[2022] KEHC 16444 (KLR)

Co-operative Bank of Kenya Limited v Nzilia & 3 others (Miscellaneous Civil Application E346 & E060 of 2020 & E059 of 2021 (Consolidated)) [2022] KEHC 16444 (KLR) (Civ) (8 December 2022) (Ruling)

Neutral citation: [2022] KEHC 16444 (KLR)

Republic of Kenya

In the High Court at Nairobi (Milimani Law Courts)

Civil

Miscellaneous Civil Application E346 & E060 of 2020 & E059 of 2021 (Consolidated)

CW Meoli, J

December 8, 2022

Between

Co-operative Bank of Kenya Limited

Applicant

and

Alexander Makau Nzilia

1st Respondent

Africa Merchant Assurance Co. Ltd

2nd Respondent

As consolidated with

Miscellaneous Civil Application E060 of 2020

Between

Co-operative Bank of Kenya Limited

Applicant

and

James Kiplagat Chesang

1st Respondent

Africa Merchant Assurance Co. Ltd

2nd Respondent

As consolidated with

Miscellaneous Civil Application E059 of 2021

Between

Co-operative Bank of Kenya Limited

Applicant

and

Samuel Macharia Kariuki

Respondent

Ruling

1. For determination is the chamber summons dated October 21, 2021 by Co-operative Bank of Kenya Limited (hereafter the applicant) seeking that the decision of the taxing officer of October 18, 2021 on the party and party bill of costs dated March 16, 2021 in respect of to items 1, 11, 16, 19, 42, 52, 54, 61, 71, 76, 80, 90 & 97 be set aside; that the party and party bill of costs be referred back to the taxing officer for fresh taxation of the said items; and in the alternative, the decision of the taxing officer on the said items be varied. The summons is expressed to be brought inter alia under paragraph 11(1) & (2) of theAdvocates Remuneration Order, on grounds on the face of the thereof amplified in the supporting affidavit sworn by Stella Muraguri, counsel for the applicant.

2. The gist of counsel’s affidavit is that the taxing officer erred in law and fact by; issuing a contradictory ruling and erroneously allowing 5 separate instructions on fees of the preliminary objection and chamber summons in item 16, 53, 54, 76 & 80 despite holding that the 1st respondent was only entitled to instruction fees once; erroneously upholding item 19 at the exaggerated amount of Kshs 75,000/- without taking into consideration the nature of the case, the modest documents involved, the minimal research done and the swift conclusion of the matter; erroneously upholding items 1, 42 and 61 on the basis of their exaggerated folios ; and erroneously upholding items 11, 71, 90 and 97 concerning documents filed at the registry at Kshs 500 each while these were filed online on the e-filing platform.

3. Counsel further deposed that it is impossible to ascertain how the taxing officer arrived at the disputed items in the taxed bill of costs which findings were prejudicial to the applicant.

4. Parties canvassed the chamber summons by way of written submissions. On the part of the applicant counsel anchored his submissions on the decision in Nyangito & Co Advocates v Doinyo Lessos Cremaries Ltd[2014] eKLR to assert that courts are slow to interfere with the discretion of taxing officers unless there is a demonstration of error in principle or law.

5. Citing Geoffrey Eric Wesonga t/a Wesonga Mutembei & Kigen Advocates v ARN Security & Training Services Ltd & Another [2021] eKLR and Conrad Maloba & Associates v Music Copyright Society of Kenya (MCSK) [2021] eKLR counsel asserted that instruction fees is an independent and static item which should be charged once and is not affected or determined by the stage which the suit has reached. And that since the matters subject to the bill of costs had been consolidated, instruction fees ought to been charged once. Moreso as the pleadings were similar in nature, style and content hence no special skill was applied in the drafting.

6. Submitting on instruction fees taxed at Kshs 75,000/- in item 19, counsel pegged her submission on the principles espoused in the decisions in Republic v Minister for Agriculture & 2 others Ex Parte Samuel Muchiri W’ Njuguna & 6 others [2006] eKLR and Joreth Limited v Kigano & Associates (2002) 1 EA 92 to reiterate that the subject matters were neither complex nor did they require exceptional research being confined to routine matters of leave to appeal and stay of execution. That the parties did not argue the motion or file submissions save for replicated notices of preliminary objection and replying to affidavits, therefore. In her view, there was no justification for instruction fees taxed at Kshs 75,000/-.

7. Concerning perusal fees in respect of items 1, 42 & 61 of the bill of costs counsel restated the definition of a folio in the advocates remuneration order to contend that the folios were exaggerated and that the perusals should be taxed at Kshs 5,000/- in total.

