Ombuto v Atera & 3 others

c. THAT this Honourable Court be pleased to enlarge time and deem this Notice of Objection/Reference as properly and duly filed within time. d. THAT pending the hearing and determination of this application, there be a stay of proceedings in Kisii MELC Case No. 60 of 2020, particularly the Notice to Show Cause proceedings scheduled for hearing on the 6th May 2026. e. THAT pending the hearing and determination of this application, there be a stay of execution of the Certificate of Costs dated year 2024 arising from the Taxing Officers’ Ruling delivered on 20 th February 2024. f. THAT in the interest of justice, this Honourable Court be pleased to set aside the Taxing Officer’s decision on taxation contained in the Ruling delivered on 20th February 2024 with respect to Items No. 1 (Instruction Fees) and 28 (VAT 16%) of the 1st Respondent’s Party and Party Bill of Costs dated 11th December 2023. g. THAT in light of the foregoing and without prejudice, the Honourable Court be pleased to review, revise, adjust and/or reduce the amount contained in the Certificate of Costs reflecting the correct costs payable unto the 1st Respondent/Plaintiff. h. Consequent to prayers (f & g) herein above being granted, the Honourable Court be pleased to substitute the Certificate of Costs Page 2 of 17

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dated 2024 with a new Certificate, reflecting the correct costs payable unto the 1st Respondent/Plaintiff. i. THAT in the alternative to the foregoing, the Ruling of the Taxing Officer delivered on 20th February 2024 be set aside and the Respondent’s bill of costs dated 11th December 2023 be remitted for re-taxation before any other Taxing Officer and be heard on a priority basis in terms of items no. 1 and 28. j. THAT the costs of this application be in the cause. k. Such further and/or other orders be granted as the Court may deem fit and expedient. 3. The application is supported by the grounds stated on the face of the Summons and an Affidavit sworn on 29th April, 2026, by the Applicant. The subject matter of the application is the taxation delivered on 20th February, 2024 through which costs arising from Kisii Magistrate’s Court ELC Case No. 60 of 2020. 4. The Applicant deposes that Kisii Magistrate’s Court ELC Case No. 60 of 2020 was concluded by way consent between the parties. Subsequently, the Plaintiff/1st Respondent filed a Party and Party Bill of Costs dated 11th December, 2023 which was taxed and a Certificate of Costs in the sum of K.Shs. 155,822.80/- issued. 5. The 1st Defendant/Applicant impugns the validity of the taxation of the Plaintiff’s Bill of Costs on the grounds that he was unaware of and did not Page 3 of 17

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participate in the taxation proceedings, because he was never served with the Bill of Costs, the Notice of Taxation, or any hearing or mention notice relating to the proceedings. He therefore states that he was deprived of an opportunity to be heard. 6. He avers that since the value of the subject matter of the suit was unascertained, the instruction fee awarded at K.Shs. 100,000/- was without proper basis, unanchored in principle, and excessive, particularly considering that the suit terminated at an early stage. He further contends that the Taxing Master erred in including Value Added Tax (VAT) at the rate of 16% in a Party and Party Bill of Costs, when VAT is only recoverable where services have been rendered, as in Advocate-Client Bill of Costs. 7. The Plaintiff/1st Respondent vide a Replying Affidavit sworn on 25th May, 2026 deposes that the Applicant had filed a similar application before the magistrate’s Court in Kisii Magistrate’s Court ELC No. 60 of 2020 but withdrew it before determination. On this basis, the Plaintiff/1 st Respondent asserts that the present application is not only res judicata, but also an abuse of Court process. 8. The Plaintiff/1st Respondent further asserts that the 1st Defendant/Applicant was actively represented in the proceedings before the lower Court by the firm of Messrs. Ochwangi & Company Advocates. He deposes that the said firm was served with all documents including the Page 4 of 17

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judgement and Notice of Taxation. Therefore, since the Applicant has never filed a notice to act in person, service of Court process upon his Advocate is deemed proper service. 9. Finally, the 1st Respondent deposes that the Bill of Costs was properly taxed as the same was reduced from K.Shs. 693,438/- to K.Shs. 155,822/-. He urged the court to dismiss the application with costs. SUBMISSIONS 10. The application was canvassed by way of written submissions with the applicant’s submissions dated 4th June, 2026. He identifies five issues for determination as follows; i. whether there has been an inordinate delay on the 1st Defendant/Applicant’s part in bringing this application. 11.Mr. Otieno submits that the 1st Defendant/Applicant came to know of the taxation when he was personally served with a notice to show cause. He places reliance on the holding in Fakir Mohammed v Joseph Mugambi and 2 Others (2005) in submitting that the Court should consider the period of delay, the reason for the delay, and the degree of prejudice caused to the Respondents, to determine whether there has been unreasonable or inordinate delay. ii.whether the Taxing Master erred in the taxation of Items 1 and 28 of the Party and Party Bill of Costs. Page 5 of 17

