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ELCPartially AllowedMiscellaneous Applications Nos. 13, 14, 15, 16, 17, 41 and 42 of 2013· [2014] KEELC 214 (KLR)

Kenyariri & Associates Advocates v Salama Beach Hotel Ltd & 4 others [2014] KEELC 214 (KLR)

High Court of Kenya
26 September 2014
4,693 words in judgment
View original judgmentRead on Kenya Law Watch case
AI-assisted case brief
·~19 min to read original · ~4 min brief

The bottom line

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Kenya's High Court clarified how advocates' fees are taxed: fees follow the court's final award, counter-claims count as separate suits, and only the advocate who drafted the claim earns full instruction fees.

What this practically means

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Executive summary

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This judgment disposes of cross-references under Rule 11 of the Advocates Remuneration Order arising from seven consolidated advocate-client Bills of Costs, both sides challenging the Deputy Registrar's taxation of instruction fees. The court reiterated that a Judge on a reference interferes only where the taxing officer erred in principle, and that once a court has made an award, instruction fees must be computed on the awarded figure rather than the pleaded claim. In judicial review and constitutional matters, instruction fees are not pegged to the value of the subject matter. The court held that a counter-claim is in all respects a suit by the defendant and awarded the Applicant instruction fees of Kshs. 1,226,500 on the Kshs. 84,000,000 counter-claim in Miscellaneous Application No. 17 of 2013, noting that the rival firm's earlier defence and counter-claim had been struck out and it was unconscionable for two advocates to earn full instruction fees on the same defence. The Respondents succeeded in Miscellaneous Application No. 15 of 2013, where instruction fees were re-taxed downward to Kshs. 79,689 because the underlying bill had been re-taxed. The court upheld the deduction of the proved payments of Kshs. 5,784,550 from the taxed figure, placed the burden of proving payments on the clients, and held the taxing officer was entitled to disregard the unsigned vehicle importation agreement. All other prayers in both applications were dismissed, with each party bearing their own costs.

Key legal issues

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01

Basis of instruction fees where an award has been made

Holding

The taxing officer rightly used the amount awarded by the court rather than the amount claimed in Misc. Application No. 13 of 2013.

Reasoning

The court reasoned that when a bill of costs is taxed before determination, the pleaded amount applies, but once the court has made an award the taxing officer must use the awarded figure when calculating instruction fees. In Misc. 13 of 2013 the taxing officer used the taxed award of Ksh. 2,916,814, following the Lubellellah decision, and therefore committed no error of principle.

p. 4
02

Instruction fees in judicial review/constitutional matters

Holding

Instruction fees in such matters are not pegged on the value of the subject matter; the award of Ksh. 400,000 in Misc. No. 14 of 2013 was properly made.

Reasoning

Relying on R vs Minister of Agriculture, ex-parte Samuel W. Njuguna, the taxing officer treated judicial review proceedings as purely public law proceedings free of private business arrangements or earnings. The court agreed that the nature of the matter was judicial review and that the ascertainable value of the property was immaterial except to show complexity. Considering the complexity and research required, the taxing officer did not err in principle.

p. 5
03

Instruction fees in Misc. No. 15 of 2013 based on a re-taxed bill

Holding

The instruction fees were re-taxed at Kshs. 79,689 because the underlying bill had been re-taxed at Kshs. 1,179,255, not Kshs. 17,900,720.

Reasoning

The underlying bill in Katunga Mbuvi & Co. Advocates v Salama Beach Hotel Limited had been re-taxed and the award reduced to Kshs. 1,179,255. Since the court must use the current awarded figure, the taxing officer erred in using the earlier figure of Ksh. 17,900,720. The court re-computed instruction fees at Kshs. 79,689 and allowed the Respondents' application on this point.

p. 5
04

Entitlement of a subsequent advocate to full instruction fees

Holding

In Misc. No. 16 of 2013 the Applicant, who did not draw the Plaint and only filed two applications, was properly awarded Kshs. 300,000 for the applications only.

Reasoning

Following First American Bank of Kenya v Shah, an advocate becomes entitled to full instruction fees upon filing a defence, and the advocate who draws a Plaint earns the full instruction fees regardless of progress. Subsequent advocates can only be paid for actual work done. Having not drawn the Plaint in HCCC No. 118 of 2009, the Applicant could not claim the suit's full instruction fees, only for the two applications he drew and prosecuted.

p. 6
05

Instruction fees on a counter-claim (Misc. No. 17 of 2013)

Holding

A counter-claim is in all respects a suit by the defendant; the Applicant is entitled to instruction fees of Kshs. 1,226,500 on the counter-claim of Kshs. 84,000,000.

