https://new.kenyalaw.org/akn/ke/judgment/keelc/2026/4837

 **REPUBLIC OF KENYA** **IN THE ENVIRONMENT AND LAND COURT AT NAIROBI** **ELC CASE NO. 454 OF 2009** **TUGUTA ENTERPRISES LIMITED…………PLAINTIFF/RESPONDENT** **VERSUS** **KENYA AGRICULTURAL RESEARCH INSTITUTE…..1ST DEFENDANT** **KENYA VETERINARY VACCINES** **PRODUCTION INSITITUTE……………………………..2ND DEFENDANT** **THE LAND REGISTRAR……………………………………3RD DEFENDANT** **THE COMMISSIONER OF LANDS………………………4TH DEFENDANT** **RULING** 1. The 2nd Defendant/Applicant filed the Chamber Summons dated 11th September 2024 pursuant to Paragraph 11(1 &, (2) of the Advocates Remuneration Order seeking ORDERS: **I. THAT the ruling of the taxing officer delivered on 29th August 2024 in so far as the same relates to the reasoning and determination pertaining to Items I & I (a) of the 2nd Defendant/Applicant's Party and Party Bill of Costs dated 8th March 2024 be set aside.** **2. THAT the Honourable Court be pleased to refer the matter back for re-taxation of Items I & I(a) of the 2nd Defendant/Applicant's Party and Party Bill of Costs dated 8th March 2024 before another taxing officer with proper and appropriate directions thereon.** **3. THAT in alternative to prayer 2 above, the Honourable Court be pleased to re-tax Items I & I(a) of the 2nd Defendant/Applicant's Party and Party Bill of Costs dated 8th March 2024.** **4. THAT costs of this Application be borne by the Plaintiff/Respondent** 1. The application seeks to set aside the taxing officer’s ruling of 29 August 2024 in respect of Items I and I(a) of the 2nd Defendant’s Bill of Costs and to have the matter re-taxed before a different taxing officer. The Applicant contends that, although it claimed instruction fees of Kshs 10,000,000 and getting-up fees of Kshs 3,333,330, the taxing officer erroneously reduced the instruction fees to Kshs 900,000. 2. It is argued that the taxing officer failed to recognise that the fees covered both the defence of the suit and the prosecution of a separate counterclaim, which should have attracted its own instruction fees. The Applicant further asserts that the taxing officer disregarded the substantial value of both the Plaintiff’s claim (Kshs. 320,000,000) and the counterclaim concerning a large and valuable parcel of land in the Industrial Area, failed to determine the basic instruction fee before adjusting it, and gave no reasons for arriving at the figure awarded. 3. According to the Applicant, relevant factors such as the complexity, importance and duration of the matter were ignored, rendering the award manifestly low and amounting to an error of principle warranting the Court’s intervention. **2nd Defendant/Applicant’s Submissions** 1. Counsel for the 2nd Defendant/Applicant submits that the taxing officer’s award of Kshs. 900,000 as instruction fees was based on errors of principle warranting interference by the Court. The principal arguments are that the taxing officer failed to recognise that the claimed instruction fees covered both the defence of the main suit and the prosecution of the counterclaim, which, as a distinct and independent suit, attracted separate instruction fees. 2. Counsel argued that the Taxing Officer failed to ascertain and apply the value of the subject matter of the Plaintiff’s claim (Kshs. 320,000,000) and the valuable land forming the subject of the counterclaim; failed to determine and state the basic instruction fee before adjusting it; and failed to provide reasons for the amount awarded or to consider relevant factors such as the complexity, importance, duration and nature of the matter. 3. The Applicant further contends that full instruction fees are earned upon filing a defence and that the sum awarded was so manifestly low as to amount to an error of principle. 4. In support, the Applicant relies principally on Schedule 6A of the Advocates Remuneration Order governing the assessment of instruction fees. It cites, among others, ***Kipkorir, Titoo & Kiara Advocates v Deposit Protection Fund Board*** [2005] KECA 325 (KLR); ***First American Bank of Kenya Ltd v Gulab P. Shah & 2 Others*** [2002] eKLR; ***Ngatia & Associates Advocates v Interactive Gaming & Lotteries Ltd*** [2017] eKLR; ***Peter Muthoka & Another v Ochieng & 3 Others*** [2019] eKLR; ***Presbyterian Foundation, Trustees of P.C.E.A. Kitengela Township Church v Export Processing Zones Authority*** [2025] KEELC 2998; ***Project Innovations Ltd v Aziza Residential Suites Ltd & Another*** [2025] KEHC 722 (KLR); ***Agricultural Society of Kenya v C.W. Wanjihia & Co. Advocates*** [2008] KEHC 2880 (KLR); ***Kagwimi Kang’ethe & Co. Advocates v Penelope Combos & Another*** [2012] KEHC 1976 (KLR); ***Machakos County Government v Kabaka t/a Kabaka & Associates Advocates*** [2024] KEELC 151 (KLR); ***Tahir Sheikh Said Investments Ltd v KCB Bank Kenya Ltd & Another*** [2024] KEHC 15861**; *Premchand Raichand Ltd & Another v Quarry Services of East Africa Ltd & Others*** [1972] EA 162; and ***PZ Cussons East Africa Ltd v Kenya Revenue Authority*** [2014] KEHC 8462 (KLR), which adopted the Ugandan decision in ***Zachary Olum & Another v Attorney General***, Civil Appeal No. 1 of 2004. 