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12. Learned Counsel submits that the exercise of the Taxing Master’s discretion in taxation of Item 1 (Instruction Fees) was not judicious as the Taxing Master failed to advert to the fact that the value of the subject matter of the suit was unascertained. He anchors his argument on the holding of the Supreme Court in Kenya Airports Authority v Otieno Ragot & Company Advocates (2024) Petition No. E011 of 2023, that where instruction fees are assessed based on the nature of the matter, it is only after setting out the prescribed basic fee that the Taxing Master may use their discretion to increase or reduce the fee. He submits that the instruction fee ought to be revised to downwards of K.Shs. 45,000/-. 13. On inclusion of VAT in the Bill of Costs, Counsel submitted that under Section 5 of the Valued Added Tax Act, 2013, VAT is only chargeable on taxable supply of goods and services made by a registered supplier. He submits that the Court in Pyramid Motors Limited v Langata Gardens Limited [2015] eKLR arrived at a similar conclusion. 14. On whether the 1st Defendant/Applicant’s application is res judicata, Counsel derives support from the holding of the Court in Lotta v Tanaki [2003]2 EA 556, for his argument that the matter at issue must have been heard and finally determined by a Court of competent jurisdiction for res judicata to be successfully raised. 15. As regards whether service of the Bill of Costs upon the 1st Defendant/Applicant’s former Advocates was proper service, learned Page 6 of 17

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Counsel Mr. Otieno submitted that service upon an Advocate is not proper service when there is no subsisting Advocate-Client relationship or when service does not achieve actual notice. 16. The Plaintiff/1st Respondent’s submissions are dated 29th June 29, 2026 which equally identified five issues for determination. The first issue is whether the application is competently before the Court. Placing reliance on the holding of the Court in Macharia v Mutungi (Being and Administrator of the Estate of the Late Maina Koine) [2024] KEELC 6629 (KLR), Mr. Ombati submits that the Applicant’s Notice of Objection to the Taxing Master’s decision was filed out of time and no satisfactory reasons for the delay have been proffered. He urges that a defective Notice of Objection is an incurable flaw to the present reference. 17. On res judicata and an abuse of Court process, Mr. Ombati submits that the application was filed merely to delay execution, frustrate the 1st Respondent, and re-litigate abandoned issues. 18. As regards the soundness of the impugned decision on instruction fee and VAT, Counsel cites the holding in Kenya Airports Authority v Otieno Ragot and Company Advocates (Supra), arguing that the 1st Defendant/Applicant failed to show that the Taxing Master did not set out the basic fee before exercising their discretion. On the applicability of VAT, Mr Ombati submits that the items in the Bill of Costs were charged pursuant to the provision of legal services to the Plaintiff/1st Respondent; Page 7 of 17

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thus, there is a vatable supply of services. He urged the Court to uphold the Taxing Master's decision. 19. The Applicant filed further written submissions dated 30th June, 2026 addressing the question of competence of the reference. He contends that Applicant’s failure to comply with Paragraph 11(1) and (2) of the Advocates (Remuneration) Order is not fatal for several reasons. Fisrt, Paragraph 11(4) permits this Court to enlarge time for taking any step under Paragraph 11. 20. Second, the Courts in Ahmed Nassir v. National Bank or Kenya Ltd [2006] E.A, Wilmina Nekesa & another v. Amos Omondi Mbala [2021] KEELC 814 (KLR), and Evans Thiga Gaturu v. Kenya Commercial Bank Limited (2012) KEHC 4274 (KLR), concluded that where the reasons for the Taxing Master’s decision are already contained within a Ruling, it would be futile to seek further reasons. Analysis and Determination: 21. After carefully considering the parties’ pleadings, evidence, and written submissions, the following are the issues that invite determination: a. Whether the application is barred by res judicata or an abuse of Court process. Page 8 of 17

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b. Whether service of the Bill of Costs and other Court process upon the 1st Defendant/Applicant’s former Advocates was sufficient service. c. Whether an application objecting to the decision of the taxing master can be filed out of time. d. Whether the Taxing Master judiciously exercised his discretion in the award of the instruction fee. e. Whether VAT is chargeable on a Party and Party Bill of Costs. Res judicata or abuse of court process 22. The Supreme Court in John Florence Maritime Services Ltd & another v Cabinet Secretary Transport & Infrastructure & 3 others [2021] KESC 39 (KLR) concisely outlined at paragraph 59 the elements necessary for res judicata to be successfully raised in civil cases as follows: “For res judicata to be invoked in a civil matter the following elements must be demonstrated: a) There is a former judgment or order which was final; b) The judgment or order was on merit; c)The judgment or order was rendered by a court having jurisdiction over the subject matter and the parties; and Page 9 of 17

