Machira & Co. Advocates v Arthur K. Magugu & another [2019] KECA 867 (KLR)
The bottom line
#Kenya's Court of Appeal ruled that a law firm earns interest on taxed fees from the date of taxation, not when judgment is later entered, if delays weren't its fault.
What this practically means
#Executive summary
#Questions the Court framed
#The issues the Court set itself to decide, in its own words.
- 1.Whether the appellant is entitled to interest of 14% per annum from the date of filing the bill of costs (4th April, 2001)
- 2.Whether the learned Judge erred in awarding interest at court rates from the date of her ruling (26th May, 2015) rather than from the date of taxation (30th July, 2001)
Key legal issues
#Entitlement to contractual interest at 14% under Rule 7 of the Advocates' Remuneration Order
The appellant was not entitled to 14% interest because it failed to prove that it claimed interest at least one month before filing the bill of costs
Rule 7 of the Advocates' Remuneration Order permits an advocate to charge 14% interest only where the claim for interest is raised before the bill is paid or tendered in full. The trial judge found, and this Court agreed, that the appellant furnished no evidence of such a claim; the letter relied on referred only to the decretal sum and the firm's letter of 9th August, 2001 was never produced.
The date from which interest on the taxed costs should run
Interest at court rates runs from the date of taxation (30th July, 2001), not from the date of the High Court ruling; the trial judge's discretion was wrongly exercised
The delay in seeking entry of judgment was attributable to the respondents' successful applications to set aside the taxation and review it, and the appeal to this Court decided in 2012. The appellant was therefore not dilatory, and the judge erred in penalising it by awarding interest only from the date of her ruling. The Court interfered with the discretionary award under the Mbogo v Shah principles.
Statutory power to award retrospective interest
Section 26 of the Civil Procedure Act and Section 51 of the Advocates Act empower a court to award interest at any rate and from any date it considers fair and just
The Court considered the text of section 26 of the Civil Procedure Act, which permits interest on the principal sum adjudged and further interest from the date of the decree, and section 51 of the Advocates Act, and concluded that together they confer a wide discretion to award interest retrospectively or from any date the court deems fair in the circumstances of the particular case.
Legal principles established
#- An appellate court may interfere with a judge's exercise of discretion on award of interest where the judge misdirected himself or acted on wrong principles
- Sections 26 of the Civil Procedure Act and 51 of the Advocates Act empower a court to award any rate of interest retrospectively and/or from any date the court considers fair and just
- Entitlement to interest at 14% under Rule 7 of the Advocates' Remuneration Order requires proof that the claim for interest was raised before payment or tender of the bill
- An advocate who was prevented from entering judgment by pending applications and an appeal is not dilatory and is entitled to interest from the date of taxation
Court orders
#- 1.The part of the Decree/Decision of the High Court in Misc. Civil Application No. 151 of 2001 made on 26th May, 2015 be and is hereby set aside and the same is substituted with Judgment of this Court awarding interest at court rates on the principal sum of Kshs.4,500,000/= from 30th July, 2001
- 2.The appellant shall have costs of this appeal
The bench
#One judgment of the whole court — no separate or dissenting opinions.
- On appeal from
- High Court of Kenya at Nairobi
- H.C. Misc. Application No. 151 of 2001
- Jurisdiction invoked
- First appeal to the Court of Appeal under the Court of Appeal's appellate jurisdiction (the judgment does not cite a specific provision)
Relief refused
#Interest at 14% per annum from the date of filing the bill of costs
The appellant produced no evidence that it claimed interest at 14% at least one month before filing the bill of costs as required by Rule 7 of the Advocates' Remuneration Order
Costs
The appellant shall have costs of this appeal
Quotable passages
#Verbatim from the judgment, each located to the page it appears on in the official PDF — so these can be cited and checked directly.
a) The part of the Decree/Decision of the High Court in Misc. Civil Application No. 151 of 2001 made on 26 th May, 2015 be and is hereby set aside and the same is substituted with Judgment of this Court awarding interest at court rates on the principal sum of Kshs.4,500,000/= from 30th July, 2001.
We find that in the circumstances of this case the appellant was not dilatory in filing their application for entry of judgment, and was therefore entitled to interest from the date of taxation.
Section 26 of the Civil Procedure Act and Section 51 of the Advocates Act empower a Judge or Judicial Officer to award any rate of interest retrospectively and/or from any date that the Court may consider fair and just in the circumstances of the particular case.
They were therefore not entitled to interest at 14%.
Issues in the judgment
#The judgment inconsistently records the date of the taxing master's order, referring to taxation on 30th July, 2001 in places and to an order dated 20th July, 2001 in others
The memorandum of appeal describes the earlier Court of Appeal judgment as awarding interest at 12% p.a. from the date of taxation, whereas the judgment itself quotes the 2012 decision as awarding interest at court rates from the date of taxation
Key timeline
#Practical implications
#Frequently asked questions
#Cite this brief
#Cite this brief
Caselaw, "Machira & Co. Advocates v Arthur K. Magugu & another [2019] KECA 867 (KLR)", Case Analysis (2019). Civil Appeal No. 30 of 2016. Source: https://new.kenyalaw.org/akn/ke/judgment/keca/2019/867/eng@2019-03-08
Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.