OJSC Power Machines Limited, Trancentury Limited, and Civicon Limited (Consortium) v Public Procurement Administrative Review Board; Kenya Electricity Generating Company Limited & another (Interested Parties) [2019] KEHC 6000 (KLR)

REPUBLIC OF KENYA

IN THE HIGH COURT OF KENYA AT NAIROBI

JUDICIAL REVIEW MISC. APPLICATION NO. 284 OF 2015

IN THE MATTER OF THE ADVOCATES ACT

AND

THE MATTER OF THE ADVOCATES REMUNERATION ORDER

BETWEEN

OJSC POWER MACHINES LIMITED, TRANCENTURY                                            

LIMITED, AND CIVICON LIMITED (CONSORTIUM).......................APPLICANT

VERSUS

 PUBLIC PROCUREMENT ADMINISTRATIVE                                                            

REVIEW BOARD.............................................................................1^ST RESPONDENT

AND

KENYA ELECTRICITY GENERATING                                                                         

COMPANY LIMITED.........................................................1^ST INTERESTED PARTY

RENTCO (EA) LIMITED, LANTECH & TOSHIBA.....2^ND INTERESTED PARTY

RULING

Background

1. The ruling herein is on an application made by Kenya Electricity Generation Company Limited, the 1^st Interested Party herein, by way of a Chamber Summons dated and filed on 23^rd February 2018. The 1^st Interested Party has objected to a ruling delivered on taxation of its Bill of Costs dated and is seeking the following orders in the said application:

1. That the decision of the Taxing Officer on item 1 of the 1^st Interested Party’s Bill of Costs dated 13^th May 2016 be set aside and/or reviewed.

2. Out of abundance of caution, the time allowed for applying to a Judge under Rule 11(2) of the Advocates Remuneration order be enlarged.

3. That the costs of this application be provided for.

2. The application was supported by the grounds on its face and a supporting affidavit sworn on 23^rd February 2018 by Irene Kashindi , a partner in the firm of advocates for the 1^st Interested Party.  The Applicant herein, thereupon filed Grounds of Opposition to the said application dated 16^th April 2019, and this Court (Odunga J.) directed the parties to canvass the application by way of written submissions. Hamilton, Harrison and Mathews Advocates for the 1^st Interested Party filed initial submissions dated 7^th May 2018 and reply submissions dated 19^th July 2018, while Nyachoti & Company Advocates for the Applicant filed submissions dated 24^th May 2018.

3. The application arises from a ruling made on 22nd June 2017  by Hon. E. W. Mburu (the Taxing Officer), on a Party and Party Bill of Costs filed by the 1^st  Interested Party. The 1^st Interested Party sought a sum of Kshs 5,000,000/=  as instruction fees under item 1 of  the said Bill of Costs. The Taxing Officer taxed off a sum of Kshs 3,500,000/= from the said item in her ruling, and the 1^st Interested Party contends that the instruction fee awarded of Kshs 1,500,000/= is not commensurate with the work done as set out in its Bill of Costs. Further, that the Taxing Officer failed to appreciate the complexity of the matter, industry, time taken and work done. In addition, that the Taxing Officer failed to appreciate the value of the subject matter which was over Kshs 15 billion, which placed a heavy responsibility on the counsel for the 1^st Interested Party, and the amount awarded was so low to constitute an error in principle on her part.

4. The 1^st Interested Party in its supporting affidavit also explained that the impugned ruling was delivered on notice, and no notice was issued on it’s firm of advocates. Further, that the ruling and reasons for taxation of the 1^st Interested Party’s Bill of Costs was delivered on 22^nd June 2017,  but was not communicated to the advocates. The 1^st Interested Party attached copies of letters of inquiry about the ruling dated 16^th October 2017 and 7^th September 2017. It was the 1^st Interested Party’s case that the Taxing Officer replied in a letter to its Advocates dated 23^rd October 2017 that the ruling had been delivered in June 2018, which letter was received on 5^th January 2018. Lastly, that it’s Advocates then requested for a copy of the ruling, and the court file was not available until 9^th February 2019, when their clerk was able to pay and obtain a copy of the ruling.

5. The 1^st Interested Party’s application was opposed by the consortium of  OJSC Power Machines Limited, Transcentury Limited, and Civicon Limited, the Applicant herein. Their grounds of opposition were that the application was fatally defective, incompetent and bad in law, and that this Court lacks the requisite jurisdiction to entertain and determine the application by dint of Rule 11(4) of the Advocates Remuneration Order.  Further, that the application is also premature for reasons that the 1^st Interested Party has not demonstrated that it gave a notice in writing to the Taxing Officer as required by Rule 11(4) of the Advocates Remuneration Order, and has not sought leave of this Court to enlarge time within which to give the notice of objection which is a mandatory step under the said rule. In addition, that the 1st Interested Party is guilty of undue delay in filing the application, for which no plausible or reasonable explanation has been tendered.

