isa ltd another vs bulyanhulu gold mine ltd 2 others 2023 tzhccomd 209 10 july 2023

IN THE HIGH COURT OF UNITED REPUBLIC OF TANZANIA (COMMERCIAL DIVISION) AT DAR ES SALAAM TAX REFERENCE NO. 5 of 2023 (Arising from the decision of the Taxing Officer in Consolidated Commercial Case No.114 and 115 of 2016) ISA LIMITED & ANOTHER............................... st APPLICANT 1 PETROLUBE LIMITED...................................... 2ND APPLICANT VERSUS BULYANHULU GOLD MINE LTD.................... ^RESPONDENT Mhs 'hi NORTH MARA GOLD MINE LTD i|nIt2ND RESPONDENT PANGEA MINERALS LTD (aka BUZWftGI *l|| ^.RESPONDENT GOLD MINE Last Order: 08/05/2023 Ruling on 10/07/2023 .if'IhRULI'NG <P 111 h NANGELA, J. This rfe(ference;|| application was brought before this I IP’’ Court by way|pf a chamber summons filed under the provisions .......... l|l||h1 of qijder 7(u|| and|i('2) of the Advocates Remuneration Order, GN. bbllh264l of 2015. The chamber summons is as usual ‘’hiihP- supported by an affidavit of Mr. Jovinson Kagirwa. In this reference application, the Applicants seek for the orders of this Court as follows: 1. That, this Honourable Court be pleased to interfere with the decision of the Taxing Officer Page 1 of 17 which taxed the Bill of Costs at a tune of TZS 171,120,000/= contrary to the established principles of law. 2. That, the Deputy Registrar in her capacity as a Taxing Officer erred in law by taxing the Bill of Cost at the tune of TZS 171,120,000/= which, in a(K circumstances as taxed, was manifestly unreasonable,si and tha same,,|f* 'Hlh 'th, established legaPbrinciples. arred in taxing the Bill of Cost I T' n at the tune of TZS i 171,120,000/= without considering that the matter was nor determined to its finality. 4. That, costs of this application be provided for. Page 2 of 17 On the 18th of May 2023, the Respondents, through the services of Mr. William Mng'ena, learned counsel, contested the application by filing a counter affidavit. The Applicant did file a reply to the counter affidavit and, when this matter was called on for orders on the 22nd of May 2023, this court directed the parties to file written submissions. The parties did file their respective submissions which I will analyse here below before ' hi!||„ ''Ih. I proceed to issue my own findings and decision. !l|[h In his submission in support^ the ^rayer§i£ought by ill the applicants, Mr. Kagirwa c^d^eijt&Sdoijjithe^contents of the << Mllh supporting affidavit as^fps[mingkparti!^f his submission. He 11 nil contended that, .from. the'HHhistdry of the Consolidated l|||| । if* Commercial Cases nSsjS. iJSft'nd 115 of 2016, the parties did 1(f,s i ut|h .4h I not go to thelmetitsiibeca'use the consolidated case was struck ’ih; * ihl out with cotshaftejjl’fhe court upheld a preliminary point of law . 1111° raised'o^ifh^i'Respondents herein. He submitted that, subsequently, the Respondents filed a Bill of Cost, and, upon hearing, the Taxing Officer proceed to award the Respondents TZS 171,120,000/= as instruction fees, an amount which he considers to be colossal. He contended that, much as the jurisdiction of this court and the powers of a judge to interfere with the decision of the Taxing Page 3 of 17 Officer is limited, where there is an injudicious and manifest excessiveness necessitating interference, the court will act. To support that position, reliance was placed on the case of Haji Athumani Issa vs. R. Rweitama Mutatu [1992] T.L.R 372, at 373. In that case the court held that: The law about taxation is this: that, judges will, in most cases, not interfered with the questions of ,;\K( ’h quantum, because these are regarded'b., as matters which the taxing-master is particularly fitted to'tdeai withlbBut, and thatHisTa big||hBUT"|!the court |l Ji could interfere,|>ifi!the<ltaxing master dO 'hih, "Mhh llih- J clea rly|.actedl[dpjudicia I." From that premisej’Mr. Kagirwa has contended that, the Taxpg Officer inline present matter before me did not act III judicially.. He contended that, the Taxing Officer acted erroneously in principle and cost awarded are manifestly excessive necessitating this court's intervention. He contended that, according to the Advocates Remuneration Order,2015, (GN.No.263 of 2015), the Taxing Officer must tax the bill according to the prescribed scales. Page 4 of 17 He submitted that; it will be only in few exceptional circumstances the Taxing Officer is allowed to use his discretion and must use it judiciously and consistent with the principles of taxing a bill of cost. Mr. Kagirwa relied on Order 41 and 46 read together with Order 13 of the GN.No.263 of 2015. He maintained a view that, costs in contentious proceedings must be in line with the prescribed scales under ’ ‘hh> the 9th Schedule to the Order. "Ik ‘ He also pointed out that, ab*cording.