

AND

IN THE MATTER OF THE COURT OF APPEAL RULES, 2010

AND

IN THE MATTER OF TAXATION IF ADVOCATE –CLIENT BILL OF COSTS IN CIVIL APPEAL NO.  272 OF 2003   AT NAIROBI

BETWEEN

P.M. WAMAE & COMPANY ADVOCATES ……......APPLICANT

VERSUS

NTOITHA M’MITHIARU ………………….......…...RESPONDENT

RULING

1. On  12th January 2016, the advocate/applicant filed an advocate/client  bill of costs  dated   7th January 2016,seeking  for  taxation  of the said bill consisting  of 92  items all totaling shs  10,876,012. 68  inclusive  of VAT. Pursuant  to the said  bill, the Deputy Registrar issued   notice of taxation to the respondent  Honourable Ntoitha  M’Mithiaru.  It is dated 14th January 2016.

2. In response  to the Bill of Costs, the respondent   through his advocates  Gitonga Kamiti, Kairaria  and Company Advocates filed  grounds of opposition dated  1st February  2016   on  3rd February  2016, a replying  affidavit  sworn by the Respondent  on 2nd February  2016  and filed on 4th February   and  a notice of  preliminary  objection dated  18th February  2016  filed on 22nd February  2016.

3. In all the response documents,  the  common thread  is that the bill of  costs  is statute  barred  as it contravenes  the clear  provisions of Section 4(1) (a)  of the Limitation of Actions Act  Cap  22 Laws of Kenya; and that the  bill of costs  is incompetent and constitutes a gross  abuse of the court  process.

4. The applicant/advocate  filed an  affidavit  in response  to the respondent’s replying  affidavit dated  2nd February  2016  on  20th May  2016    as well as the grounds of opposition to the preliminary objection notice dated  18th February 2016.

5. In the grounds  of objection, the  applicant/advocate   contends that the bill of costs  dated 7th January  2016  is not premised on contract as stipulated in  Section 4(1)  of the Limitation of Actions  Act Cap 22 Laws of  Kenya but that  it is premised  on an action   upon a judgment  under Section 4(4) of the  Limitation of Actions Act  Cap 22  Laws of Kenya.  Further, that  the judgment the subject of  the bill of costs  was  delivered  on 19th October  2007 and that the bill  of costs  was filed on 12th January 2016, 9 years  after the delivery  of the said  judgment and three years prior  to expiry of the limitation period which is 12 years.

6. In addition, it is  contended that  the preliminary  objection is in bad faith since the issue  of fees payable  for the Election Petition  in the High Court and the fees payable   for the  appeal, CA 272/2003  at Nairobi, which  appeal  was  against the dismissal of the election petition, were  matters in  issue  in the respondent’s appeal being CA 17/2013 in which payments  for the election petition  and  the appeal  against the  dismissal  of the petition, were  included  in the  grounds of appeal  and also in the  record  of appeal.  That the said  inclusion  of  fees is necessary  implication an acknowledgment  of the fees sought   to be taxed  in the bill of costs  hereof  as provided in Section  23(3)  of the Limitation of Actions Act.  That  by offering to settle the fees  of the Election Petition by installment  followed by entering  into an agreement  with the applicant  upon acceptance  of the said  offer, it  was  implicitly  mutually  understood that   upon full payment of the fees   in terms of  the said  agreement, the advocates  had the option of  pursuing  or not  pursuing the recovery of the balance  of the fees  of the appeal, which is the subject of this  bill.

7.  It was  further contended that by reneging  on the said  agreement  through the filing of the appeal at Nyeri, the applicant  had opted to pursue  recovery of the balance  of his  fees for the appeal  case CA 272/2003  at Nairobi.

8.  It  was  therefore contended that the preliminary  objection is misconceived, incompetent , fatally and  incurably  defective, bad in law  and an abuse  of the court process  and  should be  dismissed with costs to   the applicant.

