APA Insurance Company Limited v Raymond Olendo t/a Ogejo, Olendo Company Advocates (Miscellaneous Civil Application E082 of 2022) [2023] KEHC 19433 (KLR) (30 June 2023) (Ruling)

Key Facts

Tax Type

Issues

• The court examined if the taxation disregarded Schedule 7 of the Advocates' Remuneration Order, a critical legal framework for cost calculations.
• A major issue was the lack of trial court records available to the taxing master, which hindered the proper evaluation of the litigation's weight and subject matter value, leading to an erroneous exercise of discretion.
• The court considered whether the taxing master erred in not determining that the bill of costs was submitted prematurely, which is a key issue in the application to set aside the taxation decision.
• The applicant argued that the taxed costs were excessive and not supported by law under the Civil Procedure Act, raising the issue of proper cost assessment compliance.

Holdings

• The court ordered the immediate closure of the current application (E082 of 2022) to ensure all further proceedings occur in the correct file (E199/2021), emphasizing procedural compliance.
• The court found the taxing master committed a fundamental error by proceeding without the trial court records, making it impossible to assess the litigation's value and subject matter. This omission rendered the instructions fees determination invalid.
• The court held that the taxing master's discretion in determining costs is judicial and immune from arbitrary interference. However, it can be challenged if the discretion was exercised without considering material factors or contrary to legal principles.
• The court determined that the application was erroneously titled as an appeal and must be treated as a reference. It directed that all such applications must be filed in the original taxation file (Kakamega HC Misc Civil Application No E199 of 2021) to ensure proper procedural alignment.
• Costs awarded to the Applicant (APA Insurance Company Limited) but deemed part of the original file (E199/2021). The taxing officer must reassess these costs per the Advocates' Remuneration Order.
• The court set aside the taxing master's decision on the grounds of improper exercise of discretion and remitted the bill for re-taxation in accordance with Schedule VII of the Advocates' Remuneration Order.

Remedies

• The bill is remitted back to the taxing master to be taxed according to the law and Schedule VII of the Advocates' Remuneration Order, with the trial court file now required for accurate assessment.
• The current file is closed to ensure all further proceedings occur in the proper file (E199/2021) where taxation was originally conducted.
• Costs are awarded to the Client/Applicant but deemed part of HC Misc Application No E199/2021 for taxation under the Advocates' Remuneration Order.
• The court set aside the taxing master's decision dated October 13, 2022, finding it was improperly exercised due to failure to consider trial court records and Schedule VII of the Remuneration Order.

Tax Issue Category

Legal Principles

• The Remuneration Order mandates that costs must be determined by considering factors such as the value of the subject matter, the nature and importance of litigation, and the trial court records. Failure to account for these factors renders the taxation decision vitiated by error in principle.
• The court emphasized that a taxing master's discretion in cost taxation is judicial and immune from unbridled interference. It will only be overturned if the decision is based on no reason, contrary to established law, or if the award is so little or exaggerated as to demonstrate a wholly erroneous exercise of discretion.

Precedent Name

Cited Statute

• Constitution of Kenya
• Civil Procedure Act
• Advocates (Remuneration) Order

Judge Name

Passage Text

• It is now well established that the duty and mandate of the taxing matter in taxing a bill of costs vests upon such master a judicial discretion. Such discretions are otherwise immune from free and unbridled interference upon reference. The Court will only interfere with the decision of the master where it is guided upon no reason; where it is done contrary to the established principles of law and the spirit of the Remuneration Order or where the award is so little or otherwise exaggerated to demonstrate a wholly erroneous exercise of discretion in taxation¹.
• But how does a taxing master gauge the weight of a litigation or the value of the subject matter, as claimed or determined by the Court in the absence of the trial court records? The court considers it a fundamental error to seek to determine an item like instruction fees in the absence of the trial court records. Here it is said, without rebuttal, that the taxation proceeded in the absence of the court file. I have called for and perused the file with the notes and there is no advertence to the trial court file or indeed any material from it having been availed to the taxing master.
• The court determines that there were no facts upon which to decide on the appropriate instructions fees in that the taxing master failed to take into account a material matter being the records at trial. It is to this Court a grievous error of principle not to establish the weight of the matter where the major issue is the determination of instructions fees. For that reason, it is the finding of the court that the discretion by the taxing master was exercised improperly and injudiciously. It is thus set aside.