REPUBLIC OF KENYA IN THE CHIEF MAGISTRATE’S COURT AT BUNGOMA CIVIL SUIT NO. E265 OF 2025 ALICE NASIMIYU IKANDA.…………………………………………………….PLAINTIFF VERSUS IWAKI TRADING LIMITED………………………………………………1ST DEFENDANT SAVIOOR MABALE………………………………………………………...2ND DEFENDANT RULING 1. This ruling determines the Plaintiff’s Party and Party Bill of Costs dated 09th May 2026. 2. Items 1, 3 – 6, 13 – 22 and 24 – 29 were assessed as drawn since the said items were drawn to scale. Instruction Fees 3. The value of the subject matter herein is Kshs. 948,400/=. This matter proceeded by way of formal proof. Schedule 7 (1) (a) of the Advocates (Remuneration) Order (ARO) provides for instruction fees of 65% of the fees chargeable under item 1(a). The said item 1 (a) provides for a lower scale of instruction fees of Kshs. 65,000/= where a matter proceeds by way of formal proof. 4. Given the above, instruction fees in item 1 will be 65% of Kshs. 65,000/=, which is Kshs. 42,250/=. 5. It is against this backdrop that item 1 is assessed at Kshs. 42,250/=. Value Added Tax 6. The Plaintiff prayed for an award of Value Added Tax (VAT) in the instant Party and Party Bill of Costs. 7. The costs in a Party to Party Bill of Costs are costs due to a litigant, not counsel representing a litigant. This begs the question of whether a litigant is entitled to a claim for VAT during the assessment of their costs. This question was answered in Pyramid Motors Limited vs Langata Gardens Limited (2015) eKLR, where J.L. Onguto, J (as he then was) rendered himself 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 (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
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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. In the result, I would not return the Bills to the master for re-assessment but would direct that the item of VAT be completely and wholly taxed off” 8. The holding in the Pyramids Motors Limited case (supra) was also followed in Kenya Commercial Bank Limited v Stagecoach Management Limited [2017] eKLR. 9. This court’s understanding of the authorities above is that unless a party proves that it supplied taxable goods and services to the other party. VAT cannot be awarded in a Party and Party Bill of Costs. 10. The mere fact that a law firm representing a party pays VAT does not entitle a party to an award of VAT. 11. For the reasons above, item B on VAT is assessed off. Service 12. Items 7 -12 involved service in Kimwanga, just a few kilometres from Bungoma town. Guided by Schedule 7 (10) (i) of the ARO and considering the distance between Bungoma and Kimwanga, items 7 – 12 are assessed at Kshs. 2,000/= each. Filing Fees 13. Item 2 is assessed off for want of proof. Attendance 14. Item 23 is assessed off since the Plaintiff’s counsel did not attend court on that occasion. DETERMINATION 15. The upshot of the above is that the Plaintiff’s Party and Party Bill of Costs dated 09th May 2026 is assessed at Kshs. 82,035/=. Read, signed and delivered in open court at Bungoma this 11th day of August 2026 T.O. OMONO SENIOR RESIDENT MAGISTRATE In the presence of: C/A: Rioba
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