Tractor Den (K) Limited v Commissioner of Domestic Taxes [2023] KEHC 25587 (KLR)

Tractor Den (K) Limited v Commissioner of Domestic Taxes (Income Tax Appeal E215 of 2021) [2023] KEHC 25587 (KLR) (Commercial and Tax) (20 November 2023) (Ruling)

Neutral citation: [2023] KEHC 25587 (KLR)

Republic of Kenya

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

Commercial and Tax

Income Tax Appeal E215 of 2021

JWW Mong'are, J

November 20, 2023

Between

Tractor Den (K) Limited

Applicant

and

The Commissioner of Domestic Taxes

Respondent

Ruling

1. The Appellant has filed a Notice of Motion application dated 30th May, 2023 pursuant to the provisions of Order 45 Rules 1(2) & 2(1), (2) & (3) and Order 51 Rule 1 of the Civil Procedure Rules, 2010, Sections 27 & 80 of the Civil Procedure Act Cap 21 of the Laws of Kenya, Section 2 of the Law Reform Act, Cap 26 of the Laws of Kenya and all enabling provisions of the law seeking the following orders:-i.Spent;ii.That this Court be pleased to set aside and/or vary the order of costs as contained in paragraph 27 of the judgment and award costs of the suit to the Appellant/applicant herein; andiii.That costs of this application be provided for.

2. The application is premised on the grounds on the face of the motion and is supported by an affidavit sworn on 30th May, 2023 by Cliff Bwogo Manoti. Notably, when this matter came up for mention on 19th June, 2023 Ms. Njuguna, learned Counsel for the Respondent indicated that the Respondent has no objection to the instant application. Therefore, the instant application proceeded unopposed.

3. In the affidavit filed by the Appellant it deposed that this Court delivered its judgment in this matter on 5th May, 2023 in favour of the Appellant but awarded costs of the appeal to the Respondent. The Appellant averred that it agrees with the entire judgment save for the issue of costs which it believes to be an error on the face of the record. The Appellant urged this Court to exercise its discretion as provided for under Section 27 of the Civil Procedure Act, Cap 21 Laws of Kenya and vary its order awarding costs of this appeal to the Respondent with one awarding the said costs to the Appellant.

4. The Plaintiff contended that it has incurred huge costs at the Tax Appeals Tribunal and at the High Court in terms of filing fees and legal fees, and as the successful party in the appeal, it is only fair and just that it is awarded costs of the appeal. The Appellant referred to the provisions of Section 80 of the Civil Procedure Act Cap 21 Laws of Kenya and Order 45 Rules l (2) & 2(1). (2) & (3) of the Civil Procedure Rules, 2010 and urged this Court to review its judgment dated 5th May, 2023 as prayed.

Analysis And Determination. 5. Upon consideration of the instant application and the grounds on its face, I am of the view that the only issue that arises for determination is whether this Court should review its judgment dated 5th May 2023 by varying its order awarding costs of this appeal to the Respondent with one awarding the said costs to the Appellant.

6. Applications for review are provided for under Section 80 of the Civil Procedure Act Cap 21 Laws of Kenya and Order 45 of the Civil Procedure Rules 2010. The Court of Appeal in the case of Sanitam Services (E.A.) Limited v Rentokil (K) Limited & Another [2019] eKLR held as hereunder with regards to applications for review of an order or judgment:-“Jurisdiction to review a judgment or order of a court is donated by Section 80 of the Civil Procedure Act and Order 45 Civil Procedure Rules. By those provisions of law any person considering himself aggrieved by a decree or order from which an appeal is allowed but from which no appeal has been preferred or is aggrieved by a decree or order by which no appeal is allowed and who from the discovery of new and important matter or evidence which after the exercise of due diligence was not within his knowledge or could not be produced by him at the time when the decree was passed or the order made or on account of some mistake or error apparent on the face of the record or for any other sufficient reason – a person who fits within those categories may apply for a review of judgment or to the court which passed the decree or made the order and this should be done without unreasonable delay”.

7. From the foregoing, it is evident that one can make an application for review of an order or judgment where there was a mistake or error apparent on the face of the record as is the case herein. It is not disputed that despite the fact that this Court in its judgment delivered on 5th May, 2023 found in favour of the Appellant, it awarded costs of the appeal to the Respondent. Notably, this Court delivered its judgment on 5th May, 2023 and the Appellant filed the application herein on 2nd June, 2023 approximately one month later. I am however of the considered view that the delay here is not so inordinate as to be inexcusable.

8. It is trite that costs of any action shall follow the event unless the Court or Judge shall order otherwise for good reason. Costs are provided for under Section 27 of the Civil Procedure Act Cap 21 Laws of Kenya which states as hereunder:-1. Subject to such conditions and limitations as may be prescribed, and to the provisions of any law for the time being in force, the costs of and incidental to all suits shall be in the discretion of the court or judge, and the court or judge shall have full power to determine by whom and out of what property and to what extent such costs are to be paid, and to give all necessary directions for the purposes aforesaid; and the fact that the court or judge has no jurisdiction to try the suit shall be no bar to the exercise of those powers:

Provided that the costs of any action, cause or other matter or issue shall follow the event unless the court or judge shall for good reason otherwise order. 2. The court or judge may give interest on costs at any rate not exceeding fourteen per cent per annum, and such interest shall be added to the costs and shall be recoverable as such.

9. I agree with the Court’s holding in the case of Orix (K) Limited v Paul Kabeu & 2 others [2014] eKLR that:-“...the court should have been guided by the law that costs follow the event, and the Plaintiff being the successful party should ordinarily be awarded costs unless its conduct is such that it would be denied costs or the successful issue was not attracting costs. None of the deviant factors are present in this case and the court would still have awarded costs to the Plaintiff, which I do.”

10. From the judgment delivered by this Court on 5th May, 2023, it is evident that the Appellant was the successful party in the appeal. Further, the Appellant averred that it has incurred huge costs at the Tax Appeals Tribunal and at the High Court in terms of filing fees and legal fees fact which is not disputed by the Respondent, therefore it is only fair and just that it is awarded costs of the appeal. In light of the foregoing, I am satisfied that there is a mistake and/or error apparent on the face of the record with regards to the award on costs. In the circumstances, this Court finds that the Appellant is entitled to an Order for costs for the appeal since it was the successful party in the appeal and there are no good and/or sufficient reasons given by the Respondent as to why this Court should not award the Appellant costs of the appeal.

11. The upshot is that the application dated 30th May 2023 is merited and it is hereby allowed in the following terms-i.That this Court is hereby pleased to set aside and/or vary the order of costs as contained in paragraph 27 of the judgment and award costs of the appeal to the Appellant; andii.Each party to bear its own costs.Orders accordingly.

DATED, SIGNED AND DELIVERED VIRTUALLY AT NAIROBI THIS 20TH DAY OF NOVEMBER, 2023. J.W.W. MONG’AREJUDGEIn the Presence of:-1. Mr. Manoti for the Appellant/Applicant.2. Ms. Njuguna for the Respondent.3. Amos - Court Assistant