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d) There must be between the first and the second action identical parties, subject matter and cause of action.” 23. Unfortunately, the Plaintiff/1st Respondent’s argument fails to consider that for res judicata to apply, the issues between the parties ought to have been determined on the merits. The 1st Respondent stated that the application was withdrawn before determination. 24. The Court as well does not agree with the Plaintiff’s argument that the application should be struck out for being an abuse of Court process. In holding as such, the Court is guided by Paragraph 11(2) of the Advocates (Remuneration) Order that states as follows: “The taxing officer shall forthwith record and forward to the objector the reasons for his decision on those items and the objector may within fourteen days from the receipt of the reasons apply to a judge by chamber summons, which shall be served on all the parties concerned, setting out the grounds of his objection.” 25. By virtue of the above-cited provision, the 1st Defendant/Applicant has a clear avenue to approach this Court regarding a challenge to the decision of the Taxing Master. In fact, an application such as the one filed by the 1st Defendant/Applicant is to be placed before this Court, not the lower Court. Page 10 of 17

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Whether service of the bill of costs and other court process was sufficient: 26. The Applicant deposes that he was unrepresented during the taxation proceedings that led to the impugned Certificate of Taxation. He faults the Plaintiff/1st Respondent for effecting service of the Bill of Costs and related taxation documents upon his former Advocates, as opposed to serving him personally as an unrepresented litigant. However, the Applicant has not contradicted the Plaintiff’s deposition that he was represented in the proceedings before the lower Court by the firm of Messrs. Ochwangi & company Advocates. 27. On changing advocates, Order 9 Rule 5 of the Civil Procedure Rules 2010 provides as follows: “A party suing or defending by an advocate shall be at liberty to change his advocate in any cause or matter, without an order for that purpose, but unless and until notice of any change of advocate is filed in the court in which such cause or matter is proceeding and served in accordance with rule 6, the former advocate shall, subject to rules 12 and 13 be considered the advocate of the party until the final conclusion of the cause or matter, including any review or appeal.” Page 11 of 17

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28. Moreover, Order 9 Rule 3(1) of the Civil Procedure Rules states as follows: “Processes served on the recognized agent of a party shall be as effectual as if the same had been served on the party in person, unless the court otherwise directs.” 29. Upon coming on record on behalf of a party, the Advocate is taken to represent the party until the conclusion of the matter, unless the Advocate applies to cease acting, there is a change of Advocates, or the litigant files a notice of intention to act in person. If any of these steps were taken in the proceedings before the lower Court, the Applicant has not so deposed. It can only be concluded that the firm of Messrs. Ochwangi & Company Advocates remained the duly appointed agents of the 1st Defendant/Applicant. 30. Service of the Bill of Costs and other Court process was therefore properly effected upon the said firm. In addition, the 1st Defendant/Applicant annexed an Affidavit of Service confirming that the Bill of Costs was served upon the firm of Messrs. Ochwangi & Company Advocates, and the 1st Defendant/Applicant did not contest the propriety of the service. The Applicant failed to explain to the Court the circumstances in which his Advocates ceased representing him. 31. Mshila J. in Stephen Chege Waweru v Ephantus Mwangi & 16 others [2020] KEHC 313 (KLR) stated as much in her holding that: Page 12 of 17

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“12. First of all it is not disputed that the applicant had appointed an advocate to act for him in the matter; and unless there was a change of advocate or the advocate withdrew his services or was deceased the counsel herein namely Mr. Mindo is deemed to be still acting for the applicant until the conclusion of the matter; therefore the Notice of Taxation together with the Bill of Costs ought to have been served upon the applicant’s advocates on record; and it was improper for the respondents’ advocates to have effected service directly upon the applicant and or his spouse;” Whether time can be enlarged to admit the reference: 32. The reason advanced by the 1st Defendant/Applicant to justify the delay in filing this application was that he was not served with the Bill of Costs or any notice of the taxation proceedings. However, this Court has already found that the 1st Defendant/Applicant did not prove that service on the firm of Ochwangi & Company Advocates was improper. There is no dispute that there has been an inordinate delay in filing this application. 33. The Court is therefore in considering whether or not to exercise its discretion under Paragraph 11(4) of the Advocates (Remuneration) Order to allow the application filed out of time is guided by the principles enunciated in Patel VEA Cargo Handling Services Ltd [1974/ EA 75 at p 76 where Duffus P said; Page 13 of 17

