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ELCDismissed· [2024] KEELC 1016 (KLR)

Anti-Counterfeit Agency v Sherman Nyongesa & Mutubia Advocates (Environment and Land Miscellaneous Application E046 of 2022) [2024] KEELC 1016 (KLR)

High Court of Kenya
28 February 2024
1,785 words in judgment
View original judgmentRead on Kenya Law Watch case
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The bottom line

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The High Court in Mombasa dismissed a challenge to taxed legal fees, confirming that a Taxing Master's decision stands unless clear errors are proven.

What this practically means

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Executive summary

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This was a reference under Paragraph 11(2) of the Advocates Remuneration Order 2006 challenging a Taxing Officer's Ruling and Taxation of 12th April 2023 on a Bill of Costs dated 27th June 2022. The Applicant, the law firm that prepared a lease agreement dated 31st July 2018, sought review and setting aside of the taxation on grounds including lack of locus standi by the Respondent law firm, absence of privity of contract, the existence of an arbitration clause in the lease, alleged illegality under the Public Procurement and Asset Disposal Act and the Anti-Counterfeit Act, and lack of jurisdiction by the Taxing Officer. The Respondent law firm was the Tenant under the lease with Mombasa Trade Centre Limited as Landlord. Justice N.A. Matheka perused the lease and found that Term 23 ('Legal Costs') and Clause 1.20 expressly provided that the costs of preparing and completing the lease, stamp duty, registration fees and disbursements were to be borne by the Tenant and paid directly to the Landlord's lawyers on demand. The court held that the Respondent was properly instructed and entitled to its fees, and that the obligation to pay for preparation of the lease was contractual and could not be subjected to arbitration. Applying the principles in First American Bank of Kenya v Shah and Joreth Ltd v Kigano & Associates, the court found no error of principle, no manifestly excessive award, and no capricious exercise of discretion by the Taxing Master. The reference was dismissed with costs to the Respondent.

Key legal issues

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01

Whether the Advocate-Client relationship/retainer existed between the Respondent law firm and the Applicant

Holding

The court found the retainer was not disputed in substance; the lease agreement expressly provided that the Tenant (Respondent) would bear legal costs payable to the Landlord's lawyers (Applicant), establishing entitlement to fees.

Reasoning

The court perused the lease agreement dated 31st July 2018 and found Term 23 ('Legal Costs') and Clause 1.20 expressly required the Tenant to pay costs of preparing and completing the lease directly to the Landlord's lawyers on demand. The lease was prepared by the Applicant law firm and signed by the Respondent. The obligation to pay the Applicant's fees was therefore contractual and could not be subject to arbitration.

p. 3
02

Whether the Taxing Officer had jurisdiction given the arbitration clause and alleged failure to exhaust alternative remedies

Holding

The arbitration clause did not oust the Taxing Officer's jurisdiction over advocate-client costs as the obligation to pay fees was not arbitrable.

Reasoning

The court found that the obligation to pay for preparation of the lease was a direct contractual term between the parties and 'cannot be subject to arbitration'. The dispute over taxation of the advocate's fees was properly before the Taxing Master under the Advocates Remuneration Order and Section 51(2) of the Advocates Act, which provides the procedure for taxation and entry of judgment.

p. 3
03

Whether the Taxing Master's decision was amenable to interference on the reference

Holding

No error of principle, manifest excessiveness, or capricious exercise of discretion was established to warrant interference.

Reasoning

Applying First American Bank of Kenya v Shah and Joreth Ltd v Kigano & Associates, the court reiterated that a Taxing Master's judicial discretion can only be interfered with where it is established that the decision was based on an error of principle, the fee awarded was manifestly excessive, or the discretion was exercised capriciously and in abuse of proper application of correct principles of law. The Applicant did not demonstrate any such ground.

p. 4

Legal principles established

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  • A Taxing Master's decision can only be interfered with where it is based on an error of principle, the fee awarded is manifestly excessive, or the discretion was exercised capriciously or in abuse of correct legal principles.
  • Where costs have been taxed and certified, the certificate is not set aside or appealed, and the retainer is not disputed, judgment may be entered for the certified sum under Section 51(2) of the Advocates Act.

Court orders

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  1. 1.The Reference/application dated 26th April 2023 is dismissed
  2. 2.Costs of the application awarded to the Respondent

Authorities

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Legislation

  • Advocates Remuneration OrderParagraph 11(1) and 11(2)
  • Advocates ActSection 51(2)
  • Public Procurement and Asset Disposal ActNot specified (referred to generally on procurement of services)
  • Anti-Counterfeit ActSection 36

Cases cited (3)

  • First American Bank of Kenya v Shah and Others
    (2002) EA 64 / (2002) EALR 64
  • Joreth Ltd v Kigano and Associates
    (2002) 1 EA 92 / (2002) eKLR
  • Musyoka & Wambua Advocates v Rustam Hira Advocate
    (2006) eKLR
Jurisdiction invoked
Paragraph 11(2) of the Advocates Remuneration Order 2006 (reference against a Taxing Master's decision); Section 51(2) of the Advocates Act

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, "Anti-Counterfeit Agency v Sherman Nyongesa & Mutubia Advocates (Environment and Land Miscellaneous Application E046 of 2022) [2024] KEELC 1016 (KLR)", Case Analysis (2024). . Source: https://new.kenyalaw.org/akn/ke/judgment/keelc/2024/1016/eng@2024-02-28

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