[2022] KEHC 14577 (KLR)

Saham Assurance Company Limited v Gas & Go Petroleum Products Limited & another (Miscellaneous Civil Application E003 of 2021) [2022] KEHC 14577 (KLR) (Civ) (6 October 2022) (Ruling)

Neutral citation: [2022] KEHC 14577 (KLR)

Republic of Kenya

In the High Court at Nairobi (Milimani Law Courts)

Civil

Miscellaneous Civil Application E003 of 2021

JN Mulwa, J

October 6, 2022

Between

Saham Assurance Company Limited

Applicant

and

Gas & Go Petroleum Products Limited

1st Respondent

Nyambura Musyimi - Mciarb

2nd Respondent

Ruling

1. This is a Ruling in respect of the Applicant’s Chamber Summons dated January 11, 2022 brought under Sections 1A, IB & 3A of the Civil Procedure Act and Rule 11 of the Advocates (Remuneration) Order. The application seeks an order that this Court do enlarge the time for filing a Notice of Objection and a Reference against the ruling of the taxing officer, Hon LA Mumassabba, delivered on October 14, 2021 and the Certificate of Taxation dated December 10, 2021. It also seeks an order for enlargement of time and for such leave to operate as stay of execution pending the hearing and determination of the Reference. Lastly, the Applicant prays that the costs of this application be provided for.

2. The application is supported by the Affidavit of Leah Wanjiru Muhia, an advocate from the firm of Wamae & Allen Advocates. She averred that the Applicant was dissatisfied with the ruling of the taxing officer in respect to the 1st Respondent’s Party and Party bill of costs dated May 18, 2021 and is desirous of filing a Reference against the same. However, the Applicant failed to file the Reference on time because the impugned ruling was delivered in the absence of the Applicant and/or her Advocate, explaining that the delay was occasioned by an honest and inadvertent mistake on the part of the Applicant's counsel who failed to diarize a mention date that had been scheduled for purposes of reserving the ruling date and further, that they were never served with a Notice for delivery of the ruling. As such, the Applicant only became aware of the said ruling on December 21, 2021 when the 1st Respondent wrote to the Applicant threatening to execute for the sum of Kshs 425,565. 50 as per the Certificate of Costs. By then, the time for filing a Notice of Objection and Reference had lapsed.

3. The application was opposed by the 1st Respondent through a Replying Affidavit sworn on February 23, 2022 by its advocate, Noel Ngoloma Okwach. He averred that the Applicant has not demonstrated any reasonable cause for failing to appear in court on September 23, 2021 when the matter was mentioned for purposes of fixing a ruling date. Further, that since the delivery of the ruling on October 14, 2021, the Appellant took no step whatsoever to follow up on the matter until December 21, 2021 when it heard from the Respondent’s advocates. In his view therefore, the conduct of the Applicant confirms its lack of interest in bringing the matter to a conclusion and this application is only meant to deny the 1st Respondent the fruits of its ruling.

4. The issues that arise for determination are as follows:-a.Whether the Applicant is entitled to enlargement of time within which to file a Notice of Objection and Reference against the Taxing Officer’s said decision?b.If the first issue is in the affirmative, whether the Applicant has made out a case for the granting of orders of stay of execution of the Taxing Officer’s Ruling of October 14, 2021 and the Certificate of Taxation dated December 10, 2021?

Whether the Applicant has satisfied the requirements for enlargement of time within which to file a Notice of Objection to taxation and a Reference? 5. On this, the Applicant submitted that paragraph 11(4) of the Advocates Remuneration Order grants this Court discretionary power to enlarge the time for filing a reference against a taxing officer’s decision. It was also submitted that Section 3A of the Civil Procedure Act recognizes the inherent jurisdiction of this court to make such orders as may be necessary for the ends of justice to be met. The Appellant reiterated that the delay was occasioned by an inadvertent error on the part of its counsel which should not be visited upon it. Further, it was the Applicant’s submission that it has an arguable reference with great chances of success as the taxed costs are exaggerated and contrary to the legal principles in the Advocates Remuneration Order. Additionally, it submitted that the Respondent does not stand to suffer any prejudice as it will still have an opportunity to recover costs once the court determines the reference on its merits.

6. On the other hand, the 1st Respondent maintained that no reasonable explanation has been tendered for the delay. It asserted that the Applicant’s Counsel was negligent in handling the taxation proceedings as she not only failed to file and serve the Applicant’s submissions on the bill of costs but also failed to follow up on the progress of the matter until long after the taxing officer had delivered her ruling. Reliance was placed on Bains Construction Co Ltd v John Mzare Ogowe [2011] eKLR and Josphat Nderitu Kariuki v Pine Breeze Hospital Ltd [2006] eKLR where courts refused to excuse some mistakes of counsel which were regarded as mere professional negligence. The 1st Respondent also cited the case of Donald O Raballa v Judicial Service Commission & another [2018] eKLR, where the court stated that parties have a responsibility to show interest in and to follow up their cases even when they are represented by counsel.

