Bethsaida Resort and Spa Ltd v Gauderlot (Environment & Land Case 032 of 2021) [2023] KEMC 271 (KLR)
The bottom line
#Kenya's Environment and Land Court cut a legal costs bill nearly in half, ruling that unreceipted expenses and VAT cannot be recovered between parties.
What this practically means
#Executive summary
#Key legal issues
#Determination of the subject matter value for instruction fees
The subject matter was Ksh. 4,500,000/-, being the amount ultimately decreed, not Ksh. 45,000,000/- as contended by the Plaintiff; instruction fees taxed at Ksh. 210,000/-
The taxing officer examined the Plaint and Defence dated 22nd February 2018 and found no counterclaim. What was at stake was the contract claim of Ksh. 4,500,000/- which the judge granted in the judgment of 21st February 2022. Since the matter was contested, Schedule 6(b) of the ARO applied, yielding Ksh. 120,000/- plus a percentage of Ksh. 4,500,000/=, computed at Ksh. 210,000/-, with Ksh. 340,000/- taxed off.
Interpretation of the additional 2% under Schedule 6 Paragraph 1(b) of the ARO
The 2% is to be levied on the entire value of the subject matter, not prorated on the amount over a threshold
The Defendant proposed a prorated/clustered calculation akin to PAYE, interpreting the additional 2% as applying only to the amount above a threshold. The court compared the equivalent clause in the 1989 Order, which reads 'plus ½% on the amount over Sh. 750,000', and noted that the words 'extra' or 'excess' or their equivalent are absent from the current provision, so the natural meaning is that the 2% applies to the whole subject matter value.
Whether receipts attached to written submissions could substantiate items of the bill
No - submissions cannot be used to introduce evidence; items without receipts on record were taxed off
Relying on the Court of Appeal in Daniel Toroitich Arap Moi & Another v Mwangi Stephen Murithi & Another, the court held that submissions are parties' 'marketing language' and cannot take the place of evidence. The Plaintiff attached receipts to submissions but did not seek leave to introduce them as evidence, depriving the Defendant of a chance to challenge them. Items lacking receipts on file were therefore taxed off.
Legal principles established
#- The value of the subject matter for taxation is to be determined from the pleadings, judgment or settlement between the parties
- Submissions cannot take the place of evidence and cannot be used to introduce evidence before a taxing officer
- Under Schedule 6 Paragraph 1(b) of the ARO, the additional 2% is levied on the entire value of the subject matter, absent words such as 'extra' or 'excess'
- VAT is not awardable on a party and party bill of costs
- A party is bound by its Notice of Objection; material in written submissions contrary to the notice is disregarded
Court orders
#- 1.Instruction fees taxed at Ksh. 210,000/= founded on a subject matter of Ksh. 4,500,000/=, with Ksh. 340,000/= taxed off
- 2.Item 3 (get-up fees) taxed at Ksh. 70,000/=, Ksh. 113,333.33 taxed off
- 3.Items 17, 22, 60 and 82 each taxed at Ksh. 240/= under Schedule 6 paragraph 4(h) of the ARO
- 4.Items 99, 101, 110, 115 and 119 taxed as drawn on the strength of receipts on the file
- 5.Items 100, 102 to 109, 111 to 114 and 116 to 118 taxed off for want of receipts
- 6.VAT of Ksh. 142,709.33 taxed off as not awardable on a party and party bill of costs
- 7.The Bill of Costs dated 7th July 2022 taxed at Ksh. 513,150/=, with Ksh. 620,182.66 taxed off
- 8.Each party to bear its own costs of the Bill of Costs
- Jurisdiction invoked
- Taxation of a party and party bill of costs under the Advocates (Remuneration) (Amendment) Order, 2014 (Legal Notice No. 35), Schedule 6, following judgment of the High Court
Key timeline
#Practical implications
#Frequently asked questions
#Cite this brief
#Cite this brief
Caselaw, "Bethsaida Resort and Spa Ltd v Gauderlot (Environment & Land Case 032 of 2021) [2023] KEMC 271 (KLR)", Case Analysis (2023). Party and Party Bill of Costs dated 7th July 2022. Source: https://new.kenyalaw.org/akn/ke/judgment/kemc/2023/271/eng@2023-01-18
Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.