Mukele Ngacho & Co Advocates v Emanga Ne Sameta Investments Limited [2019] KEELC 4785 (KLR)
The bottom line
#The High Court confirmed that when a settlement is silent on value, advocates' fees are calculated from the pleadings, not what parties later negotiated privately.
What this practically means
#Executive summary
#Key legal issues
#Whether the taxing officer correctly fixed the value of the subject matter at Kshs.68,000,000/- from the pleadings
Yes. The consent settling the original suit did not disclose a value; the taxing officer was entitled to turn to the pleadings, which pleaded a purchase price of Kshs.53,000,000/- and damages of Kshs.15,000,000/-
The consent marking the original suit settled referred only to a transfer of a flat without stating its value and did not mention the Kshs.5,500,000/- refund the applicant relied on. The amended plaint pleaded the agreed sale price of Kshs.53,000,000/- and special damages of Kshs.15,000,000/- sought in lieu of or in addition to specific performance. The sum of Kshs.5,500,000/- was neither pleaded nor in the consent, so the taxing officer rightly assessed instruction fees on the pleaded value of Kshs.68,000,000/-.
Whether the court should interfere with the taxing officer's discretion
No. The taxing officer took into account all relevant factors; the instruction fee awarded was the minimum on the assessed value, and the applicant showed no error of principle
Applying the principles in Nyangito & Co. Advocates v Doinyo Lessos Creameries Ltd, interference is only warranted on an error of principle or manifest excess. The taxing officer considered the pleadings and the consent, chose the correct basis of assessment, and awarded minimum instruction fees on the assessed value. The applicant identified no irrelevant factor considered or relevant factor omitted, so the court found no reason to disturb her discretion.
Whether the reference failed for want of notice under paragraph 11(1) of the Advocates Remuneration Order
The respondent raised this procedural objection but the court decided the reference on its merits and dismissed it
The respondent contended the applicant should first have given notice to the taxing officer under paragraph 11(1) of the Advocates Remuneration Order before filing the reference, and that the reference should fail on that irregularity. The judgment does not record any determination of this objection; the court proceeded to consider and dismiss the reference on its merits, so no holding was made on the point.
Legal principles established
#- The value of the subject matter of a suit for taxation purposes is to be determined from the pleadings, judgment or settlement; if not ascertainable therefrom, the taxing officer may use discretion
- A court will not interfere with a taxing officer's discretion unless the decision was based on an error of principle or the fee was manifestly excessive
- Where a decision discloses an error of principle, the normal course is remission to the taxing officer unless the error could not materially have affected the assessment
Court orders
#- 1.The chamber summons dated 6th October, 2017 is dismissed
- 2.Costs of the reference to the respondent
- Jurisdiction invoked
- Advocates Remuneration Order - reference against a taxing officer's decision under paragraph 11
Key timeline
#Practical implications
#Frequently asked questions
#Cite this brief
#Cite this brief
Caselaw, "Mukele Ngacho & Co Advocates v Emanga Ne Sameta Investments Limited [2019] KEELC 4785 (KLR)", Case Analysis (2019). Chamber Summons dated 6th October, 2017 (reference from taxation in Nairobi HCCC No. 165 of 2009, Magnate Ventures Ltd v David Some Barno & others). Source: https://new.kenyalaw.org/akn/ke/judgment/keelc/2019/4785/eng@2019-01-24
Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.