Republic v Sugar Arbitration Tribunal, Attorney General, Kenya Sugar Cane Growers Association & Kenya National Sugarcane Growers Union Exparte Chemelil Sugar Company Limited & Kibos Sugar & Allied Industries Limited [2017] KEHC 2191 (KLR)

REPUBLIC OF KENYA

IN THE HIGH COURT AT KISUMU

MISC. CIVIL APPLICATION NO. 14, 15 & 16 OF 2014

BETWEEN

REPUBLIC ………………………………….........……… APPLICANT

AND

THE SUGAR ARBITRATION TRIBUNAL ………. 1ST RESPONDENT

THE ATTORNEY GENERAL ……………….…… 2ND RESPONDENT

AND

KENYA SUGAR CANE GROWERS

ASSOCIATION …………………...……… 1ST INTERESTED PARTY

KENYA NATIONAL SUGARCANE

GROWERS UNION ……..……………..… 2ND INTERESTED PARTY

EXPARTE

CHEMELIL SUGAR COMPANY LIMITED

KIBOS SUGAR & ALLIED INDUSTRIES LIMITED

RULING

1. The ex-parte applicants, Chemelil Sugar Company Ltd (“Chemelil Sugar”) and Kibos Sugar & Allied Industries Ltd (“Kibos Sugar”) have filed references under Rule 11(1) of the Advocates Remuneration Order seeking to set aside the assessment of costs by the Deputy Registrar assessing party and party costs following the judgment of Chemitei J., dated 29th October 2015. Before I consider the references, a brief summary is necessary to give the matter context.

2. In November 2012, the interested parties lodged a claim before the Sugar Arbitration Tribunal (“the Tribunal”) claiming Kshs.183,459,936. 00 arising from losses incurred by sugar farmers who had delivered cane to the ex-parte applicants between July 2009 and September 2010. The ex-parte applicants opposed the claim and contended that it lacked sufficient particulars of who made the deliveries, the accounts and the amounts paid to them. The interested parties did not supply the particulars requested by the ex-parte applicants but instead filed an application for orders that the ex-parte applicants provide a list of all farmers and outgrower institutions who supplied sugarcane during the period in issue, their accounts, the quantities supplied and price offered. In turn the ex-parte applicants applied to strike out the claims for want of sufficient particulars and lack of proof of the claims.

3. Both applications were argued and by a ruling delivered on 23rd July 2013, the Tribunal dismissed the ex-parte applicants’ application and allowed the interested parties’ application. In effect the Tribunal ordered the furnishing of particulars by the ex-parte applicants to the interested parties. It is that order which precipitated these judicial review proceedings. Each ex-parte applicant filed an application before this court seeking an order of certiorari to quash the decision of the Tribunal and an order of prohibition to prohibit the Tribunal from enforcing its decision.

4. The applications were consolidated and argued before Chemitei J, who, by the judgment dated 29th October 2015, held that the orders made by the Tribunal were within its jurisdiction hence the court could not intervene by way of orders of judicial review. He dismissed the applications with costs to the interested parties.

5. Following the awards of costs, the interested parties proceeded to file their bill of costs for taxation. As regards Kibos Sugar, the interested parties filed the bill of costs dated 10th May 2017 claiming Kshs. 3,557,777. 00 as party and party costs. Of that amount, the sum for instruction fees was taxed and allowed at Kshs. 1,478,449. 52. The interested parties also claimed Kshs. 3,703,851. 00 as party and party costs from Chemelil Sugar through the bill of costs dated 10th May 2017. The instruction fee was taxed and allowed at Kshs. 1,520,899. 50.

6. The main contest before me concerns the instruction fees only. The circumstances under which this court will interfere with the taxing officer’s discretion are well settled and are that the Court will not interfere with the discretion of the taxing officer unless it is shown that either the decision was based on an error of principle or the fee was too high or too low to justify interference on the ground that it is an injustice to one party (see Premchand Raichand Limited and Another v Quarry Services of East Africa Limited and Another [1972]EA 162, First American Bank of Kenya v Shah and Others[2002]EA 64 and Joreth Limited v Kigano and Associates [2002]1 EA 92).

7. The substance of the ex-parte applicants case as urged by their counsel, Mr Onyango and Mr Ayuko, is that the Deputy Registar erred in calculating the instruction fees by pegging it on the value of the subject matter which was the amount claimed by the interested parties before the Tribunal, that is, Kshs. 183,459,936. 00 as disclosed on the face of the application.  The ex-parte applicants contended that even though the value of the subject matter was disclosed, Schedule VI(j) of the Advocates Remuneration Order provides for Kshs. 100,000. 00 as the minumum amount and since the matter was a judicial review, the amount awarded by the Deputy Registrar was excessive.  Both counsel suggested that Kshs. 100,000. 00 as instruction fees was reasonable in the circumstances as the matter was not complex.

8. In response, Mr Jura, for the interested parties, supported the decision of the Deputy Registrar. He submitted that the instruction fee was not excessive and that Schedule VI(j) of the Advocates Remuneration Order only provided the minimum fee. Thus, he urged that in increasing the amount, the taxing officer may take into account other factors such as the complexity, nature and value of the subject matter. Counsel contended that the Deputy Registrar was entitled to consider the value of the subject matter which was clearly stated in the application even though the claim was an application for judicial review orders. Counsel submitted that considering the value of the claim and the complexity of the cause, the amount awarded was reasonable and the court shoud not interfere with the awards.