|pfb qjrder 13 of GN.No.263 of 2015, an advocate^is^fdHbijJben from charging or accepting remuneration((Wi(iich^iS||mor^than what is provided for under the law. Tohfurthenhstrengthen his argument, he contended tha^^acccillding tl^ffie holding of the Court of Appeal *' I- in the case ofhTan2ania!Rent a Car Ltd vs. Peter Kimuhu, * hiii., i(!i"""1|iiii1i, Civil|||Ref. Nq||9 ofp2'020, the Court of Appeal held, inter alia, that-. ^lllhi j' tnat. "...the taxing officer has been given wide latitude and discretion to determine taxing costs as it appears to him to be proper for attainment of justice. However, the said discretion should be exercised within the cost scales prescribed in the rules. In Page 5 of 17 addition, and as it was argued by Mr. Shayo, the taxing officer is also supposed to consider other factors such as the greater the amount of work involved, the complexity of the case, the time taken up at the hearing, including attendances, correspondences, perusals aipd “ <! ^lll consulted authorities or arguments." fees costs, US$ 180,000.00 W. Commercial Case No.114 of > 2016 and US$ 180,000.00 for Commercial Case No. 115 of uH|h, ^l|h| l!t 2016, all under item||No.llhyeHcontended, therefore, that, the amount sdlhdainfed was1'excessive and on the high side 'llh. JlHHiih.....*' 3 the nilfieth schedule. He argued that the disputed Bill of Costs emanated in the consolidated Commercial Case No. 114 and 115 of 2016 and not the separate commercial cases No.114 of 2016 and 115 of 2016. Mr. Kagirwa submitted further that, even though the matter took five years to come to an end, it was not because of complexity but due to the various applications Page 6 of 17 before this court and the Court of Appeal and which were time consuming. He submitted that, as a matter of law, costs are not meant to enrich an advocate. He referred to this Court the case of Tanzania Rent a Car (supra) where the Court was of the view that, instruction fees are supposed to compensate adequately an advocate for the work done in the preparation and the conduct of the case, and not to enrich him. Mr. Kagirwa relied’iaswvell onkthejcases 'In1 of Attorney General vs. Amos SHravu, TaxatioijMeference Rainchand vs. QuarrynServices ofhEast Africa Ltd and court held that costs shall not be allowed to rise to such a level as to confine access to the courts to only the wealthy. Consequently, he surmised, that, the amoun jqual to TZS 150,000,000/= taxed by the Taxing Officer as instruction fees was excessive and the same should be rejected and taxed off as it did not follow the prescribed scale as enumerated under the Advocate Remuneration Order. Page 7 of 17 In his further submission, he contended that, the Taxing Officer did not confine herself to the fact that, the matter ended at the preliminary stages and did not go into a full trial. In view of all such arguments, he urged this court to make a finding that the awarded TZS 150,000,000/- as instruction fees was excessive, unreasonable, and unjustifiable, hence, be disallowed. For his part, Mr. William Mang'enay|t^e learne'd. cpunsel ^Ihh, 1 for the Respondents referred to thi^courti^the’[well-known principle that, the allowance JoMfeimn fees is a matter peculiar in the taxing.fiiofficeh^h disctetion and courts are <i- ’hi '' ill hf’ reluctant to interfere wih theihid d scretion unless it has been exercised injudiciously, Reliance was placed on the decision of the court inRahiHashaim vs. AlibhainKaderbhai [1938] 1 T.L.|(R) 67^. hhp I 'M^i^ang'ena submitted further that, much as it is well- agreed that the court has power in proper cases to reduce the instruction fee allowed by the Taxing Officer, it can only do so where the Taxing Officer has acted upon wrong principles or applied wrong consideration in arriving at his decision. To bolster that position he referred to this court the case of Premchand Rainchand (supra). Page 8 of 17 According to Mr. Mang'ena, a careful reading of the Applicants submission does not disclose any fact which shows that the Taxing Officer's decision was faulty either for having been premised on a wrong principle or due to application of a wrong consideration. He submitted that, the Applicants' contestation that the Taxing Officer erred in law for awarding cosjjs for separate ''' ,lllh ''III. Commercial Case No.114 and Commercial Case 'No. 11'5 of 2016 while the Bill of Cost emanatedl[from a^cdhsciteated case S||| {< and not from individual^ '^■Gp^^lj^ted'1’ cases is a misconception. He cont^ded^tlpat, cdsjis of a suit are issued il under section 30^(1) l^nd ('2!)