Gold Africa v EB Hance Taxation Reference

1 IN THE HIGH COURT OF THE UNITED REPUBLIC OF TANZANIA COMMERCIAL DIVISION AT DAR ES SALAAM TAXATION REFERENCE NO. 2714 OF 2024 (Arising from Taxation Cause No. 114 OF 2023) GOLD AFRICA LIMITED……………………………………………………APPLICANT VERSUS EB-HANCE COMPANY LIMITED……………………………………….RESPONDENT RULING May 6th, 2024 & June 28th, 2024 Morris, J In this Taxation Reference (the reference), the applicant challenges the Taxing Officer’s ruling dated 23.01.2024, in Taxation Cause No. 114 of 2023 (the taxation cause). 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 section 95 of the Civil Procedure Code, Cap. 33, R.E. 2019 (the CPC). The same is supported with an affidavit of Xavier Rumisha Maleko, Principal Officer of the applicant. Briefly, the taxation cause emanated from Commercial Cause No.44 of 2022 (the commercial cause). Therein, the applicant and the 2 respondent were the applicant and the 2nd respondent. The commercial cause was however, struck out for want of this court’s jurisdiction, following a preliminary objection raised by the 2nd respondent. As a result, the respondent was also awarded costs. Later on, the respondent in pursuit of such costs, filed a bill of costs via the taxation cause herein. He claimed for Tshs. 27,670,000/= being instruction fees at Tshs. 25,000,000/=, attendances and disbursements. Consequently, the bill of costs in the taxation cause was taxed by the Taxing Officer (Hon. J.M. Minde). In consequence thereof, the respondent was awarded Tshs. 8,000,000/= as instruction fee; 750,000/= for attendance; 170,000/= as disbursements; and 1,000,000/= as cost for the bill of costs. Thus, a total of Tshs. 9,920,000/= was taxed, out of the claimed amount (Tshs. 27,670,000/=). Dissatisfied with such taxation, the applicant has thus, preferred this reference for the following reliefs; 1. That this Honourable Court be pleased to determine this reference, quash the ruling and finding of the Taxing Officer (Hon. Minde, DR) dated 23/01/2024 in Taxation Cause No. 114 3 of 2023, and appropriately, fairly and legally tax the bill of costs presented by the Applicant thereat. 2. Any other or further relief(s) as this Honourable Court shall deem fit to grant. 3. Costs be provided for in favour of the Applicant in this reference. The reference is based upon four noticeable grounds as per the applicant’s affidavit. One, the taxing officer’s discretionary power was not exercised judiciously. Two, the law regulating bill of costs was misapplied. Three, the matter subject of the bill of costs was not the claim for liquidated sum and that, the same ended at preliminary stages. Four, the ruling upon which the bill of costs was based was later on reversed via ruling/order on application for review. On the other side, through its counter affidavit, the respondent has disputed this reference, particularly on the grounds raised above. Hearing of this matter proceeded by written submissions. Parties filed their respective submissions through their advocates. For the applicant and the respondent were counsel Ms. Hamida Mkali and Mr. Mutakyamirwa Philemon, respectively. 4 The applicant’s counsel commenced her submissions by firstly adopting the affidavit in support of this reference. She went on to argue that, in awarding the instruction fee (Tshs. 8,000,000/=), the taxing officer did not consider the fact that the case (the commercial cause) ended on a preliminary objection. She thus, pointed out that, instruction fee must be commensurate with the work for which they are to be charged, as well as, a number of factors have to be taken into account, including the nature of the case, the time taken in disposing of the matter, the value and nature of the subject matter, parties’ behaviour in facilitating expeditious disposal of the case and public policy of ensuring affordability of litigation and consistency in quantum of costs. The counsel continued to submit that, the taxing officer ought to have considered the fact that the matter ended on a preliminary objection as well as other factors. Instead, according to the Counsel, the taxing officer considered only one factor, which is the time taken by the commercial cause from the date of filing to the date when it was struck out (9 months). Reference was made to the cases of NBC Ltd v Kapinga & Company Advocates, Civil Reference No. 4 of 2003; and Trace 5 Associates Limited and 2 Others v Rosemary Evarist, Taxation Reference No. 09 of 2023. in support hereof. She further asserted that, in awarding Tshs. 8,000,000/=, the taxing officer wrongly applied her discretion by going beyond the limit set by law. Reason behind this assertion according to the counsel is that, the taxing officer when granting the said amount, relied