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ELRCPartially AllowedChamber Summons dated 4th October, 2019 (Reference from taxation in Nakuru ELRC Cause No. 169 of 2015)· [2022] KEELRC 122 (KLR)

Kenya National Union of Nurses v Council of Governors & 6 others [2022] KEELRC 122 (KLR)

Employment and Labour Relations Court
26 April 2022
3,279 words in judgment
View original judgmentRead on Kenya Law Watch case
AI-assisted case brief
·~13 min to read original · ~4 min brief

The bottom line

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A Kenyan court nearly tripled a lawyer's taxed fees to Kshs.1.29 million, but confirmed unexecuted fee agreements can't justify huge claims.

What this practically means

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Executive summary

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The law firm of Sifuna & Sifuna Advocates filed a Reference by Chamber Summons dated 4th October 2019 under paragraph 11(1) of the Advocates Remuneration Order, 2014, seeking to set aside the ruling of the Deputy Registrar (Hon. Makau, DR) of 20th August 2019 taxing its Advocate/client bill of costs in Nakuru ELRC Cause No. 169 of 2015 at Kshs.447,500/=. The Applicant complained of seven specific items, principally instructions fees of Kshs.3,580,000/= taxed down to Kshs.300,000/=, attendance fees of Kshs.20,000/= per appearance taxed at Kshs.2,300/=, non-application of VAT, and failure to add one-half under Schedule VIB. The Respondent urged dismissal. The court held that a Reference is a review or revision rather than a traditional appeal, and that a judge should not disturb a taxing officer's decision absent error in law or departure from principle. Finding the ruling unexplained on key parameters - the prayers in the main cause, complexity, effort and party and party costs - the court interfered only with the items complained of. It substituted instructions fees of Kshs.500,000/=, awarded getting up fees of Kshs.166,667/=, raised attendance fees to Kshs.10,000/= per appearance in recognition of travelling costs from Kitale to Nakuru, allowed the overlooked item 3, and applied the one-half addition to fees only, with VAT on the gross sum. The bill was re-taxed at Kshs.1,287,789/= with interest at court rates from the date of ruling. Each party was ordered to bear its own costs.

Key legal issues

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01

Whether the taxing officer's ruling should be set aside

Holding

Yes, in respect of the specific items complained of, because the ruling was short on the import and impact of the written submissions and the mother file on the awards made.

Reasoning

The court found the two-page ruling did not explain how the pleadings and prayers in the main cause, the complexity of the issues, the effort and research required, or the party and party costs informed the awards. Had those relevant parameters been considered, the taxing officer most likely would have arrived at a different decision on the complained-of items, justifying interference.

p. 3
02

The correct quantum of instructions fees

Holding

Kshs.500,000/= substituted for the Kshs.300,000/= awarded by the taxing officer.

Reasoning

The claimed Kshs.3,580,000/= was unsupported as the LPO was not executed and no fee agreement was produced. The prayers in the main cause were mainly declaratory and the defence did not show a very complex matter, yet Kshs.300,000/= was inordinately low for a novel devolution-related cause. The court assessed a fair and reasonable amount.

p. 4
03

Getting up fees

Holding

Awarded at one-third of instructions fees, Kshs.166,667/=, being the minimum under Schedule VIA part 2 of the ARO.

Reasoning

Getting up fees is chargeable under Schedule VIA part 2 and should not be less than one-third of instructions fees. The court found no reason to go beyond the minimum one-third and computed Kshs.500,000 x 1/3 = 166,667.

p. 4
04

Court attendance fees for an out-of-town advocate

Holding

Kshs.10,000/= per attendance substituted for Kshs.2,300/= per attendance.

Reasoning

The taxing officer treated the bill as a party and party bill considering only actual attendance. The Applicant's office is in Kitale, about 225 kilometres from Nakuru, so travelling and incidental costs were incurred. While the claimed Kshs.20,000/= per attendance lacked particulars and was high, the taxed sum was inordinately low; the court exercised discretion fixing Kshs.10,000/=.

p. 4
05

Application of VAT and the one-half addition under Schedule VIB

Holding

VAT applies to the gross amount awarded; the one-half addition applies only to fees awarded to the lawyer, not to disbursements.

