[2022] KEHC 16170 (KLR)

Maxam Limited & 2 others v Heineken East Africa Import Company Ltd & 2 others (Civil Suit 29 of 2016) [2022] KEHC 16170 (KLR) (Commercial and Tax) (9 December 2022) (Ruling)

Neutral citation: [2022] KEHC 16170 (KLR)

Republic of Kenya

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

Commercial and Tax

Civil Suit 29 of 2016

A Mabeya, J

December 9, 2022

Between

Maxam Limited

1st Plaintiff

Modern Lane Ltd

2nd Plaintiff

Olepasu Tanzania Ltd

3rd Plaintiff

and

Heineken East Africa Import Company Ltd

1st Defendant

Heineken Brouwerijen BV

2nd Defendant

Heineken International BV

3rd Defendant

Ruling

1. Before court is a reference dated June 9, 2021. It was brought under rule 11(2) of the Advocates Remuneration Order, sections 1A, 1B 3 and 3A of the Civil Procedure Act and article 159(2) of the Constitution2010.

2. It sought orders for stay of execution of the ruling of the Hon Deputy Registrar Elizabeth Tanui delivered on April 21, 2021 and the resultant certificate of taxation issued on May 18, 2021 pending the hearing of the application inter partes and the hearing of the reference.

3. It also sought orders that the said ruling be reviewed, revised and or varied and in particular all items save for items 3, 127, 133, 134 and 135, and that the amount in the certificate of taxation be reviewed, revised, adjusted and or reduced accordingly. It further sought that the bill of costs filed by the 2nd defendant/respondent be taxed afresh before a different taxing officer of this court.

4. The application was supported by the lengthy affidavit of Ngugi Kiuna which was sworn on June 9, 2021. The applicant’s case was that this suit was commenced by way of a plaint dated February 5, 2016 which was amended on May 12, 2016. The defendants filed a joint defence on February 18, 2016. A series of applications were filed by both parties culminating in the plaintiffs’ application dated December 14, 2017.

5. Amongst other orders, the plaintiff’s application dated December 14, 2017 sought leave to discontinue the 2nd and 3rd plaintiff’s suit against the defendants and the 1st plaintiff’s suit against the 2nd defendant be discontinued. There was also a prayer for re-amendment of the plaint. On December 18, 2017, when the suit came up for hearing, all the defendants conceded to the application.

6. The 2nd defendant then filed a bill of costs dated March 7, 2018 consisting of 135 items charged at Kshs 120,864,177. 94. The applicant contended that whilst the defendants conceded to the plaintiffs’ application and the discontinuance of suits as pleaded, neither of the defendants sought for costs of the suit, and if at all they did, the court did not issue any order to the effect that the costs were to be borne by the plaintiffs.

7. By a ruling dated April 21, 2021, the taxing officer determined that the court had awarded costs of the withdrawal of the suit which was to be borne by the plaintiffs. She found that the bill of costs as filed by the 2nd defendant was properly before court. The taxing officer proceeded to tax the bill of costs.

8. Amongst other items, instruction fees were taxed and it was found that the instructions fees were calculated from the value of the subject matter and the same was taxed at Kshs 80,874,695. 325. The entire bill was taxed under different items and cumulatively taxed at Kshs 120,839,575/=. A sum of Kshs 24,600/= was taxed off.

9. The plaintiff objected to all the items save for items 3, 127, 133, 134 and 135. It however, challenged the sum of Kshs 12,131,204/30 allowed on item 3. That the subject matter of the suit was wrongly quantified at Kshs 5,377,979,755/- as the principal reliefs were only injunctive in nature. That the instruction and getting up fees were excessive.

10. The defendants opposed the application vide the replying affidavit of Victor Mailu, advocate sworn on July 8, 2021. It was denied that the defendants did not pray for costs for the discontinued claims and that they were not awarded. The defendant’s referred this court to the court’s proceedings and asserted that those costs were indeed prayed for and awarded. That the defendant’s conceded to the application on two conditions; that withdrawal and adjournment costs be paid. That adjournment costs were equally awarded to the defendants as the hearing of the suit was scheduled for December 18, 2017, but the plaintiff’s insisted on an adjournment.

11. On instruction fees, it was contended that from the plaintiff’s own pleadings including amended plaint dated May 12, 2018, the value of the subject matter was Kshs 5,377,979,755. 00 at paragraph 12. That the plaintiffs confirmed this value on their oral submissions before court on December 18, 2017 at lines 12-14 of page 46 of the proceedings.

12. That the bill of costs had thus been drawn to scale as per the Advocates Remuneration Order, 2014. That the taxing master did not err in the impugned ruling and in issuing the certificate of taxation dated May 18, 2021. It was urged that the application be dismissed.

13. I have considered the parties pleadings, evidence and submissions in this matter. The issue for determination is whether the ruling of April 21, 2021 ought to be set aside, varied or reviewed as prayed, or in the alternative whether the taxation of the bill of costs of the 2nd defendant should be set aside and the same be re-taxed afresh by a different taxing officer.

