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Court of AppealPartially AllowedNot stated in the judgment

Devshi Dhanji and 2 others v Kanji Naran Patel and 2 others [1978] KECA 2 (KLR)

Court of Appeal for East Africa (Kenya)
24 November 1978
2,010 words in judgment
View original judgmentRead on Kenya Law Watch case
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·~8 min to read original · ~4 min brief

The bottom line

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Kenya's Court of Appeal confirmed judges can cut excessive legal costs directly and refunded Shs 32,849 to the winning party — but without interest.

What this practically means

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Executive summary

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This is a judgment of the East African Court of Appeal at Nairobi delivered by Law JA, with Wambuzi JA and Miller Ag JA concurring, in an appeal arising from a taxation dispute between the same parties as Patel v Dhanji [1975] EA 301. The plaintiffs had sued unsuccessfully for declarations entitling them to inspect the accounts and membership lists of an institution; the defendants obtained a costs order which the taxing officer reduced to Shs 36,000. On a reference, Platt J found defects in the taxing officer's ruling - over-emphasis of the importance and complexity of a basically simple suit - reduced the instructions fee to Shs 10,000 plus one-third, and, at the defendants' request, finalised the taxation himself rather than remit it. The defendants appealed, contending the judge lacked grounds to interfere and should have remitted; the plaintiffs cross-appealed, seeking the taxed-off sum of Shs 32,849 and interest. The Court held that a manifestly excessive award permits an inference of error in principle, and that a reviewing judge has discretion to re-tax a bill himself; the protracted history of the litigation justified finalising it. The appeal was dismissed with costs. The cross-appeal succeeded only in part: the defendants were ordered to refund Shs 32,849 within seven days, but no interest was payable because the money lay in a trust account earning nothing pursuant to a court order. The plaintiffs received one-third of the costs of the cross-appeal.

Questions the Court framed

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The issues the Court set itself to decide, in its own words.

  1. 1.Whether the High Court judge was entitled to interfere with the taxing officer's ruling despite not finding that the taxing officer had acted on a wrong principle
  2. 2.Whether the judge should have remitted the bill to the taxing officer rather than re-tax the bill himself
  3. 3.Whether the instructions fee allowed by the judge was manifestly excessive
  4. 4.Whether the defendants should refund the taxed-off sum of Shs 32,849 to the plaintiffs
  5. 5.Whether interest should be paid on the refunded sum by way of restitution

Key legal issues

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01

Error of principle justifying interference with taxation

Holding

The judge was entitled to interfere because the excessive award itself supported an inference of error in principle

Reasoning

The judge found defects in the taxing officer's ruling, particularly the over-emphasis of the difficulty, importance and complexity of what was basically a simple suit. Although the judge did not expressly find that the taxing officer acted on a wrong principle, the manifestly excessive award supported a necessary inference of error in principle. The Court declined to disturb the decision to interfere.

p. 2
02

Judge's power to re-tax rather than remit

Holding

The judge rightly exercised his discretion to finalise the taxation himself given the protracted history of the litigation

Reasoning

Although the general practice is to remit the bill to the taxing officer for re-assessment, the reviewing judge may deal with the matter himself. Here the case had become protracted, a remittal would invite further references and appeals, and the judge's reasons of convenience were sound. The Court agreed the history of the case fully justified finalising the matter and found the assessment of Shs 10,000 plus one-third eminently reasonable.

p. 3
03

Interest on restitution of taxed-off costs

Holding

No interest was payable where the money lay in a trust account earning no interest pursuant to a court order

Reasoning

Relying on Harnan Singh s/o Jhanda Singh v Jamal Pribhai, the Court held that although section 91(1) of the Civil Procedure Act permits a consequential order for interest on restitution, the defendants had not had the use of the money, which lay in a trust account earning no interest pursuant to the judge's order pending appeal. The principle applied is that interest is not payable where the recipient obtained no benefit from the funds.

p. 3

Legal principles established

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  • A reviewing judge has jurisdiction to tax a bill himself rather than remit to the taxing officer; it is a question of discretion
  • Where a sum awarded is manifestly excessive, an error in principle may be inferred
  • A party is not bound by counsel's request in the court below to depart from the general practice of remitting taxation to the taxing officer

Court orders

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  1. 1.The defendants' appeal against the judge's interference with the taxing officer's ruling and his re-assessment of the fee is dismissed with costs
  2. 2.The defendants are ordered to pay to the plaintiffs the sum of Shs 32,849 within seven days
  3. 3.No interest is payable on the sum of Shs 32,849 by way of restitution
  4. 4.The cross-appeal is allowed to the limited extent of ordering the refund; the plaintiffs are awarded one-third of the costs of the cross-appeal

The bench

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One judgment of the whole court — no separate or dissenting opinions.

majority

Wrote the judgment

majority
majority
On appeal from
High Court of Kenya
Not stated
Jurisdiction invoked
Statutory right of appeal against the decision of the High Court on a reference from a taxing officer (not expressly stated in the judgment)

Relief refused

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Interest on the taxed-off sum by way of restitution

The money lay in a trust account where it earned no interest and the defendants obtained no benefit from it

p. 3

Costs

Appeal dismissed with costs; plaintiffs awarded one-third of the costs of the cross-appeal

Quotable passages

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Verbatim from the judgment, each located to the page it appears on in the official PDF — so these can be cited and checked directly.

I would accordingly order that the appeal should be dismissed with costs, and the cross-appeal allowed to the limited extent of ordering that the defendants do pay to the plaintiffs the sum of Shs 32,849 within seven days, but without interest. I would award the plaintiffs one-third of the costs of the cross-appeal.
p. 3Final orders and disposition
But a judge has jurisdiction to tax a bill himself. As was said by Gould Ag V-P in D’Souza’s case [1960] EA 602, “Though the general practice is as indicated in the foregoing passages, the reviewing judge can and sometimes does deal with the matter himself.” It is a question of discretion.
p. 2Judge's discretion to re-tax a bill rather than remit
if this Court should consider that the sum awarded was manifestly excessive it may be a necessary inference that there has been an error in principle.
p. 2Inference of error in principle from excessive award
When a party is entitled to restitution by way of an order for the refund of costs, the Court may make a consequential order for the payment of interest.
p. 3Power to order interest on restitution of costs under section 91(1) of the Civil Procedure Act
The conclusion I reach is that the defendants should not be ordered to pay interest on that money by way of restitution.
p. 3Refusal of interest where funds earned nothing in trust account

Issues in the judgment

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minor

The case title and appeal number are not stated in the judgment text supplied; the case is identified only through the related report Patel v Dhanji [1975] EA 301

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, "Devshi Dhanji and 2 others v Kanji Naran Patel and 2 others [1978] KECA 2 (KLR)", Case Analysis (1978). Not stated in the judgment. Source: https://new.kenyalaw.org/akn/ke/judgment/keca/1978/2/eng@1978-11-24

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