Skip to content
AI-generated case briefs sourced from Kenya Law · Not legal advice
Caselaw
AI-generated case brief
Case Brief · caselaw.co.ke
Court of AppealAllowedCivil Appeal No. 268 of 2010· [2017] KECA 213 (KLR)

Kagwimi Kang’ethe & Company Advocates v O-Kerai Nurseries Limited & 2 others [2017] KECA 213 (KLR)

Court of Appeal
6 October 2017
WKW. KaranjaGKG. B. M. KariukiJMJ. Mohammed
2,910 words in judgment
View original judgmentRead on Kenya Law Watch case
AI-assisted case brief
·~12 min to read original · ~4 min brief

The bottom line

#

The Court of Appeal restored a taxing officer's fee ruling, confirming judges can only interfere with taxation decisions when there is an error of principle, not just disagreement over amounts.

What this practically means

#

Executive summary

#
The appellant, a firm of advocates, acted for O-Kerai (O-lerai) Nurseries Limited in HCCC No. 565 of 2005 against National Bank of Kenya. Its advocate/client bill of Shs.4,795,524.16 was taxed by the Deputy Registrar at Shs.1,364,623 after crediting Shs.1.5 million paid. The client filed a reference before Kimaru, J, who on 15th July 2009 found the taxing officer had erred in principle by allegedly basing instructions fees on US$977,000, set aside items 1(a) and 1(b), valued the subject matter at US$500,000 (Shs.35 million), reduced the instructions fee to Shs.487,000 with a further Shs.243,750, and taxed off get-up fees of Shs.599,799.54. The advocate appealed. The Court of Appeal, per a single judgment of the court (Karanja, Kariuki and Mohammed, JJ.A), held the judge had misread the taxing officer's ruling: the taxing officer had expressly found no specific sum claimed and had exercised discretion in awarding Shs.600,000, and the US$500,000 figure adopted by the judge appeared nowhere in the pleadings. There being no error of principle and no evidence of manifest excess, the judge wrongly corrected a non-existent error. Reiterating the principles in First American Bank v Shah, Thomas James Arthur and Joreth Ltd, the court allowed the appeal, set aside the judge's ruling, restored the taxing officer's ruling of 29th January 2009, and awarded the appellant costs of the reference and of the appeal. This decision binds subordinate courts and High Court judges on the limits of judicial interference with taxation.

Key legal issues

#
01

Whether the learned judge erred in finding that the Taxing Officer had based the instructions fee on US$977,000 as the value of the subject matter

Holding

The judge misread the taxing officer's ruling; the taxing officer had expressly found no specific amount claimed and had exercised discretion under the Remuneration Order, so there was no error of principle to correct

Reasoning

The taxing officer expressly stated he was unable to attach any figure to the claimed damages from the pleadings and instead considered the nature, complexity, length of papers and skill required in awarding Shs.600,000 as instructions fees. The judge wrongly attributed a US$977,000 basis to the taxing officer and substituted his own figure of US$500,000, which appeared nowhere in the pleadings as a claim. Correcting a non-existent error, the judge himself fell into error.

p. 5
02

Whether the judge was entitled to substitute his own assessment of the instructions fee

Holding

No; in absence of error of principle or manifest excess, interference was unjustified; the correct course would have been remittal to a taxing officer

Reasoning

Citing First American Bank v Shah, Steel Construction v Uganda Sugar Factory and Thomas James Arthur, the court reiterated that questions solely of quantum are for taxing officers and judges should re-tax only to make corrections flowing from their decisions. With no error of principle shown and no evidence that the taxed amount was excessive, the judge had no justification for interfering with the taxation.

p. 5

Legal principles established

#
  • A judge on a reference may interfere with a taxing officer's decision only where there is an error of principle or the fee awarded is so manifestly excessive as to indicate an error of principle; quantum alone is for the taxing officer.
  • Where a fee has to be reassessed on different principles, the proper course is to remit to the same or another taxing officer rather than for the judge to re-tax.
  • The value of the subject matter of a suit for taxation is determined from the pleadings, judgment or settlement; if not ascertainable, the taxing officer may exercise discretion considering the nature and importance of the matter and other relevant circumstances.

Court orders

#
  1. 1.Appeal allowed
  2. 2.Ruling of the learned judge (Kimaru, J) dated 15th July 2009 set aside
  3. 3.Ruling of the taxing officer dated 29th January 2009 restored and upheld
  4. 4.Costs of the reference in the Superior Court and of this appeal awarded to the appellant

Authorities

#

Legislation

  • The Advocates (Remuneration) OrderRule 11(1)
  • The Advocates (Remuneration) OrderSchedule VI, items 1(a), 1(b), 2(a), 2(b)

Cases cited (4)

  • First American Bank of Kenya v Shah & Others
    [2002] 1 EA 64
  • Steel Construction & Petroleum Engineering (EA) Ltd v Uganda Sugar Factory Ltd
    [1970] EA 141
  • Joreth Limited v Kigano & Associates
    Nairobi Civil Appeal No. 66 of 1999
  • Thomas James Arthur v Nyeri Electricity Undertaking
    [1961] EA 492
On appeal from
High Court of Kenya, Nairobi
H.C. Misc Cause No. 393 of 2008
Jurisdiction invoked
First appellate jurisdiction under the Appellate Jurisdiction Act over appeals from the High Court

Key timeline

#

Practical implications

#

Frequently asked questions

#

Cite this brief

#

Cite this brief

Caselaw, "Kagwimi Kang’ethe & Company Advocates v O-Kerai Nurseries Limited & 2 others [2017] KECA 213 (KLR)", Case Analysis (2017). Civil Appeal No. 268 of 2010. Source: https://new.kenyalaw.org/akn/ke/judgment/keca/2017/213/eng@2017-10-06

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