Kenya Ports Authority, the Applicant,
applied to this Court under Rule 114 of the Rules of Procedure of this Court
for orders that:
a) The Ruling of the Taxing Officer dated 22nd June 2010 be set aside.
b) Item No. 1 of the Respondent’s Bill of costs be taxed as pleaded by the
Applicant or as may be ordered by this Court.
c) Costs of the application be provided for.
 The grounds for the application are set out in the Notice of Motion as
1. The award of costs was manifestly excessive in the circumstances as to
amount to a misdirection in law by the Taxing Officer.
1. The Taxing Officer failed to calculate the basic instruction fees on the
basis of the value of the subject matter.
2. The award of costs by the Taxing Officer is in contravention of Rule 9(1)
on Taxation of costs under the 2nd Schedule.
3. The Taxing Officer took into account irrelevant matters and failed to
consider the legal principles in reaching his decision.
4. The Taxing Officer failed to consider the submisions of counsel for the
 The instant application arose from Reference No. 1 of 2008 filed by the
Respondent against the Applicant claiming over USD 31,000,000. Court struck
out that Reference with costs on a preliminary objection by the Applicant
that it lacked the jurisdiction to determine the Reference.
 The Applicant then filed a Bill of Costs which the Registrar taxed and
allowed at US$ 48,097.47.
 However, the Applicant was dissatisfied with the taxation amount on the
grounds that it was inordinately low and filed Taxation Reference No. 1 of
2009 under Rule 114 to set aside that award and re-tax item 1 on instruction
fees. Hon. Justice J. Mkwawa heard the Reference, found no reason to set
aside the Taxing Officer’s decision and dismissed that application with
costs to the Respondent.
 This time it was the turn of the Respondent to file a Bill of Costs
which it promptly did and the Registrar taxed the bill vide Taxation cause
No. 1 of 2010 allowed US $ 48,116.This time the learned taxing officer
included VAT of USD 8,660.88.( Being 18% of USD 48,116), which gave a total
of USD 56,776.88.
 Using his powers under Rule 14 of Schedule Two of the Rules of procedure
of this court, he adjusted the figure by setting off the USD 48,097.47 he
had awarded the Applicant in Taxation Cause No.1 of 2009 from USD 56,777.88.
This leaves the Applicant to pay to the Respondent the difference between
the two awards which is 8,679.41. It is this order that prompted the
Applicant to institute the instant proceeding.
 The complaint as can be summarised from the supporting affidavit and Mr
Wetangula’s submissions in Court is that the Taxing officer applied the
wrong Rule, namely, Rule 9(2) which applies to references, instead of Rule
9(1) which applies to applications. He also applied wrong principles and
failed to take into account and to appreciate that the issue in dispute was
the value of the subject matter of the application which was quantifiable at
US $ 48,097.47. This resulted into the award of instruction fees to oppose
an application which was ironically higher than the sum awarded for
dismissal of the main Reference where the value of the subject matter was
US$ 33 million. The award was therefore manifestly excessive and should be
set aside and the bill retaxed properly.
 Learned counsel for the Respondent Mr Sang’ka strongly supported the
award and denied that the award was manifestly excessive. He contended that
this is a continuation of the original reference between the parties. In the
original reference, the Applicant objected to the jurisdiction of the Court.
The work done in dismissing the original Reference was little. On the other
hand there was a lot of work before Justice Mkwawa in Taxation Reference No.
1 of 2009. He had to consider many authorities. Under Rule 9(2), which he
contended applies to that reference; the main consideration is the amount of
work done by the lawyer. The learned Registrar exercised his discretion
judiciously in arriving at his decision. He was consistent throughout from
the first Bill of Costs to the last one. There is nothing outrageous. The
only exception is that this time he added VAT which goes to the coffers of
the Government in any case. The application should be disallowed as the
Applicant is merely speculating.
 The principles regarding review of taxation orders by the courts is
well settled. According to a wealth of authorities some of which were cited
by both counsel, this court cannot interfere with the taxing officer’s
decision on taxation unless it is shown that either the decision was based
on an error of principle, or the fee awarded was so manifestly excessive as
to justify an interference that it was based on an error.See:Premchand
Raichand & Anor v. Quarry Services of 4
 E.A Ltd. & Others (1972) E.A ; Steel Construction Petroleum Engineering
(EA) Limited v Uganda Sugar FactoryEA 141.Of course it would be an
error of principle to take into account irrelevant factors or omit to
consider relevant factors.
