Hexa Development Group Ltd v Chase Bank (Kenya) Ltd (In Liquidation) (Commercial Miscellaneous Application E313 of 2025) [2026] KEHC 8229 (KLR) (Commercial and Tax) (10 June 2026) (Ruling)

Hexa Development Group Ltd v Chase Bank (Kenya) Ltd (In Liquidation) (Commercial Miscellaneous Application E313 of 2025) [2026] KEHC 8229 (KLR) (Commercial and Tax) (10 June 2026) (Ruling) Neutral citation: [2026] KEHC 8229 (KLR) Republic of Kenya In the High Court at Nairobi (Milimani Commercial Courts) Commercial and Tax Commercial Miscellaneous Application E313 of 2025 BK Njoroge, J June 10, 2026 Between Hexa Development Group Limited Applicant and Chase Bank (Kenya) Limited (In Liquidation) Respondent Ruling 1.This is a Ruling in respect of a reference filed by the Applicant arising out of the taxation of a Party and Party Bill of Costs. Background Facts 2.The Applicant filed the Chamber Summons dated 24th March, 2025 and sought the following orders;a.That this Honourable Court be pleased to set aside in its entirety the ruling delivered on 10th March 2025 in respect of the Respondent's Party and Party Bill of Costs dated 8th October 2024.b.That this Honourable Court be pleased to remit the Respondent's Party and Party Bill of Costs to another Taxing Officer other than Honourable L. Adisa for taxation.c.That in the alternative, this Honourable Court be pleased to exercise its inherent jurisdiction and re-tax Items number 1 and 2 as set out in the Respondent's Party and Party Bill of Costs dated 8th October 2024.d.That Costs of the reference be awarded to the Applicant.e.That this Honourable Court be pleased to make such other or further orders as it may deem just and fit in the circumstances of the case. 3.The Application was supported by the Affidavit of Antony Mwaniki. He contended that the Taxing Officer erred in principle in assessing the taxed costs. This is by failing to appreciate that the suit herein was not a monetary claim. That consequently it applied the wrong provisions of the Advocates Remuneration Order in assessing instruction fees, thereby arriving at an excessive award. 4.The Applicant further averred that the Taxing Officer improperly treated the sum of Kshs. 43,000,000/= as the value of the subject matter. Thus, it assessed instruction fees on the basis thereof, resulting in taxed costs of Kshs. 890,185/=. That such costs are manifestly excessive and founded on a grave error of principle. This therefore warranted the Court’s intervention. 5.In reply, the Respondent filed the Replying Affidavit sworn on 16th April, 2025. The Respondent stated that on 4th October, 2024, the Hon. Lady Justice Njoki Mwangi awarded costs of the suit together with interest at Court rates. This was in favour of the Respondent in HCCOMM No. E444 of 2020 Hexa Development Group Limited v Chase Bank (Kenya) Limited (In Liquidation). Pursuant thereto, the Respondent filed its Party & Party Bill of Costs dated 8th October. 2024. The Bill of Costs was subsequently taxed on 10th March, 2025 by the Hon. Chembeni L. Adisa (DR) at a sum of Kshs. 890,185/=. This is including Kshs. 622,500/= for instruction fees and Kshs. 207,500/= for getting up fees. The Applicant now challenges only the taxation of the instruction fees and getting up fees. This is on the basis that the pleadings allegedly did not disclose the value of the subject matter. 6.The Respondent contended that the Deputy Registrar committed no error of principle. It maintained that the Plaint clearly disclosed the value of the subject matter as Kshs. 43,000,000/=. This being the amount the Plaintiff sought to enforce as the agreed settlement sum. This is in respect of the overdraft facility in place of the Kshs. 70,228,938.35 demanded by the Defendant. According to the Respondent, the effect of the prayers sought in the Plaint was that, upon payment of the balance of Kshs. 20,000,000/= (after offsetting Kshs. 23,000,000/= allegedly held in deposits), the Plaintiff would be discharged from its obligations under the overdraft facility. It is therefore argued that the Deputy Registrar properly identified Kshs. 43,000,000/= as the value of the subject matter, for purposes of taxation. 