Crossley Holdings Ltd v Cabinet Secretary, Ministry of Agriculture, Livestock, Fisheries & Co-operatives & 3 others; Ogendo & another (Interested Party) (Constitutional Petition 6 of 2020) [2022] KEELC 2529 (KLR)
The bottom line
#A Kenyan court allowed a taxing officer to adjust a Kshs 752 million land value for inflation when calculating legal fees, rejecting efforts to overturn the huge fee award.
What this practically means
#Executive summary
#Key legal issues
#Whether the taxing officer erred in principle by extrapolating the value of the subject property to Kshs. 7,984,900,000 for inflation
No error of principle: the base value of Kshs. 752,000,000 was discerned from the proceedings and pleadings, and taking cognisance of inflation and passage of time was a proper exercise of discretion
The taxing master found from the proceedings that the petitioner paid Kshs. 752,000,000 for 9,394 acres in 2007, being about Kshs. 80,051 per acre. She then took account of 14 years of inflation, approximating Kshs. 850,000 per acre and arriving at Kshs. 7,984,900,000. The court held the value was discerned from the proceedings and that considering time and inflation disclosed no error of principle.
The threshold for interfering with a taxing officer's decision on a reference
Interference is only warranted on an error of principle or where the figure is so manifestly excessive as to justify an inference of erroneous principles; the burden lies on the applicant
Citing Kipkorir Titoo & Kiara Advocates v Deposit Protection Fund Board, the court restated that a judge on reference will not normally disturb the taxing officer's discretion absent an error of principle. The applicants bore the burden of demonstrating that the taxing officer misapprehended the principles, took irrelevant factors into account or acted capriciously, and failed to discharge it.
Whether instruction fees should have been taxed under Schedule 6 paragraph (j) (constitutional petitions) rather than on the value of the subject matter
Rejected: the value of the subject matter was ascertainable from the pleadings and the dispute concerned ownership and recovery of land, so the taxing officer was entitled to rely on the pleaded value
The respondents argued that the value of the subject property, Kisumu Municipality Block 11/7545/3, was pleaded in the cross-petitions which sought recovery of the land. The court accepted that the entire petition revolved around ownership and recovery of the parcel, so the taxing officer was entitled to rely on the pleaded value notwithstanding the declaratory and constitutional reliefs granted.
Legal principles established
#- A judge on a reference will not interfere with a taxing officer's exercise of discretion unless the taxing officer erred in principle or the costs allowed are so manifestly excessive as to justify an inference of erroneous principles
- Where the value of the subject matter is ascertainable from the pleadings, judgment or settlement, the taxing officer must start from that value and may only exercise discretion where it is not ascertainable
Court orders
#- 1.Both references (that of Miwani Sugar Company (1989) Ltd in receivership and that of the Attorney General) against the taxing officer's decision dated 26th January 2022 are dismissed
- 2.Costs of the references awarded to the Petitioner/Respondents
- On appeal from
- Deputy Registrar (Taxing Officer), Environment and Land Court, Kisumu
- Taxation of the Petitioner's bill of costs dated 2nd November 2021
- Jurisdiction invoked
- Reference against the decision of a taxing officer (Chamber Summons dated 7th February 2021 / reference dated 8th February 2022)
Key timeline
#Practical implications
#Frequently asked questions
#Cite this brief
#Cite this brief
Caselaw, "Crossley Holdings Ltd v Cabinet Secretary, Ministry of Agriculture, Livestock, Fisheries & Co-operatives & 3 others; Ogendo & another (Interested Party) (Constitutional Petition 6 of 2020) [2022] KEELC 2529 (KLR)", Case Analysis (2022). Constitutional Petition No 6 of 2020. Source: https://new.kenyalaw.org/akn/ke/judgment/keelc/2022/2529/eng@2022-07-15
Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.