9. In the ruling, the Deputy Registrar paid homage to the principles set out in Premchand Raichand Limited and Another v Quarry Services of East Africa Limited and Another(Supra)and correctly pointed out that in accordance with Schedule VI(j) of the Advocates Remuneration Order, the taxing officer has discretion to tax costs taking into consideration the nature and importance of the petition or application, complexity of the matter and difficulty or novelty of the issues raised, the amount or value of the subject matter and the time expended by the advocate. She thereafter considered the value of the subject matter and calculated the costs based on the sum of Kshs. 183,459,936. 00 as follows by reference to Schedule VI(b) of the Advocates Remuneration Order as follows:

Fee for the 1st Kshs. 1 million                                 Kshs.     120,000. 00

Fee for Kshs 20 million                                             Kshs.     400,000. 00

Fee for the balance of Kshs. 162,491,936            Kshs. 2,436,899. 04

Total instruction fee                                                  Kshs. 2,956,899. 04

10. The Deputy Registrar then reduced the sum by one half on the ground that the matter was disposed of by written submissions which meant that the Advocates took time to research to prepare.

11. As a starting point, the Deputy Registrar correctly identified the scale applicable to the matter was Schedule VI(j) of the Advocates Remuneration Order which prescribes a minimum fee of Kshs. 100,000. 00 to present or oppose an application for a Constitutional and Prerogative Orders where the matter is opposed. The provision goes on to state that the taxing officer may in the exercise of his discretion, take into consideration the nature and importance of the petition or application, the complexity of the matter and the difficulty or novelty of the question raised, the amount or value of the subject matter and the time expended by the advocate increase the minimum amount.

12. While the Deputy Registrar identified that proper charging section of the Advocates Remuneration Order, she went ahead to calculate the fees based on the value of the subject matter by reference to Schedule VI(b) as I have shown at para. 9 above. While the value of the subject matter is a factor that may be taken into account, it is not the primary factor particular given that the application before the court was an application for judicial review. An application for orders of judicial review is a public law claim and in Republic v Ministry of Agriculture & 2 Others ex-parte Muchiri W’Njuguna & 6 Others NRB Civil Appl. No. 621 of 2000[2006]eKLR, Ojwang J., observed that;

Private law claims do not fall in the same class as public law claims such as those in judicial review, in constitutional application, in public electoral matters. Such matters are in a class of their own and the instruction fees allowable in respect of them should not, in principle be extrapolated from the practices obtaining in the private law domain which may involve business claims and profit calculations.

13. In the circumstances, the Deputy Registrar erred in principle in proceeding to tax the bills of costs based primarily on the value of the matter and by reference to Schedule VI(b) of the Advocates Remuneration Order. In addition, I find that the sum awarded as instruction fees is excessive being about 15 times the basic instruction fee. I therefore set aside the amounts awarded as instruction fees.

14. Instead of referring the matter back to the Deputy Registrar for taxation, the parties agreed that I should proceed to determine the applicable instruction fee. I am satisfied that this court has jurisdiction to tax the bill of costs and determine the instruction fee. In Kipkorir Titoo & Kiara Advocates v Deposit Protection Fund Board NAI Civil Appeal No. 220 of 2004 (UR), the Court of Appeal observed that:

We have no doubt that if the taxing officer fails to apply the formula for assessing instructions fees or costs specified in schedule VI or fails to give due consideration to all relevant circumstances of the case particularly the matters specified in proviso (1) of schedule VIA, (1) that would be an error in principle. And if a judge on reference from a taxing officer finds that the taxing officer has committed an error of principle the general practice is to remit the question of quantum for the decision of taxing officer (see D'Sonza v Ferrao [1960] EA 602. The Judge has however a discretion to deal with the matter himself if the justice of the case so requires (see Devshi Dhanji Naran Patel (No. 2) [1978] KLR 243. ) (Underlining ours).

15. Schedule VI(j) of the Advocates Remuneration Order, which I have alluded to at para. 11 above, sets out the factors which the taxing officer may consider in enhancing the minimum instruction fee provided. As I have stated elsewhere in the ruling, the subject matter of this case was an application for judicial review seeking to quash an interlocutory order of the Tribunal. Although the value of the claim before the Tribunal was Kshs. 183,459,936. 00, the claim had neither been ascertained or determined and the matter was still at a preliminary stage. It cannot therefore be said that the value of the subject matter was a decisive consideration. The application before this court was a straightforward application for orders of judicial review. I cannot say it was complex. It did not present any novel issue before the court that was not covered by any controlling authorities or precedents. Although the parties presented voluminous documents, these were primarily the documents that formed the basis of the claim before the Tribunal.

16. The parties however prepared for the matter, did research and filed written submissions which guided the judge in making the judgment. Taking all these factors in consideration, I think a sum of Kshs. 250,000. 00 is reasonable as instruction fees in respect of each bill against the ex-parte applicants.

17. Since the references have been successful, I award costs to the ex-parte applicants which I assess at Kshs. 10,000. 00 for each applicant.

18. The decisions of the Deputy Registrar in respect of the bills of costs filed against the ex-parte applicant herein are set aside. The Deputy Registrar is directed to certify the amount due to the interested parties in accordance with this decision.

DATED andDELIVERED at KISUMUthis 6th day of November2017.

D.S. MAJANJA

JUDGE

Mr Onyango instructed by Onyango Olel and Company Advocates for the Kibos Sugar & Allied Industries Limited.

Mr Ayuko instructed by A. Ayuko and Company Advocates for the Chemelil Sugar Company Limited.

Mr Juro instructed by Kerario Marwa and Company Advocates for the interested parties.