Mwangangi & Co Advocates v Mbaabu (Miscellaneous Application E010 of 2023) [2024] KEELC 5375 (KLR)
The bottom line
#A Kenyan court raised an advocate's fees from Kshs 500,000 to Kshs 4 million after finding the property's value must guide pricing, but rejected claims for storage charges and interest.
What this practically means
#Executive summary
#Key legal issues
#Whether the taxing officer erred in finding that the brief was not complex
The brief was not complex; the applicant failed to demonstrate elements of complexity, difficulty or novelty, and the transfer was by transmission notwithstanding the preceding subdivision.
The court noted that the brief was to obtain registration of the respondent's share from her late father's estate following a confirmed grant. The applicant's assertion that she had to coordinate with various government offices did not demonstrate complexity, and the trips made were accounted for under travel items. The court found no complexity, difficulty or novelty in the brief.
Whether the taxing officer erred in finding the value of the subject matter unascertainable
The finding was erroneous; the value of the subject matter was ascertainable by estimation under paragraph 21 of the Advocates Remuneration Order based on the sale of adjacent properties, and the estimated average market value for 2016 was Kshs. 378,000,000/= (Kshs. 14 million per acre for 27 acres).
The court held that even without a scale, the value of the subject matter is a relevant consideration in non-contentious matters. In the absence of stamp duty, estate duty or last sale price evidence, the taxing officer may estimate the average market value in the preceding three years. The parties' evidence of adjacent property sales in 2016 provided a sufficient basis for such estimation.
Whether the award of Kshs. 500,000/= as instruction fees was reasonable
The award was too low and was based on an error of principle; the court awarded Kshs. 4,000,000/= as instruction fees.
Given the estimated value of the subject matter at Kshs. 378 million and the nature of the property (27 acres along Mombasa Road at Lukenya), the court found the award of Kshs. 500,000/= manifestly too low, justifying the conclusion that it was based on an error of principle.
Whether the taxing officer erred in failing to make determinations on specific items (6, 10, 12, 13, 14, 15, 17, 18, 19, 20, 21, 22, 24, 26, 31, 35, 38, 41, 42, 45, 49 & 53)
No miscarriage of justice arose from grouping the items into attendances, copies and travelling; determinations were in fact made on the grouped items.
The court found that the taxing officer did address the items though grouped into categories rather than individually itemised, and that this approach did not result in any miscarriage of justice.
Whether items 23, 33, 34, 36, 37, 40, 43, 47 & 48 ought to have been taxed under Schedule 6 rather than Schedule 5
The taxing officer erred in principle in applying Schedule 5; most of those items (relating to the taxation proceedings) ought to have been taxed under Schedule 6, except item 23 which remained under Schedule 5.
The court agreed that items relating to drawing the bill of costs, making copies, drawing taxation notices, and drawing certificate of costs were done pursuant to contested taxation proceedings and thus fell under Schedule 6. However, item 23 (perusal of a letter on rent apportionment) was pursuant to the original client instructions and remained under Schedule 5.
Whether interest was chargeable from 2020 when the respondent was allegedly made aware of the bill of costs
No; interest is chargeable 30 days after service of the bill of costs, and there was no evidence of service of the bill of costs filed in court, so the applicant cannot claim interest before taxation.
The court interpreted paragraph 7 of the Advocates Remuneration Order as pegging entitlement to interest on the client's non-compliance within 30 days of receiving service of the bill, which must include a claim on interest. A letter dated 8th December 2020 did not amount to a bill of costs. Further, the bill presented was dated 28th May 2021, making service in 2020 impossible, and no return of service was presented.
Whether the applicant was entitled to storage charges for the certificate of title and related documents held as lien
No; the claim was unjustified as there is no provision in the Advocates Remuneration Order entitling an advocate to storage charges for documents held as lien pursuant to client instructions.
The court found that documents such as the certificate of title, deed of assent and deed plan came into the applicant's possession by dint of the brief and were held as lien pending payment of fees. Merely informing the respondent that storage charges would be payable did not create an entitlement to charge that which is not provided for in the Advocates Remuneration Order.
Whether the respondent had paid the alleged deposit/security
Yes; the respondent demonstrated payment by way of cheque and RTGS, and the applicant failed to rebut that evidence.
Although the applicant stated that there was no evidence of payment, the respondent produced a cheque and RTGS evidence of payment of the stated amount, which the applicant did not rebut, leading the court to accept it as the deposit paid.
Legal principles established
#- A court will not ordinarily interfere with a taxing officer's exercise of discretion unless it is shown the decision was clearly wrong due to misdirection on relevant/irrelevant matters, or the award is manifestly excessive or too low to justify a conclusion that it was based on an error of principle.
- In non-contentious matters, the value of the subject matter is a relevant matter that must be considered by a taxing officer in assessing instruction fees, and failure to consider it amounts to an error of principle, even where no scale is provided.
- Where the value of the subject matter is not expressly stated, paragraph 21 of the Advocates Remuneration Order permits the taxing officer to arrive at an estimated average market value using stamp duty value, estate duty value, last sale price, or estimated average market value during the preceding three years.
- A party alleging complexity of a brief bears the burden of proving it with specificity, demonstrating elements of complexity and how it constrained the application of time-consuming industry.
- Entitlement to interest under paragraph 7 of the Advocates Remuneration Order is pegged on the client's non-compliance within 30 days after receiving service of a bill of costs which includes a claim on interest, and the same bill served must be the one filed before the taxing officer.
- A bill of costs is not an application upon which the taxing officer can invoke paragraph 13A powers to order a valuation of property; a party must file a separate application before the taxing officer for that purpose.
- An advocate is not entitled in law or equity to charge storage charges for documents placed in her custody pursuant to client instructions and held as lien for fees.
Court orders
#- 1.The court awarded the applicant Kshs. 4,000,000/= in respect of instruction fees
- 2.Items 33, 34, 35, 37, 38, 40, 41, 42, 43 and 45 to be taxed as per Schedule 6 of the Advocates Remuneration Order
- 3.The sum of Kshs. 4,746/= which was an over assessment is taxed off
- 4.The total amount attracts VAT of 16%
- 5.The applicant's bill of costs dated 28th May 2021 is taxed in the sum of Kshs. 3,969,626/=, taking into account the deposit paid by the respondent of Kshs. 838,676.41/=
- 6.Each party shall bear its own costs
- On appeal from
- Taxing Officer - Machakos ELC Misc. Appl. E033 of 2021
- Machakos ELC Misc. Appl. E033 of 2021
- Jurisdiction invoked
- Reference against the decision of a taxing officer under the Advocates Remuneration Order
Key timeline
#Practical implications
#Frequently asked questions
#Cite this brief
#Cite this brief
Caselaw, "Mwangangi & Co Advocates v Mbaabu (Miscellaneous Application E010 of 2023) [2024] KEELC 5375 (KLR)", Case Analysis (2024). Machakos ELC Misc. Application No. E033 of 2021. Source: https://new.kenyalaw.org/akn/ke/judgment/keelc/2024/5375/eng@2024-07-10
Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.