5. The Applicant accordingly urges the Court to set aside the taxation of Items 1 and 1(a) and remit them for re-taxation before a different taxing officer, or to re-tax the items itself. **The Plaintiff/Respondent’s Submissions** 1. Counsel for the Plaintiff/Respondent submits that the reference is devoid of merit and that the taxing officer properly exercised his discretion in taxing items 1 and 1(a). It argues that the dispute concerned ownership of land rather than a liquidated commercial claim, and that the value of the subject matter was not ascertainable from the pleadings, judgment or any settlement to justify the instruction fees sought by the Applicant. In those circumstances, the taxing officer was entitled to assess a reasonable fee in the exercise of his discretion. The Respondent further contends that the Applicant has failed to identify any specific error of principle in the taxation, and that increasing the award would impose an undue burden on the Plaintiff, who is already liable for costs to more than one defendant, thereby undermining the constitutional guarantee of access to justice. 2. The Respondent relies on Article 48 of the Constitution of Kenya, 2010, which requires that any fees imposed be reasonable and not impede access to justice. It cites **Joreth Ltd v Kigano & Associates** [2002] 1 EA 92 for the principle that where the value of the subject matter cannot be ascertained from the pleadings, judgment or settlement, the taxing officer has discretion to determine a just instruction fee. It also relies on **Prof. Tom Ojienda & Associates v County Government of Nairobi** (Environment and Land Misc. Application E115 of 2023) [2025] KEELC 3383 (KLR), where the court upheld a taxing officer’s exercise of discretion in the absence of an agreed or otherwise ascertainable valuation, and on M**/S Oduk & Co. Advocates v Mideny** (Misc. Civil Application E054 of 2021) [2025] KEHC 6825 (KLR), which, citing **Republic v Ministry of Agriculture & 2 Others ex parte Muchiri W’Njuguna & 6 Others**, reaffirmed that a court should interfere with a taxation only where there is a demonstrable error of principle or a manifestly unjust award. **Analysis and Determination** 1. The Court has considered the application herein, and the rival submissions filed by Counsel for the 2nd Defendant/Applicant and the Plaintiff/Respondent, and finds that the issues for determination are; 2. ***Whether the Taxing Officer erred in failing to tax item 1 and 1(a) on the 2nd Defendant's Party and Party Bill of Costs on the main suit and the counterclaim as two separate items.*** 3. ***Whether the Taxing Officer erred in taxing Items 1 and 1 (a) of the Applicant’s Party and Party Bill of Costs dated 8th March 2024, being instruction fees and getting up fees.*** 4. The governing framework for taxation of Party and Party Bills of Costs and filing of a reference is the Advocates Act and, more specifically, the Advocates Remuneration Order, particularly Schedule 6 and paragraph 13A, which empower the taxing officer to exercise discretion while taking into account the value and circumstances of the matter. A reference to a judge lies under paragraph 11 of the Advocates Remuneration Order. 5. The above Schedule 6 (A) generally provides for Party and Party Costs, while paragraph1 of the said Schedule provides for Instructions fees and states that: ***Subject as hereinafter provided, the fees for instructions shall be as follows—*** ***(a) To sue in an ordinary suit in which no appearance is entered under Order IX A of the Civil Procedure Rules where no application for leave to appear and defend is made, the fee shall be 65% of the fees chargeable under item 1(a).*** ***(b) To sue or defend in a suit in which the suit is determined in a summary manner in any manner whatsoever without going to full trial, the fee shall be 75% of the fees chargeable under item 1(b).*** ***(c) In a suit where settlement is reached prior to confirmation of the first hearing date of the suit, the fee shall be 85% of the fee chargeable under item 1(b) of this Schedule.*** 1. Item 1 (b) of the said schedule sets out the amounts payable where a party sues and a defence or other denial of liability is filed; It states as follows; ***“To sue in any proceedings described in paragraph (a) where a defence 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***—“ 1. The leading authorities remain **Joreth Ltd v Kigano & Associate**s[2002] 1 EA 92 on ascertainment of the value of the subject matter, where the Court stated as follows: “***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.”;*** 1. The authority of **First American Bank of Kenya Ltd v Shah & Others[2002] 1 EA 64** and **Kipkorir, Titoo & Kiara Advocates v Deposit Protection Fund Board[2005] eKLR** gives guidance on the limited grounds for interfering with taxation. The Court stated as follows; ***“The Taxing Officer must first set out the basic fee before venturing to consider whether to increase or reduce it.”