8. She further submitted that the taxing officer misdirected herself by upholding items 11, 71, 90 & 97 without the evidence of receipts on disbursements. She relied on Ngatia AMP Associates Advocates v Interractive Gaming AMP and Lotteries Limited [2017] eKLR for the proposition. The court was urged to set aside or refer back for fresh taxation items 1, 11, 16, 19, 42, 52, 54, 61, 71, 80, 90 & 97.

9. On the part of the 1st respondent, counsel reiterated the submissions filed during taxation. That instructions fees of Kshs 75,000/- was justified in that the matter was consolidated with the two other causes and hitherto defended separately. He argued that it was after consolidation that services were rendered in an omnibus manner. Further that, instruction fees for an application and preliminary objection are separate and distinct from basic instruction fees as they are services rendered post basic instruction fees and the remuneration order specifically provides for them separately from the basic instruction fees. Hence the sum of Kshs 5,000/- charged is specifically provided for.

10. It was asserted moreover that there was specific provision for attending at the court registry in the sum of Kshs 500/- as charged herein and the objection thereon is misconceived. In defence of taxed sums in respect of perusals, counsel stated that the relevant folios were exhibited in the affidavits, exhibits and submissions filed on the matter. In conclusion the court was urged to dismiss the reference and uphold the taxing officer decision.

11. The 2nd respondent did not participate in the instant proceedings.

12. The court has considered the grounds of the reference as well as rival material and submissions. Equally the court has perused the record herein. In Premchand Raichand Ltd & another v Quarry Services of East Africa Ltd [1972] EA 162, Spry, V-P stated at p164 that:“The taxation of costs is not a mathematical exercise; it is entirely a matter of opinion based on experience. A court will not, therefore, interfere with the award of a taxing officer, and particularly where he is an officer of great experience, merely because it thinks the award somewhat too high or too low: it will only interfere if it thinks the award so high or so low as to amount to an injustice to one party or the other.”

13. The Court of Appeal in that case proceeded to lay down some principles to undergird the exercise by taxing officers of their discretion in the assessment of costs as follows:-“(a)that costs be not allowed to rise to such a level as to limit access to the courts to the wealthy only;(b)that a successful litigant ought to be fairly reimbursed for the costs he has had to incur;(c)that the general level of remuneration of advocates must be such as to attract recruits to the profession; and(d)that so far as practicable there should be consistency in the awards made.”See also Rodgers Mwema Nzioka v The Attorney General & 9 others (2007) eKLR and Rogan Kamper v Grosvenor (1978) eKLR.

14. The foregoing was affirmed by Ojwang J (as he then was) in Republic v Minister for Agriculture & 2 others Ex-parte Samuel Muchiri W’Njuguna & 6 others (supra). The learned Judge observed that:-“Discretion, as an aspect of judicial decision-making, is to be guided by principles, the elements of which are clearly stated, and which are logical and conscientiously conceived. It is not enough to set out by attributing to oneself discretion originating from legal provision, and thereafter merely cite wonted rubrics under which that discretion may be exercised, as if these by themselves could permit of assignment of mystical figures of taxed costs… Taxation of costs as a judicial function is to be conducted regularly, on the basis of rational criteria which are clearly expressed for the parties to perceive with ease. Regularity in this respect cannot be achieved without upholding fairness as between the parties; the taxing officer is to provide only for reasonable compensation for work done; the taxing officer should avoid the possibility for unjust enrichment for any party and ought to refuse any claim that ends to be usurious; so far as possible, the taxing officer should apply the test of comparability; the taxing officer should endeavour to achieve objectivity when considering ill-defined criteria such as public policy, interests affected, importance of matter to parties, or importance of matter to the public; the taxing officer should clearly identify any elements of complexity in the issues before the court – and in this regard should revert to the perception and mode of analysis and determination adopted by the trial judge; the taxing officer ought to describe accurately the nature of the responsibility which has fallen upon counsel; the taxing officer should state clearly the nature of any novel matter in the proceedings; the taxing officer should determine with a measure of accuracy the amount of time, research and skill entailed in the professional work of counsel.”

15. Similarly Ringera, J (as he then was) in First American Bank of Kenya v Shah& others [2002] 1 EA 64 at p69 to the stated;-“First, I find that on the authorities, this court cannot interfere with the taxing officer’s decision on taxation unless it is shown that either the decision was based on an error of principle, or the fee awarded was so manifestly excessive as to justify an inference that it was based on an error of principle…. Of course it would be an error of principle to take into account relevant factors or to omit to consider relevant factors. And according to the Advocates (Remuneration) Order itself, some of the relevant factors to take into account include the nature and importance of the cause or matter, the amount or value of the subject matter involved, the interest of the parties, the general conduct of the proceedings and any direction by the trial judge. Needless to state not all the above factors may exist in any given case, and it is therefore open to the taxing officer to consider only such factors as may exist in the actual case before him. If the court considers that the decision of the taxing officer discloses errors of principle, the normal practice is to remit it back to the taxing officer for reassessment unless the judge is satisfied that the error cannot materially have affected the assessment.”

