Ngatia & Associates Advocates v Interactive Gaming & Lotteries Limited

The Application is opposed by the Advocate who filed Grounds of Opposition dated 13th February 2025 and a Replying Affidavit of the same date, sworn by Fredrick Ngatia SC. 5. Pursuant to the directions of this Court of 21st March 2025, the matter proceeded by way of written submissions. Parties were directed to file their respective submissions within 14days apiece, beginning with the Advocate, and thereafter, the Client who was to file theirs upon service with the Advocates Submissions. Advocate/Applicant’s Case 6. The Advocate’s case is that he was instructed by the Client to institute judicial review proceedings against a government agency to challenge an administrative decision adversely affecting the Respondent’s commercial interests. She contends that the matter was urgent, complex, and required extensive consultations, research, and preparation of draft pleadings. 7. The Advocate maintains that instruction fees are earned upon being retained and commencing work, even if the matter does not proceed to filing. It was argued that the taxing officer failed to consider the extent of the preparatory work, the value of the subject matter, and the responsibility borne by the Advocate. 8. He contended that the taxing officer misdirected herself by failing to appreciate that the subject matter involved potential exposure of the client to significant financial and reputational loss. The Applicant cited First American Bank of Kenya v Shah & Others [2002] 1 EA 64, Republic v Minister for Agriculture & 2 Others ex parte Samuel Muchiri W’Njuguna [2006] eKLR, and Kipkorir, Titoo & Kiara Advocates v Deposit Protection Fund Board [2005] 1 KLR 528, in support of the argument that this Court may interfere with a taxation where the taxing officer has proceeded on wrong principles or awarded a manifestly low fee. 9. It was therefore prayed that the Court sets aside the decision of the taxing officer and substitute the same with an award of Kshs. 1,500,000 as fair instruction fees, or in the alternative, remit the matter for re-taxation before a different taxing officer. Client/Respondent’s Case 10. The Client opposed the Advocate’s Reference and supported its own Reference dated 3rd December 2024. It argued that the taxing officer erred in awarding Kshs. 250,000 as instruction fees, where no judicial review proceedings were ever filed, and where the only work demonstrated was the preparation of a demand letter. 11. The Respondent also challenged the competency of the Advocate’s Reference, arguing that it was filed out of time contrary to Rule 11(2) of the Advocates (Remuneration) Order. It submitted that the ruling having been delivered on 18th November 2024, the Reference filed on 29th November 2024 was beyond the prescribed 14 days. 12. On the merits, the Respondent submitted that the taxing officer’s assessment was arbitrary and unsupported by evidence, and that she applied Schedule 6 of the Advocates (Remuneration) Order, which relates to proceedings before the High Court, instead of Schedule 5, which governs work not otherwise provided for. 13. The Respondent relied on Premchand Raichand Ltd & Another v Quarry Services of East Africa Ltd & Others (No. 3) [1972] EA 162 and Vipul Premchand Haria v Kilonzo & Co. Advocates [2020] eKLR, to urge that the Court will only interfere with a taxation where an error of principle is demonstrated or where the award is manifestly excessive or inadequate. https://new.kenyalaw.org/akn/ke/judgment/kehc/2025/16434/eng@2025-10-21 2

