Catherine Njeri Angote v Lucy Wangari Ngugi & another [2021] KEELC 1641 (KLR)
The bottom line
#A Kenyan court corrected a Taxing Master's cost calculation errors but kept the property valuation unchanged, and confirmed VAT cannot be charged on party-and-party costs.
What this practically means
#Executive summary
#Key legal issues
#Whether the Taxing Master erred in principle in valuing the suit property at Kshs.20,000,000/= as at filing for instructions fees
No error; instruction fees are pegged to the value at filing suit and absent a valuation at filing, the court will not interfere
The Taxing Master appreciated the 1993 sale price of Kshs.1,400,000/= but recognised appreciation by the time of filing in 2009. Since instruction fees are assessed as at the date of filing and the applicants provided no valuation at that date, the court found no basis to disturb the valuation. The court noted the Bill's generalised assertions of complexity were not set out with the specificity required by the Muchiri W'njuguna principles.
Whether the Taxing Master erred in calculating the additional 2% on instructions fees
Yes - the Taxing Master computed 2% of Kshs.120,000/= instead of 2% of the remainder of the value above Kshs.1,000,000/= (i.e. Kshs.19,000,000/=)
Under Schedule 6 of the Advocates Remuneration Order 2014, where the value exceeds Kshs.1,000,000/= the fee is Kshs.120,000/= plus 2% of the remainder. The Taxing Master applied the 2% to the base fee rather than to the balance of the value, a mathematical misapplication of the Remuneration Order amounting to an error to be corrected on remittance.
Whether the Taxing Master erred in disallowing getting up fees
Yes - the applicants were entitled to getting up fees, the matter having proceeded to hearing and judgment with issues joined
Schedule 6 Paragraph 2 of the Remuneration Order provides for getting up fees where a denial of liability is filed or issues are joined. The suit proceeded to hearing and judgment in favour of the applicants on both suit and counterclaim. The Taxing Master wholly disallowed getting up fees without reasons; the court held the item must be included on remittance.
Whether VAT was properly awarded on the party and party bill
No - VAT is taxed off; a party and party bill involves no taxable supply between the parties
Section 6(1) of the VAT Act 2015 charges VAT on taxable supplies made by a taxable person. In party and party taxation the successful party, not the advocate, is compensated, so no services are supplied to the opposing party. Relying on Pyramid Motors, the court held VAT could only arise in an advocate-client bill or on proof VAT was actually paid.
Legal principles established
#- The High Court (and by extension the Environment and Land Court) will only interfere with a Taxing Master's decision where there is a clear error of principle or the sums awarded are manifestly excessive or so low as to amount to an injustice
- Instruction fees are assessed by reference to the value of the subject matter at the time of filing the suit, not the date of judgment
- A party is entitled to getting up fees where a denial of liability is filed or issues are joined, and the fee shall be not less than one-third of the instruction fee
- VAT is not chargeable on party and party costs as there is no taxable supply between the parties
Court orders
#- 1.The Bill of Costs is remitted back to the Taxing Master to consider the issue of the additional 2% on instructions fees, to award Getting Up Fees, and to tax off the VAT
- 2.The Bill of Costs to be taxed afresh by the Taxing Master on those items
- 3.It is so ordered
- Jurisdiction invoked
- Reference against a Taxing Master's decision under the Advocates Remuneration Order 2014 (Environment and Land Court as the successor court to the High Court in land disputes)
Key timeline
#Practical implications
#Frequently asked questions
#Cite this brief
#Cite this brief
Caselaw, "Catherine Njeri Angote v Lucy Wangari Ngugi & another [2021] KEELC 1641 (KLR)", Case Analysis (2021). Not stated in the judgment. Source: https://new.kenyalaw.org/akn/ke/judgment/keelc/2021/1641/eng@2021-10-08
Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.