9. The preliminary  objection  was  urged  orally on  27th July  2016  with  Mr Kairaria  advocate  appearing  for the  client/respondent  whereas  Mr Wawire  advocate appeared  for the advocate/applicant.  In  his submissions, Mr Kairaria  asserted  that the bill of costs  as filed by  the advocate/applicant is based  on legal services  rendered  in CA 272 of  2003 which  was dismissed  on 19th October  2007.  That the applicant/ advocate ceased to act  for the client/respondent  herein in  2008  pursuant  to a letter  dated  7th April 2008  advising  the client/respondent  to seek services  of another  advocate  and indicating  that the advocate  would be  filing a bill of costs  on that matter.

10. Mr Kairaria  submitted that  a client/advocate  relationship  is a contractual one and has   a limitation  period of  6 years  from the date  when  the cause of  action arises/accrues. In this matter, it  was submitted  that  time started  running   from the date   when the matter was determined  or when  the advocate/client  relationship ceased, which is 19th October  2007 when the  appeal  was dismissed, or on  7th April  2008  when the advocate/applicant  wrote to the client/respondent  informing  him seek services  of another  advocate. Counsel relied on Abincha & Company  Advocates  Vs Trident  Insurance Company  Ltd [2013]eKLR  wherein the court held that  an advocate’s claim for costs  would be   based on the contract for  professional services  between him and   his client.  It would be a claim founded on contract.  Further, that on action to recover such costs would be subject to the limitation period stipulated in Section 4(1) (a) of the Limitation of Actions Act Cap 22 of Laws of Kenya.

11. Mr Kairaria further submitted that the advocate/applicant does not deny that the services he offered to the client ceased in 2008. In addition, it  was submitted that there is  no factual  or legal  basis that  the bill of costs  as filed is based on a judgment  since item No.1  in the said bill of costs  is clear that it was the instructions to file CA 272/2003   hence  the bill  as filed   was an abuse  of the court process.

12. Counsel  further  denied that there  was  any acknowledgment  of the fees   due  or payment  which would   be a defence to a time  barred  claim by the advocate from  his client.

13. Further, counsel submitted that the advocate’s argument that had the appeal gone their way then they would not    have filed   a bill of costs in an abuse of the court process and therefore this court should strike out the bill of costs.  It was further submitted that the Nyeri CA 17/2013 was different from the matter subject of the impugned bill.

14. In response, Mr Wawire  opposed the  preliminary objection submitting that  the bill of costs  is not based  on the contract  under Section 4(1) (a)  of the Limitation of Actions Act  but that  it is premised  on an action upon a judgment  under Section  4(4)  of the Limitation of Actions Act.  That the dispute occurred after judgment in 2008 hence the limitation period is 12 years.  Further, that the bill as filed on 7th January 2016 was 3 years before expiry of the said 12 years limitation period.

15. In addition, it  was submitted by the applicant  that even if  the bill  was  based on a contract, Section  23(3)  of the Limitation of Actions Act   comes to their aid and that before CA  17/2013 at Nyeri  was  filed, the respondent  had agreed  to pay the  amount  of shs  3,236,348. 60  by a letter  dated  18th March  2013  out of which   one  million  was paid.  Further, that the  parties negotiated  and agreed that  if  the respondent  paid the   whole of  costs as  taxed  in HC Election  Petition No 1/2003   then the  applicant/ advocate  would not  file this  bill of  costs.  That this  bill was only  filed  after the respondent  reneged  and that therefore if the bill is based  on contract  then the time   started running  in 2013 when there    was part   payment made.  The applicant   urged this court to dismiss the preliminary objection.

16. In a rejoinder, Mr Kairaria  submitted  that there   was no agreement  on the payment of  costs  in CA  272/2003  and that the letter   of 18th  March  2013  related  to costs  in  Petition  1/2003. Further, that the issue of part payment being raised by the applicant is Resjudicata since the Court of Appeal ordered the applicant to re tax their costs.

17. In addition, it  was  submitted that the letter  annexed  as PMW2 dated  20th March  2013  does not  mention  any costs  of appeal  and that costs  on the appeal  were never  agreed  upon and that there  was no  part payment.  Mr Kairaira  also submitted that Section 4(4)  of Cap  22 does not  fit the  circumstances  of this case  as it envisages  a case  where  two  parties  have been  litigating  and a party  does not  act on a judgment  until 12  years lapse, and not a  case where   an advocate seeks  to recover  costs  from a client that  he acted for.  He urged the court to allow the preliminary objection   with costs.

