Paragon Electronics Limited & another v I&M Bank Ltd (aka Investment and Mortgage Bank); Velos Enterprises Limited & 2 others (Interested Parties) (Environment & Land Case E315 of 2022) [2024] KEELC 6615 (KLR)
The bottom line
#Kenya's Environment and Land Court dismissed a challenge to taxed legal costs because the objectors never filed the required notice of objection to taxation first.
What this practically means
#Executive summary
#Key legal issues
#Competency of a reference filed without a notice of objection to taxation
The reference was incompetent and invalid because no notice of objection to taxation was ever filed following the impugned ruling of 24th July 2024.
Rule 11(1) of the Advocates Remuneration Order requires an aggrieved party to file, within 14 days, a notice of objection itemising the impugned items. The court searched the CTS/online platform and the application but found no such notice. Relying on Machira & Co. Advocates v Arthur K. Magugu, a reference founded on no notice of objection is vitiated and incompetent; the notice is synonymous with a notice of appeal and cannot be dispensed with.
Entitlement to instruction fees absent a statement of defence
The 1st interested party was entitled to instruction fees although no defence was filed, since instructions were received and acted upon by filing a striking-out application.
The court reaffirmed Joreth Ltd v Kigano & Associates that instruction fees are an independent, static item charged once and unaffected by the stage the suit has reached. Filing an application to strike out the suit, or raising a preliminary objection, constitutes acting on instructions. The view in First American Bank of Kenya v Shah that a defence is a condition precedent was not treated as inflexible.
Whether the taxing officer committed an error of principle on quantum
No error of principle was demonstrated; a judge interferes with a taxing officer's discretion only where erroneous factors were taken into account, relevant factors ignored, or the award is manifestly excessive or low.
Guided by Kipkorir, Titoo & Kiara Advocates v Deposit Protection Fund Board and First American Bank of Kenya v Shah, quantum is a matter within the technical competence of the taxing officer. That another officer might have awarded a different figure does not demonstrate injudicious exercise of discretion; interference requires a misdirection or manifest excess amounting to an error of principle.
Legal principles established
#- Filing and service of a notice of objection to taxation, itemising the impugned items, is a jurisdictional prerequisite to a reference against a certificate of taxation; a reference mounted without it is incompetent.
- Instruction fees are an independent item accruing the moment instructions are received and acted upon, whether or not a statement of defence is filed.
Court orders
#- 1.The Chamber Summons application [Reference] dated the 31st July 2024 be and is hereby dismissed.
- 2.Costs of the Reference be and are hereby awarded to the 1st interested Party.
- 3.Costs in terms of clause (ii) hereof be and are hereby assessed and certified in the sum of Kes. 25,000/= only.
- Jurisdiction invoked
- Section 13 of the Environment and Land Court Act, 2015; Sections 1A, 1B and 3A of the Civil Procedure Act, CAP 21; Paragraph 11(2) of the Advocates Remuneration Order
Key timeline
#Practical implications
#Frequently asked questions
#Cite this brief
#Cite this brief
Caselaw, "Paragon Electronics Limited & another v I&M Bank Ltd (aka Investment and Mortgage Bank); Velos Enterprises Limited & 2 others (Interested Parties) (Environment & Land Case E315 of 2022) [2024] KEELC 6615 (KLR)", Case Analysis (2024). Chamber Summons Application dated 31st July 2024 (ELC). Source: https://new.kenyalaw.org/akn/ke/judgment/keelc/2024/6615/eng@2024-10-09
Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.