Mbugua t/a Ngure Mbugua & Co. Advocates v Mumbi House Pharmaceuticals (K) Ltd (Environment and Land Miscellaneous Application E095 of 2023) [2024] KEELC 6416 (KLR)
The bottom line
#Kenya's High Court confirmed advocates earn full instruction fees even on incomplete land deals, but the taxing officer must follow the correct Remuneration Order formula.
What this practically means
#Executive summary
#Key legal issues
#Applicable schedule for taxing instruction fees on an incomplete land sale/purchase transaction
Schedule 1 applies; the taxing officer was correct to use Schedule 1 notwithstanding the incomplete transaction
The advocate was retained for a specific transaction involving the purchase of registered immovable property. Schedule 1 governs scale fees on sales and purchases affecting land. Instruction fees are earned upon receipt of instructions and are not affected by subsequent events or progress of the work. The client cannot escape full instruction fees merely because it took away the brief. The court relied on Ratemo Oira, Joreth Ltd, Insurance Regulatory Authority and Kimani Richu.
Whether the taxing officer applied the correct formula under Schedule 1
No - the taxing officer's use of 0.13% of the property value as the benchmark was an error of principle vitiating the certificate of taxation
Schedule 1 prescribes a graduated cumulative calculation: 2% on the first Kshs.5 million, 1.5% on the balance up to 100 million, 1.25% up to 250 million and 1% on the balance. The taxing officer instead taxed instruction fees at 0.13% of the subject matter's value, a benchmark found nowhere in the Remuneration Order. The court could not discern the origin of that figure and held it clearly erroneous, citing Kipkorir, Titoo & Kiara on interference for errors of principle.
Appropriate orders upon finding an error of principle
The certificate of taxation should be set aside and the bill remitted to a different taxing officer for re-taxation under Schedule 1
Taxation is the exclusive technical preserve of the taxing officer. Following Kipkorir, Titoo & Kiara and Kimani Richu, where a judge finds an error of principle the general practice is to remit quantum for decision by a taxing officer other than the one impeached. The court therefore set aside the certificate and remitted the entire Advocate Client Bill of Costs dated 4th April 2023 for re-taxation before a taxing officer other than Hon. Vincent Kiplagat.
Legal principles established
#- Instruction fees accrue the moment the advocate is retained, regardless of whether the assignment is concluded
- Where a transaction concerns sale/purchase of registered land, instruction fees are chargeable under Schedule 1 of the Advocates Remuneration Order even where the transaction is not completed
- A judge on a reference should, upon finding an error of principle, remit the bill for re-taxation by a different taxing officer
Court orders
#- 1.The chamber summons application dated the 20th March 2024 be and is hereby allowed.
- 2.The certificate of taxation arising from the Ruling delivered on the 6th March 2024 be and is hereby set aside.
- 3.The Advocate Client Bill of Costs dated the 4th April 2023 be and is hereby remitted for taxation before a taxing officer other than Hon. Vincent Kiplagat.
- 4.Costs of the Application shall await the outcome of the taxation.
- Jurisdiction invoked
- Reference from the decision of a taxing master under the Advocates Act and Advocates Remuneration Order (specific provision not stated in the judgment)
Key timeline
#Practical implications
#Frequently asked questions
#Cite this brief
#Cite this brief
Caselaw, "Mbugua t/a Ngure Mbugua & Co. Advocates v Mumbi House Pharmaceuticals (K) Ltd (Environment and Land Miscellaneous Application E095 of 2023) [2024] KEELC 6416 (KLR)", Case Analysis (2024). Chamber Summons dated 20th March 2024 (reference from ruling of 6th March 2024). Source: https://new.kenyalaw.org/akn/ke/judgment/keelc/2024/6416/eng@2024-10-03
Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.