Determination

18. I have  considered the  respondent’s    preliminary  objection, the responses  by the applicant  and the  parties'  advocates oral submissions and  authorities  relied on.

19. In my view, the only issue  for determination in this preliminary objection is whether the bill of  costs dated  7th January  2016   filed on  12th January  2016  is statute  barred under  Section  4(1)  of the Limitations  of Actions Act.  There are also ancillary questions which the court will endeavour to answer in resolving the above single   issue.

20.  The first question is whether the advocate/client relationship is a contractual relationship.  But first, some background information is critical. On 12th January 2016, the applicant/advocate herein PM. Wamae & Company Advocates filed an advocate client bill of costs   for taxation.  The bill, from item No. 1 , is clear  on the  face of  it that it  was   in respect  of instructions  to file  Civil Appeal No. 272 of  2003  on behalf of the appellant, Hon Ntoitha M’ Mithiaru against  the judgment  in the High Court at Meru. Before that bill  of costs  could be taxed   but after the Deputy Registrar  has issued a notice of taxation  dated  14th January 2016  to the  client/respondent, the respondent/ client through   Gitonga  Kamiti Kairaria and Company Advocates filed grounds  of opposition dated  1st  February 2016 simultaneous with notice of  appointment  of Advocates, followed by a replying  affidavit and notice of  preliminary  objection dated 18th February  2016  seeking to have the bill of costs  as filed to be struck out  for  being statute barred as it founded on a contract   for provision of legal  services  hence it   falls within the purview  of Section 4 of the  Limitation of Actions Act hence time barred.

21. As to whether  the advocate’s bill of  costs is  time  barred under section 4 of the Limitation of Actions Act, it is important to  note and   it is trite   law that an advocate’s  claim for costs  would be  based on  the contract for professional services  between him and his   client.  It is therefore a claim founded on a contract for legal services.  An action  to recover  such costs  would therefore  be subject  to the limitation period   stipulated  under Section 4(1)  of the Limitation of Actions  Act, Cap  22 Laws of Kenya which provides  that:

“4 Actions of contract   and tort and certain other actions.

(1)  The following actions may not be brought after the end of six years from the date on which the cause of action accrues-

(a) actions founded on contract…………”

22. Halsbury’s Laws of England 4th Edition, Volume 28 at paragraph 879 page (452) is also instructive and provides the following guide:

“879 Solicitor’s costs: In relation to continuous work by a solicitor, such as the bringing and prosecuting or defending an action;

a. If   a solicitor  sues  for  his costs  in an action, the statute  of limitation  only begins  to rum from the  date of termination of action or of the  lawful ending of the  retainer of the solicitor;

b. 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;

c. 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 statute.

d. 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.

e. A solicitor cannot sue   a client   for costs until the expiration of one month after delivery if a signed bill, but nevertheless time runs against a solicitor from the completion of the work and not from the delivery of the bill.

f. If some only of items included in the bill  are statute  barred, the solicitor   may recover  in respect of  the balance.”

23. The respondent /clients  case herein with regard to the issue of limitation  is that time started  running  from  7th April   2008  when the advocate wrote  a letter to the  client  advising the latter to engage  services of another  advocate  to represent him in the subject   appeal  HCCA 272  of  2003  at Meru which    was between the client  and  Richard  Maoka Maore  & 2 Others.  This court   notes from the record  that the  advocate represented  the client  in Election Petition No.  20  of  2003  which petition   was dismissed.  The terms of engagement  between the client   and the advocate are  contained in the letter  dated  20th March 2003  written by  the advocate  to the client  and which  the Court of Appeal 17/2013  at Nyeri  did confirm vide  a judgment  dated 25th November  2014.  Being  dissatisfied  with the decision  of the Court of Appeal on  his entitlement  as to advocate/client  costs, the advocate  approached  the Supreme Court   vide  SC  CAPP 48/2014  which letter  latter court rejected  an attempt   by the advocate to advance   his claim  to the Supreme Court on  a matter of taxation   of advocate/client  bill  of costs.

