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Court of AppealPartially AllowedCivil Appeal No. 39 of 2017· [2021] KECA 587 (KLR)

Otieno, Ragot & Company Advocates v Kenya Airports Authority [2021] KECA 587 (KLR)

Court of Appeal
19 May 2021
15,944 words in judgment
View original judgmentRead on Kenya Law Watch case
AI-assisted case brief
·~64 min to read original · ~4 min brief

The bottom line

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Kenya's Court of Appeal ruled that once party-and-party costs are taxed, an advocate's instruction fees are fixed by formula—here worth Kshs. 196 million.

What this practically means

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Executive summary

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The appellant firm of advocates was instructed by Kenya Airports Authority to defend Kisumu HCCC No. 156 of 2009, in which 54 plaintiffs claimed Kshs. 13,932,000,000 for compulsory acquisition of land. The suit was struck out for want of jurisdiction, after which party and party costs in the same suit were taxed and certified at Kshs. 151,650,000, unchallenged. When the advocates later taxed their advocate and client bill, the taxing officer declined to adopt the taxed instruction fees, holding the two bills independent, and awarded only Kshs. 7,549,601.50. The High Court (Majanja, J) upheld that decision but awarded 14% interest from the date of taxation. Allowing the appeal by a 2-1 majority, the Court of Appeal held that once party and party costs in the same suit are taxed and certified, the instruction fees therein become final and binding under section 51(2) of the Advocates Act, and Schedule VI Part B mandatorily requires an increase of one-half with no further discretion. Failing to apply the formula, and invoking public interest instead, were errors of principle. The Court taxed the instruction fees at Kshs. 196,044,750.50 and set aside the High Court's ruling on instruction fees and interest. It held rule 7 interest accrues one month after delivery of the bill but declined the 14% award because interest was not claimed in the Bill of Costs. Ouko, P concurred; Gatembu, JA dissented, holding the pleaded figure was a 'figure from nowhere' and discretion properly lay with the taxing officer. As the appeal succeeded in part, each party bears their own costs throughout.

Key legal issues

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01

Whether the taxing officer could re-determine instruction fees when party and party costs in the same suit had already been taxed and certified

Holding

No. The taxed party and party certificate fixed the instruction fees finally; the taxing officer was bound to apply the Schedule VI Part B formula (increase by 50%) rather than exercise a fresh discretion based on public interest.

Reasoning

Section 51(2) of the Advocates Act makes the certificate of taxation final unless set aside or altered. The party and party bill was taxed and certified on 15 July 2010 and never challenged. The instruction fees were therefore effectively disposed of and could not be reopened by another taxing court of concurrent jurisdiction. Schedule VI Part B leaves no discretion once Part A is determined; the formula is arithmetical. Failing to apply it, and instead relying on public interest, was an error of principle.

p. 5
02

Whether the High Court erred in upholding the taxing officer's disregard of the certificate of costs

Holding

Yes. The learned judge rightly acknowledged the Part B formula was mandatory but then endorsed the taxing officer's failure to consider the certificate, a contradiction amounting to a grave misdirection.

Reasoning

The judge's conclusion that the formula in Schedule 6 Part B must be adhered to, coupled with the finding that the taxing officer did not err in ignoring the certificate of costs, was internally contradictory. Upholding the taxing officer's disregard of the unchallenged certificate was tantamount to permitting the taxing officer to sit on appeal over her coordinate's decision. The judge therefore took into account irrelevant matters and reached the wrong conclusion, warranting appellate interference.

p. 6
03

Whether the value of the subject matter was ascertainable from the pleadings

Holding

Yes (majority). The plaint specifically pleaded Kshs. 13,932,000,000 as special damages and the decree acknowledged the claim; that figure was the value of the subject matter for taxation.

Reasoning

Under Order 2 and Order 4 of the Civil Procedure Rules a pleading must contain only material facts, not evidence, and a plaint seeking recovery of money must state the precise amount claimed. The plaintiffs complied by pleading Kshs. 13,932,000,000. Whether the claim would succeed on evidence was irrelevant to taxation, since the suit was struck out before trial. The value was therefore ascertainable from the pleadings, per Joreth Ltd v Kigano & Associates.

p. 11
04

From what date interest on taxed costs accrues under rule 7

Holding

Interest under rule 7 accrues from the expiry of one month from delivery of the bill or fee note, but the rule was not engaged because interest was not claimed in the Bill of Costs.

Reasoning

Rule 7 clearly stipulates that interest at 14% per annum runs from one month after delivery of the bill, so the judge's reasoning that the rule does not specify a start date was a misdirection. However, the appellant's Bill of Costs did not include a charge for interest, which is the basis on which the taxing officer computes amounts due; that omission negates rule 7 and leaves interest to the court's discretion under section 26 of the Civil Procedure Act. No basis for 14% interest was established.

p. 7

Legal principles established

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  • Once party and party costs in the same suit have been taxed and a certificate of costs issued, the instruction fees therein are final and binding and must be increased by one-half under Schedule VI Part B to determine advocate and client instruction fees; no further discretion arises.
  • Advocate and client costs cannot be ascertained independently of party and party costs; Part B is an arithmetical computation derived from Part A.
  • A certificate of the taxing officer is final as to the amount of costs covered unless set aside or altered by the Court.
  • Interest under rule 7 of the Advocates Remuneration Order begins to accrue from the expiry of one month from the date of delivery of the bill or fee note.
  • An appellate court will not interfere with a taxing officer's discretion unless the taxing officer erred in principle.

