PETER MNANKA tanzlii

IN THE HIGH COURT OF THE UNITED REPUBLIC OF TANZANIA MUSOMA SUB-REGISTRY AT MUSOMA CIVIL APPLICATION NO. 4454/2024 BETWEEN PETER MNANKA….…………..………………………………..………………….APPLICANT VERSUS ANARUA MWANGA ELIAS…….…………………………..………………… RESPONDENT RULING OF THE COURT 26/06/2024 & 31/07/2024 Kafanabo, J.: This is a ruling in respect of an application for reference arising from the decision of the taxing officer of the Tarime District Court in Taxation Cause No. 03 of 2023 dated 15th February 2024. The Applicant being aggrieved by the said decision preferred this application of reference under Order 7(1) and (2) of the Advocates Remuneration Order, 2015. The Applicant, by chamber summons and affidavit, beseeches this court to examine and determine the correctness and justifiability of the decision of the taxing officer in Taxation Cause No. 03 of 2023. A little backdrop of the matter is that the Applicant herein instituted Civil Case No. 06/2022 in the District Court of Tarime against the Respondent herein, claiming for Tanzania Shillings (TZS) 31,000,000/= being an amount of money arising from malicious prosecution, false information, and 1 consequential damages. The suit was duly heard and in the end, it was determined against the Applicant herein with order as to costs. That being the situation, the Respondent instituted Taxation Cause No. 03 of 2023 against the Applicant claiming for TZS 7,190,000/= being the total costs incurred. The said taxation cause was duly heard and on 15th February 2024 the said application was determined in favour of the Respondent, and the taxing officer awarded TZS 4,520,000/= being costs to be paid by the Applicant, but taxed off TZS 2,670,000/=. The Applicant was aggrieved by the said decision and thus this application for reference. The affidavit supporting the application and the counter affidavit by the Respondent contains specific items that have been challenged by the Applicant, and addressed by the Respondent, and the same shall be addressed categorically in the course of this ruling. At the hearing of the application, the Applicant had the services of Mr. Emmanuel Werema, Advocate and the Respondent entered an appearance in person. In support of the application, first of all, the Applicant’s counsel adopted his affidavit in support of the application as part of his submissions. He further submitted that the taxing officer misdirected herself after taxing TZS 4,520,000/= as costs of the suit without considering Order 48 of the Advocates Remuneration Order, 2015. Order 48 provides that if one- sixth (1/6) of the bill of costs is disallowed, the whole bill of costs should be disallowed. 2 It was argued by the Applicant’s counsel that the total amount presented in the bill of costs was TZS 7,190,000/= and one-sixth of the said amount was TZS 1,198,333.3. Moreover, the taxing officer taxed off TZS 2,670,000/= which was more than one-sixth of the total amount of the bill of costs, but allowed the bill of costs which contravened Order 48 of the Advocates Remuneration Order, 2015. The case of David Livingstone Memorial and Bagamoyo Zoological Society Park Ltd vs Dodsal Hydrocarbons and Power (T) Pvt Ltd, Civil Reference 18 of 2020 (unreported) was cited in bolstering the Applicant’s counsel’s submissions. In reply submissions, the Respondent, being a layperson, had very little to submit, he simply adopted his counter affidavit as part of his submissions opposing the application for reference. Now therefore, in light of the parties’ submissions and the relevant pleadings in this application, the major complaint of the Applicant is that the taxing officer erred in granting costs after disallowing more than one-sixth of the total amount of the bill of costs presented by the Respondent. The Applicant’s claim is hinged on Order 48 of the Advocates Remuneration Order, 2015, hereinafter referred to as the ‘ARO’. For ease of reference, the said order provides as follows: “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: 3 Provided that, at the discretion of the taxing officer any instruction fee claimed, may be disregarded in the computation of the amount taxed of that fee in the computation of the one-sixth.” The above-reproduced provision of the law is twofold. One is that 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. This means that even if other items of the bill are correct, the same will not be allowed. However, this will be the conclusion if the said Order 48 of the ARO is read partly, and in isolation or without considering the proviso thereto. Nevertheless, if the said Order 48 of the ARO is read and interpreted as a