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ELCPartially AllowedKitale ELC Reference (Miscellaneous Application) arising from Kitale ELC Misc App No 6 of 2021· [2022] KEELC 3788 (KLR)

County Government of Trans Nzoia v Sifuna & Sifuna Advocates (Miscellaneous Reference Application E005 of 2022) [2022] KEELC 3788 (KLR)

Environment and Land Court of Kenya
26 July 2022
FNFred Nyagaka
2,384 words in judgment
View original judgmentRead on Kenya Law Watch case
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The bottom line

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A Kenyan court cut a law firm's legal bill by over Kshs 3 million because the Taxing Master raised fees without explaining why.

What this practically means

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Executive summary

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The County Government of Trans Nzoia (Applicant) filed a Reference by Summons in Chambers seeking to set aside in its entirety the Taxing Master's ruling of August 3, 2021 in Kitale ELC Misc App No 6 of 2021, by which the Respondent firm's Advocate-Client Bill of Costs dated March 26, 2021 was taxed as drawn at Kshs 10,745,347.00. The bill arose from the Respondent's representation of the Applicant in Kitale ELC No 136 of 2014, a land suit over parcel Kitale Municipality Block 7/120 valued at Kshs 185,000,000.00, which was dismissed for want of prosecution on February 7, 2018. The Applicant argued the award was excessive, that the matter had been consolidated with a Petition already taxed at Kshs 4,294,010.00, and that instruction fees should have been Kshs 2,980,000.00 on scale. The Respondent opposed, asserting the two suits were distinct and sui generis, and that the bill was drawn to scale with proper advocate-client enhancements and VAT. The court framed one issue: whether it should interfere with the Taxing Master's findings. Applying the First American Bank of Kenya v Shah test, it found the Taxing Master failed to justify increasing instruction fees to Kshs 5,000,000.00. Calculating to scale under the 2014 Advocates Remuneration Order, with a discretionary increase, getting up fees, a 50% advocate-client uplift and 16% VAT, the court set aside the assessment and substituted an award of Kshs 7,482,000.00, with the Respondent to bear the Applicant's costs of the Reference. The Reference therefore partially succeeded: the Applicant did not obtain the Kshs 4,294,010.00 figure it sought, and disbursements unsupported by receipts were disallowed.

Key legal issues

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01

Whether the Taxing Master's award of Kshs 10,745,347.00 was based on an error of principle

Holding

Yes - the Taxing Master failed to give reasons for increasing instruction fees to Kshs 5,000,000.00; instruction fees should have been calculated to scale with only a modest increase, and the court substituted its own award of Kshs 7,482,000.00

Reasoning

The court applied the First American Bank test, requiring an error of principle or manifest excess before disturbing a taxing officer's decision. Applying Schedule 6 of the 2014 Advocates Remuneration Order to a subject matter valued at Kshs 185,000,000.00, instruction fees compute to Kshs 2,975,000.00, to which the court added Kshs 250,000.00 for complexity and public importance. Getting up fees, undisputed items 3-9, a 50% advocate-client increase and 16% VAT were then added. Disbursements without receipts were disallowed.

p. 5
02

Whether the two suits (Kitale ELC No 136 of 2014 and Kitale HC Petition No 4 of 2015) were consolidated such that costs should mirror the earlier taxation

Holding

The Applicant abandoned the consolidation allegation at the hearing; the suits were distinct and the Respondent was entitled to file a separate bill

Reasoning

The court noted the Applicant abandoned the claim that the two matters had been consolidated. In any event the Respondent deposed that the matters were sui generis - one a plaint, the other a petition - filed by different persons, heard separately by courts of equal status, with the petition determined on its merits and the suit dismissed for want of prosecution. The outcome of the taxation was therefore not affected by the decision in Kitale HC Misc App No 1 of 2016.

p. 3

Legal principles established

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  • A court cannot interfere with a taxing officer's decision unless it is shown that the decision was based on an error of principle or the fee awarded was so manifestly excessive as to justify an inference of an error of principle

Court orders

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  1. 1.The Taxing Master's assessment of costs in the Respondent's Advocate-Client Bill of Costs dated March 26, 2021 in Kitale ELC Misc App No 6 of 2021 arising out of Kitale ELC No 136 of 2014 is set aside and substituted with an award in the sum of Kshs 7,482,000.00
  2. 2.The Respondent shall meet the costs of the Applicant in this Reference

Authorities

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Legislation

  • Advocates Remuneration OrderSchedule 6, paragraph 1 (instruction fees); Schedule B (50% increase on advocate-client bills); 16% VAT provision

Cases cited (1)

  • First American Bank of Kenya vs Shah and Others
    [2002] 1 E A 64
Jurisdiction invoked
Reference by Summons in Chambers against a Taxing Master's decision 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, "County Government of Trans Nzoia v Sifuna & Sifuna Advocates (Miscellaneous Reference Application E005 of 2022) [2022] KEELC 3788 (KLR)", Case Analysis (2022). Kitale ELC Reference (Miscellaneous Application) arising from Kitale ELC Misc App No 6 of 2021. Source: https://new.kenyalaw.org/akn/ke/judgment/keelc/2022/3788/eng@2022-07-26

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