16. The applicant’s reference is specific to items 1, 11, 16, 19, 42, 52, 54, 61, 71, 76, 80, 90 & 97 in the bill of costs dated 16. 03. 2021. With the foregoing principles in mind, the court has reviewed the grounds argued before it. First, it is pertinent to note at this juncture that the instant matter was consolidated with Misc No E060 of 2020 and Misc No E059 of 2020 pursuant to orders issued by Githua J on November 24, 2020. Therebefore the matters had been initiated and were proceeding separately. Thus, as rightly argued by the 1st respondent, it is only after and not before consolidation that services could rendered in an omnibus manner.

17. The applicant complains about the award of instruction fees in items 16, 52, 54 76 & 80 of the bill of costs. Specifically, items 16, 52 & 76 in the 1st respondent’s bill of costs were in relation to instructions in respect of opposition mounted to the applicant’s notice of motion dated September 3, 2020. The 1st respondent on his part filed both a replying affidavit and preliminary objection in opposition to the motion and proceeded to charge Kshs 5,000/- as fees for each of these items. The taxing officer in her ruling stated that “on instruction fees on the preliminary objection; items 16, 52 and 76 are drawn to scale and hence taxed as drawn. The same is provided for under schedule 6 paragraph (c) (viii) of the Advocates Remuneration Order 2014”.

18. As rightly asserted by the taxing officer, the specific items are provided for in theAdvocates Remuneration Order and because the applicant presented the motions in Misc Nos E346 of 2020, E060 of 2020 and E059 of 2020, which were duly opposed by the 1st respondent by way of a replying affidavit and preliminary objection the 1st respondent was entitled to fees as drawn in items 16, 52 & 76. The foregoing were drawn to scale as per schedule 6 (j) (b) (viii) of the Advocates Remuneration Order therefore the taxing officer did not err in taxing the same drawn. Additionally, the court concurs with the submission that these items attracted instruction fees independently of the basic instruction fee.

19. In respect of item 54 the same was to “instruction fees to oppose application dated August 18, 2020”. The court having perused the record cannot locate such a motion. On this item, the taxing officer stated that “Item 54 is drawn to scale and hence taxed as drawn. The same is provided for under schedule 6, paragraph (c)(vii) of the 2014 Remuneration Order”. Evidently, the court erred in so finding and that award cannot stand. Ditto for item 80 stated to be in respect of fees to oppose a chamber summons dated October 2, 2020. No application dated October 2, 2020 was presented by the applicant therefore the item ought to have been taxed off.

20. On item 19, the instant matter was consolidated with Misc No E060 of 2020 and Misc No E059 of 2020 pursuant to orders issued on November 24, 2020. In respect of the item the applicant contended that matters were neither complex nor did require exceptional normal research as they were confined to commonplace issues in the motion for leave to appeal and stay of execution. That the parties did not argue the motion or file submissions beyond the filing of similar notices of preliminary objection and replying to affidavits. Hence there was no justification for instruction fees of Kshs 75,000/-.

21. The 1st respondent reiterated submissions during taxation and essentially argued that instruction fees of Kshs 75,000/- was justified and provided for in schedule 6 1(b) of the Advocates Remuneration Order.

22. The taxing officer in her ruling dated October 18, 2021 addressed herself in depth on the issue by stating: -“On item 19, 43 and 79 being instruction fees in Misc Nos E346 of 2020, E060 of 2020 and E059 of 2020 respectively, the applicant has taxed 75,000/- each. I have read and considered both parties submissions on this issue. It is not in dispute that Misc Nos E346 of 2020, E060 of 2020 and E059 of 2020 were consolidated on November 24, 2020 by Hon, Lady Justice Githua.…………….On item 19 on instruction fees; the 1st respondent has charged Kshs 75,000/-. The suit was a garnishee proceeding and was an intended appeal from the decision of the Chief Magistrate’s Court. I will therefore consider the same as an appeal since it was not a fresh High Court suit. It is trite the instruction fees is calculated from the value of the subject matter which is discerned from the pleadings, judgment or settlement. The applications were withdrawn at preliminary stage thus no judgment and hence it is not possible to deduce the value of the subject. Furthermore, it is not possible to deduce the value of the subject matter from the applications.Schedule 6 paragraph 1(j)(a) of the Advocates Remuneration Order, 2014 provides that;“To present or propose an appeal in any case not provided for above; such sum as may be reasonable but not less than Kshs 25,200. ”Based on the above the instruction fees ought not to be less than 25,200/-. Taking into account all relevant circumstances of the case, including the nature and importance of the case to the parties, documentation involved, the research done, trending nature of the inflation in the country, the general conduct of the proceedings, time taken, considering that the applications were withdrawn before they could be heard and determined being guided by the principles set out in the case of Joreth Ltd v Kigano & Associates civil appeal No 66 of 1999 [2002] 1 EA 92, I find that a sum of Kshs 75,000/- as instruction fees is sufficient. Item 19 is therefore drawn to scale and hence taxed as drawn.” (sic)

