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ELCPartially Allowed· [2024] KEELC 3859 (KLR)

Ndegwa v Ol’kalou Water & Sanitation Company Limited & another (Environment & Land Case 107 of 2023) [2024] KEELC 3859 (KLR)

Environment and Land Court
16 May 2024
2,250 words in judgment
View original judgmentRead on Kenya Law Watch case
AI-assisted case brief
·~9 min to read original · ~4 min brief

The bottom line

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A Kenyan court threw out a Kshs.9.8 million legal costs bill, ruling Kshs.3 million instruction fees were unjustified where the case's value couldn't be established.

What this practically means

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Executive summary

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This ruling by Y. M. Angima J of the Environment and Land Court at Nyandarua, dated 16 May 2024, determined a reference dated 19.12.2023 filed by the Defendants under paragraph 11 of the Advocates Remuneration Order against the taxing officer's decision of 31.05.2023 taxing the Plaintiff's party and party bill of costs at Kshs.9,825,962/=. The Defendants, having been granted extension of time to file the reference without the taxing officer's reasons, contended the taxation was based on errors of principle and was a wholly erroneous estimate of costs. The court framed two issues: merit of the reference and costs. Applying the principles in Republic v Commissioner of Domestic Taxes Ex-Parte Ukwala Supermarkets Ltd, the court found that since the value of the subject matter could not be ascertained from the pleadings, settlement or judgment, and the trial Judge had not certified any complexity, paragraph 1(b) of Schedule VI did not apply; the 'other matters' scale with a defended minimum of Kshs.75,000/= governed. Allowing instruction fee of Kshs.3,000,000/= - a 40-times increment - was a grave error of principle. The same error infected the counterclaim instruction fee, the getting-up fee, folio-dependent items, and an impermissible Kshs.30,000/= 'instruction fee' for amending the plaint. The court set aside the entire taxation and certificate of taxation dated 31.05.2023 and remitted the bill to a different taxing officer for taxation de novo, awarding the Defendants costs of the reference.

Key legal issues

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01

Whether the taxing officer committed an error of principle in allowing instruction fee of Kshs.3,000,000/= without an ascertainable subject-matter value or certification of complexity

Holding

Yes; the minimum applicable fee under the 'other matters' scale was Kshs.75,000/= and a 40-times increment was unjustified

Reasoning

The value of the subject matter could not be ascertained from pleadings, settlement or judgment, and the trial Judge never certified the suit as involving difficult, complex or novel issues. Paragraph 1(b) of Schedule VI was therefore inapplicable, and the taxing officer was bound by the 'other matters' scale with a defended minimum of Kshs.75,000/=. An increment of 40 times was excessive and constituted a wholly erroneous estimate of costs.

02

Whether consequential errors infected the instruction fee on the counterclaim, getting-up fees, folio-dependent items and the fee for amending the plaint

Holding

Yes; the same error of principle affected the counterclaim instruction fee, the getting-up fee, folio-dependent items, and the Kshs.30,000/= 'instruction fee' for amending the plaint was a strange, unsanctioned charge

Reasoning

The counterclaim instruction fee of Kshs.3,000,000/= and the getting-up fee of Kshs.1,000,000/= flowed directly from the erroneous instruction fee. Items dependent on folios lacked particulars of folios or copied documents, leaving no basis for allowance. The Kshs.30,000/= item for amending the plaint had no anchorage in Schedule VI, which only permits a fee for drawing the amended plaint.

03

Who should bear the costs of the reference

Holding

The Defendants, being successful, were awarded costs

Reasoning

Costs follow the event under the proviso to Section 27 of the Civil Procedure Act. The court found no good reason to depart from the general rule that a successful party should ordinarily be awarded costs, and awarded the Defendants the costs of the reference.

p. 5

Legal principles established

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  • A judge may interfere with a taxing officer's decision only on an error of principle or where the fee awarded is manifestly excessive as to justify an inference of error of principle
  • Where the value of the subject matter cannot be ascertained, the 'other matters' scale applies, with a minimum defended fee of Kshs.75,000/=, subject to the taxing officer's discretion to adjust upwards
  • Costs follow the event under the proviso to Section 27 of the Civil Procedure Act unless the court, for good reason, directs otherwise

Court orders

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  1. 1.The Defendants' reference dated 19.12.2023 is allowed
  2. 2.The certificate of taxation dated 31.05.2023 is set aside
  3. 3.The Plaintiff's bill of costs dated 02.02.2023 is remitted to a different taxing officer for fresh taxation in accordance with the applicable provisions of Schedule VI of the Advocates Remuneration Order
  4. 4.The Defendants are awarded costs of the reference

Authorities

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Legislation

  • Advocates Remuneration OrderParagraph 11; Schedule VI paragraph 1(b) and 'other matters' scale; Schedule 6A Paragraph 1(b)
  • Civil Procedure Act (Cap 21)Section 27 (proviso)

Cases cited (3)

  • Republic v Commissioner of Domestic Taxes Ex-Parte Ukwala Supermarkets Ltd & 2 Others
    [2018] eKLR
  • First American Bank of Kenya v Shah and Others
    [2002] 1 EA 64
  • Hussein Janmohamed & Sons v Twentsche Overseas Trading Co. Ltd
    [1967] EA 287
Jurisdiction invoked
Paragraph 11 of the Advocates Remuneration Order (reference against taxing officer's decision)

Key timeline

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Practical implications

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Frequently asked questions

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Cite this brief

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Cite this brief

Caselaw, "Ndegwa v Ol’kalou Water & Sanitation Company Limited & another (Environment & Land Case 107 of 2023) [2024] KEELC 3859 (KLR)", Case Analysis (2024). . Source: https://new.kenyalaw.org/akn/ke/judgment/keelc/2024/3859/eng@2024-05-16

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