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ELCPartially AllowedNot stated in the judgment (Reference against taxing officer's ruling; Chamber Summons dated 12th October 2020 and Notice of Motion dated 26th April 2021)· [2022] KEELC 1076 (KLR)

Virginia Shaw & Co. Advocates v Minar Katherine Holroyd & another [2022] KEELC 1076 (KLR)

High Court of Kenya
24 February 2022
6,507 words in judgment
View original judgmentRead on Kenya Law Watch case
AI-assisted case brief
·~26 min to read original · ~4 min brief

The bottom line

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Kenya's High Court confirmed lawyers can recover fees even without a written agreement, but instruction fees must be based on value shown in the pleadings, not valuation reports.

What this practically means

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Executive summary

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This ruling by Okong'o J of the High Court at Nairobi determines a reference and a Notice of Motion arising from the taxation of an advocate/client bill of costs of Kshs. 18,839,947.80 drawn by Virginia Shaw & Co. Advocates, taxed at Kshs. 4,757,963.45 inclusive of VAT by the Deputy Registrar on 29th September 2020. The administrators of the late Dipa Pulling challenged the taxation, contending there was no retainer with the Respondent firm (the deceased having instructed Ransley, McVicker and Shaw Advocates in 2008), that the value of the subject matter was wrongly taken from a valuation report rather than the pleadings, and that VAT was wrongly applied at 16% instead of 14%. The court held that the taxing officer had jurisdiction to determine the retainer dispute herself, since absent consent under paragraph 12 of the Remuneration Order she was obliged to proceed with taxation and the dissatisfied party could file a reference under paragraph 11. On the merits, the court found a retainer existed between Ms. Virginia Shaw and the deceased, holding that a retainer need not be written and may be inferred from conduct; the firm-name change was a technicality and the administrators could not avoid paying fees. The exhibits annexed to the Respondent's affidavit were admitted, privilege not barring an advocate from proving a retainer by client correspondence. Only one error of principle was established: instruction fees were wrongly based on a valuation report rather than on value ascertained from the pleadings. The ruling was reviewed and varied only as to instruction fees, and the bill was remitted to Hon. Diana Orago, DM, for reassessment, with the tabulated costs to reflect the reassessment and applicable VAT. Each party was ordered to bear its own costs.

Key legal issues

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01

Jurisdiction of the taxing officer where retainer is disputed

Holding

The taxing officer had jurisdiction to tax the bill notwithstanding the retainer dispute; she was not obliged to refer the issue to the High Court absent agreement under paragraph 12.

Reasoning

Paragraph 13A of the Advocates Remuneration Order gives the taxing officer full power to deal with all issues arising during taxation. Court intervention is limited to references under paragraph 11 or opinions under paragraph 12 by consent. Raising retainer as a preliminary objection does not oblige the taxing officer to lay down her tools; the aggrieved party may pursue a reference afterwards. The court reaffirmed its own prior decision in Mwema Kitulu and declined to follow the restrictive view in Abincha and Kenya Orient.

p. 5
02

Existence of retainer between the deceased and the Respondent firm

Holding

There was a retainer between Ms. Virginia Shaw and the deceased; the administrators cannot avoid paying fees merely because the bill was filed in the name of Virginia Shaw & Company Advocates rather than Ransley, McVicker and Shaw Advocates.

Reasoning

Ms. Shaw was instructed by the deceased in 2008 as a partner in Ransley, McVicker and Shaw, remained the sole surviving partner when that firm ceased to exist, registered the Respondent firm in 2016 and continued acting until judgment in 2019. A retainer may be inferred from conduct. The court held the Applicants' objections were technicalities without substance and could not aid an attempt to avoid paying fees.

p. 5
03

Admissibility of the Respondent's exhibits on retainer and privilege

Holding

The exhibits VWS-1 to VWS-4 were properly before the court and would not be expunged; the privilege objection failed.

Reasoning

Because retainer was raised before the taxing officer only as a preliminary objection (which requires no evidence), the Respondent had no opportunity to produce the correspondence there. The correspondence goes directly to the retainer issue. Advocate/client privilege protects confidentiality but cannot be used by a client to bar the advocate from proving a retainer through their own correspondence.

p. 5
04

Interference with the taxation: instruction fees, getting up fees and VAT

Holding

Only the instruction fees were affected by an error of principle; getting up fees were correctly 1/3 of instruction fees and VAT at 16% was left undisturbed since payment had not been made and the rate had reverted to 16%.