||jj)f the Civil Procedure Code, Cap.33 R.E 2019. ^Ih,. ''I||||il!l111 r Jlihiht. Milk Mr. M^pgMahSubmitted that, the court struck out the ...... min ,|,|iiiil, . two^uits md Commercial Case No.114 of 2016 and Com^fcia^kase No.115 of 2016) with costs, meaning that, costs were awarded on both suits. In view of that, he maintained that the Taxing Officer's hands were tied, in as far as the issue of costs for the two cases was concerned. He submitted that, holding otherwise would have led to an absurdity as the two suits were separately filed, and instructions were separately given save for the consolidation Page 9 of 17 which came much later for the purpose of easy of management of the two cases. He surmised that; a consolidation of suits does not extinguish the existence of the costs incurred separately for the two cases. As regards whether the amount of TZS 150,000,000 .00 awarded by the Taxing Officer as instruction fees was excessive or not, Mr. Mang'ena submitted that, the amount ''III, was reasonable, and fair based on the (Omcumstafc ,pf the ’Ir’Hhh, 'hr h * case. He pointed out the circumstances^ as ylbeing the complexity of the matter, thd^lim’ell'splnt ir^court and the ’Qh h“«h|b t >|||( amount involved. Hhu tlhip Hhi t coupleail^hf’several interlocutory applications, and the suits took five years in court where parties were appearing within every three to four weeks. He concluded, therefore, that, the TZS 150,000,000.00 awarded by the Taxing Officer as instruction fees was reasonable and fair given that, the amount claimed in both Page 10 of 17 suits was above TZS 400,000,000.00 considering the scale is 3% of the claimed amount. Mr. Mang'ena has submitted as well that, the Applicants have not stated the amount which ought to have been considered fair and reasonable if the TZS 150,000,000.00 is considered unreasonable. To that end, he contended that, the application is with no purpose. He relied on th§|decision of this 'i||l|i|, ’'h|, court in Jubilee Insurance Companyimp vs. ;^od<acom Tanzania Pic, Ref. No.2 & 3 of 202€j^(unrep^ed;|Ae argued that this application should be,!teaisUre&pnfee same wave 3 hlb lengths and be declare^pjjrpos^ss, fiance devoid of merits. I■ dis Mr. Kagirwa made a Dnief rejoinder submission. Apart <d| in ’Olh. Ir ' III * 'III *’ from reiterating wnak was!llsubmitted in chief, it was Mr. •^ik. ■I Kagirwa's rej;©indeiuijthat, the issue of costs should not be allowed to rise tojsdch a level as to confine the courts to only wealthi'dhijiygants as propounded in the case of Premchand Rainchand (supra). He contended as well that, since the Respondent did not comment on the case of Tanzania Rent a Car (supra) it should be taken to mean that the Taxing Officer should have exercised her discretion within the cost scales prescribed by the schedules. He maintained that the awarded costs of TZS Page 11 of 17 150,000,000.00 were excessive for a matter which did not proceed to a full trial and the same should be disallowed. From the rival submissions made by the learned counsel for the parties herein, I am confronted with two basic issues to resolve, namely: (ij whether the /earned Taxing Officer applied wrong principie(s) when determining costs to be paid as instruction fees and, (ii) whether the quantum of costs lllllh '’ll'. which she eventually decided to ^^ifestiy excessive considering that the consShdated^ca^e^not go to a full trial. In essence of thpnigatterj||ijt is undisputed that, the law jl if has prescribed guidelines or sables which a Taxing Officer is to 'Ulih ir llh ir follow, and w^kjh musji|be followed. Where such guidelines are adhered to, tbe (^uantupi of costs is largely left to the discretion of tfjje Taxink Officer and this court will not normally interfere with thel'e^rc se of that discretion unless the amounts allowed are manifestly excessive. The issue, therefore, is whether the prescribed guidelines were adhered to. According to the Applicants, the Taxing Officer was supposed to be guided by Orders 41 and 46 read together with Order 13 of the Advocates Remuneration Order, G.N.No.263 of 2015. A view was maintained, therefore, that, costs in Page 12 of 17 contentious proceedings must be in line with the prescribed scales under the 9th Schedule to the Order. Under Orders 41 and 46 of the GN. No. 263 of 2015, the law provides that: 41."Bills of costs incurred in contentious proceedings under this /fl I] rates prescribed in the Tenth, Eleventh and Twelfth Schedulesdjtq .4 % filin’ this Order, .. I I ... 4 . 'Mlhf/. n . the prescnbedjscale, unless a Judge 4i|lk H’b. 11 of tne|HighlkGp^,( for special reasons fj[ toi be certified, II H allows t- •in addition costs dd'F ll|,tp the costs provided by the scale or s *|h!