 Justice Mulenga of the Uganda Supreme Court, as he then was stated the
principles clearly in Bank of Uganda vs Banco Arabe Espaniol , Supreme Court
Civil Application No. 29 of 1999 in the following words:
“Before consideration of those grounds, however, I should reiterate briefly
some pertinent principles applicable to review of taxation as I am called
upon to do in this reference. The first is that save in exceptional cases, a
judge does not interfere with the assessment of what the taxing officers
considers to be a reasonable fee. This is because it is generally accepted
that questions which are solely of quantum of costs, are matters with which
the taxing officer is particularly fitted to deal, and in which he has more
experience than the judge. Consequently a judge will not alter a fee allowed
by a taxing officer, merely because in his opinion he should have allowed a
higher or lower amount.
Secondly, an exceptional case is where it is shown expressly or by inference
that in assessing and arriving at the quantum of the fee allowed, the taxing
officer exercised or applied a wrong principle. In this regard, application
of a wrong principle is capable of being inferred from an award of an amount
which is manifestly excessive or manifestly low.
Thirdly, even if it is shown that the taxing officer erred on principle, the
judge should interfere only on being satisfied that the error substantially
affected the decision on quantum and that upholding the amount allowed would
cause injustice to one of the parties.”
 With these principles in mind, I shall now consider the grounds of
 It is not in dispute that Taxation Reference No. 1 of 2009 was
instituted on behalf of the Applicant by virtue of Rule 114 which reads:
“Any person who is dissatisfied with a decision of the taxing officer may
within fourteen days apply for any matter to be referred to a single judge
of the Court whose decision shall be final...”
 Although it is described as a ‘’reference ” in the aforesaid Rule in
practice, the procedure used to move court under that Rule is by Notice of
Motion supported by affidavit. The procedure for filing references to this
court is set out in Rule 24. It is clearly different from the one prescribed
under Rule 114 in respect of taxation references. From perusal of the Ruling
the subject of this application, I find that the Learned Registrar was alive
to this fact when he stated on page 3 of his Ruling as follows:
“Much as there may be a technical difference between a reference and an
application, when it comes to complexity and time spent and the amount of
concentration on the part of the lawyers involved, I do not see any such
distinction as Mr Imende would like me to believe. A reference is considered
by the Court in the same way it considers an application and the costs
involved cannot be distinguished basing on the nature of the dispute. Some
applications may be more than or equally involving as references depending
on the subject matter under consideration. A lawyer sails in dangerous
waters when he grades the matters that are before the court to the extent of
doing less or more research. Such grading would make one case look more
important than another. I find it very difficult and odd to base my decision
on this distinction. I realise the fact that various authorities were
presented to the judge in arriving at the decision and this fact on the
applicant’s lawyer cannot be ignored or disregarded.”
 This was in response to the submissions of the Applicant’s lawyers (who
were respondent’s in that Taxation cause) which the learned Taxing officer
had summarised on page 2 of the impugned Ruling as follows:
“Specifically item No. 1 was disputed by Counsel representing the
Respondents (now Applicant) on the grounds of exaggeration and that the
amount of USD 60,000 was manifestly excessive as it exceeded the USD 48,000
which had given rise to the reference and therefore a subject matter of the
reference. According to the learned counsel the costs of defending an
application should be lower than the costs for defending a reference.”
(Underlining is for emphasis)
 On the next page, the Learned taxing officer continued and stated once
more as follows:
“Let me revert to the submissions on item one of the Bill of costs. The
Counsel for the Respondents did not only strongly dispute charges referred
to in item 1 as charges worth USD 60,000 but went on to suggest that instead
of Court awarding that amount which he finds to be highly excessive, it
should consider awarding not more than USD 1,000.That if at all there is an
award to be awarded, it should be between USD 500.00- USD 1000.00 which he
considered sufficient reimbursement for the Applicant.”
 It is therefore clear to me from the foregoing quotations that the
taxing master did consider the submissions of counsel for the applicant in
reaching his decision. He also considered the submissions by the opposite
counsel on page 3 of the Ruling where he stated that:
“The counsel for the applicant (now Respondent) prayed that the court should
examine and consider the complexity of the case, the time taken and the
legal responsibility undertaken in preparation of the filing of the suit and
all that goes with it.”
 What is not clear is, however, is the Rule under which he carried out
the taxation because he stated on page 4 of the Ruling that:
“I am guided by Rule 1(1) of the Rules of procedure in arriving at the final
decision in this matter”.
 This Rule does not exist in the Rules of Procedure of this Court.
Counsel for the Applicant faulted him on this, but if this statement is read
in context of the Ruling as a whole as I have done, it appears to be and I
am of the view that it is a typographical error. What the Registrar must
have meant was Rule 9 (1) of the Second Schedule since Taxation Reference
No. 1 of 2009 which Justice Mkwawa dealt with was an application, and the
Learned Registrar had stated so in his Ruling.
 According to Rule 9(1):
“The fee to be allowed for instruction to make, support or oppose any
application shall be the sum that the taxing officer shall consider
reasonable but shall not be less than US $ 100”.
