KAS FREIGHT LTD VS PAN AFRICA EQUIPMENT T LTD COMM REF NO

IN THE HIGH COURT OF THE UNITED REPUBLIC OF TANZANIA (COMMERCIAL DIVISION) AT PAR ES SALAAM COMMERCIAL REFERENCE NO. 17 OF 2023 (Arising from Taxation Cause No. 110 of 2023) KAS FREIGHT LIMITED....................................................... APPLICANT VERSUS PAN AFRICA EQUIPMENT TANZANIA LIMITED..............RESPONDENT RULING Date of last order: 24/04/2024 Date of Ruling: 20/06/2024 GONZI, J. In Commercial case No.116/2021, the Respondent herein as the plaintiff, successfully sued the Applicant for breach of contract between them. In the Judgment delivered on 25th August 2023 (as per Hon. A. A. Mbagwa, J.), the Court inter alia awarded the Respondent costs of the suit. The Respondent then presented before the Taxing Officer in this Court, her Bill of costs claiming Tshs.41,280,000. That application was heard as Taxation Cause No. 110 of 2023 between the parties herein. At the end of 1 the taxation proceedings before the Taxing Officer, the Bill of costs was taxed at Tshs. 32,320,000/=. The Applicant was not happy with the amount awarded as costs to the Respondent and therefore instituted the present application for reference seeking to challenge the order of the Taxing Officer in respect of the awarded costs. During the hearing of this application, the Applicant enjoyed the services of Mr. Oscar Millanzi, learned Advocate while the Respondent enjoyed the services of Mr. Florian Francis, learned Advocate. Mr. Millanzi, learned Advocate, adopted the affidavit for the Applicant which was filed in Court on 20th November 2023. He submitted that the Applicant was challenging the amount awarded to the respondent by the Taxing Officer on 31st October 2023. He argued that the applicant was opposing the Tsh.32, 320,000/= awarded to the Respondent as that amount was excessive for three reasons. The first reason argued by Mr. Millanzi, learned Advocate was that in the Taxation Cause No. 110/2023, filed by respondent before the Taxing Officer, the Respondent had attached an EFD Tax Invoice issued to their client on 20th October 2021 with TIN Number 107-737-073. It showed the 2 agreement on the payment to be made by the respond as a client in the CRDB account of the Respondent is advocates. Mr. Millanzi argued that on the other hand, in the receipt ultimately issued by the Respondent's lawyers, the invoice total was indicated as Tshs. 29,460,000/= whereby the agreed fees were Tshs 15million, direct costs judiciary fees 10,260,000/= and disbursement of Tshs. 1,500,000/=. Mr. Millanzi submitted that, however, contrary to their own records, in their application for Bill of Costs, the Respondent applied for Tshs.29,460,000/= as instruction fees of and that the same was assessed by the Taxing Officer during the taxation of costs proceedings on the basis of that figure. Ultimately, the Respondents were awarded instruction fees of only Tshs 20million. Therefore, Mr. Millanzi submitted that the total amount of instruction fees of claimed by the Respondent and as substantiated in Court by the tax invoice as the agreed fees, were Tshs.l5million only. The learned counsel for the Applicant submitted that the Taxing Officer in assessing instruction fees of Tshs. 20 million had erred. Mr.Millanzi argued that the instruction fees should have been assessed based on the basis of the maximum figure of Tshs. 15m and not on the basis of Tshs. 29,460,000/= as claimed in the Bill of Costs. 3 The second line of argument by Mr.Millanzi was that under item 12 of the Bill of Costs Application before the Taxing Officer, the Respondent had claimed filing fees for the plaint at Tshs. 10,260,000/= as disbursements. But ironically, this same amount had also been included in the Claim for Tshs. 29,460,000/=, earlier on claimed by the Respondent as part of instruction fees in respect of which Tshs.20 million was awarded. Yet under Item 12, of the Bill of Costs, the Taxing Officer assessed, again separately, and awarded Tshs. 10,470,000/= aS disbursements. Mr. Millanzi submitted that it was not correct to do so because the applicant had separated it and claimed it again while he had already asked for it, and had been awarded costs in respect thereof, as part of instruction fees. The last line of argument which Mr. Oscar Millanzi, learned Advocate, submitted upon, was with regard to violation of the principles of taxation of costs by the Taxing Officer. He cited the case of Primchand Reichand (1972) 1EA 262, wherein the principles to be used by Taxing Master in taxation of costs were stipulated. He submitted that the Taxing Officer in this case did not consider the 4 tests stipulated in the Primchand Reichand case and ended up granting the respondent more than what was due. That caused injustice to the applicant. 4 Mr. Millanzi, learned Advocate concluded his submissions by praying that the Court be pleased to reduce the amount or to nullify the entire Ruling as prayed in the application. Mr. Florian Francis, learned Advocate for Respondent to adopted the counter affidavit sworn by Wilson Mukebezi and filed on 16th February 2024 and made his reply submissions. He subscribed to the principles cited in the case of Anand Satyavan Chande vers Exim Bank cited in CRDB Bank PLC versus Stapeco Ltd and another (2022) by Hon. Nangela, 1, where the Court held that: "The exercise of Taxing Officer's discretion cannot be easily interfered with by the Court unless there are exceptional grounds." Mr.Francis, learned counsel, argued that it is trite that the costs will follow the event and decree holder need be paid for the costs incurred unless where there are good reasons. He submitted that in the case at hand the awarded costs were not excessive. He argued that the costs paid included the time involved in the case, out of, and when dealing with, the matter in the Court from the start to the end. He submitted that the instruction fee grows when the matter grows and that when the respondent had filed the 5 matter in Court the applicant brought a Preliminary Objection challenging jurisdiction of the Court to entertain the matter which objection was argued by parties and was dismissed