7. The legal framework on extension of time within which to file a notice of objection to taxation and/or a reference is clearly stipulated under Paragraph 11 of the Advocates Remuneration Order which provides:1. 'Should any party object to the decision of the taxing officer, he may within fourteen days after the decision give notice in writing to the taxing officer of the items of taxation to which he objects.2. The taxing officer shall forthwith record and forward to the objector the reasons for his decision on those items and the objector may within fourteen days from the receipt of the reasons, apply to a judge by chamber summons, which shall be served on all the parties concerned setting out the grounds of his objection.

3. 4.The High Court shall have power in its discretion by order to enlarge the time fixed by subparagraph (1) or subparagraph (2) for the taking of any step; application for such an order may be made by chamber summons upon giving to every other interested party not less than three clear days’ notice in writing or as the Court may direct, and may be so made notwithstanding that the time sought to be enlarged may have already expired.' 8. In the case of Nicholas Kiptoo Arap Korir Salat v Independent Electoral and Boundaries Commission & 7 others [2014] eKLR, the Supreme Court set down the principles for extension of time, as follows:1. Extension of time is not a right of a party. It is an equitable remedy that is only available to a deserving party at the discretion of the Court;2. A party who seeks for extension of time has the burden of laying a basis to the satisfaction of the court3. Whether the court should exercise the discretion to extend time, is a consideration to be made on a case to case basis;4. Whether the delay has been sufficiently explained to the courts satisfaction.5. Whether there will be any prejudice suffered by the respondents if the extension is granted;6. Whether the application has been brought without undue delay;

7. 9. In the instant case, there is no dispute that the ruling by the taxing officer in respect of the 1st Respondent’s Bill of Costs was delivered in the absence of the Applicant and/or its advocates. It is also common ground that the Applicant’s advocates failed to appear in court for a mention that was scheduled for purposes of fixing a ruling date. The Applicant’s advocate has admitted that this was occasioned by an inadvertent mistake on her part regarding the diarizing of the matter. Nothing has been placed before the court to show any foul play or willful negligence on the part of the Applicant’s advocates so as to make to the mistake inexcusable. In any event, the 1st Respondent’s Advocate has also admitted that he never served the Applicant’s advocate with a Ruling Notice informing them about the date that was fixed when the latter failed to attend court. This was despite having been directed to issue such notice by the Hon Taxing officer. In the premises, I find that there was reasonable cause for failing to lodge the notice of objection to taxation and a reference within the required period.

10. Further, I find that the present application was filed timeously and without undue delay. The Applicant became aware of the taxing officer’s ruling on December 21, 2021 and the instant application was filed on January 11, 2022. Additionally, it is my considered view that in the circumstances in this case, the Respondents will not suffer any prejudice that cannot be recompensed in costs if the order is granted. In the premises, I am satisfied that the Applicant has made out a case for enlargement of time to file a notice of objection and reference against the decision of the taxing officer made on October 14, 2021.

Whether the Applicant has made out a case for the granting of orders of stay of execution of the Taxing Officer’s Ruling of October 14, 2021 and the Certificate of Taxation dated December 10, 2021? 11. In granting stay of execution pending hearing and determination of a reference to a judge from taxation of costs, the court will be guided by the conditions under Order 42 Rule 6(2) of the Civil Procedure Rules. These are; substantial loss that may be suffered if a stay order is not granted; the provision of suitable security for due performance of any decree or order that may eventually be binding upon the applicant; and, that the application has been brought without undue delay. The court has already established hereinabove that the application was filed timeously hence there are only two conditions that are remaining for consideration.

12. The Applicant submitted that it stands to suffer substantial loss as it might end up paying exaggerated costs on account of a simple application and may not recover the same. Further, it reiterated that it has an arguable reference which risks being rendered a nugatory if the stay is not granted. On the other hand, the 1st Respondent submits that the Applicant has not tendered any proof of the substantial loss it may suffer if stay is not granted hence there is no chance that the reference shall be rendered nugatory.

13. It is evident that the amount is quite substantial and the Applicant has expressed its fears that it may not recover the same in the event that the Reference succeeds. The 1st Respondent has not refuted these claims hence it is my view that there is a likelihood of the Applicant suffering substantial loss if the stay sought is not granted.

14. On security, I note that the Applicant did not indicate whether it is able or prepared to furnish any security for due performance of the decree or order that may eventually be binding upon it. The court is however enjoined to order security as a condition for granting a stay. This therefore means that in the instant case, stay will only issue upon the provision of security by the Applicant in the nature and to the extent determined by the court.

Conclusion 15. For the foregoing, I am satisfied that the Applicant’s application dated January 11, 2022 has merit. The same is allowed on the following terms:-

i.The Applicant is granted leave to file a Notice of Objection to Taxation and a Reference within 21 days from the date hereof.ii.There shall be a stay of execution of the Certificate of Costs pending the filing, hearing and determination of the intended Reference on condition that the Applicant deposits the sum of Kshs 425,565. 50 in an interest earning bank account in the joint names of the advocates for the Applicant and the 1st Respondent within 21 days from the date hereof as security.iii.In default of Order (ii) above, the stay granted shall automatically lapse.iv.The costs of this application shall be in the intended reference.Orders accordingly.

DATED DELIVERED AND SIGNED AT NAIROBI THIS 6THDAY OF OCTOBER 2022. J.MULWAJUDGE.