Mwiti & another v Viljoen & another [2023] KEHC 24906 (KLR) | Taxation Of Costs | Esheria

Mwiti & another v Viljoen & another [2023] KEHC 24906 (KLR)

Full Case Text

Mwiti & another v Viljoen & another (Civil Case E002 of 2022) [2023] KEHC 24906 (KLR) (8 November 2023) (Ruling)

Neutral citation: [2023] KEHC 24906 (KLR)

Republic of Kenya

In the High Court at Nanyuki

Civil Case E002 of 2022

AK Ndung'u, J

November 8, 2023

Between

Silas Mwiti

1st Respondent

Sunland Roses Ltd

2nd Respondent

and

Johannes Petrus Viljoen

1st Applicant

Oletala Limited

2nd Applicant

Ruling

1. This ruling resolves the reference by chamber summons dated 18/10/2022 against the Honourable Taxing Master’s ruling. The orders sought are as follows;i.That this court do set aside the Taxing Master’s decision delivered on 06/10/2022 upon the Defendants’ Bill of Costs on items 1(a), (b) and (c), item no.10 and item no. 12. ii.That this court do remit the Bill of Costs back to the Taxing Master with appropriate directions or re-tax the above referred items.

2. The application is grounded on the fact that the Taxing Master misdirected himself in regards to item 1(a) (b) and (c) in holding that the valuation report and the charge sheet submitted in support of the items were inapplicable and could not be used as an indicator of the value of the subject matter. Further, the Taxing Master erred in misconstruing the number of folios under items 10 and 12.

3. The application was opposed and in a replying affidavit dated 29/11/2022 it is deponed that the application is brought in bad faith and is an abuse of the court process. That the Taxing Master did not misdirect himself in relation to Items 1(a) (b) and (c) since his decision was based on the law and was guided by precedents from superior courts. Further, that the Taxing Master correctly applied Rule 62 of the Advocates (remuneration) Order, 2009 by holding that instructions should not be charged twice.

4. The application was canvassed by way of written submissions. The Respondent . From the record, the Respondents did not file submissions.

5. It is submitted for the Applicants that the Taxing Master erred by relying on the case of Giuseppe Bozzolasco vs Anneliese S. Feller & 3 others (2014) eKLR by arriving at a decision that the Plaintiffs had a common claim against both the Defendants therefore attracting one fee in respect of instructions. Counsel submitted that the Plaintiffs were seeking different reliefs with the 1st Plaintiff seeking reliefs as contained in paragraph 9,10 and 13 of the plaint whilst the 2nd Plaintiff claims were contained in paragraph 11 and 12 of the plaint.

6. The Taxing Master was faulted for placing reliance on the cases quoted and for wrongly applying Paragraph 13 of the Advocates (Remuneration) Order in refusing to admit the valuation report, the charge sheet and other documents in determining the valuation of the subject property on account that they were not part of the pleadings filed prior to the filing of the Bill of Cost. Counsel submitted that Paragraph 13 of the Advocate (Remuneration) Order gives the Taxing Master wide discretion to consider any relevant matter in the exercise of taxation. That the cases that the Taxing Master relied on misinterpreted Paragraph 13 of the Remuneration Order and therefore, the Taxing Master should have disregarded them. Am urged to be guided by the decision in Shiva Enterprises v. Mwangi Njenga & Co. Advocates (2020) eKLR; Ambwere T.S & Associates vs Frank Nyambu Wafukwa & others (2020) eKLR and Masore Nyang’au & Co. Advocates vs Kensalt Ltd (2019) eKLR.

7. It is further submitted that the Taxing Master misdirected himself by stating that the valuation report and the charge sheet were unprocedurally sneaked in to the court file and that it was not clear whether the same were served upon the Plaintiffs since the Defendants had only attached the said documents to the Bill of Costs when they were filing the said Bill. The Applicants maintain that the Plaintiffs did not complain in their submission that they were not served with the said documents.