Reasoning

The taxing officer awarded full instruction fees for the defence but none for the counter-claim. The court held that a counter-claim contains assertions the defendant could have made by starting a lawsuit and is governed by nearly the same rules as a plaintiff's claim, so it is a suit in all respects. The taxing officer erred in not awarding instruction fees on it, and the court awarded Kshs. 1,226,500.

p. 6
06

Watching brief and the vehicle agreement deduction

Holding

The award of Ksh. 100,000 for a watching brief in Misc. No. 41 of 2013 was not disturbed, and the taxing officer was entitled to disregard the unsigned vehicle agreement in assessing payments.

Reasoning

No good reason was given to interfere with the taxing officer's discretion on the watching brief award. On the vehicle agreement, the document on its face showed the lender as Accredo Ag and the Applicant as borrower, was signed only on behalf of the lender, and there was no indication the Applicant signed it. Consequently, the taxing officer could not be faulted for disregarding it, and only JPY 1,160,000 was accounted for by the agreement.

p. 8

Legal principles established

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  • A Judge on a reference will not interfere with a taxing officer's discretion unless the taxing officer erred in principle, for example where costs allowed are so manifestly excessive as to justify an inference of erroneous principles.
  • If an advocate taxes a bill before the matter is determined, instruction fees are based on the pleaded amount; once an award has been made, the figure awarded by the court is used.
  • In constitutional and judicial review matters, instruction fees are not pegged on the value of the subject matter.
  • Instruction fees are only payable to an advocate in respect of work done; the advocate who draws a Plaint or files a Defence earns the full instruction fees, and subsequent advocates are paid only for actual work done.
  • A counter-claim is in all respects a suit by the defendant, attracting its own instruction fees.
  • The burden of showing what has been paid to the advocate lies with the client who alleges payment.

Court orders

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  1. 1.The Applicant's Chamber Summons dated 14th June 2014 is allowed in respect to instruction fees payable on the Counter claim in Miscellaneous Application number 17 of 2013 only; the payable instruction fees on the counter claim is Kshs. 1,226,500 which shall be increased by half less VAT and added to the already taxed bill of costs
  2. 2.The other prayers in the Applicant's Chamber Summons dated 14th June 2014 are dismissed
  3. 3.The Respondents' Chamber Summons dated 25th June 2014 in respect to Miscellaneous Application number 15 of 2013 is allowed; the payable instruction fees is Kshs. 79,689 and not Kshs. 330,510, to be increased by a half less VAT
  4. 4.The other prayers in the Respondents' Chamber Summons dated 25th June 2014 are dismissed
  5. 5.Each party shall bear their own costs

Authorities

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Legislation

  • Advocates Remuneration OrderRule 11
  • Advocates Remuneration OrderSchedule VI
  • Advocates Remuneration OrderSchedule VII

Cases cited (7)

  • Joreth vs Kigano & Associates
    (2002) EA 92
  • Kipkorir, Titoo & Kiari Advocates vs Deposit Protection Fund Board
    (2005) 1 KLR 528
  • Arthur Vs Nyeri Electricity Undertaking
    (1961) EA 497
  • Lubellellah & Associates Advocates vs N. K. Brother
    Nairobi Misc. Application No. 52 of 2012
  • R vs Minister of Agriculture, ex-parte Samuel W. Njuguna
  • Leornard Katunga Mbuvi T/a Katunga Mbuvi & Advocates vs Accredo Ag & Others
    Malindi Civil Application No. 59 of 2011
  • First American Bank of Kenya vs Shah & Another
    (2002) 1 EA 64
Jurisdiction invoked
Rule 11 of the Advocates Remuneration Order (reference to a Judge from taxation by the taxing officer)

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, "Kenyariri & Associates Advocates v Salama Beach Hotel Ltd & 4 others [2014] KEELC 214 (KLR)", Case Analysis (2014). Miscellaneous Applications Nos. 13, 14, 15, 16, 17, 41 and 42 of 2013. Source: https://new.kenyalaw.org/akn/ke/judgment/keelc/2014/214/eng@2014-09-26

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