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14. In conclusion, the Respondent urged the Court to allow its Reference, set aside the award of Kshs. 250,000, and re–assess the instruction fee as the Court may deem just. Analysis and Determination 15. Having duly considered the two applications filed herein, the responses thereto, and the parties’ respective submissions, I find that the following issues arise for this Court’s determination: i. Whether the Advocate’s submissions filed out of time should be disregarded; ii. Whether the Client’s Reference dated 3rd December 2024 is competent; and iii. Whether the taxing officer’s decision of 18th November 2024 was founded on an error of principle or resulted in a manifestly excessive or inadequate award. On the late filing of the Advocate’s submissions 16. On 21st March 2025, the Court directed that the Advocate’s submissions be filed within 14 days from that day. However, the Advocate’s submissions were actually filed on 5th May 2025, way beyond the timelines directed by the Court. The Client, consequently, in its submissions, urged the Court to disregard and expunge the same for non-compliance with the court’s timelines. 17. It is not in dispute that the Court directed the parties to file their submissions within fixed timelines, which the Advocate failed to comply with. His submissions were filed over a month late, without any application for extension of time or explanation for the delay. 18. The Respondent in urging this Court to expunge the same, relied on Nickson v Collins & 3 others (ELC Case No. 1 of 2024) [2024] KEELC 1797 and Tana Teachers’ Cooperative & Credit Society Ltd v Andriano Muchiri [2018] eKLR, where courts held that failure to comply with court directions cannot be excused by the overriding objective or Article 159(2)(d) of the Constitution. 19. Indeed, court directions are not issued in vain. However, while non-compliance is a serious matter, Courts do also consider whether the infraction is fatal to the cause of justice. The Court of Appeal in the case of Toppias & 4 others v Bomet County Government & another [2025] KECA 841 (KLR) stated as follows on the issue: “ While procedure is crucial, courts cannot allow minor procedural errors to derail a case and deny parties their day in court. Therefore, courts often strike a balance between upholding the rules of procedure and ensuring substantive justice is achieved. Judges have some discretion to overlook procedural technicalities, especially when doing so is necessary to prevent injustice. The court's understanding of the foregoing is that while procedure is a necessary component in the administration of justice, substantive justice is the ultimate goal unless the procedural deficiency is sufficiently grave to render substantial justice unattainable.” 20. In the present case, while this Court strongly deprecates the Advocate’s disregard of its directions, it will, in the interests of substantive justice, take cognizance of the submissions already on record. This indulgence, however, should not be construed as condonation of future non-compliance. https://new.kenyalaw.org/akn/ke/judgment/kehc/2025/16434/eng@2025-10-21 3

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Competency of the Client’s Reference 21. The Advocate has challenged the Respondent’s Reference dated 3rd December 2024 on the ground that it was filed on 5th December 2024, two days out of the 14–day timeline prescribed under Rule 11(2) of the Advocates (Remuneration) Order. According to the Advocate, ruling on the taxation having been delivered on 18th November 2024 (complete with the reasons), and uploaded on the Court Tracking System on 19th November 2024, the Client ought to have filed its reference by 3rd December 2024 and not on 5th December 2024 as was the case herein. 22. In support of his arguments, the Advocate cited among others, the case of Evans Thiga Gaturu, Advocate v Kenya Commercial Bank Limited [2012] eKLR, where Odunga J (as he then was) held that where reasons are contained in the decision itself, it would be futile to expect further reasons from the taxing officer, and that a reference filed more than 14 days after delivery of such a decision is incompetent. 23. The Advocate further relied on the decision in Kenya National Union of Teachers v Mutai & 2 others; Lelgo & 4 others (Interested Parties) (Misc. Ref. App. E009 of 2022) [2022] KEELRC 12820, where Makau J held that a reference filed out of time without leave is fatally incompetent and liable to be struck out. 24. The Respondent, on the other hand, maintained that it had filed a Notice of Objection dated 28th November 2024, which was within 10 days of the taxation ruling of 18th November 2024, and that it had requested reasons from the taxing officer, which were never provided. 25. Rule 11(1) and (2) of the Advocates (Remuneration) Order sets out the procedure for objecting to a taxation, requiring that a party give notice in writing to the taxing officer within fourteen (14) days, specifying the items objected to, and thereafter file a Reference within fourteen (14) days of receiving reasons for the decision. The Rule 11 states that: - 26. “ (1) Should any party object to the decision of the taxing officer, he may within fourteen days after the decision give notice in writing to the taxing officer of the items of taxation to which he objects. (2) The taxing officer shall forthwith record and forward to the objector the reasons for his decision on those items and the objector may within fourteen days from the receipt of the reasons apply to a judge by chamber summons, which shall be served on all the parties concerned, setting out the grounds of his objection.” The jurisprudence on this issue is settled. In Kipkorir,Titoo & Kiara Advocates v Deposit Protection Fund Board [2005] KECA 325 (KLR), the Court of Appeal held that failure by the taxing officer to give reasons should not defeat a Reference, and that Rule 11 must be construed in a manner that facilitates rather than obstructs access to justice. The Court stated that: “ Although there was no strict compliance with Rule 11 (2) of the Order, we are nevertheless, satisfied that there was substantial compliance. The adequacy or otherwise of the reasons in the ruling is another matter. Indeed, we are of the view, that if a taxing officer totally fails to record any reasons and to forward them to the objector, as required then that would be a good ground for a reference and the absence of such reasons would not in itself preclude the objector from filing a competent reference.” https://new.kenyalaw.org/akn/ke/judgment/kehc/2025/16434/eng@2025-10-21 4