6. Lastly, the Applicant stated that the Taxing Officer exercised her discretion judiciously in assessing the instruction fee as Kshs 1,500,000/=, as the amount is within reasonable limits considering all the circumstances and is not manifestly inadequate to warrant interference by this Court.

The Determination

7. There are three issues for determination raised by the pleadings and submissions made by the 1^st Interested Party and Applicant. The first is whether the 1st Interested Party’s application is brought in compliance with Rule 11(4) of the Advocates Remuneration Order, and if not, whether the non-compliance is fatal. If the application is found to be properly before this Court, the second issue is whether the 1^st Interested Party has laid out sufficient basis to warrant this courts exercise its discretion by granting leave for extension of time for filling of this application. If this discretion is exercised in favour of the 1^st Interested Party, the last issue to be decided will be whether the taxation of  item 1 of the 1st Interested Party’s Bill of Costs  and award of Kshs 1,500,000/= as instruction fees by the Taxing Officer was made in error.

8. On the first issue, the 1st Interested Party submitted that the provisions of paragraph 11(1) and (2) have to be read conjunctively, and that the purpose of giving a written notice of objection is to afford the Taxing Officer an opportunity to explain the reasons for his decision on the items objected to. That in the present case, the reasons contained in the ruling delivered on 22^nd June 2017 were sufficient for purposes of the reference, and reliance was placed on the decisions in Governors Balloon Safaris Limited vs Skyship Company Limited & Another ,(2015) e KLR, Evans Thiga Gaturu Advocate vs Kenya Commercial Bank, (2012) e KLR and Ahmednasir Abdikadir & Company Advocates vs National Bank of Kenya Limited, (2007) e KLR,  for this position.

9. Furthermore, that the letter from the Taxing Officer dated 23^rd October 2017 invited the 1^st Interested Party’s advocates on record to peruse the court file for the ruling and reasons, and there was no need to produce a ruling already on record. In any event, that the Applicant did not cite any statutory provision to support the argument that the ruling must be annexed to the application, which is a procedural technicality that is curable by Article 159 (2)(d) of the Constitution. The decisions in Peter Amolo Akumu Gould vs Kenya Commercial Bank Ltd, (2014) e KLR and Zacharis Okoth Obado vs Edward Akong’o Oyugi & 2 Others, (2014) e KLR were cited in support of the above arguments. The decision in Peter Amolo Akumu Gould vs Kenya Commercial Bank Ltd, (supra) was also distinguished on the ground that very existence of the decision of the Taxing Officer was contested in that case unlike in the present case.

10. The Applicant on the other hand submitted that even where the decision of a Taxing Officer contains the reasons for taxation, a party seeking to challenge the same is still mandated to notify the taxing officer in writing of the items being objected to, which is a statutory requirement that cannot be excused, ignored or waived. Reliance was placed on the decisions to this effect in Kinyua Muyaa & Co. Advocates vs Kenya Ports Authority Pension Scheme & 8 Others, (2017) eKLR and Karume Investments Limited vs Kenya Shell Limited & Another, (2015) e KLR . On the failure by the 1^st Interested Party to annex a copy of the Taxing Officer’s ruling, the Applicant submitted that the same was fatal as it denies the Court the chance to appreciate the reasoning of the Taxing Officer when taxing the impugned instruction fees. The decision in Peter Amolo Akumu Gould vs Kenya Commercial Bank Ltd, (supra) was cited for the holding that the ruling ought to be exhibited under section 51 of the Advocates Act.

11. It is not disputed by the parties that the procedure for the challenge of a taxing master's decision is provided under Rule 11 of the Advocates Remuneration Order,  which provides as follows:

“(1)  Should any party object to the decision of the taxing officer, he may within 14 days after the decision give notice in writing to the taxing officer of the items of taxation to which the objects.

(2)  The taxing officer shall forthwith record and forward to the objector the reasons for his decision on those items and the objector may within fourteen days from the receipt of the reasons apply to a judge by chamber summons, which shall be served on all the parties concerned, setting out the grounds of his objection.”

(3)Any person aggrieved by the decision of the judge upon any objection referred to such judge under subparagraph (2) may, with the leave of the judge but not otherwise, appeal to the Court of Appeal.