14. It is now trite law that the High Court will only interfere with the decision of a Taxing Master in cases where there has been shown to be an error in principle. In Republic –vs- Ministry of Agriculture & 6 others Ex-parte Muchiri W’ Njuguna [2006] eKLR, the court held: -“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, 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 is so high or so low as to amount to an injustice to one party or the other… The 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 manifestly excessive as to justify an inference that it was based on an error of principle”.

15. The plaintiff’s application is grounded on the ground that though the defendants conceded to the discontinuation of the claims as prayed for, they did not pray for costs. That if they did, the court did not award the same, hence the taxing officer erred in making an award for withdrawal costs. The plaintiff proceeded to set out what it held to be the orders of the court. It also challenged the taxation for being colossal and therefore an error of judgment.

16. I have considered the proceedings for December 18, 2017. Page 44 of the same reads: -“SinghI am conceding to the application on condition that the plaintiff being withdrawn make reparations on costs…CourtThe plaintiff’s application for amendment seeks effectively to cause the withdrawal of the claims as against the 2nd defendant and also the claim by the 2nd plaintiff and 3rd plaintiff against all the defendants.The defendants are not averse to the amendments but have indicated that they will seek for costs of the withdrawn claims as occassioned by the amendments. I consequently allow the amendments as sought by the plaintiffs. The costs occasioned by the amendments including any costs as may be occasioned by dint of the termination of claim against the 2nd defendant and also termination of claims by the 2nd and 3rd plaintiffs shall be paid by the 2nd and 3rd plaintiffs to the defendants”.

17. The taxing officer relied on the same proceedings in arriving at her decision that the court had awarded costs of the withdrawal of the suit to the defendants and that they were to be borne by the plaintiffs.

18. I think the taxing officer erred when she held that the costs of the withdrawal of claims was to be borne by the plaintiffs. The court was very clear in its order of December 18, 2017. The costs were to be borne by the 2nd and 3rd plaintiffs. The 1st plaintiff was left out of the order for costs.

19. I agree with both the respondents and the taxing officer that an order for the costs of the withdrawn claims was awarded, but I am not in agreement that the same was against all the plaintiffs. The judge was very clear in his order that the costs were to be borne by the 2nd and 3rd plaintiff and not all the plaintiffs.

20. On instruction fees, the plaintiffs objected to the sum of Kshs 5,377,979,755/= as being the value of the subject matter. At page 7 of the subject ruling the taxing master relied on paragraph 12 of the amended plaint and held that the plaintiffs tabulated that they stood to lose business worth Kshs 5,377,979,755/=.

21. I have looked at the re-amended plaint. The claims as set out in paragraph 12 of the Amended plaint were separate and distinct as follows:-a.1st plaintiff – Kshs 1,799,978,868/=b.2nd plaintiff – Kshs 22,722,214/=c.3rd plaintiff – Kshs 3,555,278,673/=

22. Further, prayer No x of the amended plaint clearly set out the respective claims of the plaintiffs as aforesaid. Indeed, after the amended plaint was re-amended and the claims by the 2nd and 3rd plaintiffs withdrawn, the amounts that were removed from the suit was Kshs 3,578,000,887/=. The claim by the 1st plaintiff of Kshs 1,799,978,868/= was left intact to proceed for trial.

23. Accordingly, I hold that although the claims by the plaintiffs was in one suit, each of the plaintiff had a separate and distinct claim against the defendants. The claims having been separate and distinct as set out in both the body of the plaint and the prayers, the defendants cannot purport to tax their bill of costs on the total claim. The same should be separated; ie instructions fees as well as getting up as against the 2nd plaintiff shall be Kshs 22,722,214/= and 3rd plaintiff Kshs 3,555,278,673/=.

24. In this regard, I find that the taxing officer erred in so for as she based the value of the claim at a whopping sum of Kshs 5,377,979,755/=. Indeed, that amount includes the 1st plaintiff’s claim of Kshs 1,799,978,868/= that went to trial. The 2nd and 3rd plaintiffs cannot be made to suffer the costs of the 1st plaintiff who decided to pursue its claim to the bitter end.

25. In view of the foregoing, I find that the taxing officer erred in holding that costs of the withdrawn claims were ordered as against all the plaintiffs instead of the 2nd and 3rd plaintiff. She further erred in taxing the bill on the entire claim of Kshs 5,377,979,755/= instead of on the withdrawn claims as ordered by the court.

26. Accordingly, I find that the application dated June 9, 2021 to be meritorious. I allow the same. The ruling of the taxing officer dated April 21, 2021 is hereby set aside. The bill of costs is remitted back to be taxed by a different taxing officer.It is so ordered.

DATED AND DELIVERED AT NAIROBI THIS 9TH DAY OF DECEMBER, 2022. A. MABEYA, FCI ArbJUDGE