[2022] KEHC 221 (KLR)

Kariuki v Equity Bank Limited & another (Civil Case 343 of 2009) [2022] KEHC 221 (KLR) (Commercial and Tax) (18 March 2022) (Ruling)

Neutral citation: [2022] KEHC 221 (KLR)

Republic of Kenya

In the High Court at Nairobi (Milimani Commercial Courts Commercial and Tax Division)

Civil Case 343 of 2009

A Mshila, J

March 18, 2022

Between

Terry Wanjiru Kariuki

Plaintiff

and

Equity Bank Limited

1st Defendant

Edward Nyingi Mukundi

2nd Defendant

Ruling

1. The Applicant filed a Chamber Summons dated 18th August 2021 brought under Paragraph 11(2) of theAdvocates Remuneration Order. The Application was supported by the grounds on the face of it and the sworn Affidavit of Edward Nyingi Mukundi who sought for orders that;a.The court sets aside and/or reviews the determination by the taxing master dated 22nd June 2021 on item numbers 1 and 129 of the party and party bill of costs dated 23rd June 2020 and refer the said items of the bill of costs for taxation with appropriate directions to the taxing master to consider the valuation report dated 27th August 2020 while exercising discretion in determining the instruction fee.

2. The applicant stated that the Deputy Registrar erred in law by failing to state or set out on record the amount of basic instruction fee and how he exercised his wide discretion to enhance it or otherwise

3. Further, that the Deputy Registrar erred in law when he returned an instruction fee of Kshs.655 ,000/ = which is way below the basic instruction fee under Schedule 6 of the Advocates Remuneration Order of 17th November 2006.

4. The Deputy Registrar erred in law by failing to demonstrate sufficiently or at all how he exercised his judicial discretion when determining instruction fee.

5. The Applicant stated that the Deputy Registrar erred in law by failing to consider sufficiently or at all the value of the property at the time when the final property rights of the parties to the dispute was determined and disregarded the valuation report on record.

6. The Applicant was directed to file written submissions. The application was unopposed. Hereunder is a summary of the submissions;

Applicant’s Case 7. The Applicant submitted that that the Taxing Master erred in principle when assessing the amount payable as instruction fee and getting up fee and invites the court to step in and correct the error of principle by setting aside the Taxing Master's decision on these two items.

8. The guiding principles on this issue was settled and adequately discussed inM. Mbai & Associates Advocates vs. Clerk, Kiambu County Assembly (2017) eKLR.

9. The Applicant was aggrieved by the demonstrable fact that the Taxing Master erred in principle when he failed to determine on record the basic instruction fee and how he exercised his wide discretion to either increase or decrease the basic instruction fee.

10. It was the Applicant’s contention that after settling on the pleaded but historical purchase price of Kshs.30 Million as the value of the subject property the Taxing Master stated simply thus: "The instruction fees on this figure is Kshs.655, 000/=" Without demonstrating on record how he arrived at the said figure.

11. It is the Applicant's prayer that the Court sets aside the Taxing Officer's finding on instruction fee and getting up fee and refer these two items for reconsideration with appropriate directions on factors to consider when exercising direction on whether or not to increase or decrease the basic instruction fee as is well explained by the plethora of judicial authorities on this point.

Issues for Determination 12. The court has considered the Application and the Applicant’s written submissions and has framed only one issue for determination;a.Whether the court should set aside and/or review the Taxing Officer's finding on instruction fee and getting up fee

AnalysisWhether the court should set aside and/or review the Taxing Officer's finding on instruction fee and getting up fee; 13. It was the Applicant’s case that the Deputy Registrar erred in law when he returned an instruction fee of Kshs.655 ,000/ = which is way below the basic instruction fee under schedule 6 of the Advocates Remuneration Order of 17th November 2006.

14. It is trite law that a Court interferes with the decision of the Taxing Officer where there has been an error in principle and will intervene only in exceptional cases as was held in Joreth Limited vs. Kigano & Associates [2002] 1 EA 92 at 99 where the Court of Appeal stated;“the value of the subject matter for the purposes of taxation of a bill of costs ought to be determined from the pleadings, judgement 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 the 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. It is not really in the province of a Judge to re-tax the bill. If the Judge comes to the conclusion that the taxing officer has erred in principle, he should refer the bill back for taxation by the same or another taxing officer with appropriate directions on how it should be done. The Judge ought not to interfere with the assessment of costs by the Taxing Officer unless the officer has misdirected himself on a matter of principle. In principle the instruction fee is an independent and static item, is charged once only and is not affected or determined by the stage the suit has reached. The Taxing Officer whilst taxing his bill of costs is carrying out his functions as such only. He is an officer of the Superior court appointed to tax bills of costs.”

15. The Applicant does not dispute the fact that the Deputy Registrar applied the proper charging schedule of the Order, Schedule 6 Paragraph 1(b) which provides, inter alia, that:1(b) To sue in any 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 partiesThat value exceeds Kshs. But does not exceed Kshs.

- - 500,000 75,000

500,000 750,000 90,000

750,000 1,000,000 120,000

1,000,000 20,000,000 fees as for Kshs.1,000,000 plus an additional 2%.

Over 20,000,000 Fees as for 20,000,000 plus an additional 1. 5%.

16. Further to the above, the value of the subject matter is not disputed and it stands at Kshs.30, 000,000. The point of contention is how the Deputy Registrar arrived at the figure of Kshs.655, 000 as the instruction fees.

17. It is noteworthy that the Deputy Registrar’s ruling of 22nd June 2021 does not contain the reasons as to how and why the said figure was arrived at.

18. The court in Republic v Medical Practitioners & Dentist Board & 2 others Ex-parte: Mary A. Omamo-Nyamogo [2017] eKLR faced with a similar issued stated as follows;“Whereas in this case the Taxing Officer did not offer any explanation as to why she opted for the said sum of Kshs 300,000. 00 and not any other figure, considering the foregoing decisions, I am not satisfied that I ought to interfere with the award even if this Court itself would have awarded a different figure. I am not satisfied that the decision was based on an error of principle, or the fee awarded was manifestly excessive or low as to justify interference.”

19. Going by the above schedule, it is this courts considered view that there was no error as to principle as the Deputy Registrar correctly used the value of the property when coming up with the figure for the instruction fees and the getting up fees. This court finds that the amount awarded was not manifestly excessive or low as to justify interference by this Court.

Findings and Determination 20. For those reasons this court makes the following findings and determination;i.The court finds the application to set aside and/or review the determination by the Taxing Master dated 22nd June 2021 to be devoid of merit and it is hereby dismissed.ii.The matter is hereby marked as closed.Orders Accordingly.

DATED SIGNED AND DELIVERED ELECTRONICALLY AT NAIROBI THIS 18THDAY OF MARCH, 2022. HON. A. MSHILAJUDGEIn the presence of;Barbara Auma for Mungla for the 2nd Defendant/ApplicantNo appearance for the Respondent/PlaintiffLucy---------------------------Court Assistant