upon items (k) and 1 (d) of the 11th Schedule to the Remuneration Order. Such items as per the counsel, cover fee of either suing or defending a case not otherwise provided for under the Remuneration Order, whereby a taxing officer is required to consider sum not more than 1,000,000/=. Hence, she insisted that, in awarding Tshs. 8,000,000/=, the taxing officer in this matter wrongly went beyond the limit set by law. To buttress this position, the counsel cited the case of Stanbic (T) Limited v. Iddi Halfani, Civil Appeal No. 139 of 2021. She further submitted that, the taxing officer wrongly applied her discretion in respectively awarding 50,000/= and 1,000,000/= as attendance fees and instruction fees to prosecute the bill of costs. To her, such figures are extremely high. Hence, they ought to be adjusted 6 downwards. Accordingly, she suggestively contended that, the figures ought to fall between Tshs. 25,000/= and 30,000/= respectively. The learned advocate continued to submit that, the taxing officer’s taxation of Tshs. 1,000,000/= for presentation of the bill of costs is nonexistent in law. According to her, Rule 55(3) of the Remuneration Order provides for costs for attending taxation, not for presentation of taxation. In the end, the learned counsel argued on legality of the impugned ruling in this matter. On this regard, she attacked the said ruling on the ground that the ruling upon which the taxation proceedings emanated was later on vacated by the same court and same judge. As such, the taxation cause was overtaken by events, hence the respondent can no longer benefit from the already vacated ruling. Specifically, the counsel averred that, on 13/12/2023 Hon. Agatho, J. nullified the ruling which previously gave the respondent right to costs. That being the position, she maintained that the decision in the taxation cause has no legs to stand. Therefore, she prayed for this reference to be allowed and the taxing officer’s decision be vacated with costs. 7 In reply submissions, the respondent’s counsel also began by adopting the counter affidavit. Then, he proceeded to submit on the award of Tshs. 8,000,000/= that, the case (commercial cause) took almost nine months to come to an end and that period cannot be termed as preliminary stages. Additionally, he contended that, instruction fees are chargeable before commencement of a case. Hence, the same do not take into account whether the case is terminated on preliminary stages or goes further to the final stages. To him, instruction fees are not based on what has been awarded by the court but on the claimed amount. On this stance, he referred to the case of Tanzania Ports Authority and Another v JV Tangerm Construction Limited and Another, Commercial Reference No. 26 of 2022. The learned counsel proceeded to argue that, in the case (commercial cause), the dispute was in relation to mining industry which is according to him, an exceptional business. As such, special instruction fees should be demanded. On this regard, he made reference to Order 15 of the Remuneration Order, as well as, the case of Hotel Travertine Ltd v. National Bank of Commerce, Taxation Reference No. 9 of 2006. The learned counsel concluded on this aspect that, the 8 instruction fees of Tshs. 8,000,000/= awarded by the taxing officer basing on item 1 (d) and (k) of the Eleventh Schedule is reasonable. Hence, according to him, the taxing officer judicially exercised her discretion not warranting this court’s interference. On the complaint of the taxing officer’s ruling being taken by events, it was submitted that, such prayer could be lodged before the taxing officer as the same cannot be entertained by this Court at this stage of reference. He further maintained that, the order awarding costs in the suit (the commercial cause) has not been vacated. In rejoinder, the applicant’s counsel substantially reiterated his submissions in chief. In addition, she insisted that the taxing officer misused her discretion calling for this court’s interference. I have discreetly considered the chamber summons in this matter, the parties’ affidavits, the counsel’s submissions and the impugned ruling. As such, I have observed that, the parties’ contention is on discretionary powers of the taxing officer in Taxation Cause No.114 of 2023. While the applicant has asserted that the taxing officer’s taxation powers were not exercised judicially, the respondet has maintained to the contrary. In fact, 9 it is undisputed by the parties herein that, the taxing officer’s power in taxation is discretionary in nature. I fully subscribe to that position. Besides, I am fully armed with the principle that, the taxing officer’s powers in taxation cannot be interfered unless it is established