8. In regards to item 10 and 11, it is urged that the Taxing Master erred by regarding the item as consisting of one folio each whereas there were three folios each hence all the three copies consisted of 9 folios. Therefore, the taxation on each item should have been as follows;3 x 3x Kshs.25 = 225/-

9. I have considered the reference together with the submissions on record. I have also considered the relevant legal framework and principles upon which a Taxing Officer exercises jurisdiction and the principles upon which a superior court interferes with the discretionary jurisdiction of the Taxing Officer. For determination in this reference is whether the applicant has satisfied the criteria upon which this court exercises jurisdiction to interfere with the discretionary decision of a Taxing Officer.

10. In determining this issue, the court will pose and answer the following questions;i.Whether the Taxing Master erred in consolidating the instruction fees for both Plaintiffs;ii.Whether the Taxing Master erred in failing to consider the valuation report and the charge sheet to determine the value of the subject matter; andiii.Whether the Taxing Master erred in misconstruing the number of folios under items 10 and 12.

11. The Courts have consistently held that in assessing costs to be paid to an advocate, a Taxing Officer exercises judicial discretion which can only be interfered with if it is established that the discretion was exercised capriciously and in abuse of the proper application of the correct principles of law, that the decision of the Taxing Officer is based on an error of principle, or that the fee awarded is manifestly excessive or excessively low as to amount to an injustice to one party or other. Thus, unless the amount awarded by the Taxing Officer is manifestly high or low as to lead to an injustice or unless there is a clear error of principle, the High Court should not interfere.

12. The Advocate faulted the Taxing Master for holding that the Plaintiffs had a common claim against both the Defendants therefore attracting one fee in respect of instruction fees instead of two separate fees. The Taxing Master’s reliance on the case of Giuseppe (supra) is challenged. In that suit the Learned Judge held inter alia that;“From the averments of the Plaint and the admission made by the 1st and 2nd Defendants in their joint Defence, it is clear that the Plaintiff's claim as against the two of them could not be severed. That in my view explained why counsel opted to file a joint Defence notwithstanding that the Plaintiff sued both of them. In that respect, I am in agreement with the holding of the taxing officer that the cause of action was the same and so was the defence. This position is however true only in respect to the payable costs for the 1st and 2nd Defendants.”

13. The record shows that the Taxing Master declined to award the Advocate two separate fees in respect of the instruction fees. It was the Taxing Master’s finding that from the averments in the plaint and the admissions made in the 1st and 2nd Defendants’ joint defence, it was clear that the Plaintiffs’ claim against the two of them could not be severed and that explains why the Defendants’ Advocate filed joint defence. The Taxing Master therefore found that the cause of the action was the same and thereby consolidated the instruction fees. In doing so, the Taxing Master relied on the case of Giuseppe(supra).

14. Looking at the plaint and the joint defence filed, the claims of both Plaintiffs are drafted in such a way that they are so intertwined that it is virtually impossible to segregate the one from the other. It bears repeating here that costs awarded are in the form of reimbursement for work done. It is never intended that costs are to enrich a party.

15. In a situation where two clients face the same claim and instruct the same Advocate, the costs awarded would not automatically amount to a multiplication of costs awardable by the number of clients. The situation would be completely different where each defendant would have to, out of sheer necessity, file separate responses to the claim based on how the claim relates to them. In such cases, it is in my view permissible to have varying fees charged based on the complexity, labour and other applicable parameters to each Party’s case. Ultimately, it is the duty of the Taxing Master to consider and determine if a global or individual fee is applicable. In this matter the Taxing Master appears to have in his discretion exercised this duty.

16. As indicated above, my own evaluation of the pleadings, specifically the plaint and the defence leads me to the unhesistating conclusion that it is impossible to severe one claim from the other.

