ecobank tanzania limited vs aa trans limited others 2024 tzca 100 23 february 2024

IN THE COURT OF APPEAL OF TANZANIA AT PAR ES SALAAM (CORAM: MWAMBEGELE. J.A.. MAIGE, 3.A. And MDEMU, J.A.) CIVIL APPEAL NO. 399 OF 2020 ECOBANK TANZANIA LIMITED ............ ............................................ APPELLANT VERSUS A.A. TRANS LIMITED..................................................................1st RESPONDENT DOUBLE A COMPANY LIMITED................................................ 2nd RESPONDENT ASGHER BASHIR VERSI ......................................................... 3rd RESPONDENT AKBER BASHIR VERSI ........................................................ 4™ RESPONDENT (Appeal from the ruling and order of the High Court of Tanzania, Commercial Division at Dar es Salaam) (Maooiqa, 3.^ dated the 29th day of November, 2019 In Commercial Reference No. 6 of 2019 JUDGMENT OF THE COURT 14th& 23rd February, 2024. MAIGE, J.A: At the High Court of Tanzania, Commercial Division at Dar es salaam (the High Court), the appellant commenced a suit against the respondents and each of them for payment of Tanzania Shillings 994,818,151.12 and USD 1,299,761.98 plus interest accruing therefrom being outstanding loan amount i extended to the first respondent and which was guaranteed by the second, third and fourth respondents. As it can be gathered from the record, the case did not go to full trial. It was struck out with costs, at the pretrial stages for the reason that, the plaint violated the requirement of rule 19(1) of the High Court (Commercial Division) Procedure Rules, 2012 (GN 250 of 2012) for containing 13 pages which was beyond the maximum of 10 pages allowed under the said provisions. The decision arose from the preliminary objection raised in the joint written statement of the respondents. The bill of costs filed subsequently, sought to recover the costs involved in defending the suit. In item No. 1 thereof which was in respect of instruction fees, respondents claimed for each of them, 3% of the value of the subject matter of the dispute. In total, it was TZS 566,400,000.00. There were other claims falling under disbursements which are, however, not the subject of this appeal. In his ruling, the learned taxing officer (Rumisha, D.R as he then was) awarded TZS 39,792,736.0448 and USD 51,997.4792 being 1% of the value of the subject matter of the dispute for each of the respondents. Aggrieved, the appellant lodged a reference to a judge of the Hight Court. The High Court judge (Magoiga, J) dismissed the reference. Still aggrieved, 2 the appellant has lodged the current appeal which initially consisted of six grounds. At the hearing, however, the fourth, fifth and six grounds were abandoned. In the three remaining grounds of appeal, the High Court judge is faulted for: one, holding that the decision by the taxing officer was made judiciously; two, upholding the decision of the taxing officer which relied on new evidence adduced by the respondents without affording the appellant a right to be heard; and three, upholding the award of the taxing officer which was extremely excessive while the case ended up on technicality. At the hearing, the appellant was represented by Mr. Deogratius William Ringia assisted by Ms. Inviolata Wangoma, both learned advocates. The respondents were represented by Mr. Dismas Raphael, also learned advocate. In his submission, Mr. Ringia consolidated the remaining three grounds of appeal and argued them together. He submitted that, in determining the bill of costs, the taxing officer did not act judiciously and as a result he ended up awarding an amount which was extremely excessive. The counsel assigned three reasons why the amount was excessive: one, the suit was struck out merely because the plaint had many pages; two, the respondents filed a joint written statement of defence which contained merely general denials; three, the respondents were and still remain defaulters of the loan. Citing the case of 3 the Registered Trustees of Cashewnut Industry Development Fund v. Cashwnut Board of Tanzania, Civil Reference No. 4 of 2007 (unreported), the counsel urged us to hold that the amount awarded was extremely excessive and thus substitute them with an appropriate amount. For the respondents, it was submitted that the amount was correctly awarded based on the prescribed scale under the 9th schedule to the Advocates Remuneration Order, 2015. He submitted that in the bill of costs, two factors are to be considered namely; the claim involved and the work done. In this case, he submitted, the taxing officer awarded only 1% of the value of the subject matter of dispute while in law he was justified to award up to 3%. As to the work done, it was submitted, the plaint filed by respondents was bulky which required much time to study before filing the defence. In his contention, therefore, the taxing officer properly exercised his jurisdiction and this Court is not justified to disturb his award of bill of costs. He urged us to dismiss the appeal with costs. We have duly considered the rival submissions in line with what are on the records. We have noted, in the first place that Mr. Ringia did not, in his submission, address the second ground of appeal. We take it that the said ground has been abandoned. The major complaint in the two grounds of appeal, it would seem to us, is that the amount awarded as instructions fees was extremely excessive. The taxing officer is blamed for not exercising his discretion judiciously in that; he did not consider the stage at which the suit was terminated, the nature of the case and the work involved. For the respondents it was argued to the contrary. It seems to be apparent that, in determining the quantum of costs under