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"I also agree with this broad statement of the principles to be followed. The main concern of the Court is to do justice to the parties, and the Court will not impose conditions on itself to fetter the wide discretion given to it by the rules. I agree that where it is a regular judgment, as is the case here, the Court will not usually set aside the judgment unless it is satisfied that there is a defence on the merits. In this respect, defence on the merits does not mean, in my view, a defence that must succeed, it means as Sheridan J, put it "a triable issue" that is an issue which raises a prima facie defence and which should go to trial for adjudication. " 34. Consequently, in this case, the Applicant is challenging the amount awarded as an instruction fee and whether VAT is chargeable on that sum. Given that the Applicant’s advocate on record did not attend court during the taxation, this court will uphold the rules of natural justice by allowing the Applicant to be heard on the contested items of the bill of costs. The costs have not yet been paid, and although the 1st Respondent accuses the Applicant of delay, the 1st Respondent also appears to have delayed in executing the decree. Any prejudice occasioned to the 1 st Respondent by the delay in filing this application can be cured by awarding him costs of the application in any event. Therefore, I exercise my discretion to enlarge the time. Page 14 of 17

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Whether the instruction fee allowed is high and whether VAT is chargeable; 35. The Applicant argues that the amount of Kshs 100000 awarded was excessive since the value of the subject matter was not ascertainable from the pleadings and the taxing master did not provide any reasons for awarding the same. The Plaintiff had in the bill of costs filed put the instructions fees at Kshs 445,000 and during the taxation, the same was reduced to Kshs 100,000. The taxing master had this to say; “Item 1 on instruction fees, the amount is taxed at Kshs 100,000/ =. I find the amount sufficient considering the nature of the claim. conduct of the proceedings and the industry of parties in prosecuting the matter. This is a matter that terminated by way of consent. The rest of the amount is taxed off.” 36. It is not true, as the Applicant avers, that the taxing master did not give any reason. She clearly stated the reasons, including the nature of the claim and that the matter terminated by way of consent. 37.The Applicant submitted that the award of Kshs. 100,000 was excessive, unreasonable, and based on wrong principles, amounting to a manifest error of principle. He proposed that the instruction fee be revised downward to Kshs. 45,000 or less, since the value of the subject matter was not ascertainable, and in conformity with the legal principles and Page 15 of 17

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commensurate with the actual work done and the summary nature of the proceedings. 38. However, the Applicant does not disclose to this court what the wrong principles are which the taxing master based the award of Kshs 100,000. Further, his proposal of Kshs 45000 is premised on the ground that the value of the subject matter was not ascertainable and that it was commensurate with the actual work done and in conformity with legal principles. In the circumstances, i find no difference in his argument and the reasoning put forth by the taxing master. 39. The gist of the argument put forth by the Applicant in challenging the amount awarded as instruction fee is that the taxing master erred in granting instructions fee at Kshs 100,000 where the value of the subject matter was unascertainable. In order for this court to be persuaded to find otherwise, the Applicant was under a duty to demonstrate that the taxing master did not exercise her discretion judiciously. He failed to do so hence, there is no reason for me to interfere with the finding on this item. 40. The second limb of the reference is whether the taxing master erred in awarding VAT on the instructions fee. On this, I adopt the position taken by Onguto J (RIP) in the case of .. when he held thus; “On the final issue of VAT, I hold the simple view that in allowing the same the Master erred under the Value Added Tax Act, 2013 particularly section 5 thereof. Value Added Tax Page 16 of 17

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(VAT) is chargeable in taxable supply made by any registered person. There was no taxable supply of either goods or services made to the Applicant herein by the Respondent herein. The Bills herein concerned Party and Party costs and VAT could then not apply as neither party fetched nor supplied services to the other. True, legal services were rendered but it is not the Advocate who was being compensated herein. The Master could only have awarded VAT if the Bills were Advocate-Client Bills or if there was tendered evidence before the Master that the Plaintiff had paid VAT and was consequently entitled to indemnity. But yet that again is also debatable whether the Plaintiff was a vatable person. I would vacate the award on VAT as the Master erred.” 41. In conclusion, in relation to the merits of this application, the taxed costs are interfered with to the extent of removing the amount awarded under VAT, namely Kshs 21,492.80. The taxed costs of Kshs 134,330= remain as is. Each party to meet their own costs of the application. It is so ordered. Ruling dated, signed and delivered at Kisii this 17th of September, 2026. A. OMOLLO JUDGE Page 17 of 17

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