Reasoning

The court reasoned that adding one-half on actual disbursements such as court fees paid would amount to unlawful and unjust enrichment of the lawyer. The taxation schedule reflects this: a sub-total of fees attracted the one-half addition, and 16% VAT was applied to the overall total.

p. 5
06

Effect of non-delivery of reasons/ex-parte delivery of the taxing ruling

Holding

No prejudice was occasioned as the Applicant acted within the 14 days provided under rule 11(1) of the ARO.

Reasoning

Although Counsel complained the ruling was delivered ex-parte or without notice, the Applicant was able to act within reasonable time, writing on 13th September 2019 for reasons and proceedings. The court thus declined to set aside the ruling on that procedural ground, confining interference to the merits of the items taxed.

p. 2

Legal principles established

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  • A Reference to a judge under paragraph 11 of the ARO is not an appeal in the traditional sense but a review or revision of the taxing officer's ruling.
  • A judge should not interfere with the decision of a taxing officer unless it is clear the officer erred in law or departed from established principles.
  • On finding error, a judge may remit the bill for taxation by the same or another taxing officer or tax the bill himself.
  • Where an out-of-town lawyer must travel a long distance to attend court, the client must compensate travelling and incidental costs; it is wrong in principle to award only actual court attendance fees.
  • The one-half addition under Schedule VIB applies only to fees awarded to the lawyer, not to disbursements, while VAT applies to the gross amount awarded.

Court orders

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  1. 1.Set aside the sum of Kshs.300,000/= awarded as instructions fees and substitute therefor Kshs.500,000/=
  2. 2.Award getting up fees at one-third of instructions fees, Kshs.166,667/=
  3. 3.Allow item 3 of the bill at Kshs.1,075/= as the taxing officer overlooked it
  4. 4.Leave item 4 undisturbed at Kshs.1,100/= and item 5 at Kshs.3,500/=
  5. 5.Allow item 6 at Kshs.5,000/=; make no award on item 7; allow items 8, 9 and 10 at Kshs.1,075/=, Kshs.1,100/= and Kshs.75/= respectively
  6. 6.Award court attendance fees at Kshs.10,000/= per attendance instead of Kshs.2,300/= per attendance
  7. 7.Add one-half under Schedule VIB of the ARO on fees awarded to the lawyer only, and apply 16% VAT on the gross amount
  8. 8.Tax the Applicant's Advocate/client bill of costs dated 1st April, 2019 at Kshs.1,287,789/=, to attract interest at court rates from the date of the ruling till payment in full
  9. 9.Each party to bear own costs both for the proceedings before the taxing officer and before this court

Authorities

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Legislation

  • Advocates Remuneration Order, 2014Paragraph 11(1)
  • Advocates Remuneration Order, 2014Rule 10
  • Advocates Remuneration Order, 2014Rule 11(3)
  • Advocates Remuneration Order, 2014Schedule VIA part 2
  • Advocates Remuneration Order, 2014Schedule VIB
  • Advocates Act

Cases cited (3)

  • Masore Nyang’au & Co Advocate Vs. Kensalt Limited
    (2019) eKLR
  • Kenya Tea Development Authority Vs. J.M. Njenga & Co. Advocates
    (2011) eKLR
  • Otieno Ragot & Co. Advocates Vs. Kenya Airports Authority
    (2021) eKLR
On appeal from
Deputy Registrar (Taxing Officer), Employment and Labour Relations Court, Nakuru
Taxation of Advocate/client bill of costs dated 1st April, 2019 in Nakuru ELRC Cause No. 169 of 2015
Jurisdiction invoked
Paragraph 11(1) of the Advocates Remuneration Order, 2014, the Advocates Act and other enabling provisions of the law

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, "Kenya National Union of Nurses v Council of Governors & 6 others [2022] KEELRC 122 (KLR)", Case Analysis (2022). Chamber Summons dated 4th October, 2019 (Reference from taxation in Nakuru ELRC Cause No. 169 of 2015). Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2022/122/eng@2022-04-26

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