(4) The High Court shall have power in its discretion by order to enlarge the time fixed by subparagraph (1) or subparagraph (2), [and] may, with the leave of the judge but not otherwise, appeal to the Court of Appeal.

(5) The High Court shall have power in its discretion by order to enlarge the time fixed by subparagraph (1) or subparagraph (2) for the taking of any step; application for such an order may be made by Chamber Summons upon giving to every other interested party not less than three clear days’ notice in writing or as the Court may direct, and may be so made notwithstanding that the time sought to be enlarged may have already expired.”

12. The provisions of Rule 11 of the Advocates’ Remuneration Order contemplate a notice in writing requesting for reasons of the Taxing Officer’s decision on taxation of specified items of the Bill of Costs, and upon receipt thereof,  an application commonly referred as a reference to a judge, setting out the grounds of objection to the taxation. The 1^st Interested Party did not dispute that no such notice was given to the Taxing Officer. It is my view that even though the requirement of giving notice to the Taxing Officer of items objected to is not couched in mandatory terms, it is necessary for purposes of ensuring the necessary timelines are observed, and that such references are filed and heard timeously.

13. The Supreme Court of Kenya had occasion to consider the importance of adherence to the laid down procedure in approaching a court of law in the case of Moses Mwicigi & 14 Others v Independent Electoral and Boundaries Commission & 5 Others [2016]eKLR where the court stated thus:

“This court has on a number of occasions remarked upon the importance of rules of procedure, in the conduct of litigation.  In many cases, procedure is so closely intertwined with the substance of a case, that it befits not the attribute of mere technicality.  The conventional wisdom, indeed, is that procedure is the handmaiden of justice.  Where a procedural motion bears the very ingredients of just determination, and yet it is overlooked by a litigant, the Court would not hesitate to declare the attendant pleadings incompetent.

Yet procedure, in general terms, is not an end in itself.  In certain cases, insistence on a strict observance of a rule of procedure, could undermine the cause of justice.  Hence the pertinence of Article 159(2)(d) of the constitution, which proclaims that, “...courts and tribunals shall be guided by...[the principle that] justice shall be administered without undue regard to procedural technicalities”.  This provision, however, is not a panacea for all situations befitting judicial intervention; and inevitably, a significant scope for discretion devolves to the courts.”     

14. To this extent the notice of objection required to be given to the Taxing Officer it is thus not a mere technicality as alleged by the 1^st Interested Party, and the present application is thus defective. This Court is thus not in a position to address the outstanding issues arguments made thereon, which are predicated on the instant application having been competently filed before this Court.

15. The provisions of Rule 11 of the Advocates Remuneration Order do however grant this Court discretion to extend time for lodging a reference from the taxing master’s decision, notwithstanding the expiry of the 14 days period prescribed. In exercising such discretion, the court acts judiciously bearing mind the facts placed before it and to meet the ends of justice. In the present case the 1^st Interested Party did explain the events leading to the delay in filing the reference, namely the deferment of the delivery of the ruling by the Taxing Officer which was to be delivered by notice, which is also borne out by the Court record. In addition, the 1^st Interested Party exhibited a letter by the Taxing Officer dated 26^th October 2017 addressed to the 1^st Interested Party’s advocates, which was in response to their inquiries about the ruling and indicated that the ruling had been delivered in 22^nd June 2017. The letter had a stamp of having been received on 5^th January 2018 application. The 1^st Interested Party therefore has shown reasonable justification as to why it was not able to comply with the timelines set in Rule 11 of the Advocates Remuneration Order.

16. This finding notwithstanding, this Court notes that no good reason was shown by the Interested Party for non-compliance with the procedure set out in Rule 11 of the Advocates Remuneration Order, and  that extending time for the 1st Interested Party to comply with the provisions of Rule 11  is likely to cause further delay. This eventuality militates against this Court exercising its discretion in the 1^st Interested Party’s favour. The Court has also considered the fact that further delay is likely to cause prejudice to the Applicant, given that the ruling that was the subject of this application was delivered in June 2017.

17. The 1^st Interested Party’s Chamber Summons dated 23^rd February 2018 is therefore declined for the foregoing reasons. In addition, arising from the 1^st Interested Party’s  failure to comply with the provisions of Rule 11 of the Advocates’ Remuneration Order, the 1^st Interested Party will pay the costs of this application of Kshs 30,000/=. to the Applicant

18. Orders accordingly.

DATED AND SIGNED AT NAIROBI THIS  26^TH  DAY OF  JUNE 2019

P. NYAMWEYA

JUDGE