HARARE – The High Court of Zimbabwe has dismissed a bid by Fidelity Life Assurance Zimbabwe Limited to recover US$21,840 in legal fees incurred while defending a recusal application in a US$30 million arbitration dispute with CFI Holdings Limited, ruling that the use of two advocates in the interlocutory matter was excessive.
Justice Joel Mambara dismissed Fidelity’s application seeking to overturn a decision by a taxing officer who reduced the company’s legal costs.
The judge upheld the decision of the taxing officer, Chipo Chitata, who had trimmed Fidelity Life’s claimed advocates’ fees from US$21,840 to US$7,000.
The dispute arose after Fidelity Life successfully opposed an application to remove an arbitrator in proceedings involving a claim exceeding US$30 million.
The recusal application, brought under case number HCH 2173/24, sought the removal of arbitrator Lloyd Mhishi on allegations of bias. The High Court ruled in favour of Fidelity Life, allowing the arbitration to continue and awarding costs to the insurer.
In its subsequent party-and-party bill of costs, Fidelity Life claimed US$21,840 for the services of two advocates, one senior and one junior, engaged to oppose the recusal application.
However, during taxation, the taxing officer concluded that employing two counsel in what she regarded as an interlocutory application amounted to “over-cautiousness”. She allowed US$7,000 as a reasonable recoverable fee and disallowed the balance.
Fidelity Life approached the High Court in terms of rule 72(26) of the High Court Rules, 2021, arguing that the taxing officer had misdirected herself in principle by effectively disallowing the second counsel’s fees.
The insurer contended that where two counsel are engaged, their fees should ordinarily be allowed unless expressly limited by the court that awarded costs.
It further argued that the matter was complex and high-stakes, given the value of the underlying arbitration, and justified the use of both senior and junior counsel.
CFI Holdings opposed the review, maintaining that the taxing officer had properly exercised her discretion under rule 72(3), which permits the disallowance of costs incurred through over-caution or unnecessary expenditure.
The company argued that a recusal application was a narrow procedural issue that did not warrant the engagement of two advocates.
In his ruling, Justice Mambara emphasised that a court reviewing taxation exercises a limited supervisory role and may interfere only where there is an error in principle or a decision that is clearly wrong or grossly unreasonable.
The judge held that while the rules allow recovery of fees for more than one counsel where reasonably employed, the taxing officer retains the authority to assess whether such employment was necessary in the circumstances of the case.
He found that the recusal application was an interlocutory matter concerning alleged bias and did not determine the substantive rights of the parties in the US$30 million arbitration.
Although the allegations were serious, he concluded that the issues were not so complex as to require both senior and junior counsel.
“The applicant was, to put it bluntly, over-cautious,” Justice Mambara stated.
He added that while Fidelity Life was entitled to engage as many lawyers as it wished, the losing party could only be made to pay reasonable costs.
The court ruled that the taxing officer’s decision to allow US$7,000 was within the range of reasonable outcomes and did not amount to a misdirection or gross unreasonableness.
“The applicant took a strategic choice to engage two counsels in an interlocutory application, a choice that was within its rights but beyond what was strictly necessary.
“The consequence in costs is that the applicant must bear the luxury portion of that choice on its own. The losing party, second respondent, is properly charged with only the reasonable costs, not the deluxe costs,” Justice Mambara stated.
The application for review was dismissed, and Fidelity Life was ordered to pay the costs of the review proceedings.
