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Court of AppealDismissedCivil Appeal No. 203 of 2018

Andy Forwarders Services Limited & another v Ochieng, Onyango, Kibet & Ohaga Advocates [2019] KECA 552 (KLR)

Court of Appeal of Kenya
5 July 2019
2,641 words in judgment
View original judgmentRead on Kenya Law Watch case
AI-assisted case brief
·~11 min to read original · ~4 min brief

The bottom line

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Kenya's Court of Appeal confirmed that clients challenging their legal bill must prove an error of principle, and must produce the documents they want used to set fees.

What this practically means

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Executive summary

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This Court of Appeal judgment, delivered as a single judgment of the court by Waki, Nambuye and Gatembu Kairu, JJ.A, arises from an advocate-client dispute over legal fees. The advocates, retained by the clients to prosecute a suit against Price Waterhouse Coopers Ltd and others, filed a bill of costs seeking Kshs.91,214,851.06. The taxing officer allowed Kshs.3,000,000.00 as instruction fees, disallowed the getting up fee entirely, and taxed the bill at Kshs.5,623,851.06. The clients' Rule 11(2) reference succeeded only on extension of time: Olga Sewe, J., by ruling of 22nd September 2017, declined to set aside the taxation, finding no error of principle and noting that the Deed of Settlement, on which the clients wanted the instruction fee based, was never availed to the taxing officer. On appeal, the clients argued the value of the subject matter should have been ascertained from the Deed of Settlement and alleged concealment by the advocates. The Court of Appeal affirmed the High Court, holding that interference with a taxing officer's decision requires an error of principle; that the taxing officer properly exercised her discretion after finding the subject matter unascertainable from the pleadings, judgment or settlement; and that the clients, who had kept the Deed confidential, could not fault the advocates for non-disclosure. The Deed, even when later disclosed, disclosed no value. The appeal was dismissed with costs to the advocates.

Questions the Court framed

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The issues the Court set itself to decide, in its own words.

  1. 1.Whether the taxing officer committed an error of principle in awarding Kshs.3,000,000.00 as instruction fee instead of basing the fee on the Deed of Settlement
  2. 2.Whether the value of the subject matter could be ascertained from the Deed of Settlement for purposes of assessing the instruction fee
  3. 3.Whether the Court of Appeal may interfere with the discretionary decision of the High Court on the reference

Key legal issues

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01

Error of principle as the threshold for interference with a taxing officer's decision

Holding

The Court upheld the two courts below: absent an error of principle, or a manifestly excessive award, the taxation stands.

Reasoning

The Court restated that interference with a taxing officer's decision lies only on proof of an error of principle, and that a manifestly excessive instruction fee may support an inference of such error. Here the taxing officer applied the Joreth Limited v Kigano principles, found the subject matter unascertainable from the pleadings, judgment or settlement, and exercised her discretion having considered the nature and importance of the matter, the work done and all relevant circumstances. The High Court found no error of principle, and this Court agreed.

p. 4
02

Whether the instruction fee should have been based on the Deed of Settlement

Holding

No. The Deed of Settlement was confidential and not disclosed to the taxing officer; the clients, who possessed it, bore the onus of producing it; and it disclosed no value in any event.

Reasoning

The clients instructed the advocates that the settlement details were confidential to shareholders, so they could not fault the advocates for non-disclosure. The Deed first surfaced as an attachment to an affidavit filed in June 2016, well after taxation, and even then revealed no monetary value. The taxing officer therefore properly exercised her discretion in fixing the instruction fee without reference to the settlement, and the Judge correctly declined to disturb that exercise.

p. 4

Legal principles established

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  • A court may interfere with a taxing officer's decision on a reference only where it is satisfied that the decision is based on an error of principle; a manifestly excessive award may justify such an inference.
  • An appellate court may interfere with the High Court's discretionary decision only on the established grounds of misdirection in law, misapprehension of facts, taking into account irrelevant or failing to take into account relevant considerations, or a decision that is plainly wrong.
  • Where a party has possession of a document (such as a Deed of Settlement) and intends to rely on it before a taxing officer, it is incumbent on that party to produce it; it cannot fault the opposing party for non-disclosure of a document kept confidential from that party.

Court orders

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  1. 1.The appeal is dismissed with costs to the advocates

The bench

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One judgment of the whole court — no separate or dissenting opinions.

majority

Wrote the judgment

majority

Wrote the judgment

majority

Wrote the judgment

On appeal from
High Court of Kenya at Nairobi
H.C.MISC. C.APPL. No. 135 of 2014
Jurisdiction invoked
First appellate jurisdiction over the High Court's ruling in an advocate-client taxation reference (Advocates Remuneration Order, 2009, Rule 11(2))

Relief refused

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Setting aside the taxation and remitting the bill for fresh taxation based on the Deed of Settlement

No error of principle by the taxing officer; the Deed of Settlement was not disclosed to the taxing officer, and even when later disclosed it did not disclose any value of the subject matter

p. 4

Costs

The appeal is dismissed with costs to the advocates

Quotable passages

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Verbatim from the judgment, each located to the page it appears on in the official PDF — so these can be cited and checked directly.

The appeal is devoid of merit and is accordingly dismissed with costs to the advocates.
p. 5Disposition
For the High Court to interfere with a decision of a taxing officer on a reference, it has to be satisfied that the impugned decision of the taxing officer is based an error of principle.
p. 3Standard for interference with taxation
There is no error of principle attributable to the taxing officer. We have no basis for interfering with the decision of the High Court.
p. 4Application to the facts
The circumstances when an appellate court may justifiably interfere with the decision of the High Court are absent in this case.
p. 4Appellate interference with discretionary decisions

Key timeline

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Practical implications

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Frequently asked questions

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Later judgments citing this (1)

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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, "Andy Forwarders Services Limited & another v Ochieng, Onyango, Kibet & Ohaga Advocates [2019] KECA 552 (KLR)", Case Analysis (2019). Civil Appeal No. 203 of 2018. Source: https://new.kenyalaw.org/akn/ke/judgment/keca/2019/552/eng@2019-07-05

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