Encod v Stanbic

1 IN THE HIGH COURT OF THE UNITED REPUBLIC OF TANZANIA COMMERCIAL DIVISION AT DAR ES SALAAM TAXATION REFERENCE NO. 7471 OF 2024 (Arising from Taxation Cause No. 757 of 2024) ENCOD LIMITED…………………………………………………..…… 1ST APPLICANT PATRICIA RUHINDI……………………………………….…………..2ND APPLICANT JOHN MGHANGA HANTI…………………………………….………..3RD APPLICANT VERSUS STANBIC BANK TANZANIA LIMITED………………………………..RESPONDENT RULING August 11th, 2024 & October 18th, 2024 Morris, J This ruling is in respect of the above taxation reference (the reference). The applicants are challenging the Taxing Officer’s ruling in Taxation Cause No. 757 of 2024 dated 13.03.2024. The application is preferred by chamber summons under Order 7(1) and (2) of the Advocates Remuneration Order, GN No. 263 of 2015 (the Remuneration Order) and is supported with an affidavit of Shabaan Nsato Marijani, the applicants’ advocate. In brief, material facts of this matter are as extracted from the applicants’ affidavit. On record, the respondent filed the bill of costs 2 (annexure EC-1), in Taxation Cause No. 757 of 2024 (the taxation cause). Therein, he sought TZS. 89,660,001.78 being costs incurred in defending Commercial Case No. 102 of 2022 (the commercial Case) which was decided in her favour. Upon hearing the parties, the Taxing Officer delivered the ruling on 18.03.2024, allowing TZS. 26,367,969,00 out of the TZS. 89,660,001.78 claimed in the bill of costs. The taxed off amount was thus, TZS. 63, 292,032.78. This amount according to the applicants, is more than one- sixth of the total amount claimed. Thus, the applicants are aggrieved by said ruling. Accordingly, through this reference, they are seeking for an order to set it aside. The only ground advanced by the applicants is that, the Taxing Officer ought to have disallowed the costs of TZS. 26,367,969.00 pursuant to rule 48 of the Remuneration Order because the taxed off amount (TZS. 63,292,032.78) exceeds one-sixth (1/6) of the total amount claimed. Hearing of this matter was by written submissions. Parties filed their respective submissions through their advocates. For the applicants and the respondent were advocates Shabani Marijani and Oscar Msechu, respectively. The applicants’ counsel submitted that; the amount 3 disallowed from the bill of costs exceeded one-sixth (1/6) of the total bill of costs. Hence, the appropriate recourse to be taken by the honourable Taxing Officer was to disallow the entire bill as required by rule 48 of the Remuneration Order. Conclusively, the learned counsel was of the view that the Taxing Officer erred in law hence, this court should revise, quash and set aside the impugned decision. To reinforce the foregoing position, the counsel made reference to the cases of John Memose Cheyo v Stanbic Tanzania Ltd, Comm. Ref. No. 72 of 2018; Dr. Livingstone Memorial and Bagamoyo Zoological Society Park Limited v Dosal Hydrocarbons and Power (Tanzania PVT) Limited, Civ. Ref. No. 18 of 2020 and Octopus Engineering Limited v. Spencos Services Limited, Civ. Ref. No. 14 of 2020 (all unreported). The application was contested by the respondent. Hereof, the respondent’s counsel argued that the Taxing Officer did not tax off one- sixth of the bill of costs presented by the respondent. To him, the court fees is not supposed to be included in computing the one-sixth (1/6). Also, the instruction fee is not included at the discretion of the Taxing Officer. On this regard, the respondent made reference to the cases of NMB 4 Bank PLC v Shimilang Wada Estate Company Ltd, Land Ref. No. 2 of 2023 and Yara Tanzania Limited v D.B. Shapriya & Co. Limited, Misc. Comm. Ref. No. 08 of 2022 (both unreported). He therefore, prayed for dismissal of the application with costs. I have carefully considered the record, proceedings and rival submissions of the parties’ counsel. The issue for determination is whether the honourable Taxing Officer erred in law in taxing TZS. 26,367,969.00 out of TZS. 89,660,001.78. It is the applicants’ position that, the former amount was erroneously taxed because calculating it out of the total amount presented in the bill of costs (TZS. 89,660,001.78), sum of TZS. 61,962,032.78 (sic) was taxed off. The taxed off amount according to the