7.Further, the dispute was highly complex and transcended an ordinary banker-customer dispute. That it raised substantial legal and regulatory questions concerning the powers of the Central Bank of Kenya and Kenya Deposit Insurance Corporation in relation to bank receivership, asset transfers, depositor rights, and statutory protections applicable to failing financial institutions. The Respondent stated that the matter was document-intensive, spanned approximately four years, involved numerous Court attendances and extensive pleadings exceeding 500 pages. Thus, it necessitated specialized legal skill and substantial preparation. Therefore, that this justified the taxed instruction and getting up fees even independently of the value of the subject matter. Issues for determination 8.The Court has carefully considered the Application, response, the written submissions as well as the oral highlights by Counsel for the parties. The Court frames a single issue for determination as follows;a.Whether the Taxing Officer committed any error of principle in taxing the bill of costs. Analysis 9.The circumstances under which a Court can interfere with the Ruling of the taxing officer and the consequential Certificate of Taxation are clear. They were highlighted and elaborated upon by the Court of Appeal in the case of Kipkorir, Titoo & Kiara Advocates v Deposit Protection Fund Board [2005] eKLR. The Appellate Court held as follows:“On a reference to a judge from the taxation by the Taxing Officer, the judge will not normally interfere with the exercise of discretion by the taxing officer unless the taxing officer, erred in principle in assessing the costs. In Arthur v Nyeri Electricity Undertaking [1961] EA 497, the predecessor of this Court said at page 492 paragraph I:“where there has been an error in principle the court will interfere; but questions solely of quantum are regarded as matters with which the taxing officers are particularly fitted to deal and the court will interfere only in exceptional cases.”An example of an error of principle is where the costs allowed are so manifestly excessive as to justify an inference that the taxing officer acted on erroneous principles – see Arthur v Nyeri Electricity Undertaking (supra) or where the taxing officer has over emphasized the difficulties, importance and complexity of the suit (see Devshi Dhanji v Kanji Naran Patel (No. 2), [1978] KLR 243. We have no doubt that if the taxing officer fails to apply the formula for assessing instructions fees or costs specified in schedule VI or fails to give due consideration to all relevant circumstances of the case, particularly the matters specified in proviso (1) of schedule VIA (1), that would be an error in principle.” 10.It was the Applicant’s case that the Taxing Officer erred in principle. This is in constituting the settlement sum of Kshs. 43,100,000 as the value of the subject matter and assessing the instruction fees based on that figure. The value of the subject matter was not ascertainable. The claim was for declaratory and injunctive orders 11.The Applicant emphasized that the proper provision for assessment of instruction fees was Schedule 6 under "Other Matters" which provides:a."To sue or defend in any case not provided for above; such sum as may be reasonable but not less than if undefended 45,000 or if defended 75,000. 12.In contrast, the Respondent maintained that the orders had a clear and unmistaken monetary benefit of Kshs.43,000,000/-. That this was the value of the subject matter in the subject case. In other words, had the Applicant been successful in the suit, it would have a Court order. The Court Order would have awarded it a clear monetary relief/benefit as against the Respondent in the sum of Kshs. 43,000,000/-. This being the consideration for the release of its obligation under the overdraft facility. As a point of fact, the ‘settlement sum’ as averred by the Applicant of Kshs. 43,000,000/- is what it stood to lose if the reliefs sought were not granted. In short, it came to Court to enforce a financial benefit of Kshs. 43,000,000/- which it stood to gain if no such claim was made against it. 13.The principles to be applied when assessing instruction fees in a suit are well settled. In Joreth Ltd v Kigano & Associates NRB CA Civil Appeal No. 66 of 1999 [2002] eKLR the Court of Appeal outlined the principle as follows:“We would at this stage point out that the value of the subject matter of a suit for the purpose 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 ascertainable, the taxing officer is entitled to use his discretion to assess such instruction fee as he considers just, taking into account, among 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 and all other relevant circumstances.” 