whole, the conclusion would be completely different. This is because the proviso to the said order gives the discretion to the taxing officer to disregard instructions fee taxed off when computing the one-sixth of the total amount of the bill of costs. This, further, means that if the taxing officer exercises his/her discretion to disregard the instructions fee in the computation of one-sixth, then two items will be excluded in the computation of one-sixth of the total amount of the bill of costs presented. The two items are; one, the court fees as indicated in the main provision of Order 48 of the ARO, and two the instructions fee upon the taxing officer exercising his discretion as stated in the proviso to Order 48 of the ARO. Partial interpretation of Order 48 of the ARO would do injustice to, and rob the deserving litigants of their rights if the harsh interpretation of Order 4 48 is preferred. The exception provided in the proviso to Order 48 of the ARO should be interpreted positively, and as part of Order 48 of the ARO, and not as a separate provision altogether. Moreover, the sad proviso should be utilized to ensure that justice is done to both parties. The same should not be avoided to simply allow all items of the bill of costs, including court filing fees, to be disallowed simply because the taxing officer did not exercise his/her discretion under the proviso to Order 48 of the ARO. It is also a view of this court that the taxing officer should provide cogent reasons as to why the whole bill of costs is disallowed on the basis that more than one-sixth of the total amount of the bill of costs has been taxed off, and as to why the proviso to Order 48 of the ARO is not invoked to use his/her discretion in disregarding the instructions fee taxed off when computing the one-sixth of the total bill of costs. The importance and role of a proviso in an interpretation of a statute cannot be overemphasized. A proviso is part of the particular provision under which it is enacted and has several functions as an internal aid to statutory interpretation. Borrowing a leaf from the Supreme Court of India, in the case of Swedish Match AB v. Securities & Exchange Board, India, (2004) 11 SCC 641 quoting with approval its decision in S. Sundaram Pillai v. V. R. Pattabiraman, (1985) 1 SCC 591, the Court observed that a proviso to a particular section has four functions, as follows: “(1) qualifying or excepting certain provisions from the main enactment; 5 (2) it may entirely change the very concept of the intendment of the enactment by insisting on certain mandatory conditions to be fulfilled in order to make the enactment workable; (3) it may be so embedded in the Act itself as to become an integral part of the enactment and thus acquire the tenor and colour of the substantive enactment itself; and (4) it may be used merely to act as an optional addenda to the enactment with the sole object of explaining the real intendment of the statutory provision." Moreover, in another case of Ali M.K. v. State of Kerala - [2003] 11 SCC 632, 637, the Supreme Court of India made similar observations as follows: "The normal function of a proviso is to except something out of the enactment or to qualify something enacted therein which but for the proviso would be within the purview of the enactment…when one finds a proviso to a section the natural presumption is that, but for the proviso, the enacting part of the section would have included the subject matter of the proviso. The proper function of a proviso is to except and to deal with a case which would otherwise fall within the general language of the main enactment and its effect is confined to that case. It is a qualification of the preceding enactment which is expressed in terms too general to be quite accurate. As a general rule, a proviso is added to an enactment to qualify or create an exception to what is in the enactment and 6 ordinarily, a proviso is not interpreted as stating a general rule'." Emphasis added. In light of the above persuasive holdings of the Supreme Court of India, it is a view of this Court that the enactment of Order 48 of the ARO, that if one-sixth of the bill of costs is disallowed, a party presenting the bill of costs is not entitled to the costs of such taxation is a general rule qualified and excepted by the proviso thereto. It is also a trite law that every general rule has an exception, and an exception to Order 48 of the ARO is provided in the proviso thereto. As alluded to herein above, a taxing officer is given the discretion to disregard the amount of the instructions fee taxed off when computing one-sixth