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ELCPartially Allowed· [2022] KEELC 3777 (KLR)

Muraya v Kenya Commercial Bank Ltd & another (Environment & Land Case 113 of 2014) [2022] KEELC 3777 (KLR)

Environment and Land Court
21 July 2022
2,541 words in judgment
View original judgmentRead on Kenya Law Watch case
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The bottom line

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What this practically means

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Executive summary

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This is a ruling on an objection to taxation (a reference) under rule 11(1) of the Advocates (Remuneration) Order, brought by plaintiffs who had sued Kenya Commercial Bank over a charge and attempted auction of land parcel subdivision No 12101, mainland north, Mombasa. Shallom Homes Limited, the successful bidder at the auction (Kshs 29,850,000/=), had been joined as 2nd defendant but was later removed from the suit by amendment, with the plaintiffs conceding her costs. Her bill of Kshs 2,062,412/= was taxed at Kshs 1,085,695/= on March 12, 2021, the taxing officer using Kshs 50,000,000/= as the value of the subject matter, yielding instruction fees of Kshs 712,500/= and getting up fees of Kshs 237,500/=. The applicants argued the suit, being a challenge to the sale process, was not monetary and that the 'other matters' scale (minimum Kshs 75,000) should have applied, relying on Bunson Travel v Kenya Airways. The respondent supported the taxation, relying on Joreth Limited v Kigano and Kenyariri & Associates v Salama Beach Hotel. The court, guided by Kipkorir, Titoo & Kiara Advocates v Deposit Protection Fund Board, held that the suit had a valuable subject matter - the injunction sought related to the suit property - so schedule 6 was correctly applied, and distinguished Bunson Travel as a court of equal jurisdiction involving an unquantified commission claim. However, the taxing officer fell into error by using Kshs 50,000,000/=, which covered a loan secured by two properties and a sale agreement for a different parcel (No 12100). The correct value was the respondent's purchase price of Kshs 29,850,000/=. The taxation on instruction fees was set aside and the bill remitted for retaxation on that basis, with no orders as to costs of the reference.

Key legal issues

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01

Correct schedule for taxing instruction fees in a suit seeking to stop an auction of charged land

Holding

Schedule 6 (value-based scale) applied because the subject matter had a determinable value; the 'other matters' minimum of Kshs 75,000 was inapplicable

Reasoning

The applicants sought an injunction to stop sale of the suit property. The court held that an injunction relating to subject matter with value is taxed on that value. Schedule 6 for High Court proceedings was the correct schedule, and direction (b) applied since the respondent filed a defence and the suit was resolved without full trial.

p. 6
02

Correct value of the subject matter for assessing instruction fees

Holding

The taxing officer erred by using Kshs 50,000,000/=, a loan secured by two properties, and a sale agreement relating to a different plot; the correct value was the respondent's purchase price of Kshs 29,850,000/=

Reasoning

The Kshs 50 million loan covered two parcels, and the May 6, 2014 sale agreement concerned subdivision No 12100, not the suit property (No 12101). The respondent, as successful bidder, was defending her purchase of Kshs 29,850,000/=, which the court took as the value she attributed to the property.

03

Standard of interference on a reference from taxation

Holding

The court applied the Kipkorir, Titoo & Kiara principle: interference only where the taxing officer erred in principle

Reasoning

The court cited the Court of Appeal's guidance in Kipkorir, Titoo & Kiara Advocates v Deposit Protection Fund Board and Arthur v Nyeri Electricity Undertaking, holding that questions purely of quantum are for the taxing officer and the court interferes only in exceptional cases. Here an error of principle was found in the valuation basis, justifying intervention.

p. 2

Legal principles established

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  • A judge on a reference from taxation will not interfere with the taxing officer's discretion unless there was an error in principle; questions of quantum are for the taxing officer except in exceptional cases
  • Every suit has a subject matter capable of valuation, including suits for injunction, unless it is a loose declaration of rights not pegged to anything of value

Court orders

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  1. 1.Setting aside the taxation on instruction fees as it was based on the wrong quantification of the subject matter
  2. 2.Remitting the advocate's bill back to the taxing officer with direction to tax the bill based on Kshs 29,850,000/= as the value of the subject matter
  3. 3.No orders as to the costs of this reference

Authorities

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Legislation

  • Advocates (Remuneration) Order, 2014Rule 11(1); Schedule 6 (instruction fees items 1(a), 1(b), (j) 'other matters'; paragraph 2 getting up fees)
  • Civil Procedure RulesOrder IX A

Cases cited (5)

  • Joreth Limited v Kigano
    (2002) eKLR
  • Bunson Travel & Others v Kenya Airways
    (2006) eKLR
  • Kenyariri & Associates Advocates v Salama Beach Hotel
    (2014) eKLR
  • Kipkorir, Titoo & Kiara Advocates v Deposit Protection Fund Board
    (2005) eKLR
  • Arthur v Nyeri Electricity Undertaking
    [1961] EA 497
Jurisdiction invoked
Rule 11(1) of the Advocates (Remuneration) Order - reference to a judge from a decision of the taxing officer

Key timeline

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Practical implications

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Frequently asked questions

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Later judgments citing this (1)

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Judgments in the corpus that rely on this one. Where the Court said how it treated the authority, that is shown.

Cite this brief

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Cite this brief

Caselaw, "Muraya v Kenya Commercial Bank Ltd & another (Environment & Land Case 113 of 2014) [2022] KEELC 3777 (KLR)", Case Analysis (2022). . Source: https://new.kenyalaw.org/akn/ke/judgment/keelc/2022/3777/eng@2022-07-21

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