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Court of AppealDismissedCivil Appeal No. 292 of 2012· [2017] KECA 272 (KLR)

Lucy Waithira & 2 others v Edwin Njagi T/A E. K Njagi & Company Advocates [2017] KECA 272 (KLR)

Court of Appeal
29 September 2017
AVAlnashir VisramHOH. M. OkwenguGKG. B. M. Kariuki
3,707 words in judgment
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The bottom line

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Kenya's Court of Appeal confirmed that clients challenging how their lawyers' fees were taxed need real evidence of error, not just disagreement with the amount.

What this practically means

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Executive summary

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This appeal arose from a ruling of the High Court (Odunga, J.) in a reference against the taxing master's decision on an advocate/client Bill of Costs. The taxing officer had taxed off Kshs.122,464,371 and allowed Kshs.32,447,332, including instruction fees of Kshs.5,000,000, getting up fees of Kshs.16,666,667, separate instruction fees of Kshs.5,000,000 for arbitration, and various disbursements. The learned Judge upheld the taxing officer on all items except instruction fees for the arbitral process and fees for legal research, which he remitted for re-taxation by a different Deputy Registrar. The appellants challenged the Judge's treatment of the instruction fees, getting up fees and disbursements. The Court of Appeal held that the taxing officer properly exercised his discretion in determining the value of the subject matter using the undisputed valuation of one of Fig Tree Hotel Limited's properties, consistent with Joreth Ltd v Kigano & Associates and Kamunyori & Co Advocates v Development Bank of Kenya Limited. The increase of the basic instruction fee was within paragraph 5 of the Remuneration Order, as the taxing officer took into account the nature, importance and complexity of the matter, and no error of principle was shown. Getting up fees were justified because the suit had been set down for hearing before referral to arbitration. On disbursements, the taxing officer enjoys a very wide discretion under paragraph 16, and the appellants' objections were mere murmurs of dissatisfaction unsupported by evidence. The Court of Appeal, in a single unanimous judgment, upheld the High Court decision and dismissed the appeal with costs.

Key legal issues

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01

Determination of the value of the subject matter where it is not ascertainable from pleadings, judgment or settlement

Holding

In the absence of pleadings or judgment disclosing the value, the taxing officer properly exercised his discretion by using the best evidence available, namely the undisputed value of one of the company's properties

Reasoning

The dispute concerned shareholding in Fig Tree Hotel Limited; the pleadings and judgment did not disclose the value of the subject matter. The taxing officer relied on the undisputed valuation of one of the company's properties on record. The Court held this was consistent with Joreth Ltd v Kigano & Associates and Kamunyori, and the learned Judge's approach could not be faulted.

p. 5
02

Increase of the basic instruction fee to Kshs. 5,000,000

Holding

The taxing officer exercised his discretion under paragraph 5 of the Remuneration Order, taking into account the nature, importance, complexity and volume of work, and committed no error of principle

Reasoning

Although the taxing officer did not cite the provision, his stated considerations matched the criteria in section 5(2) of the Advocates Remuneration Order for special fees in matters of exceptional importance or unusual complexity. The learned Judge rightly found no justification for interference; no irrelevant matters were considered and none relevant omitted.

p. 6
03

Justification of getting up fees where the suit was set down for hearing before referral to arbitration

Holding

Since the matter had been fixed for hearing on 14th August 2008 when the consent referring it to arbitration was recorded, the advocate must have prepared for hearing and the getting up fees were justified

Reasoning

The record showed an order of 14th August 2008 that the suit came up for hearing of an application when a consent allowed temporary restraining orders and referred the matter to arbitration. Preparation for hearing is therefore presumed, and the learned Judge did not err in declining to interfere with the taxing officer's finding of fact.

p. 6
04

Scope of the taxing officer's and the Judge's discretion over disbursements

Holding

The taxing officer has a very wide discretion under paragraph 16 of the Remuneration Order to allow costs, charges and expenses necessary or proper; the Judge could not interfere absent evidence that the discretion was not exercised judiciously

Reasoning

The disbursements (arbitrator's fees, stenographer's fees and accountants' fees) arose from the consent order referring the matter to arbitration, and the arbitral proceedings were on record. The appellants offered only mere murmurs of dissatisfaction without proof that the expenses were unnecessary or incurred through over-caution, negligence or mistake.

p. 6

Legal principles established

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  • A taxing officer's discretion must be exercised judiciously and in accordance with the scale in the Remuneration Order; a judge on a reference may interfere where relevant considerations were not taken into account, irrelevant ones were, or the award is so high or so low as to amount to injustice
  • The value of the subject matter for taxation is to be determined from the pleadings, judgment or settlement; where it is not so ascertainable, the taxing officer may use his discretion to assess a just instruction fee on the best evidence available
  • Where a matter has been fixed for hearing, an advocate is presumed to have prepared for that hearing and getting up fees are justified

Court orders

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  1. 1.Upholding the decision of the learned Judge of the High Court
  2. 2.Dismissing the appeal with costs

Authorities

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Legislation

  • Advocates Remuneration OrderParagraph 16
  • Advocates Remuneration OrderParagraph 5(1)
  • Advocates Remuneration OrderSection 5(2)
  • Advocates Remuneration OrderSchedule VI
  • Advocates Remuneration OrderSchedule VI B
  • Advocates Remuneration OrderSchedule VI (h)

Cases cited (6)

  • Moronge & Co Advocates v Kenya Airports Authority
    [2014] eKLR
  • Kamunyori & Co Advocates v Development Bank of Kenya Limited
    [2015] eKLR
  • Devshi Dhanji & Others v Kanji Naran Patel and others
    1978 KLR 243
  • Premchand Raichand Ltd & Anor v Quarry Services of East Africa Ltd & others
    (1972) EA 162
  • Kipkorir Titoo & Kiara Advocates v Deposit Protection Fund Board
    Civil Appeal No. 220 of 2004 (UR)
  • Joreth Ltd v Kigano & Associates
    Civil Appeal No. 66 of 1999 [2002] eKLR
On appeal from
High Court of Kenya at Nairobi
Misc. Application No. 516 of 2009
Jurisdiction invoked
First appeal to the Court of Appeal against a ruling of the High Court on a reference from the taxing master

Key timeline

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Practical implications

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Frequently asked questions

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Later judgments citing this (11)

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Judgments in the corpus that rely on this one. Where the Court said how it treated the authority, that is shown.

Cite this brief

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Cite this brief

Caselaw, "Lucy Waithira & 2 others v Edwin Njagi T/A E. K Njagi & Company Advocates [2017] KECA 272 (KLR)", Case Analysis (2017). Civil Appeal No. 292 of 2012. Source: https://new.kenyalaw.org/akn/ke/judgment/keca/2017/272/eng@2017-09-29

Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.