Alfred Ochieng Opiyo t/a Ochieng Opiyo & Co. Advocates v Muganda Wasulwa t/a Keysian Auctioneers [2018] KEELRC 1751 (KLR)

Employment and Labour Relations Court of Kenya

13 June 2018

RSRadido Stephen

1,549 words in judgment

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The bottom line

The Employment Court confirmed that strict 14-day deadlines apply when challenging a taxing officer's ruling in Kenya, and dismissed the auctioneer's late application with costs.

What this practically means

Executive summary

This ruling of the Employment and Labour Relations Court at Nairobi (Radido Stephen, J) determined a Reference by Muganda Wasulwa t/a Keysian Auctioneers against the taxation, on 14 March 2018, of an advocate/client bill of costs lodged by the applicant firm of advocates. The applicant firm had acted for the auctioneer in taxing a bill against Letangule & Co. Advocates, recovering Kshs 77,195,821/- on 9 July 2014. After the firm failed to pay, garnishee proceedings were compromised on 25 January 2016 at Kshs 8,000,000/-. The auctioneer then contended before the Taxing Officer that instruction fees should be assessed on the compromise sum of Kshs 8,000,000/- rather than the taxed sum, but the Taxing Officer taxed the bill at Kshs 1,811,795/-. The auctioneer sought reasons for the taxation, was told they were in the ruling, and filed a Reference on 10 April 2018 seeking to set aside or vary the taxation. The Court framed two questions: timeliness and the alleged error in the valuation of the subject matter. It held that time ran from the delivery of the ruling on 14 March 2018 since the reasons sought were already in the ruling, so the Reference, filed without leave to enlarge time, was incompetent, following Evans Thiga Gaturu v Kenya Commercial Bank Ltd. In the alternative, on the merits, the Court found no error: the applicant had substantially executed his instructions before the compromise, and the client could not rely on the compromise to deny the advocate the fruits of his labour. The application dated 9 April 2018 was dismissed with costs.

Key legal issues

Whether the Reference was filed within the 14-day timeline prescribed by Rule 11(2) of the Advocates Remuneration Order

Holding

The Reference was incompetent as it was filed out of time and no leave to enlarge time was sought.

Reasoning

The Taxing Officer delivered her taxation ruling on 14 March 2018 and, when reasons were requested by letter of 26 March 2018, responded that the reasons were already outlined in that ruling. The anchor ground of the Reference had been raised and addressed before the Taxing Officer. Time therefore began to run on 14 March 2018, and the Reference filed on 10 April 2018 was outside the prescribed period, with no extension of time sought. Relying on Evans Thiga Gaturu v Kenya Commercial Bank Ltd, the Court found the Reference incompetent.

p. 2

Whether the Taxing Officer erred in assessing instruction fees on the taxed sum of Kshs 77,195,821/- rather than the compromised settlement of Kshs 8,000,000/-

Holding

No error of law or principle; the correct value for assessment was the taxed sum of Kshs 77,195,821/-.

Reasoning

At the time the applicant was instructed, a definite and known sum of Kshs 77,195,821/- was owing from Letangule & Co. Advocates, and the applicant had the bill taxed and a certificate of taxation issued. Only later, after parting ways with the applicant, did the Respondent auctioneer compromise the debt at Kshs 8,000,000/-. Allowing the client to pay fees based on that compromise would use technicalities to deny the advocate fees for work already done, and would be unconscionable. Shylock must have his pound of flesh.

p. 3

Legal principles established

Where a dissatisfied party seeks reasons for a taxation but the reasons were already contained in the taxation ruling, time for filing a reference under Rule 11(2) runs from the date of the ruling, not from the later response.
An advocate who substantially executes instructions and secures a taxed bill before the client compromises the debt is entitled to fees assessed on the taxed amount, not the later compromised settlement sum.

Court orders

1.The Reference/application dated 9 April 2018 was dismissed with costs

Authorities

Legislation

Advocates Remuneration OrderRule 11(2)

Cases cited (1)

Evans Thiga Gaturu, Advocate v Kenya Commercial Bank Ltd
(2012) eKLR

Jurisdiction invoked: First-instance reference against a taxing officer's decision under the Advocates Remuneration Order (Rule 11); the judgment does not cite a specific constitutional or statutory jurisdictional provision.

Key timeline

Practical implications

Frequently asked questions

Cite this brief

Caselaw, "Alfred Ochieng Opiyo t/a Ochieng Opiyo & Co. Advocates v Muganda Wasulwa t/a Keysian Auctioneers [2018] KEELRC 1751 (KLR)", Case Analysis (2018). . Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2018/1751/eng@2018-06-13

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