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27. Similarly, in Machira & Co. Advocates v Arthur K. Magugu & another [2012] KECA 245 (KLR), it was emphasized by the Court of Appeal that a Reference may properly lie where the taxing officer declines or fails to furnish reasons, provided a timely notice of objection was filed. 28. In the present case, the Respondent’s Notice of Objection was filed on 28th November 2024, within ten (10) days of the ruling. The taxing officer did not communicate whether the reasons were contained in the ruling, nor did she issue any further written explanation. In the circumstances, I am satisfied that the Respondent took all the necessary procedural steps under Rule 11(1), and that its Reference dated 3rd December 2024 was filed within a reasonable period. 29. The Court also notes that the Advocate’s own Notice of Objection was filed on the same date, which further supports the Respondent’s position that time could not have started running before the taxing officer issued reasons. I therefore find and hold that both References are properly before the Court and will be considered on their merits. 30. Accordingly, the Court finds that the Respondent’s Reference dated 3rd December 2024 was competently filed in compliance with Rule 11 of the Advocates (Remuneration) Order. Whether the Taxing Offcer erred in Assessing Instruction Fees 31. The central issue in both References is whether the taxing officer erred in assessing the instruction fees at Kshs. 250,000. The Advocate contends that the award was manifestly low, unjust, and failed to consider the nature, urgency, and responsibility of the work done. Conversely, the Respondent argues that the award was excessive and unsupported by any evidence, particularly since no judicial review proceedings were ever filed. 32. The principles governing interference with a taxing officer’s decision are well settled. In Premchand Raichand Ltd & Another v Quarry Services of East Africa Ltd & Others (No. 3) [1972] EA 162, the Court stated that the Court will not interfere with taxation unless the taxing officer erred in principle or the fee awarded is manifestly excessive or inadequate. 33. The above position was reaffirmed in Kipkorir, Titoo & Kiara Advocates v Deposit Protection Fund Board (supra), where it was held by the Court of Appeal that the discretion of the taxing officer must be exercised judiciously, taking into account the nature and importance of the matter, the complexity of the issues, the amount involved, and the interest of the parties. The Court stated: “ The learned judge like the taxing officer was exercising judicial discretion when he allowed the reference. This Court cannot interfere with the exercise of that discretion unless it is shown that the learned judge acted on the wrong principles of law. The appeal to this Court from the decision of a judge on reference from a taxing officer is akin to a second appeal and should be governed by Section 72 (1) of the Civil Procedure Act. In our view, such an appeal can only be allowed on any of the three grounds specified in Section 72 (1) of the Civil Procedure Act, that is to say, if the decision is contrary to law or some usage having the force of law; or the decision has failed to determine some issue(s) of law or usage having the force of law or where there is a substantial error or defect in the procedure provided by law which may possibly have produced error or defect in the decision on the case upon merits.” https://new.kenyalaw.org/akn/ke/judgment/kehc/2025/16434/eng@2025-10-21 5