Court orders

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  1. 1.The appellant's instruction fees are taxed in terms of Schedule VI Part A and B of the Advocates Remuneration Order in the sum of Kshs. 196,044,750.50
  2. 2.The ruling and orders of the High Court on instruction fees and interest are set aside
  3. 3.Each party to bear their own costs in this Court and in the lower courts

Authorities

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Legislation

  • Advocates Remuneration OrderSchedule VI Part A
  • Advocates Remuneration OrderSchedule VI Part B
  • Advocates Remuneration Orderrule 7
  • Advocates Remuneration Orderrule 16
  • Advocates Remuneration Orderparagraph 57
  • Advocates Remuneration Amendment OrderSchedule VI (1)(ii), 2006
  • Advocates Actsection 51(2)
  • Civil Procedure Actsection 26
  • Civil Procedure RulesOrder 2, rules 2 and 3
  • Civil Procedure RulesOrder 4, rule 2
  • Kenya Airports Authority ActCap 395
  • Land Acquisition ActCap 295
  • Constitution of Kenya

Cases cited (24)

  • Mbogo & Another vs Shah
    [1968] EA, p.15
  • Kipkorir, Tito & Kiara Advocates vs Deposit Protection Fund Board
    [2005] eKLR
  • Joreth Ltd vs Kigano & Associates
    [2002] 1 E.A. 92
  • Peter Muthoka & another vs Ochieng & 3 others
    [2019] eKLR
  • Lubulellah & Associates Advocates vs N. K. Brothers Limited
    [2014] eKLR
  • Musyoka & Wambua Advocates vs Rustam Hira Advocate
    [2006] eKLR
  • Central Bank of Kenya vs Makhecha & Co. Advocates
    [2019] eKLR (Civil Appeal (Application) No. 48 of 2014)
  • D. Njogu and Co. Advocates vs Kenya National Capital Authority
    Miscellaneous Application No. 21 of 2003 [2005] eKLR
  • D. Njogu & Company Advocates vs Kenya National Capital Corporation
    [2006] eKLR
  • Kenya Tea Development Agency vs J.M. Njenga & Co Advocates
    [2011] eKLR
  • Vipul Premchand Haria vs Kilonzo & Co Advocates
    [2020] eKLR
  • George Arunga Sino vs Patrick J.O & Geoffrey D.O. Yogo T/A Otieno Yogo & Co. Advocates
    [2012] eKLR
  • Moronge and Company Advocates vs Kenya Airports Authority
    [2014] eKLR; KSM CA Civil Appeal No. 262 of 2012
  • Kamunyori & Company Advocates vs Development Bank of Kenya Limited
    (2015) Civil Appeal 206 of 2006
  • Lucy Waithira & 2 others vs Edwin Njagi T/A E. K Njagi & Company Advocates
    [2017] eKLR
  • B Mbai & Associates Advocates vs Clerk, Kiambu County Assembly & Another
    [2017] eKLR
  • M/S Nyaundi Tuiyott & Co. Advocates vs Tarita Development Ltd.
    [2016] eKLR
  • J M Njenga & Co. Advocates vs Kenya Tea Development Agency Limited
    [2011] eKLR
  • Otieno Ragot & Company Advocates vs. National Bank of Kenya
    KSM H.C Misc. Appl. No. 61 of 2015
  • Capital Fish Kenya Limited vs. The Kenya Power and Lighting Company Limited
    [2016] eKLR
  • Mercy Nduta Mwangi t/a Mwangi Keng'ara & Company Advocates vs. Invesco Assurance Company Limited
    [2017] eKLR
  • Arthur Vs Nyeri Electricity Undertaking
    [1961] E.A 492
  • Premchand Raichand Limited & another vs. Quarry Services of East Africa Limited and another
    [1972] E.A 162
  • First American Bank of Kenya vs. Shah and others
    [2002] EA 64
On appeal from
High Court of Kenya at Nairobi
Miscellaneous Application No. 95 of 2011
Jurisdiction invoked
First appeal to the Court of Appeal against the High Court's decision on a reference from taxation (Advocates Act; Court of Appeal appellate jurisdiction)

Key timeline

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Practical implications

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Frequently asked questions

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Later judgments citing this (5)

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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, "Otieno, Ragot & Company Advocates v Kenya Airports Authority [2021] KECA 587 (KLR)", Case Analysis (2021). Civil Appeal No. 39 of 2017. Source: https://new.kenyalaw.org/akn/ke/judgment/keca/2021/587/eng@2021-05-19

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