14.Further, in the case of Rachuonyo & Rachuonyo Advocates v National Bank of Kenya Limited [2021] eKLR, the Court cited the Court of Appeal decision in Peter Muthoka & Another v Ochieng & 3 others NRB CA Civil Appeal No. 328 of 2017 [2019] eKLR. In this decision the principles in Joreth Ltd v Kigano & Associates (Supra) were expounded. The said Court set down the proper basis of taxing instruction fees as follows;“It seems to us quite plain that the basis for determining subject matter value for purposes of instruction fees is wholly dependent on the stage at which the fees are being taxed. Where it happens before judgment, it is the pleadings that form the basis for determining subject value. Once judgment has been entered, and for what seems to us to be an obvious reason, recourse will not be had to the pleadings since the judgment does determine conclusively the value of the subject matter as a claim, no matter how pleaded, gets its true value as adjudged by the court.………..It is only where the value of the subject matter is neither discernible nor determinable from the pleadings, the judgment or the settlement, as the case may be, that the taxing officer is permitted to use his discretion to assess instructions fees in accordance with what he considers just bearing in mind the various elements contained in the provision we are addressing. He does have discretion as to what he considers just but that discretion kicks in only after he has engaged with the proper basis as expressly and mandatorily provided: either the pleadings, the judgment or the settlement. He has no leeway to disregard the statutorily commanded starting point. And we think, with respect, that the starting point can only be one of the three. It is not open to the taxing officer to choose one or the other or to use them in combination, the provision being expressly disjunctive as opposed to conjunctive. It is also mandatory and not permissive.” 15.Was the value of the subject matter ascertainable or unascertainable? On this, the Court agrees with the Taxing Officer that the value of the subject matter is ascertainable from the pleading in this case. Looking at the Further Amended Plaint Further Amended on 1st August, 2022 there is a sum of Kshs. 43,000,000. This is what the parties sought to enforce in the suit. 16.The Court reiterates the decision in National Bank of Kenya Limited v Tahir Sheikh Said Investments Limited & 3 others (Civil Appeal E052 of 2022) [2024] KECA 1478 (KLR) (25 October 2024) (Judgment)“In this case, we take the view that the value of the subject matter was what, according to the appellant, it stood to lose unless the reliefs it was seeking were granted. Clearly, the appellant’s position was that, by the 3rd and the 4th respondents proceeding with their intended auction, it was likely to lose the facility it had extended to the 1st respondent. The appellant’s primary interest was not in the charged property or the securities, but the facility it had advanced to the 1st respondent. The value of that facility as at the time of filing suit was specified by the appellant in the plaint as Kshs.937,892,424 and USD 343,626.30” 17.On the issue of getting up fees, as rightly pointed out by the Applicant, a party is only entitled to getting up fees when the matter is confirmed for hearing. Schedule VI of the Advocates (Remuneration) Order provides under Paragraph 2 sub-paragraph (ii) that“no fee under this paragraph is chargeable until the case has been confirmed for hearing" 18.The Applicant argued that the suit was never certified ready for hearing and the same was withdrawn on 14th February, 2024. The Respondent is therefore not entitled to Getting Up Fees and they should be taxed off. 19.On the other hand, the Respondent relied on the Ruling dated 4th October, 2024 by the Hon. Lady Justice Njoki Mwangi in the Primary Suit, in which the Court confirmed that;“15… Upon perusal of the Court record, it is evident that this matter was certified ready for hearing by the Deputy Registrar on 9th August, 2023 and scheduled for mention before this Court for purposes of fixing of a hearing date, however, before a hearing date could be fixed, the suit was withdrawn by the plaintiff.” 20.The matter having been certified ready for hearing, the Court finds no error in principle by the Taxing Officer and as such the Ruling by the Taxing Officer is hereby upheld. 21.As to Costs the same lie at the discretion of this Court. They ordinarily follow the event. The Applicant having lost on the reference, no good reasons have been advanced as to why the Respondent should be denied costs. The event is that the reference was dismissed. Determination 22.The Applicant’s Application by way of a Chamber Summons dated 24th March, 2025 is hereby dismissed for lack of merits. 23.The Costs thereof are awarded to the Respondent. 24.It is so ordered. DATED, SIGNED AND DELIVERED AT MILIMANI THIS 10TH DAY OF JUNE, 2026.NJOROGE BENJAMIN K.JUDGEIn the presence of:Miss Mwangi for the Applicant.Miss Nyaberi holding brief for Mr. Akach for the Respondent.Mr. John Paul - Court Assistant.