*** The Court further stated that: ***“The full instruction fees to defend a suit is earned the moment a defence has been filed, and the subsequent progress of the matter is irrelevant to that item of fees.*** 1. The background to this case is that the Plaintiff’s suit was dismissed for want of prosecution. The 2nd Defendant had filed a counterclaim, and the same proceeded for full hearing and a judgment was entered in its favour on 1st February 2024 with costs of the suit and the counterclaim awarded to the 2nd Defendant against the Plaintiff. 2. The Applicant challenges the finding and award of the Taxing master on item 1 instructions fees in the sum of Kshs. 900,000. The Applicant further challenges the Taxing Officer's award of Kshs 300,000 in item 1(a) being the getting up fees. ***Issue A): Whether the Taxing Officer erred in failing to tax item 1 and 1(a) on the 2nd Defendant's Party and Party Bill of costs on the main suit and the counterclaim as two separate items*** 1. The Court takes the general view that a counterclaim is treated as a separate and independent suit for all purposes including costs. Accordingly, where a defendant is awarded costs both of the main suit and of a successful counterclaim, the defendant is entitled to a separate instruction fee for defending the main suit and another for prosecuting the counterclaim, subject to the taxing officer’s assessment under the applicable remuneration schedule. 2. This principle has long been recognised in the authority cited by the Applicant in the case of **Kenya Commercial Bank Ltd v James Karanja [1981] eKLR**, where the Court of Appeal stated that; ***“A counterclaim is a fresh suit, and the defendant instituting it becomes plaintiff for all intents and purposes. The counterclaim is combined in the plaintiff’s proceedings for convenience, to enable the court to pronounce a final judgment in one set of proceedings, both on the original and on the cross claim.”*** 1. Courts have applied the same principle to taxation of costs in the cases of **Kinyariri & Associates Advocates v Salama Beach Hotel Ltd & 4 Others** [[2014] KEELC 214 (KLR)](https://new.kenyalaw.org/akn/ke/judgment/keelc/2014/214/eng%402014-09-26) **and Presbyterian Foundation, Trustees of P.C.E.A. Kitengela Township Church v Export Processing Zones Authority; Export Processing Zones Authority & 4 Others** (**Defendant to the Counterclaim) *[2025] KEELC 2998 (KLR),*** holding that a successful counterclaim attracts its own instruction fee and that denying such a fee is an error of principle. 2. In **Project Innovations Limited v Aziza Residential Suites Limited & another (Civil Case 392 of 2012) [2025] KEHC 722 (KLR),** the High Court held as follows: ***“To this court, a counterclaim is a separate suit and attracts separate instruction fees, hence taxable independently from the instruction fees in the main suit and the taxing master erred in failing to consider the same. This court concurs with the decision in Kanyiriri & Associates Advocates v Salama Beach Hotel Limited & 4 others, where the Environment and Land Court in Malindi held that;*** ***"A counterclaim is an assertion that a defendant could have made by starting a lawsuit if the Plaintiff had not already begun an action. It is governed by almost the same rules that regulate a claim made by a Plaintiff except that it is a part of the answer that the Defendant files in response to the Plaintiff's claim. A counterclaim is therefore in all respects a suit by the Defendant. The Applicant is therefore entitled to instruction fees on the counterclaim. The taxing officer erred in not awarding fees on the counterclaim. The taxing officer erred in not awarding the Applicant instruction fees on the counterclaim."*** 1. The Court finds that the Taxing Officer fell into error in principle that would warrant setting aside the award, in failing to award instruction fees for the counterclaim as a separate item from the fees awarded in the main suit. 2. One issue that the Court will point out is that the fact that the suit and the counterclaim concern the same property does not mean that the instruction fee payable for the suit and the counterclaim must be identical. In the Court's view, assessment of instruction fees depends on the nature of the counterclaim and the relief sought and the final determination of the suit and the counterclaim. ***Issue B) Whether the Taxing Officer erred in taxing Items 1 and 1 (a) of the Applicant’s Party and Party Bill of Costs dated 8th March 2024 being instruction fees*.