Reasoning

The taxing officer erred in basing instruction fees on a valuation report produced in evidence rather than on value ascertained from pleadings or judgment. The claim on getting up fees was factually wrong. On VAT, the rate at ruling date was 14% but was temporary; since the Applicants had not paid, VAT would be payable at the prevailing 16% rate. The bill was remitted for reassessment of instruction fees.

p. 6

Legal principles established

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  • A taxing officer has power to determine all issues, factual and legal, arising out of or connected with a bill of costs, including retainer, unless the parties agree under paragraph 12 of the Remuneration Order to refer an issue to the court; an aggrieved party may then file a reference under paragraph 11.
  • A retainer need not be in writing; it may be oral or inferred from the conduct of the parties.
  • A court will not interfere with a taxing officer's decision unless an error of principle or manifest excess is shown; where an error of principle is found, the general practice is to remit quantum to the taxing officer.
  • Instruction fees must be based on the value of the subject matter as ascertained from the pleadings or judgment; a valuation report produced in evidence may be considered but cannot form the basis of the assessment.
  • Advocate/client privilege cannot be used by a client to bar an advocate from adducing correspondence exchanged with the client to prove a retainer.

Court orders

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  1. 1.The ruling of the taxing officer delivered on 29th September 2020 is reviewed and varied to the extent that the taxation of the item on instruction fees is set aside.
  2. 2.The Respondent's Advocate/Client Bill of Costs dated 18th May 2020 is remitted back to the taxing officer Hon. Diana Orago with directions that she assesses the instruction fees afresh on the basis that the value of the subject matter in ELC Suit No. 200 of 2008 cannot be ascertained from the pleadings or judgment of the court; parties at liberty to address the taxing officer during reassessment.
  3. 3.The taxing officer shall thereafter tabulate afresh the costs payable to the Respondent upon reassessment of the instruction fees, which will have effect on the ½ advocate/client costs added to party/party costs under Part B of the Remuneration Order and VAT payable.
  4. 4.Each party shall bear its own costs.

Authorities

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Legislation

  • Constitution of KenyaArticle 159
  • Advocates Remuneration OrderParagraphs 10, 11, 11(1), 12, 13A; Schedule VI Part B (a)
  • Evidence Act, Chapter 80 Laws of KenyaSections 134 and 137
  • Civil Procedure ActOverriding objectives

Cases cited (22)

  • Mwadumbo & Company Advocates v Joseph Maina Kimani
    [2018] eKLR
  • Kenyariri & Associates Advocates v Salama Beach Hotel Ltd. & 4 others
    [2014] eKLR
  • Mohamed Abdi Mahamud v Ahmed Abdullahi Mohamad & 3 others
    [2018] eKLR
  • Jackline Chepkemoi Kimeto v Shafi Grewal Kaka & 3 others
    [2019] eKLR
  • Regina Waithira Mwangi Gitau v Boniface Nthenge
    [2015] eKLR
  • Ratemo Oira & Co Advocates v Magereza Sacco Society Ltd
    [2019] eKLR
  • Otieno, Ragot Advocates v Deniel Oduor Okumu
    [2014] eKLR
  • Ahmednasir Abdikadir & Co. Advocates v National Bank of Kenya Limited
    [2007] eKLR
  • Triple O Law LLP v Marianne Jebet Kitany
    [2020] eKLR
  • Wilfred N. Konosi t/a Konosi & Co. Advocates v Flamco Limited
    [2017] eKLR
  • Mwema Kitulu & Co. Advocates v Kenya Deposit Insurance Corporation
    ELC Misc. Application No. 29 of 2016
  • Abincha & Co. Advocates vs. Trident Insurance Co. Ltd.
    [2013] eKLR
  • Kenya Orient Insurance Limited vs. Oraro & Company Advocates
    [2014] eKLR
  • Ochieng, Onyango, Kibet & Another v Adopt A Light Limited
    [2007] eKLR
  • J Mbugua Mburu & Associates Advocates v City Star Shuttle Ltd
    [2021] eKLR
  • Omulele & Tollo Advocates v Mount Holdings Limited
    [2016] eKLR
  • Nyangito & Co. Advocates v Doinyo Lessos Creameries Ltd.
    [2014] eKLR
  • Visser v Gubb
    1981(3) SA 753 (C) 754H - 755 C
  • KTK Advocates v Baringo County Government
    [2017] eKLR
  • Kipkorir Titoo & Kiara Advocates v Deposit Protection Fund Board
    (2005) l KLR 528
  • D'Souza v Ferrao
    [1960] EA 602
  • Devshi Dhanji Naran Patel (No. 2)
    [1978] KLR 243
Jurisdiction invoked
Reference under paragraph 11 of the Advocates Remuneration Order against the taxing officer's ruling of 29th September 2020

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, "Virginia Shaw & Co. Advocates v Minar Katherine Holroyd & another [2022] KEELC 1076 (KLR)", Case Analysis (2022). Not stated in the judgment (Reference against taxing officer's ruling; Chamber Summons dated 12th October 2020 and Notice of Motion dated 26th April 2021). Source: https://new.kenyalaw.org/akn/ke/judgment/keelc/2022/1076/eng@2022-02-24

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