The High Court has suspended the order compelling Nairobi County government to pay a law firm Sh847 million.
Justice Pauline Nyamweya suspended the payment of Kshs 847,887,435.97 to Samson Masaba Munikah T/A Munikah & Advocates. Another judge had directed the County Secretary and Chief Finance Officer or the county Treasury to pay the city law firm the amount after winning a case recently.
“There be stay of the execution of orders issued on February, 2019 for 10 days pending hearing of the said notice of motion inter-partes on April 9, 2019,” ordered Judge Nyamweya.
The court also suspended payments of 9,756,512.96 million arising from interests of the amount, which had accrued since July 29, 2016.
Justice John Mativo had on February 25, issued an order directing the county government to pay the law firm after he moved to court saying he had been duly instructed by defunct city council of Nairobi to act for them in a case before a magistrate in 2003.
And after conclusion of the matter, (Nairobi (city council vs The Attorney General (for the commissioner of lands), the Advocate filed a bill of costs and the parties came to an agreement.
The Nairobi County Government aggrieved by the court decision filed an application under certificate of urgency seeking to suspend the said decision.
Through Lawyer Thomas Letangule, the county argued the firm is in the process of executing the orders and recover the colossal amount.
He said the County government later discovered that there was fraud and collusion to inflate legal fee through double taxation of costs. He further said that the law firm did not disclose to the court that another taxation had been done earlier over the same matter and were paid Kshs. 60,712,373.
“A perusal of the records now reveals that the respondent (Samson Masaba Munikah T/A Munikah & Advocates) has been paid in excess of the taxed amount, having received Kshs. 65,000,000 from the applicant (Nairobi County),” says the application.
He said despite the payment, the respondent has obtained orders from court based on a second certificate of taxation that was wrongly issued out of fraud and collusion in the same matter.
“The Nairobi City County has now moved to court for orders to set aside the subject certificate of taxation dated August 7,2012 for Kshs. 498,757,315.28 which was obtained by application of wrong principles and manifest fraud hence the urgency of this application to avert a loss of huge amounts of public money,” says the county.
The county said while granting the orders, the court observed that the subject certificate of taxation was never set aside or varied.
The county said legal fees were awarded wrongly and that the deputy registrar erred in law and principle by granting two certificates of taxation in respect of the same matter resulting in an oppressive amount that has now threatened the financial stability and functioning of the County Government in its provision of public services.
The county government said deputy registrar erred in principal by awarding a manifestly excessive amount that has now accumulated interest to the tune of Kshs. 846,887,435.97.
“The fraud was not discovered until lately when new administration had managed to get a firm grip of things that have always been done in secret by the perpetrators of the said acts of criminality,” added the county government.
The lawyer said the county government has unearthed a scheme that was used to loot public resources through fraud and collusion to inflate legal fees in an unprecedented theft of public funds and has therefore instituted a reference to set aside manifestly excessive amount that was awarded as legal fee owing to application of wrong principles by the taxing officer and fraud on the part of parties involved.
“It has taken a long time to get to the root of a well-calculated and choreographed fraudulent scheme owing to the fact that the perpetrators were in control of the county directly and through proxies and therefore the reference was not filed on time to revise or set aside the impugned certificate of tax”, added the county government.
The county government added that the first certificate of taxation dated January 16,2007 was awarded in favour of the respondent for the amount of Kshs. 60,712,373 after representing the the county council in RMCC No. 2 of 2003.
“Under unclear circumstances, the respondent moved back to court again in RMCC No. 2 of 2003 after about four years as in an afterthought and filed a second bill of costs dated May 25 ,2011 in respect of the same matter, erroneously basing the second bill of costs on the amount in the counterclaim yet the instructions the firm was given initially covered the entire suit and in any case instruction fees are always awarded for entire suit regardless of the stage and documents filed in the suit,” stated in the court documents.
The documents state that the respondent has initiated a process of execution for a colossal amount of Kshs. 847,887,435.97 despite having been paid legal fees per the certificate of taxation initially issued in the matter and the matter giving rise to the legal fees pending in court since 2003.