Automated Summary
Key Facts
Odera Obar & Co Advocates applied for judgment against U Design, Amazon Consultants Limited, and Professional Consultants Limited for Kshs.10,039,347/- plus 14% annual interest from 7th November 2015. The amount was based on a Certificate of Taxation from 16th September 2016. The respondents disputed the Taxing Officer's decision to tax items 122 (Kshs.5,590,000.00) and 144 (Kshs.2,976,459) as exorbitant, arguing it nearly equaled their original claim of Kshs.10,882,943.00 in the underlying case (U DESIGN & 2 OTHERS Vs ALEX BAZARA TABULO, Hccc No. 59 of 2014). The Taxing Officer relied on the Defendant's Counter-Claim of Kshs.359,000,000/- to determine the instruction fee, which the respondents claimed was an error in principle. The court upheld the Taxing Officer's decision, finding no legal error in her methodology, including the 50% increase to party and party costs and the interest calculation starting from 16th October 2016 (30 days after the taxation ruling).
Tax Type
Taxation of legal costs and advocate/client fees under the Advocates Remuneration Order
Issues
- Whether the Taxing Officer erred in principle by basing the Instruction Fee solely on the counter-claim amount of Kshs.359,000,000/- without considering other factors such as the nature and importance of the matter, as required by the Remuneration Order.
- Whether the 50% increase in party and party costs to determine Advocate/Client costs was justified under Schedule VI B of the Advocates Remuneration Order, and if the Taxing Officer failed to cite the legal basis for this adjustment.
Holdings
- The court upheld the Taxing Officer's determination of the instruction fee based on the counter-claim amount of Kshs.359,000,000/-. The judge cited precedents (e.g., FIRST AMERICAN BANK of KENYA Vs SHAH & OTHERS, NYANGITO & Co. ADVOCATES Vs DOINYO LESSOS CREAMERIES LIMITED) to affirm that the Taxing Officer correctly considered the subject matter value from the counter-claim, even if disputed, and was not obligated to adjust the fee for the case not reaching conclusion.
- The court adjusted the interest on taxed costs to start 30 days after the Taxing Officer's ruling (16th October 2016) rather than from the initial bill date. This was to align with Rule 7 of the Advocates Remuneration Order and the principle of fairness, as the final fee amount was only determined after the Taxing Officer's decision.
- The court confirmed the Taxing Officer's application of a 50% increase to party and party costs under Part B of Schedule VI of the Advocates Remuneration Order. This was deemed mandatory and compliant with the law, as supported by the case KIPKENDA, LILAN & Co. ADVOCATES Vs CITY COUNCIL of NAIROBI.
Remedies
- The advocate was awarded costs for the applications dated September 19 and September 26, 2016.
- Judgment entered in favor of Odera Obar & Co Advocates against the Respondents jointly and severally for Kshs.10,039,347/-, together with interest at 14% per annum from October 16, 2016.
Tax Issue Category
Other
Monetary Damages
10039347.00
Legal Principles
The court upheld the Taxing Officer's decision to calculate instruction fees based on the value of the subject matter (Kshs.359,000,000 counter-claim) and applied Schedule VI of the Advocates Remuneration Order, which mandates a 50% increase in party and party costs to determine advocate/client costs. The ruling emphasized that judges should not interfere with Taxing Officers' discretion unless there is an error in principle.
Disputed Tax Amount
10039347.00
Precedent Name
- REGISTERED TRUSTEES OF THE CASHEWNUT INDUSTRY DEVELOPMENT FUND Vs CASHEWNUT BOARD OF TANZANIA
- FIRST AMERICAN BANK of KENYA Vs SHAH & OTHERS
- KIPKORIR, TITOO & KIARA ADVOCATES Vs DEPOSIT PROTECTION FUND BOARD
- KIPKENDA, LILAN & Co. ADVOCATES Vs CITY COUNCIL of NAIROBI
- NYANGITO & Co. ADVOCATES Vs DOINYO LESSOS CREAMERIES LIMITED
Cited Statute
- 2014 Advocates Remuneration (Amendment) Order
- Advocates Remuneration Order
- Advocates Act
Judge Name
Fred A. Ochieng
Passage Text
- The counter-claim filed by the Defendant is for the loss of profits and damage in the sum of Kshs.359,000,000, suffered on account of the aborted project for the construction of Apartments for sale, the failure of which the Defendant contends is as a result of fraud on the Plaintiff's part. Therefore, the value of the subject matter of the counter-claim is Kshs.359,000,000...
- I further find that it is only from the date when the Taxing Officer delivered her Ruling that it became clear about the actual fee payable to the advocate. ... interest on the taxed costs be paid at the rate of 14% per annum from 16th October 2016.
- In the case of NYANGITO & Co. ADVOCATES Vs DOINYO LESSOS CREAMERIES LIMITED, Misc. CAUSE No. 843 of 2013, Odunga J. expressed himself thus; 'In the case I have found that the amount of money involved clearly showed what was at stake, and was evidence of the interest the parties had in the matter and the importance of the case to them'.