24. The said   terms of engagement between client and advocate were   that the  advocate   had offered  as a volunteer to support the client's  political party   and he agreed to  take a necessary   fee for conducting  the hearing  of the Election Petition   for shs 400,000 on  condition that in the event   of the petition succeeding, then the advocate  would be  entitled to recover  the balance  of their fees  from the costs  to be  recovered  and that  in addition the client  would pay the disbursements.  The election petition  was lost and the  advocate sought  to tax his  bills of costs   against  the client   beyond he terms of the  letter of 20th March  2003 which the Court of Appeal  halted.  The client   was dissatisfied  with the dismissal of his  election petition so he instructed  the advocate/applicant  herein to file Meru HCCA 272 of 2003.  However, their   relationship soured  and on 7th April 2008  the advocate  threw in the towel  by advising  the client  to get  another advocate  to act for him  which the client  obliged  by instructing  his present  advocates  Gitonga  Kamiti Kairaria   & Company  to represent  him  in the said appeal.

25. And while   that  was happening, the advocate  sought to have  his bill  of costs taxed  in the High Court as ordered by the Court of Appeal, after losing    his bid in the Supreme Court  to have his application certified on a question of general public  importance.  It is of importance to note  that the Court of Appeal  awarded   costs to the client following  an unsuccessful bid by  the advocate  to challenge  the High court decision vide CA  17/2003- Nyeri  delivered on  25th November   2014.

26. with the above background, the question, therefore, is, whether the bill of  costs dated   7th January  2016 and filed  on  12th January  2016  is statute  barred.

27. From the letter of 7th April  2008 written   by the applicant, which fact  is not denied, the applicant relinquished  instructions  to act for  the client /respondent  in CA 272/2003  at Meru , after which the client/respondent, vide  letter  of 13thMay  2008  acknowledged  the decision of the advocate and acting on that  decision, identified   Ms  Gitonga Kamiti Kairaria  advocates  to represent  him in the appeal.  The client  also dispatched   to the advocate  a cheque  for shs  80,000  being balance    of advocate's fees.  The advocate  acknowledged the client’s letter dated  13th May 2008  vide letter dated   29th July  2008  by writing to Gitonga Kamiti  Kairaira  advocates to among others that,   “……….Kindly  to take over the matter and do  the needful.”  The letter   was copied to the client.

28. According to the advocate, the   bill of costs  is not statute  barred because it is  premised on a judgment  of appeal which  was  CA 17/2013  at Nyeri, in which   payments for the election  petition  and the appeal  against dismissal  of the petition  were  included    in the grounds  of appeal and also in  the record  of appeal; and that  the said   inclusion  of fees  is by  necessary  implication an acknowledgement  of the fees  sought  to be taxed  in the bill of costs  hereof  as provided  for in Section  23(3)  of the Limitation of Actions  Act. The advocate  also talks of a mutual agreement   and part payment.

29. I have  examined all the annextures  to the advocate’s  replying affidavit to this  preliminary objection.  I  do not   find any single  document  wherein there  was  mention  of part payment  or even  mutual  agreement  for settlement  of  the advocate's legal fees in CA 272/2003, subject matter of this  preliminary objection.

30. In addition, I have  examined the advocate/client bill of costs  dated 7th January  2016  and filed in court  on 12th January  2016.  What I  find in item I  is instructions   fees   to file  CA  272/2003  and  no other case.  From the said   itemized  bill, the last date  when the  advocate  took some active role in the matter was on  20th February  2009 at item 62 that of  writing   the letter dated  20th February  2009  to client’s  new advocates.

31. In my  humble view, the  bill   of costs being  founded on a contractual relationship  between  the advocate  and client, which  relationship  ended in  2008  with the advocate ceasing  to act  for the client   in the CA 272/2008 and passing  on the  responsibility to  a different  advocate  without  seeking and  obtaining any  undertaking  for his costs  in the matter  to be paid  after the  appeal is determined, the  advocate could only claim for  his fees  before expiry of   6 years, thus, by  2014.  The advocate, regrettably, did not  lodge  his bill within   the said  6 years.  Consequently,  the bill is undoubtedly statute   barred as  stipulated in Section  4(1) (a)  of the Limitation  of Actions  Act , Cap 22 Laws of Kenya.