23. Prima facie the subject matter of the motion dated September 3, 2020 the twin questions n of stay of execution and leave to appeal out of time the decision of the lower court in respect of a garnishee order absolute against the applicant in respect of Kshs 495,130/-. This seems to be the 1st respondent ‘s premise for claiming instruction fees on schedule 6 1(b) of the Advocates Remuneration Order that provides for minimum fees of Kshs 75,000/- charged in respect of “proceedings described in paragraph (a) where a defense or other denial of liability is filed; or to have an issue determined arising out of inter-pleader or other proceedings before or after suit; or to present or oppose an appeal where the value of the subject matter can be determined from the pleadings, judgment or settlement between the parties and’ the value is not more than Kshs 500,000/-.”

24. The sticking point therefore is whether the taxing officer was entitled to base instruction fees on schedule 6 paragraph 1(j)(a) of the Advocates Remuneration Order, 2014. In Nanyuki Esso Services v Touring and Sports Club(1972) EA 500 the Court of Appeal stated that:“In deciding whether a claim falls under any particular head, one must look at the substance of the claim and not the way it is expressed, but if a claim , or any part of it, clearly does not fall under any particular head , it must be treated under one of the residuary heads.”.

25. The same court in Joreth Limited v Kigano and Associates(supra) stated that:“We would at this stage point out that the value of the subject matter of a suit for the purposes of taxation of a bill of costs ought to be determined from the pleadings judgment or settlement (if such be the case) but if the same is not so ascertainable the taxing officer is entitled to use his discretion to assess such instruction fee as he considers just, taking into account, amongst other matters, the nature and importance of the cause or matter, the interest of the parties, the general conduct of the proceedings, any direction by the trial judge.”

26. The taxing officer seemed to have taken a circuitous route in arriving at the awardable instruction fees yet the value of the subject matter in contention was clearly determinable from the pleadings. Despite this, the resultant amount eventually taxed was not erroneous. The taxing officer may not have been justified to use schedule 6 paragraph 1(j)(a), but she arrived at the accurate taxable amount on instruction fees. The principles applied by the taxing officer were sound and as stated in Premchand Raichand’s case, the taxation of costs is not a mathematical exercise; it is entirely a matter of opinion based on experience. The objection to item 19 is therefore without basis.

27. Concerning items 1, 42 & 61 on perusal fees, the applicant restated the definition of a folio in the Advocates Remuneration Order in contending that the items were exaggerated and that all the perusals should be taxed at Kshs 5,000/- in total. The taxing officer on addressed herself on the issue as follows “On perusing; items 1, 42 and 61 are taxed at 5,400/- each. The documents perused have 108 folios each”. The Advocates Remuneration Order 2014 defines length of folio as;-“A folio shall for all purposes of this order be deemed to consist of 100 words and any part of a folio shall be charged as one folio. A sum or quantity of one denomination stated in figures is to be counted as one word: eg. “£25,564 16s 8d.” is to be counted as three words, and “254 feet 11 inches” is to be counted as four words.”

28. The court has perused and examined the respective motions dated September 3, 2020 in Misc No E346 of 2020, Misc No E060 of 2020 andMisc No E059 of 2020 and in the absence of demonstrated error concurs with the taxing officer’s findings. Lastly on items 11, 71, 90 & 97 the applicant argues that taxing officer misdirected herself as no proof of disbursements was tendered. The applicant’s argument appears misplaced as the items relate to attendances under schedule 6 paragraph 7(b) which provides that attendances at the offices of court or registrar on routine matters attract Kshs 500/- as fees. The taxing officer cannot be faulted for awarding the taxed amounts.

29. In the result, the applicant’s reference succeeds in part in respect of items 54 and 80 only. It would be superfluous to resubmit the items for taxation in the circumstances. The court will therefore set aside the taxing master’s findings on the two items and substitute therefor an order taxing off the said items. All other items challenged on this reference remain as taxed. Costs are awarded to the 1st respondent.

DELIVERED AND SIGNED ELECTRONICALLY AT NAIROBI ON THIS 8THDAY OF DECEMBER 2022C.MEOLIJUDGEIn the presence of:Ms.Njeru h/b for Ms. Muraguri for the ApplicantMr Kaburu for the 1st RespondentC/A; Adika