17. The courts have had occasion to consider the applicable principles. In Stephen Mwangi & 2 others v Tuskeer Mattresses Limited [2018] eKLR the learned Judge was of the view that;“It is clear that the rule refers to the situation where an advocate is engaged or instructed by two or more clients and files separate pleadings for each client. It may seem to be of some dubious provenance where singular pleadings are filed. It may assist a court taxing the bill to enhance the fee by 1/3 for complexity or other such consideration. In my view, it does not contemplate that if 100 claimants filed a single suit it would mean that the instruction fees due would be multiplied by 100. I am in agreement with Angote J. in the case of Guiseppe Bozzolasco v Anneliesse S. Feller & 3 Others (supra). Additionally the case of Desai, Sarvia & Pallan v Tausi Assurance Co. Ltd [2017] eKLR clarifies the position of instruction fees where the clients are many. In this case, the decretal sum was some 2 million plus and the taxing officer carefully calculated the instruction fees due for the claim on the basis of the sum awarded by Court. The Respondent is thus correct on the principles applied by the Taxing Officer in relation to the instruction fee. I have also been guided by the decision in Republic v Minister for Agriculture and 2 Others (2006) eKLR to the effect that the taxation of Advocates instructions fees is to seek no more and no less than reasonable compensation for professional work done and to avoid an aspect of unjust enrichment upon a party. Indeed, I find that to award instructions fees to advocate as presented in the bill of costs were (sic) the advocate has presented instructions fees for each claimant would occasion an injustice and be prejudicial to the party condemned to pay costs. The same would actually lead to unjustly enriching the party granted costs.”

18. The Court of Appeal in Desai Sarvia & Pallan Advocates v Tausi Assurance Company Limited [2017] eKLR held that;“In our view, the respondent instructed the appellant to protect its interest as an insurer by representing the defendants in the suit. In doing so, the respondent engaged the appellant to act on its behalf in a single transaction, that is, protect its interest in the suit. Moreover, the liability of the 2nd defendant automatically gave rise to the liability of the 1st defendant and by extension to the respondent’s liability under the insurance contract. Thus, it would be unconscionable for the appellant to charge the respondent twice for the same transaction. Of course, the outcome would have been different if each of the defendants instructed the appellant separately or where the respondent engaged the appellant to act for it in different transactions. We find that the taxing officer properly invoked her discretionary power under Rule 16 of the Advocates (Remuneration) Order by striking out the bills of costs for duplicity. The rule provides-“Notwithstanding anything contained in this Order, on every taxation the taxing officer may allow all such costs, charges and expenses as authorized in this Order as shall appear to him to have been necessary or proper for the attainment of justice or for defending the rights of any party, but, save as against the party who incurred the same, no costs shall be allowed which appear to the taxing officer to have been incurred or increased through over-caution, negligence or mistake, or by payment of special charges or expenses to witnesses or other persons, or by other unusual expenses.”Here the appellant was instructed by the respondent and filed joint pleadings for the defendants. In the end, we see no reason to interfere with the High Court’s decision.”

19. As indicated above, my own evaluation of the pleadings, specifically the plaint and the defence leads me to the unhesistating conclusion that it is impossible to severe one claim from the other. The instruction fee payable to the defendants’ Advocate is one as the Advocate was instructed by the defendants to defend a claim against the 2 defendants which upon scrutiny is inseparable or unseverable since the matters are so intertwined. To award instruction fees for each of the defendants is not justifiable in the circumstances of this case and would fly on the face of justice and would be prejudicial to the plaintiffs.

20. On the second issue, the Taxing Master is faulted for rejecting the valuation report and the charge sheet on account that they were not part of the proceedings filed prior to filing the Bill of Costs. The Applicants’ position is that the decisions relied on by the Taxing Master are wrong and that the judges in those cases misinterpreted Rule 13A of Advocate (Remuneration) Order. This court is urged to adopt the holding in the cases of Shiva Enterprises v. Mwangi Njenga & Co. Advocates (2020)eKLR; Ambwere T.S & Associates vs Frank Nyambu Wafukwa & others (2020)eKLR and Masore Nyang’au & Co. Advocates vs Kensalt Ltd.(2019)eKLR.

21. In the Plaintiffs’ objection dated 02/08/2022, the Plaintiffs disputed the valuation report and the charge sheet and stated that in determining instruction fees, regard is on the value of the subject matter which is determined from either pleadings or judgment. The pleading did not disclose the value of the subject matter and reliance could not be made on the charge sheet and the valuation report which were not part and parcel of the record. That where the value of the subject matter is not determined from the proceedings, reliance is placed on complexity/novelty of the matter.

22. The factors to be considered in ascertaining the value of the subject matter in a suit were set out by the Court of Appeal in Joreth Limited v Kigano & Associates [2002] eKLR as follows;“We would at this stage point out that 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, taking into account, amongst 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”.