applicants, exceeds one-sixth (1/6) of the total amount claimed. Thus, in their view, the Taxing Officer ought to have disallowed the entire bill of costs in line with Rule 48 of the Remuneration Order. I have scrupulously considered this argument. The applicants have not detailed as to how the TZS. 61,962,032.78/= was calculated to make it exceed one-sixth (1/6) of the claimed amount. Nevertheless, in the interest of justice the Court has taken liberty to do the arithmetic. Indeed, the taxed off amount (TZS. 63,292,032.78) is well beyond one-sixth (1/6) 5 of TZS. 89,660,001.78. In fact, one-sixth (1/6) of TZS. 89,660,001.78 is around TZS. 14.9 million. Therefore, I am satisfied that, the disallowed amount by the Taxing Officer indeed exceeded one-sixth (1/6) of the total amount claimed in the bill of costs. The above settled position notwithstanding, the dispute herein is far from being resolved. As such, I find relevancy in reproducing rule 48 of the Remuneration Order before I steer the Court towards the just end. The same provides as below. “48. When more than one-sixth of the total amount of a bill of costs exclusive of court fees is disallowed, the party presenting the bill for taxation shall not be entitled to the costs of such taxation “(bolding rendered for emphasis). The Court’s reading and my understanding of the provision above is that: if a Taxing Officer disallows more than one-sixth (1/6) of the total amount presented in the bill of costs (as it was the case herein); then a party presenting such bill is not entitled to costs involved in pursuit of such taxation. It is my considered opinion that, the provision does not touch the costs presented in the bill of costs but those incidental in prosecuting the same. 6 It is my further view that, there are justifications which form an integral part of the rule under reference. I will name the basic ones. One, the Taxing Officer has no jurisdiction to deny the applicant costs which were awarded by the Court. That is, in the taxation cause, what is before such Officer is not an appeal or revision against the order for costs. The role of the Officer is only that of taxation of the amount of costs according to law. Parties no longer battle over whether or not the applicant is entitled to costs. The Court is already functus officio in such respect. The remaining contention is always on the exact quantum to be paid to the applicant. Two, the rule acts as a deterrent to unscrupulous parties who would, out of their own lust or mala fides, inflate the bills beyond justifiable proportions. Three, the rule complements the professional ethics regime by reminding counsel to act professionally by presenting bills which are within the ambit of the law. Thus, I find no legal basis in the applicants’ contention that, the Taxing Officer ought to have disallowed the entire bill of costs because that is not the import of Rule 48 of the Remuneration Order. However, I have further examined the impugned ruling (annexure EC-2) and found 7 that the honourable Taxing Officer also awarded costs for the bill of costs to the tune of TZS. 1,000,000/=. Having analysed the law above, it goes without contention that in granting the said amount, the Taxing Officer violated the provisions of Rule 48 of the Remuneration Order. In other words, having held that the taxed off amount herein exceeded one-sixth (1/6) of the total amount claimed, I thus proceed to hold that, the respondent was not entitled to costs of presenting or prosecuting the said bill of costs. Consequently, the issue raised above is partly answered in the affirmative to the extent that, the award of TZS. 1,000,000/= as costs for the bill of costs was erroneous. I proceed to partly allow the application. For avoidance of doubt, the Taxing Officer’s ruling in Taxation Cause No. 754 of 2024 dated 18.03.2024 is altered by taxing off TZS. 1,000,000.00 awarded as costs of the bill of costs. The rest of the entries in the impugned ruling remain intact. Given circumstances of this case, each party will bear own costs. 8 It is so ordered. C.K.K. Morris Judge October 18th, 2024 Ruling delivered this 18th day of October 2024 in the absence of parties and/or advocates. C.K.K. Morris Judge October 18th, 2024