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ELCAllowedReference by way of Chamber Summons dated 17/7/2017· [2019] KEELC 4810 (KLR)

Odera Obar & Co Advocates v Jet Properties and Apartments Limited [2019] KEELC 4810 (KLR)

High Court of Kenya
28 January 2019
1,868 words in judgment
View original judgmentRead on Kenya Law Watch case
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The bottom line

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Kenya's High Court ruled that each separate legal task a client assigns is billable separately, and that fees must be assessed under the remuneration rules in force when the work was done.

What this practically means

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Executive summary

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M/s Odera Obar & Company Advocates filed a bill of costs of Kshs 1,715,245, which the taxing officer (Hon S Mwanyuli DR) assessed on 4/7/2017 at Kshs 480,524.20 less Kshs 192,000 already paid. Aggrieved, the advocate brought a reference by chamber summons seeking to set aside the assessment on items 1, 3, 4, 5, 6, 7, 8, 9 and 10 of the bill. The advocate argued the taxing officer erred in principle by applying the 2009 Advocates Remuneration Order to work done after the 2014 Order came into force, by treating multiple distinct instructions as one, by using the wrong formula for instruction fees, and by disallowing items despite uncontroverted evidence. The client opposed, contending there was a single set of instructions given on 22/9/2013, that the 2009 Order was therefore correctly applied, and that share capital properly represented the value of the subject matter. Eboso J restated the settled principle that a court interferes with a taxing officer's decision only on proof of error of principle or manifestly excessive fees. Examining the uncontroverted emails of 22/9/2013, 26/9/2013, 8/10/2013 and 7/4/2014, the court found there were distinct instructions for the sale of apartments, incorporation of a company, a letter of offer template and a contractor agreement, each chargeable separately and under different schedules. The taxing officer's treatment of the engagement as a single assignment, her exclusive reliance on stamp duty on nominal share capital, and her application of the 2009 Order to post-April 2014 work were all errors of principle. The reference was allowed and the bill remitted for fresh assessment by a different taxing officer.

Key legal issues

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01

Separate instructions chargeable separately

Holding

The advocate received distinct instructions on diverse dates for diverse assignments, each chargeable separately; the taxing officer erred in treating them as a single assignment

Reasoning

The court examined the uncontroverted emails of 22/9/2013, 26/9/2013, 8/10/2013 and 7/4/2014 and found they related to distinct assignments: sale of apartments, incorporation of a company, preparation of a letter of offer template, and a contractor agreement. Each attracts a different schedule under the Remuneration Orders. Treating them as one assignment was an error of principle rendering the decision untenable.

p. 3
02

Applicable Remuneration Order

Holding

The taxing officer erred in applying the 2009 Remuneration Order to instructions given and work done after 11/4/2014 when the 2014 Order came into effect

Reasoning

The instructions to prepare the developer-contractor agreement were given in July 2014, after the 2014 Remuneration Order replaced the 2009 Order on 11/4/2014. The bill of costs was properly drawn under both Orders. Applying the 2009 Order to post-April 2014 work was an error of principle.

p. 3
03

Valuation of subject matter for instruction fees

Holding

Reliance solely on stamp duty on nominal share capital of the incorporated company, ignoring the subject matter of other instructions, was a grave error of principle

Reasoning

In assessing instruction fees the taxing officer relied only on the stamp duty paid on the nominal share capital of the incorporated company, disregarding the value of the subject matter of the other assignments, notably the sale of 72 apartments and the Kshs 40,000,000 contractor agreement. This omitted relevant considerations and constituted a grave error of principle.

p. 3

Legal principles established

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  • The applicable remuneration order is the one in force when the instructions were given and the work done
  • A court may interfere with a taxing officer's decision only where it is based on an error of principle or the fee awarded is manifestly excessive

Court orders

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  1. 1.The reference is allowed
  2. 2.The bill of costs is remitted for fresh assessment by a different taxing officer of the court

Authorities

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Legislation

  • Advocates Remuneration OrderSchedule 5 Part II; Schedule 6 (2009 and 2014 Orders)

Cases cited (11)

  • Joreth v Kiganjo
    (2002) 1 E.A 92
  • First American Bank of Kenya v Shah & others
    (2002) 1 E.A 64
  • Hayanga & Co Advocates v Royal Garden Developers Limited
    Misc Application No 305 of 2004
  • Kipkorir Titoo and Kiara v Deposit Protection Fund Board
    Civil appeal No 220 of 2004
  • Adipo & Co Advocates v Kenya Pipeline Company Limited
    Misc. application No. 686 of 2008
  • Anthony Thuo Kanai t/a Thuo Kanai Advocates v John Ngugi
    Misc application No 259 of 2013
  • Desai Sarvia & Pallan Advocates v Jambo Biscuits (K) Limited
    Misc. Application No 3 of 2013
  • Desai Sarvia & Pallan Advocates v Tausi Assurance Company Limited
    Civil appeal No 280 of 2015
  • Nyangito & Co Advocates v Doinyo Lessos Creames Limited
    (2014) eKLR
  • Desai, Savia & Pallan v Jambo Biscuits (Kenya) Limited
    (2014) eKLR
  • Republic v Ministry of Agriculture and 2 others: Exparte Muchiri W'Njuguna & others
    (2006) eKLR
Jurisdiction invoked
Reference against a taxing officer's decision under the Advocates Remuneration Order, heard by a judge of the superior court

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, "Odera Obar & Co Advocates v Jet Properties and Apartments Limited [2019] KEELC 4810 (KLR)", Case Analysis (2019). Reference by way of Chamber Summons dated 17/7/2017. Source: https://new.kenyalaw.org/akn/ke/judgment/keelc/2019/4810/eng@2019-01-28

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