23. In our case, the value of the property was not stated. The Plaintiffs sought several prayers including 3 declaratory orders relating to the running of the 2nd defendant and an injunction to restrain the 1st defendant from henceforth singularly making decisions concerning alienation, disposition and or selling the listed properties. No amount or value of the claim was mentioned in the plaint nor in the defence. The claim was not quantified.

24. The question that readily springs to mind is what parameters then was the Taxing Master to employ is assessing instruction fee? Counsel for the Defendants has urged that in the absence of discernment of the value of the subject matter from the pleadings a, judgement or settlement, the valuation report presented and charge sheet ought to have been used by the Taxing Master in the assessment of the instruction fee.

25. I agree with counsel to the extent that if a claim is over property and the value is not stated in the pleading a Taxing Master can effectively employ the powers under Paragraph 13A of the Advocates Remuneration Order which power would in my view include calling for a valuation report.

26. To that extent, I agree with Munyao J sentiments in Masore Nyangau & Company Advocates vs Kensalt Limited, ELC Nakuru, Miscellaneous Application No. 196 of 2015 (2019)eKLR and later in Ambwere T.S & Associates Vs. Frank Nyambu Wafukwa & Others (2020) eKLR in which he asserts that the Taxing Master has a wide discretion including the use of a valuation report in assessing instruction fee. In the cases above, Munyao J gave clear and simple examples of when such reports should be resorted to. In a nutshell, the dictum is applicable where, mostly in land matters, the value of the subject matter is not discernable from the pleadings, judgement or settlement yet a win in the ligation would translate to a benefit or value for the claimant.

27. What is gleaned from the above is that the Taxing Officer must meticulously consider pleadings before him and, even where the pleading is silent on the value of the subject matter, form an opinion whether there is any value, gain or benefit that can be ascertained through the invoking of the powers under Paragraph 13A. Ultimately, it is about the nature of the claim.

28. That said, the power donated by Paragraph 13A is not, in my view a carte blanche for introduction of unsanctioned, wild and irregular evidence outside the known rules of evidence. Introduction of such evidence must of necessity be formal and follow due process of the law.

29. Paragraph 13A is worded in clear terms; For the purpose of any proceeding before him, the Taxing Officer shall have power and authority to summon and examine witnesses, to administer oaths, to direct the production of books, paper and documents and to direct and adopt all such other proceedings as may be necessary for the determination of any matter in dispute before him.

30. The power and authority is within the Taxing Officer to summon and examine witnesses, to administer oaths, to direct production of books, paper and documents and so forth. To my understanding, any party desirous of introducing any material alluded to above and which is outside what is in the pleadings, the subject of taxation, must do so with sanction of the Taxing Master. The same must be in proper evidential form, be it affidavit or oral testimony, to allow room for the necessary test of veracity and to afford all parties the opportunity to address the same to avoid prejudice to either party.

31. The question then is, did the Taxing Master err for failing to adopt the valuation report and the charge sheet as a determinant for value of the claim? In our instant suit, the valuation report and the charge sheet filed were attached to submissions by the Defendants. This is a procedure unknown in law. The Taxing Master was thus spot on in rejecting them. One just needs to sit back and ponder the anarchy and disorder and irregularity in court proceedings if the court was to allow such a free for all introduction of evidence.

32. To buttress the position that the admission of documents in taxation proceedings is the preserve of the Taxing Master under Paragraph 13A. The decision of the Court of Appeal in Otieno Ragot & Company Advocates v National Bank of Kenya Limited [2020] eKLR is an illuminating guide. The court stated;“In the present appeal, the respondent did not seek leave to adduce additional evidence. It filed an application for review on which it purported to introduce new evidence. No additional evidence could be produced before the learned Judge unless they formed part of the record before the taxing officer as correctly submitted by the appellant. Admission of documents in taxation proceedings is a preserve of the taxing officer under Rule 13A of the Advocates Remuneration Order and on reference, the Judge only deals with what was on record before the taxing officer. In the case of Wanga & Co. Advocates (supra), the court stated that allowing a party to introduce new evidence at the appellate level was not only prejudicial to the opposing party but also against public policy and the law.” (Emphasis added)

33. It is thus for a desirous party to seek to and to regularly file such evidence be it oral or documentary.

34. It is to be noted that the valuation report and the charge sheet were not part of the proceedings prior to filing the Bill of Costs and that is why they were disregarded by the Taxing Master. I do not see any error of principle by the Taxing Master’s refusal to adopt the valuation report and the charge sheet. While making his decision, he was guided by numerous cases where valuation report was rejected for being filed with the Bill of costs and which was not part and parcel of the proceedings prior the filing of the Bill of costs.