with costs. The cost awarded in the preliminary objection were added to the Bill of costs that was ultimately filed. Mr. Florian Francis, learned Advocate submitted that the Applicant is complaining that the awarded costs were higher because the applicant does not take into account the costs of the Preliminary Objection which also included research. He argued that the critical nature of the Preliminary Objections which objections were seeking for dismissal of the suit, necessitated the respondent's counsel to put more efforts in the case. Therefore, Mr. Francis, learned counsel, submitted that the Bill of costs was not excessive and that the Taxing Master taxed it properly as it is seen in the Taxation Certificate. Mr.Francis submitted that preparations for a case do not start when the case is in the Court room. Rather, cases are won in chambers where there is earnest preparation of the case including winning strategies, preparing Witness Statements and researching for legal authorities. He submitted that all these start in day 1 upon receiving instructions form the client and not upon appearing before the Judge to defend the matter. Therefore Mr. Francis, learned Advocate, submitted that the amount of costs awarded in this case 6 was assessed due to the difficulty of the case. He argued that the Costs are not excessive. The claim is baseless. On the EFD receipt and tax invoice discrepancies, Mr.Francis submitted that the lOmillion shillings disbursement was not included in the claim for instruction fees in the Bill of costs. He submitted that as the disbursement part is made up of receipts which can be assessed by the Court, their invoice and engagement letter did not contain the filing fees of 10 million shillings rather the direct costs stated in the EFD Tax Invoice was for "judiciary fees for new case." That meant that there were new cases expected from the same client subsequent to that particular case. He argued that by that time when they issued the tax invoice, they had already filed the case in Court. They had an undertaking and retainer with the client. That phrase in the tax invoice, therefore, referred to future cases. Mr. Francis submitted that they had clarified this same issue and argument before the Taxing Officer too and the Applicant's counsel was present. Mr. Francis finished his submissions in Court praying for dismissal of the application for lack of merits. 7 Mr. Oscar Millanzi Advocate for Applicant, made his for-Rejoinder submissions by reiterating the submissions in chief. He argued that there was no justification given by the Respondent before the Taxing Officer to the effect that the Tshs.29 million claimed by the Respondent as instruction fees also include costs of the Preliminary Objection. On disbursement claims before the Taxing Officer, Mr. Millanzi submitted that the Respondent had notified the Taxing Officer and referred her to the EFD Tax Invoice submitting that it was covering direct payments made, and not new cases as alleged herein but it was for filing the same matter before the Court. I have looked at the Ruling of the Hon.Taxing Officer dated 31st October 2023. At page 2 thereof, the Respondent is on record to have claimed for Tshs.29,460,000/= as instruction Fees under Item 1 of the Bill of Costs. The basis for claiming the amount was mentioned to include the nature of the suit, two years' time taken, complexity of the matter, ten exhibits tendered and five issues framed. At page 3 the Taxing Officer awarded Tshs.20 million by mentioning the factors she had taken into consideration including that the suit had ended after full trial, the proceedings were contentious, the suit took 8 two years in Court, two witnesses testified on five issues and ten exhibits were tendered. Contrary to the submissions by Mr. Oscar Millanzi, learned counsel for the Applicant, the Taxing Officer made no reference to an EFD Receipt nor to a Tax Invoice. In fact, the Applicant in his affidavit did not attach any such Tax Invoice or EFD receipt either, and the same are conspicuously absent from the Court records in this application. I therefore find the arguments by Mr.Millanzi misplaced as there is no basis upon which they rest in the present case. Equally the submissions by Mr. Francis, learned Advocate for the Respondent on the costs awarded as having combined the costs of the Preliminary Objection and costs of the main suit, have no basis in the Ruling of the Taxing Officer. Such arguments were not made before her and she never considered them. I find that may be both counsel were arguing in respect of an entirely different case, not Taxation Cause No. 110/2023. On the allegation that the costs of the disbursements were claimed twice and awarded twice, again this is also misplaced an argument. The Ruling of the Taxing Officer at page 3 shows that "disbursements being filing fees paid directly to Court were taxed as presented". The Applicant attached a copy of the Bill of Costs of the Respondent in this application. Indeed, the claims 9 for instruction Fees of Tshs.29,460,000/= was claimed under Item 1 without any further breakdown thereof in the Bill of Costs. The disbursements were claimed separately under items 12 to 17 of the Bill of Costs as filing fees for various pleadings. There is nowhere in the Bill of Costs that the amount of disbursements is pegged to instruction fees. Also, there is nowhere in the Ruling of the Taxing Officer that the disbursements are treated as constituent part of the instruction fees therein. At any rate, the proceedings of Taxation Case No. 110/2023 and the Ruling thereof do not bear such facts. The Affidavit of the Applicant did not contain any evidence to prove those allegations either. There was no cogent facts brought to substantiate that the Taxing Officer violated the principles of taxation of costs. I therefore find the present application bankrupt of merits. The application for reference is without any basis. I dismiss it with costs. 10 Ruling is delivered in Court this 20th day of June, 2024 in the presence of Mr. Gema Mrina learned Advocate for the Applicant and Mr. Robert Mossi learned Advocate for Respondent. 11