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ELCPartially AllowedMiscellaneous Application (Reference) re Bill of Costs dated 2/9/2016 (chamber summons dated 13/3/2017)· [2018] KEELC 3188 (KLR)

Kimani Richu & Associates Advocates v Centurion Holdings Limited [2018] KEELC 3188 (KLR)

High Court of Kenya
25 May 2018
3,019 words in judgment
View original judgmentRead on Kenya Law Watch case
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The bottom line

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What this practically means

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Executive summary

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Kimani Richu & Associates Advocates, instructed as purchaser's advocate for Centurion Holdings Limited in an aborted sale of two properties (LR No 12565/37 and 12565/38) valued at Kshs 85,000,000, filed a bill of costs claiming instruction fees of Kshs 1,300,000 under Schedule 1 of the Advocates (Remuneration) (Amendment) Order 2014. The taxing officer taxed off Kshs 1,200,000 and assessed instruction fees at Kshs 100,000, holding that because the conveyance was not completed and the advocate only prepared (and did not complete) the sale agreement, the bill fell for taxation under Schedule V, applying Chokaa and Company Advocates v The Deposit Protection Fund. The advocate filed a reference by chamber summons contending that the taxing officer erred in principle by applying the wrong schedule, ignoring the value of the subject matter, and ignoring the work actually done. The client opposed, arguing the discretion was properly exercised, the applicable schedule was Part II of Schedule 5, and the conveyance aborted partly due to the advocate's negligence. Eboso J framed two issues: whether the wrong schedule and principles were applied, and whether Kshs 100,000 was manifestly low. The court held that conveyancing services, whether completed or not, must be taxed under the schedule covering those services (Schedule 1), using the instruction fee for a completed conveyance as the baseline for a proportionate award; taxing under Schedule V was an error of principle, and the fee of Kshs 100,000 was manifestly low. The reference was allowed and the bill remitted for fresh taxation under Schedule 1.

Key legal issues

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01

Whether the taxing officer erred in taxing a conveyancing bill under Schedule V instead of Schedule 1 of the Advocates (Remuneration) (Amendment) Order 2014

Holding

She erred; Schedule 1 covers sale and purchase of land services and applies even where the conveyance was not completed

Reasoning

The Remuneration Order categorises and costs services by schedule; the First Part of Schedule 1 covers sales and purchases of land. Taxing conveyancing services under a schedule not covering conveyancing risks a figure inordinately high or low. The taxing officer's view that an incomplete sale is not provided for under Schedule 1 was an error; she should have applied Schedule 1 while considering the extent of services rendered and what remained to complete the conveyance.

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02

Whether an instruction fee of Kshs 100,000 for an aborted conveyance of property worth Kshs 85,000,000 was manifestly low

Holding

Yes, it was manifestly low and did not accord with the services rendered

Reasoning

The advocate executed the agreement for sale, investigated the title, and prepared and sent transfer instruments before the vendor failed to avail completion documents. A fee of Kshs 100,000 arrived at under the wrong schedule bore no rational relationship to the value of the subject matter and the services rendered, amounting to a wrong principle producing a wrong result.

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Legal principles established

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  • In taxing a conveyancing brief, whether completed or not, the taxing officer must be guided by the schedule covering the relevant services; using the wrong schedule or baseline is an error of principle
  • The baseline for assessing fees on an incomplete conveyance is the instruction fee stipulated for a completed conveyance, proportionately adjusted for services actually rendered

Court orders

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  1. 1.The chamber summons dated 13/3/2017 is allowed
  2. 2.The bill of costs is remitted to the taxing officer for fresh taxation under Schedule 1 of the Advocates (Remuneration) (Amendment) Order 2014

Authorities

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Legislation

  • Advocates (Remuneration) (Amendment) Order 2014Schedule 1; Schedule 5; Schedule 6
  • Advocates (Remuneration) (Amendment) Order 2009Paragraph 18(f) Part II
  • Advocates Remuneration OrderRule 20; paragraph 22

Cases cited (4)

  • Kagwimi Kangethe & Company v A. A Kawir Transporters Limited
    (2014) eKLR
  • Hayanga & Co. Advocates v Royal Garden Developers Limited
    Milimani Misc. Application No. 305 of 2004
  • First American Bank of Kenya v Shah & Others
  • Chokaa and Company Advocates v The Deposit Protection Fund
    (2007)
Jurisdiction invoked
Inherent jurisdiction of the High Court to review a taxing officer's decision on a reference by way of chamber summons under the Advocates (Remuneration) Order

Key timeline

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Practical implications

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Frequently asked questions

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Cite this brief

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Cite this brief

Caselaw, "Kimani Richu & Associates Advocates v Centurion Holdings Limited [2018] KEELC 3188 (KLR)", Case Analysis (2018). Miscellaneous Application (Reference) re Bill of Costs dated 2/9/2016 (chamber summons dated 13/3/2017). Source: https://new.kenyalaw.org/akn/ke/judgment/keelc/2018/3188/eng@2018-05-25

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