35. I have also considered the cases that the Defendants urged this court to be guided by. It is noteworthy that in those cases, valuation reports were filed by consent of the parties which is not the case in the instant case. For example, in Ambwere T.S & Associates v Frank Nyambu Wafukwa & Others [2020] eKLR the Taxing Master had ordered a valuation report but exercised her discretion to award costs instead of relying on the valuation report she had ordered. In Shiva Enterprises v Mwangi Njenga & Company Advocates [2020] eKLR , the Advocate for the Respondent had sought to have the property valued in the course of taxation which is different with our case in that Applicant only presented a valuation report attached to the bill of costs.

36. It is now a settled principle of law in Kenya that superior courts do not liberally interfere with the Taxing Officer’s decision; they do so when there is a clear error of principle or when the Taxing Officer has failed to take into account a factor which ought to have been taken into account or when the sum awarded is manifestly high or manifestly low as to amount to an injustice [see Republic v Ministry of Agriculture and 2 others; Ex-parte Muchiri W’Njuguna & Others (2006)eKLR; (ii) First American Bank of Kenya v Shah & Others (2002) EALR 64; and (iii) Desai Sarvia & Dallan Advocates v Jambo Biscuits (K) Ltd (2014)eKLR].

37. Ultimately I must reach the finding that on the material properly before him, the Taxing Master applied the correct principles in his assessment of the instruction fees. The principles in Joreth v Kigano were properly applied in the absence of a determinate value of the subject matter from the pleadings, judgement or settlement. No proper basis has been laid to invite me to interfere with the exercise of the discretion.

38. The last issue was that the Taxing Master misconstrued the number of folios under items 10 and 12. That the Taxing Master erred by regarding the item as consisting of one folio each whereas there were three folios each hence all the three copies consisted of 9 folios. Therefore, the taxation on each item should have been as follows;3 x 3x Kshs.25 = 225/-

39. Item 10 and 12 were Defendant’s defence and grounds of opposition respectively. The bill of costs at item 10 reads; Making 3 copies of the Defendants defence@ Ksh25 per folio and item 12 reads; Making 3 copies of the defendants grounds of opposition @ Ksh25 per folio. The total costs for each is given at Ksh225.

40. Paragraph 17 of the Advocates (Remuneration) Order, 2009, which was not deleted by the Advocates Remuneration(Amendment) Order, 2014, provides that:“17. Length of folio.(1)A folio shall for all purposes of this Order be deemed to consist of 100 words and any part of folio shall be charged as one folio.(2)A sum or quantity of one denomination stated in figures is to be counted as one word: e.g. “?25,564 16s 8d.” is to be counted as three words, and “254 feet 11 inches” is to be counted as four words.”

41. Interpreting this paragraph, the court in Seth Ambusini Panyako v Independent Electoral and Boundaries Commission & 2 others [2020] Eklr stated;“Under Item 9, the taxing officer translated 87 pages of the petition to mean 87 folios. The same can be said in Item 3. This was clearly a misrepresentation of the definition of a ‘folio’ above and, therefore, an error in principle.”

42. In light of the above, the Taxing Master cannot be faulted for the award in items 10 and 12. It was incumbent upon the Defendants to plead the exact folios charged for. Each item in items 10 and 12 ought to have read 9 folios in the bill of costs. The Taxing Master could not award what was not pleaded.

43. With the result that the reference herein lacks merit and is dismissed with costs to the Respondents.

DATED SIGNED AND DELIVERED AT NANYUKI THIS 8TH OF NOVEMBER 2023A.K. NDUNG’UJUDGE