 In Joreth Ltd vsKigano& Associates (2002) 1 EA 92 cited by counsel for
the Applicant, Learned Judge R.O Kwach said:
“...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 of the cause or matters, the nature and importance of
the subject matter, the interest of the parties, the general conduct of the
proceedings, any direction by the trial judge and other relevant
 It is needless to say that not all the above factors may exist in any
given case and it is therefore open to the Taxing Officer to consider only
such factors that may exist in the actual case before him.
 In the case before me I find that the taxing officer did consider some
of the factors and the legal principles which were in his view relevant to
the matter before him as evidenced by the part of his Ruling quoted earlier
on. These included the complexity and time spent, among others. Besides the
allegation that he took onto account irrelevant matters and failed to
consider the legal principles in arriving at the decision is not
substantiated or supported by any evidence.
 However, where the injustice is manifest is the fact that the Applicant
was the successful party in the original Reference No.1 of 2008, where the
value of the subject matter was a whooping USD 31,000,000! In that case the
Applicant presented a bill of costs of USD 330,000. That sum was taxed down
to USD 48,000. The Applicant instituted Taxation Reference No 1 of 2009 to
complain about that award as too low. The applicant lost that application
and has been assessed to pay USD 56,000.This is ridiculous as MrWatengula
rightly pointed out because the end result is that the winning party is now
being ordered to pay the losing party for dragging it to this Court in a
bogus case by the admission of MrSang'ka who stated in his submission that
he had actually advised theRespondent against instituting those proceedings
since it was not an institution of the EAC. Secondly, it is evident from the
Ruling that the learned taxing officer made no serious attempt to justify or
to explain how he arrived at the over USD 48,000 from the basic fee of USD
100 prescribed by the drafters of the Rules in their wisdom.
 This leads me to the irresistible inference that the assessment is not
“reasonable” as Rule 9(1) requires and therefore manifestly excessive. It
also raises the issue of consistency. The basic principles on this issue
were stated by the East African Court of Appeal in the case of
PremchandRaichand v Quarry Services of EA Ltd.  EA 162 followed by
Manyindo DCJ in the case of Patrick Makumbi And Another v Sole Electrics
Civil Appeal No 11 of 1994 (SC) where it was stated inter alia that although
there is no mathematical formula to be used by a taxing officer, he must
exercise his discretion judicially and not whimsically. While a successful
litigant should be fairly reimbursed for costs incurred, the taxing officer
owes it to the public to ensure that costs do not rise above a reasonable
level so as to deny the poor access to court. The level of remuneration must
be such as to attract new recruits to the profession. So far as practicable,
there should be consistency in the awards made. There is no consistency if
the sum of USD 31 million attracts less instruction fees than a simple
application complaining about the sum of USD 48,000.
 By way of comparison, let me illustrate this point by listing down some
of the various bills that the learned taxing officer has so far taxed in the
short history of this Court. In Taxation Cause No.1 of 2006, Calist Andrew
MwatelaAnd Two Others v. The EAC, the total bill was USD 23,076, and the
taxing officer awarded USD 13,337. In Taxation Cause No.5 of 2008, James
Katabazi and 21 Others v. The Attorney General Of Uganda, the bill was
USD176,305 and the taxing officer awarded USD 70,105. In Taxation No.6 of
2008,Anyang’- Nyong’o and others v. The AG of Kenya, the bill was
USD5,622,528.69 he awarded USD 2,033,165.In Taxation Cause No. 2 of 2010
between the same parties, he awarded USD 528,802.24 where the bill was USD
1,091,745.In Taxation Cause No.1 of 2010, Modern Holdings V.Kenya Ports
Authority, the bill was USD 330,812.3 and he awarded USD 48,097.45.
 The above list shows at a glance that the bills have generally been
taxed and reduced to at least half of what was presented, which was not the
case in the Taxation cause the subject of this ruling. That amounted to an
injustice to the Applicant in my view because it was entitled to similar
treatment as the other litigants before this Court. The bottom line in my
judgment, is that the cost of doing business in this court should be as far
as possible, kept to a level that is reasonable, affordable and that should
not deter any citizen of East Africa from seeking justice from this Court,
and at the same time be proportionate for the purpose of remunerating the
 According to holding No.(ii) in PramchandRaichand (supra) “the court
will only interfere when the award of the taxing officer is so high or so
low as to amount to injustice to one party.’’
 In the circumstances, I am persuaded by MrWetangula that this is one of
those exceptional cases where misdirection in the guiding principles can
safely be inferred, and the interference by the Court is justified in that
to uphold such an amount would cause injustice to the Applicant.
 That being the case, I allow the application on orders that:
1) The order of the taxing officer in the Ruling dated 22nd June 2010 on
item 1 is set aside.
2) The order is substituted with the order of USD 15,000(fifteen thousand US
Dollars only), as instruction fees payable by the Applicant excluding VAT.