instruction fees, the primary consideration by the taxing officer was the prescribed scale under the Advocates Remuneration Order. In this matter, the value of the subject matter of the dispute was above TZS 400,000,000/=. Therefore, under order 40(2) of and paragraph 8 of the 9th Schedule to the Advocates Remuneration Order, the relevant prescribed scale was 3% of the value of the subject matter of dispute. It does not seem ever to have been doubted that, prescribed scale of the instruction fees is one of the basic consideration in determining the appropriate amount of instruction fees. The contention is, whether there were some other basic considerations which the taxing officer omitted to take into account. As it can appear at page 149 of the record, the taxing officer declined to award 3% of the value of the subject of the dispute and instead awarded 1% of the same, because the proceedings were terminated in the preliminary stages. 5 It is perhaps because of that reason that, the High Court judge in his decision, did not see anything wrong in principle with the exercise of the discretion by the taxing officer. In his view, in as long as the award was within the prescribed scale of 3% of the value of the subject matter of the dispute, the taxing officer was authorized to award the amount equal to 1% of the subject matter of the dispute of each of the respondents. He concluded, therefore that, since the taxing officer exercised his discretion judiciously, the quantum of his award could not be disturbed on reference. In principle, we agree with the High Court judge that, determination of the quantum of instruction fees is within the discretion of the taxing officer and that, the High Court judge would only interfere if the said discretion was not exercised judiciously or where the amount awarded was unreasonably excessive. Therefore, in Kitinda Kimaro v. Anthony Ngoo and Another, Civil Application No. 576/2 of 2018 (unreported), we observed. "The award o f instruction fees is peculiarly within the discretion o f a taxing officer and the court will always be reluctant to meddle with it unless the discretion has been exercised unjudiciaiiy. " In this case, the taxing officer awarded 1% of the value of the subject matter of the dispute to each of the respondents instead of the prescribed scale of 3%. This was in consideration of the stage at which the proceedings were terminated. Mr. Ringia criticizes him for not considering, among others, the nature of the case. Is his criticism relevant? Perhaps, before reverting to such question, we find it necessary to consider what factors besides the prescribed rate in the law should the taxing officer consider in determining the appropriate award for instruction fees. More or less a similar issue was considered in the case of Hotel Travertine Ltd v. the National Bank of Commerce, Civil Reference No. 9 of 2016 (unreported) where it was observed: " Paragraph 9 o f the Third Schedule deals with instruction fees and it is required to be not less than Shs. 100. However, the taxing officer has to take into account a number o f factors like the amount involved in the appeal, its nature, importance and difficult, the interest o f the parties, the other costs to be allowed, the general conduct o f the proceedings, the fund or the person to bear the costs and ail other relevant circumtances." From the above authority, it is apparent that aside from the prescribed scale in the law, the taxing officer has among others, to take into account the nature of the case and the general conduct of the proceedings. In this matter, the case was disposed of just at the stage of exchange of pleadings. This 7 factor was considered by the taxing officer. The nature of the case was however not considered. As we can see, the case involved four respondents. Truly, the claims against them were jointly and severally. They however, emanated from a loan which was extended to the first respondent only. The rest of the respondents, it is apparent, were mere guarantors. They were sued on those capacities. As the record shows, like here, both at the level of the trial and those of bill of costs and reference to the High Court judge, the respondents were being represented by the same advocate and their line of defence, according to their joint written statement of defence on the record, was the same. Considering the nature of the substantive claim involved in the suit, we think, the award of costs should have been joint and not separate. For, the claim against the second, third and fourth respondents derived from and depended upon the liability of the first respondent, the principal. They would not be liable if the principal was not. In that respect, we think, instruction fees would have been shared by all. In our view, if the taxing officer considered the nature of the case and the homogeneity of the interest of the respondents therein, the amount equal to 1% of the claim would have been shared equally by the respondents. 8 In our opinion, therefore, the appeal has merit and it is allowed. As a result, the award of costs under instruction fees should be 1% of the subject matter of the dispute to be divided by the four respondents. This means that the amount to be taxed should be equal to TZS 39,792,736.0448 and USD 51,997.4792 divided by four. DATED at DAR ES SALAAM this 22ndday of February, 2024. J. C. M. MWAMBEGELE JUSTICE OF APPEAL I. J. MAIGE JUSTICE OF APPEAL G. J. MDEMU JUSTICE OF APPEAL The Judgment delivered this 23rd day of February, 2024 in the presence of Ms. Inviolata Wangoma, learned counsel for the Appellant and Mr. Dismas Raphael, learned counsel for the Respondents, is hereby certified as a true copy of the original. A. L. KALEGEYA DEPUTY REGISTRAR COURT OF APPEAL