** 1. As stated earlier, Schedule 6 Item 1 (b) of the Advocates Remuneration Order provides for ascertainment of instruction fees where thevalue of the subject matter can be determined from the pleadings, judgment or settlement between the parties. The leading authority of **Joreth Ltd v Kigano & Associates [2002] 1 EA 92** gave directions on ascertainment of the value of the subject matter ***for*** the purposes of taxation of a bill of costs stating that it 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***.*** 2. In addition, the Court of Appeal in **Peter Muthoka & Another v Ochieng & 3 Others[2019] eKLR** emphasised that where the value of the subject matter is ascertainable from the pleadings, judgment, or settlement, the taxing officer must use that value as the starting point. 3. Collectively, these provisions and authorities suggest that a failure to identify the proper basis for instruction fees, or to give reasons for a substantial departure from the prescribed scale, would constitute an error of principle justifying the setting aside of the taxation and a re-taxation of the disputed items. 4. In the present case, the Court is satisfied that the Taxing Officer failed to identify the basis for assessing instruction fees and thus fell into error. The record shows that while assessing instruction fees, the Taxing Officer stated: ***“Guided by the decision in Republic –v- Minister of Agriculture & 2 others (2016) Eklr, I am persuaded that a sum of Kshs. 900,000.00 is reasonable and proceed to tax item 1 as such on each Bill. I tax off Kshs. 9,100,000.00 from each of the Bills***” 1. The Court is of the view that, looking at the pleadings and judgement of the Court, one can ascertain the value of the subject matter of the suit and the Counterclaim. In the present case, the Taxing Officer failed to show that he had considered either the pleadings or the judgment in arriving at the sum awarded as instruction fees or whether the sum awarded was as a result of exercise of discretion. 2. The Court of Appeal in **Peter Muthoka & Another v Ochieng & 3 Others[2019] eKLR** held that; ***“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”.*** 1. The Court of Appeal found that it is mandatory for the Taxing Officer in assessing instructions fees to consider either the pleadings, the judgment or the settlement and that he has no leeway to disregard the statutorily commanded starting point. The Court went on to discuss the circumstances in which the Taxing Officer may exercise discretion and stated that; ***"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.”*** 1. From the foregoing, the Court is persuaded that there was an error in principle in the assessment of items 1 and 1a) of the 2nd Defendant’s Bill of Costs and this Court is called upon to interfere with the taxing master's decision. 2. A faulty taxation will ordinarily be remitted to the taxing officer (often a different taxing officer), especially where the Court finds an error of principle but considers that the proper assessment of costs still requires the taxing officer's specialised discretion. This Court will itself re-tax only in exceptional cases, such as where the error is clear and cannot materially affect the assessment, where the correct amount can be determined from the record without further fact-finding or the exercise of taxing discretion, or where remittal would serve no useful purpose. 3. This Court is of the view that this is a proper case calling for remittance of the Applicant's Bill of costs to the Taxing Officer for re-taxation of the items complained of following the directions contained in this ruling and in particular paragraphs 20, 28, 30 and 32. Accordingly, the 2nd Defendant/Applicant’s Chamber Summons dated 11th September 2024 is hereby allowed in the following terms; 4. **The ruling of the taxing officer delivered on 29th August 2024 in so far as the same relates to the reasoning and determination pertaining to Items I & I (a) of the 2nd Defendant/Applicant's Party and Party Bill of Costs dated 8th March 2024 is hereby set aside.** 5. **This matter is referred back for re-taxation of Items I & I(a) of the 2nd Defendant/Applicant's Party and Party Bill of Costs dated 8th March 2024 before a different taxing officer with the directions contained in this ruling.** **3. Costs of this Application shall be borne by the Plaintiff/Respondent** **Delivered, dated and signed via Microsoft Teams this 23rd day of July 2026.** **HON. L. G. KIMANI** **JUDGE ENVIRONMENT AND LAND COURT** *The Ruling is read in the presence of:* *Muuo for the Applicant/2nd Defendant* *Oluoch for 1st Defendant* *Ernest for the Plaintiff/Respondent* Top of Form Bottom of Form