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ELCPartially AllowedNakuru ELC Miscellaneous Application (Advocate/Client Bill of Costs Reference)· [2019] KEELC 2712 (KLR)

Masore Nyang’au & Co Advocates v Kensalt Ltd (Miscellaneous Application 196 of 2015) [2019] KEELC 2712 (KLR)

Environment and Land Court
26 June 2019
MSMunyao Sila
4,635 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 Environment and Land Court in Nakuru ruled lawyers can prove their case's value from any court documents when billing fees, raising a Kshs 100,000 award to over Kshs 1 million.

What this practically means

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Executive summary

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The applicant, a firm of advocates, had represented the respondent (2nd defendant) in Akuisi Farmers Company Limited's land suit over LR No. 11278 (1,773 acres), which was withdrawn by the plaintiff with costs to the respondent on 4 October 2018. A disagreement over fees led to an Advocate/Client Bill of Costs filed in a Nakuru ELC miscellaneous application seeking Kshs. 1,898,799/=. By a ruling of 8 February 2017, the taxing officer taxed instruction fees at only Kshs. 100,000/=, holding that the value of the subject matter was not ascertainable from the pleadings, judgment or settlement. The applicant filed a reference under Rule 11(2) of the Advocates' Remuneration Order. The court first held the reference was within time, since the 14-day period ran from receipt of the reasons, deemed received on 3 May 2018 when a signed letter of reasons was collected. On the merits, the court held that where value is not ascertainable from the pleadings, judgment or settlement, the taxing officer is not confined to those documents: the court may call evidence under Rule 13A or refer to other documents in the file, including a sale agreement, valuation report, or the consideration noted in a transfer instrument or title. Here, the transfer to the respondent recorded a consideration of Kshs. 63,000,000/=, so the taxing officer erred in failing to ascertain the value and in falling back on discretion. Computing Schedule 6 paragraph 1(d) fees on Kshs. 63,000,000/= gave party and party instruction fees of Kshs. 1,052,500/= and advocate/client fees of Kshs. 1,578,750/=, but Rule 71 bars alteration of a bill once lodged, so the court awarded the Kshs. 1,007,000/= actually billed, set aside the Kshs. 100,000/= award, directed adjustment of VAT, and awarded the applicant the costs of the reference.

Key legal issues

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01

Whether the reference was filed out of time

Holding

The reference was filed within time; the 14-day period under Rule 11(2) runs from receipt of the reasons, deemed to be 3 May 2018 when the signed letter of reasons was collected.

Reasoning

The bill was taxed on 8 February 2017 and notice of objection was filed on 15 February 2017, within 14 days. The applicant repeatedly sought the reasons; an unsigned letter of 22 March 2018 was returned and only collected, duly signed, on 3 May 2018. The reference filed on 15 May 2018 was therefore 12 days after receipt of signed reasons and within the prescribed period.

p. 4
02

Whether the taxing officer erred in awarding Kshs. 100,000/= instruction fees on the basis that the value of the subject matter was not ascertainable

Holding

The taxing officer erred; the value of the subject matter was ascertainable at Kshs. 63,000,000/= from the memorandum of transfer and extract of title annexed to the plaintiff's list of documents, and the court is not confined to the pleadings, judgment or settlement.

Reasoning

Schedule 6 prescribes fees where value can be determined from the pleadings, judgment or settlement, but is silent where it cannot. The court holds it may call evidence under Rule 13A or refer to other documents such as the sale agreement, valuation report, or consideration in the transfer instrument. The transfer to the respondent recorded Kshs. 63,000,000/=, so there was no need to fall back on discretion. The taxing officer's award was thus an error of principle.

p. 7
03

The correct instruction fee payable

Holding

Party and party instruction fees on Kshs. 63,000,000/= compute to Kshs. 1,052,500/=, and with the 50% advocate/client increase, Kshs. 1,578,750/=; but only Kshs. 1,007,000/= could be awarded as that was the sum billed, Rule 71 barring alteration of the bill once lodged.

Reasoning

Applying Schedule 6 paragraph 1(d): Kshs. 75,000/= plus 1.75% of Kshs. 19,000,000/= gives Kshs. 407,500/= up to Kshs. 20,000,000/=; 1.5% of the excess Kshs. 43,000,000/= gives Kshs. 645,000/=, totalling Kshs. 1,052,500/= party and party. Part B of Schedule 6 adds 50%, yielding Kshs. 1,578,750/=, exceeding the billed Kshs. 1,007,000/=, so the billed sum was awarded.

p. 9

Legal principles established

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  • Where the value of the subject matter is not ascertainable from the pleadings, judgment or settlement, the court is not precluded from referring to other documents filed in the suit (such as the sale agreement, valuation report, or consideration noted in the transfer instrument or title) or from calling evidence to determine the value for purposes of taxing instruction fees.
  • A taxing officer may not fall back on discretion where the value of the subject matter is in fact ascertainable from documents presented in the case.
  • Rule 11(2) time for filing a reference runs from receipt of the reasons for the taxation, and the reasons are deemed received when a signed letter giving the reasons is collected by the objector.

Court orders

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  1. 1.The reference filed out of time objection is rejected; the reference is deemed filed within time
  2. 2.The decision of the taxing officer taxing instruction fees at Kshs. 100,000/= is set aside
  3. 3.Instruction fees substituted with the sum of Kshs. 1,007,000/= as billed in the bill of costs
  4. 4.VAT to be adjusted to reflect the instruction fee of Kshs. 1,007,000/=
  5. 5.The applicant to have the costs of the reference

Authorities

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Legislation

  • Advocates' Remuneration OrderRule 11(1), 11(2), 11(3), 11(4)
  • Advocates' Remuneration OrderRule 13A (Powers of taxing officer)
  • Advocates' Remuneration OrderRule 50 (Costs in High Court according to Schedule 6)
  • Advocates' Remuneration OrderRule 71 (Bills not to be altered after being lodged)
  • Advocates' Remuneration OrderSchedule VI paragraphs 1(1), 1(a), 1(b), 1(d), 22, 58; Schedule 6 Part A and Part B; Schedule 6A(b)
  • Civil Procedure RulesOrder IX A

Cases cited (2)

  • Joreth Limited vs Kigano and Associates
    Civil Appeal No. 66 of 1999
  • Otieno Omuga & Ouma Advocates vs CFC Stanbic Bank Limited
    HCCC No. 75 of 2012
Jurisdiction invoked
Rule 11(2) of the Advocates' Remuneration Order (reference to a judge against a taxing officer's decision)

Key timeline

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Practical implications

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Frequently asked questions

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Later judgments citing this (3)

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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, "Masore Nyang’au & Co Advocates v Kensalt Ltd (Miscellaneous Application 196 of 2015) [2019] KEELC 2712 (KLR)", Case Analysis (2019). Nakuru ELC Miscellaneous Application (Advocate/Client Bill of Costs Reference). Source: https://new.kenyalaw.org/akn/ke/judgment/keelc/2019/2712/eng@2019-06-26

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