32. Although the work  which the advocate  was retained   to  do  was not completed   by him, nonetheless, the advocate  on his own accord  terminated  the retainer  in respect of such    work by asking  the client to  engage   another  advocate   which  the client  did.  Accordingly, any  claim filed by advocate  more than 6 years  after  termination of the retainer is by virtue of Section  4(1) (b)  of the Limitation  of Actions Act statute  barred.  ( see also HC  Misc  App 527/2011 Nairobi  ABINCHA  & COMPANY ADVOCATE  V TRIDENT  INSURANCE  COMPANY LTD.

33. In my view, Section  23(3)  of the Limitation of Actions Act  is  inapplicable  in this case.  It  provides:

“ where a right of action accrued  to recover   a debt  or other  liquidated  pecuniary  claim ( sums owed to the advocate) and  the person liable  or accountable acknowledges  the claim or makes payment in respect of it, the right accrues  on and  not before  the date of  acknowledgement  or the last payment.

34. In addition, Section 4(4)  of the Limitation  of Actions  Act cannot  come to the aid  of the advocate/applicant.  The  said Section  provides:

“4(4)  An action  may not be brought  upon a judgment after the end of    twelve  years  from the date on which  the judgment   was delivered, or (where  the judgment  or  a subsequent  order  directs  any payment  of money or   the delivery  of any property  to be made  at a certain  date or at  recurring   periods) the date  of the default  in making the  payment or delivery  in question, and no  arrears  of interest  in respect of a  judgment  debt maybe recovered after the expiration of six years  from the date on which the interest  became due.”

35. Although   the advocate/applicant  claims that his bill of costs dated   7th January  2016  is premised on the outcome   of the appeal  and  that therefore  the period   of limitation is 12 years   and further, that the bill  was   filed  3 years  before  elapse of that  12 years period, as already  stated, the advocate  did not  represent   the client in the CA 17/2003  at Nyeri  to the end.  Further, it is the advocate  who  terminated  the client's retainer  before the appeal could be  heard  and determined.  And since the advocate  did not get any undertaking  from the client  that the  advocates  fees would be paid  after the  determination  of the appeal   or that  the client would  not plead the statute  of limitation, it  was   incumbent  upon the advocate  to lodge  his bill of costs   against the client  before  the expiry of  6 years  from the date    when the advocate  ceased  acting for the  client which, in this  case,   was by letter  dated  7th April  2008  and followed  by the letter  of  29th July  2008  to Gitonga, Kamiti Kairaria  advocates  urging the latter advocates  to “ take  over the matter and  do the needful."

36. In this case, there is also no  evidence that  the client   acknowledged  owing  the advocate  any fees  in respect   of Nyeri CA 272/2003  for which  the bill of costs  relates.  Further, there is  absolutely  no evidence  that the client  made any  part payment of the said   legal fees  in CA  272/2003  Nyeri    on demand  by the advocate.

37. There is  also no  evidence of  any mutual understanding or agreement for costs  in CA 272/2003  as alleged  by  the advocate/applicant, for the  services  rendered  in the said  appeal.

38. Accordingly, I find  that the respondent/client’s  preliminary  objection  was well  taken  and hold that the bill of  costs between advocate and client  dated 7th January 2016  and filed in court    on 12th January  2016   respecting  services  rendered  in CA 272/2003   was based  on a contract between client  and   advocate and   was filed  after  expiry   of  6 years  from the date when  the advocate lawfully terminated  his retainer  with the client/respondent in 2008. It is  therefore  statute  barred by  virtue of Section  4(1)  (a) of the Limitation of  Actions Act   Cap  22  Laws of  Kenya.  Accordingly, the same    is truck out   costs to the client /respondent.

39. Dated, signed and delivered at Nairobi this 21st day of September   2016.

R.E. ABURILI

JUDGE

In the presence of:

Mr Kairaria for the Respondent/client

Mr Senteyo h/b for Mr Wawire for the applicant/advocate

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