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34. Similarly, in the case of Peter Muthoka & another v Ochieng & 3 others [2019] eKLR, the Court of Appeal held: “ It is not lost to us … that matters of quantum of taxation properly belong in the province and competence of taxing masters. They fall within their discretion and so the High Court upon a reference will be slow to interfere with them. It is not a wild and unaccountable discretion, however, because it is at its core and by definition a judicial discretion to be exercised, not capriciously at a whim, but on settled principles. When it is shown that there was a misdirection on some matter resulting in a wrong decision, or it is manifest from the case as a whole that the discretion was improperly exercised, resulting in mis-justice, to borrow the holding in MBOGO -vs- SHAH (Supra), then the decision though discretionary, may properly be interfered with. See also Attorney General Of Kenya -vs- Prof. Anyang’ Nyong’o & 10 Others, EACJ App. No. 1 OF 2009.” 35. Regarding instructions fees, the Client argued that the taxing officer erroneously applied Schedule 6 (relating to costs in the High Court) instead of Schedule 5, which governs non-contentious business. 36. Schedule 6 applies to “proceedings in the High Court.” The Black’s Law Dictionary (10th Ed.) defines “proceeding” as the regular and orderly progression of a lawsuit, including all acts and events between commencement and judgment. 37. It is common ground that in this case, no suit was ever filed. The only document prepared by the Advocate was a demand letter. Accordingly, there were no “proceedings” capable of invoking Schedule 6. 38. The taxing officer’s reliance on Schedule 6 was therefore an error in principle. The applicable schedule should have been Schedule 5, which governs remuneration for business not otherwise provided for. 39. The Advocate has argued that instruction fees are earned upon being retained and commencing work, even if the matter is not filed. That position, according to the Advocate, is supported by authorities such as First American Bank of Kenya v Shah & Others [2002] 1 EA 64 and George Arunga Sino t/a Jone Brooks Consultants Limited v Patrick J.O. & Geoffrey D.O. Yogo t/a Atieno, Yogo & Co. Advocates [2012] eKLR, where courts held that instruction fees accrue once the advocate is instructed and substantial preparatory work is undertaken. 40. While it is indeed true that instruction fees accrue once the Advocate is instructed, the Schedule of the Remuneration Order under which the fees is to be taxed and the amount to be awarded by the taxing master, depends on the evidence adduced by the Advocate. The Advocate bears the evidentiary burden of demonstrating the nature and extent of work performed. 41. The taxing officer is entitled to rely on the materials presented in the Bill of Costs and any accompanying documentation to determine the appropriate fee. As the Court observed in Vipul Premchand Haria v Kilonzo & Co Advocates [2020] KECA 591 (KLR), the taxing officer’s discretion must be based on material evidence and not conjecture. The Court stated that: “ Now, it is not in contest that the advocate was within rights to elect to charge fees under Schedule V instead of IV of the ARO and he properly informed the client in writing as he rendered the bill of costs. Once the client was dissatisfied with the bill, it fell upon the taxing master to tax it. Such taxation, much as it lies in the taxing officer’s discretion, is governed by clear principles. In other words, the discretion is a judicial one to be judicially and judiciously exercised. It is not to be exercised whimsically or capriciously in accordance with personal https://new.kenyalaw.org/akn/ke/judgment/kehc/2025/16434/eng@2025-10-21 6

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inclination. And the matters the taxing officer takes into consideration should be apparent from the reasons that she gives for her decision. It is those reasons that give an indication whether or not the discretion reposed in the taxing officer was properly exercised.” 42. It is clear from the record in this case that the Advocate did not place before the taxing master any pleadings, drafts, or other documents evidencing substantive work done beyond the demand letter. Nor did the taxing officer invoke her powers under Paragraph 13A of the Advocates (Remuneration) Order to call for such documents. In these circumstances, both the amount claimed by the Advocate (Kshs. 1,500,000) and the amount awarded by the taxing master (Kshs. 250,000) appear to lack sufficient evidential foundation. 43. On the contention that the taxing officer failed to consider the Advocate’s standing as Senior Counsel, it suffices to state that the Advocates (Remuneration) Order does not differentiate between advocates based on rank or seniority, and remuneration must depend on the work done, not the title held. In any event, there is no evidence on record showing that the Advocate had been designated Senior Counsel at the material time. 44. It is settled that instruction fee must reflect the actual work done and the importance of the matter. In this case, while the intended judicial review proceedings may have been significant to the client’s business, there is no evidence that the work progressed beyond the initial demand and advisory stage. 45. In light of the foregoing analysis, the Court finds that: 46. 47. i. The Applicant’s late filing of submissions, while improper, is not fatal and has been considered. ii. The Respondent’s Reference dated 3rd December 2024 is competent and properly before the Court; iii. The taxing officer erred in principle by applying the wrong schedule; the proper Schedule would have been Schedule 5 of the ARO. Accordingly, the Court makes the following orders: a. The Client’s Reference dated 3rd December 2024 is partially allowed. b. The Advocate’s Reference dated 29th November 2024 is hereby dismissed. c. The ruling of the taxing officer delivered on 18th November 2024 is hereby varied, but only to the extent that taxation is to be done under Schedule 5 instead of Schedule 6. d. The Bill of Costs dated 26th January 2016 is hereby remitted for fresh taxation by a different taxing officer who will be guided by the principles enumerated in this judgment, to wit, that taxation is to be done under Schedule 5 instead of Schedule 6, taking into account the evidence of the work actually done. e. Each party shall bear its own costs of the two References. It is so ordered. SIGNED, DATED, and DELIVERED IN VIRTUAL COURT THIS 21ST OCTOBER 2025 ADO MOSES JUDGE In the presence of: - https://new.kenyalaw.org/akn/ke/judgment/kehc/2025/16434/eng@2025-10-21 7

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C/A – Moses Mwangi h/b for Kiragu…………..for the Advocate/Applicant Orenge h/b for Mbugua………….…..... for the Client/Respondent https://new.kenyalaw.org/akn/ke/judgment/kehc/2025/16434/eng@2025-10-21 8

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