that in exercise of such powers, he/she has acted unjudicially by acting upon wrong principles or wrong considerations in coming to his/her decision. See, George Mbuguzi and Another v A. S. Maskini [1980] T.L.R. 53 and ZTE Corporation v Benson Information Limited, Commercial Reference No.3 of 2018. Therefore, the issue for determination is whether in Taxation Cause No.114 of 2023, the taxing officer exercised her powers unjudicially. One of the complaints by the applicant is that, the taxing officer in awarding Tshs. 8,000,000/= as instruction fees, did not consider the fact that the case ended on a preliminary objection. Instead, the only consideration that was taken into account is the time upon which the matter (the commercial cause) took nine (9) months from the date of filing to the date when it was struck out. This assertion is not disputed by the respondent. I have also taken time to read the impugned ruling annexed to the affidavit in support of this reference. Thus, I am satisfied 10 on that position (pages 4 and 5 of the ruling). In other words, the taxing officer relied upon life span of the case, in awarding the said instruction fees. That in my considered view, was erroneous consideration because the proper consideration should be, on the time taken up at the hearing or arguments, not life span of a case as a whole. See George Mbuguzi’s case(supra) and ZTE’s case (supra). I have also considered the respondent’s contention on this regard that the instruction fee was reasonably awarded by taking into account the nature of the case as having emanated from mining industry. With due respect, that argument has no legs at this stage. The Court confines itself to the impugned ruling. Indeed, these proceedings do not allow going beyond what is before it. Therefore, it suffices at this juncture to state that, the instruction fee to the tune of Tshs. 8,000,000/= was awarded on the basis of wrong consideration. The applicant has also disputed on the taxing officer’s taxation of Tshs. 1,000,000/= costs for presentation of the bill of costs. To her, the same is non-existent in law. The respondent has not advanced any argument to the contrary. I have taken into consideration this contention in line with Order 55(3) (supra). The same is for fees for attending 11 taxation. Going through the impugned ruling (last paragraph of page 5), I have found the phrase, “costs for this bill of costs allowed at Tshs. 1,000,000/-.” It is my considered view that, the costs (Tshs. 1,000,000/=) were erroneously awarded in place of fees for attending taxation. In fact, this would suggest that, the respondent would have to file another bill of costs to recover the same since costs are recoverable by way of bill of costs. Hence, I find merits on this ground too. I have finally analysed the contention of the taxation cause having been overtaken by the ruling of review. I am in accord with the respondent. I will give the reasons. One, ordinarily, in line with the order of this court in Review Application No. 7 of 2023; whereby its decision in respect of PO was found to be erroneous; any rights and obligations attaching to the previous ruling would be exited. However, court orders need to be clear and unambiguous. I have taken liberty to read the Court Order from the review proceedings. The orders of the court stated when deciding the PO do not have express rule of being vacated. The order simply states that the Court was at err. More so, the matter was not restored. In lieu thereof, the applicant therein was given leave to refile with exemption to the applicable filing fees. 12 Two, this ground did not feature during the taxation stage. Three, if the ruling in the said review was not committal as the applicant would wish to present now, he was supposed to move the court to correct the inherent error therein than challenge it in reference. For the foregoing reasons, the issue raised is answered in the affirmative. Thus, the application partly succeeds. For avoidance of doubts, the taxing officer’s ruling is altered. The award of Tshs. 8,000,000/= as instruction fee is hereby adjusted and replaced by Tshs. 2,000,000/=. Attendance fee is set at Tshs 50,000 each making the total under this subheading to be Tshs 500,000. Disbursements remain as ruled by the taxing officer. Further, the award of Tshs. 1,000,000/= as costs of the bill of costs is hereby replaced by Tshs. 500,000/= as fees for attending taxation. Under circumstances of this case, each party bears own costs. It is so ordered. C.K.K. Morris Judge June 28th, 2024 13 Ruling delivered this 28th day of June 2024 in the presence of Advocates Farida Mkali and Philemon Mutakyamirwa for the applicant and respondent respectively. C.K.K. Morris Judge June 28th, 2024