* mi, ’ i refuses to allow costs or allows costs ’I h > ^lhiiiif!^ at a lower rate than that provided by the scale." Under Order 13 of GN. No. 263 of 2015, it is also provided that, "an advocate shall not agree or accept remuneration more than that provided by this Order". In his submission, Mr. Kagirwa submitted that, based on what Order 41 provides, costs in contentious proceedings Page 13 of 17 must abide to the scale provided under the Nineth Schedule to the Order. He even reproduced Order 41 of GN.No.263 of 2015. My examination of Order 41 of GN. No. 263 of 2015, however, does not refer to the Nineth Schedule but to the Tenth, Eleventh and Twelfth Schedules. Even so, by looking at the Nineth Schedule, I would still agree that iMs applicable to . V ’bn the matters from which the Bill of CosttVvas preferred^ since .. . c . , । . f . dr r k J^llhoo * .. that Schedule caters for scales <iof feeshdfor 'contentious % ’ih proceedings to which the Cohs^li'dat|d|forhmercial Cases No. 114 and 115 of 2016(iwul’d^all. "W if d ^li-r Under item 8th of theNineth Schedule, the fees for ^||hh |h a claim which lexceeisJ^^OO,000,000 is capped at 3%. In 4k 1’ 1ll|r his submission,, Mr. Mang'ena was of the view that, in the /"’•kp, "Ik ■ Consolidated ^Commercial cases No. 114 and 115 of 2016 the Ik claim was for US$ 35,100,000.00 and US$ 2,300,000.00 respectively, which put together makes a total of US$ 37,400,000.00. He contended that, this amount was well above TZS 400,000,000.00. Mr. Mang'ena contended that, a 3% of US$ 37,400,000.00 would be US$ 1,122,000.00 but, that, the Respondent leniently charged a modest fee amounting to US$ Page 14 of 17 360,000 which is only a 73 of the amount which ought to have been charged as instruction fees. He contended that, even so, the Taxing Officer reduced the amount to US$ 64,102.56 which is equal to TZS 150,000,000.00. In my assessment, I tend to agree with Mr. Mang'ena that, the Taxing Officer was fair and reasonable in her assessment of the instruction fees. I do so,because, in her decision, she was rightly guided by the<|s§ales provided for, '» * ^Ihih. ** i.e., Item 8 of the Nineth Schedule, and™ ch’scales were ‘k ’hl III * fl II > not disputed by the parties w|i6 afew^(ij|before her. * h|| 1 However, that was(1 notljthe e'nd» of her thinking and I' u wisdom. Instead .of "actingd"||obotically by taking a strict approach to teapphqation ofthe scales as provided for in the <d|k ’’" I ’Hlh, ’|b' Nineth Schedule^ th;e|Taxing Officer was also alive to the other li'"""ll|niii. ''' factors whicf|| neecfto be taken aboard when determining a Bill of CoAl||||||l,„ii Such factors which she pointed out on page 3 of her ruling when determining the quantum of the fees payable include the suit amount, the nature of the case/subject matter and its complexity, time taken while hearing the matter, the amount of research invested in the matter and the parties' Page 15 of 17 general behaviour in attendance and their quest for expeditious disposal of the matters laid before the court. In page 4 of her ruling, the Taxing Officer was also mindful of the fact that, costs are not meant to punish the judgement debtor or enrich the decree holder. It is on those considerations she made her decision that, US$ 64,102.56 which is equivalent of TZS 150,000,000.0Q(||was fair and !l|h» <1 > !’llh reasonable amount to be awarded as instruction feek (fi1 '|ls< However, as I look at the lawljand d^sfeasip'h'ing which the Taxing Officer pursued fee reasonable amount which ought toffee cferged construction fees, I do p ’’ ’qhi I■ <ili hlf' not find how one coulc|[ifault<fhqr| decision. ',lllllll, ,llllln t; I11’ Essentially, anld>as earlibr stated hereabove, this Court Jk 'I '||l! will be very'teita'nbtq,,fault the exercise of a Taxing Officer's jl1 l||||||| !||[|, bisection unless i^fs established that, the same was exercised injudiefejag^o- in breach of the pertinent principles of taxation of Bill of cost. I therefore find nothing wrong in her decision which I could lay hold on it to fault her regarding the award of TZS 150,000,000/= as instruction fees. In the same vein, I am not inclined to agree with the Applicants' Counsel's submission that the award of TZS Page 16 of 17 150,000,000.00 was excessive. Much as the case ended without proceeding to the full trial, that alone cannot be a reason to hold that the amount charged as instruction fees was excessive. In the upshot, I find that, the Applicants application lacks merits and should be dismissed forthwith. As such, I settle for the following: 1. That, the application being devoid of JULY 2023 DEO JOHN NANGELA JUDGE Right of Appeal Explained. Page 17 of 17