of the total amount of the bill of costs presented. Since the relevant proviso is part of the law, although is discretionarily put to use by the taxing officer, the same should not be invoked at the pleasure of the taxing officer, and since it qualifies or creates an exception to the general rule, the taxing officer should put the same to use whenever the application of the same may save the bill of costs of a deserving litigant, in an event the one-sixth rule disentitles a party that presented a bill of costs. Moreover, it should also be noted that the cardinal principle that each case should be decided based on its facts also plays a major role in the interpretation of Order 48 of the ARO, especially the invocation of discretion under the proviso thereto. The facts of each case will determine whether the use of discretion should be invoked, or otherwise and the reasons for the decision must be provided. For instance, there are cases where the amount 7 taxed off does not exceed one-sixth of the total amount of the bill of costs presented. On the proper use of discretion, this court finds comfort in the case of Benjamin Elikana Masota @ Benjamin Masota vs Omega Fish Limited (Civil Application No.540/08 of 2022) [2023] TZCA 17539 (22 August 2023), where a single Justice of the Court of Appeal, when discussing the use of discretion and peculiarity of the facts of each case, observed that: “I will begin my discussion with the obvious; the Court's discretion under rule 10 of the Rules. Both counsels agree and it is indeed elementary that it must be exercised judiciously based on judgment on what is fair under the particular circumstances guided by the rules and principles of law consistent with the Court's decision in Mwita s/o Mhere v. Republic [2005] T.L.R. 107. In other words, the exercise of discretion must take into account all relevant factors as opposed to arbitrariness, personal whims, sympathy or capriciousness. Whilst it is of paramount importance to act according to rules and principles of law in exercising discretion, one must not lose sight of the fact that each case must be decided according to peculiar facts and circumstances”. Emphasis added. Moreover, the said Order 48 of ARO should not be read in isolation from other provisions pertinent to the use of the taxing officer’s discretion. Relevant to this are Orders 12(1), 15, and 47 of the Advocates 8 Remuneration Order, 2015. To start with, Order 12(1) of the ARO provides that: ‘The taxing officer may allow such costs, charges, and expenses as authorised in this Order or appear to him to be necessary or proper for the attainment of justice.’ Order 15 of the ARO provides for a special fee payable to an advocate by the client. The order reads: “ An advocate shall in business of exceptional importance or unusual complexity, be entitled to receive as against his client, a special fee in addition to the remuneration as prescribed in this Order. The taxing officer shall, in assessing the special fee, consider the following- (a) the nature of the place and the circumstances in which the business or part thereof is transacted; (b) the nature and extent of the pecuniary or other interest involved; (c) the nature and quality of labour and responsibility entailed; (d) the number, complexity and importance of documents prepared or examined; or (e) any other relevant circumstances.” Moreover, Order 47 of the ARO provides that: “The taxing officer may allow an advocate a higher remuneration than that prescribed by the remuneration agreement on special grounds arising out of the nature, importance, complexity, sensitivity or 9 urgency of the contentious business not envisaged at the time of signing the agreement, and only upon the advocate filing his application for adjudication of the remuneration agreement against the client.” Therefore, it is a view of this court that reading Order 48 of the ARO without considering the proviso thereto, defeats the whole purpose of the said proviso. It also defeats the purpose of enacting Orders 12, 15 (about special fees), and Order 47 (on higher remuneration than that prescribed by the remuneration agreement) all of the ARO. This is because all the referred provisions bestow a mandate to the taxing officer to exercise his/her discretion for purposes of attaining justice regarding costs incurred, as it may be deemed necessary, or proper depending on the work done. Moreover, allowing the hit-or-miss approach in the application of the said proviso in the interpretation of Order 48 of the ARO defeats the purpose of other enactments as alluded hereinabove, and the right to recover costs. This is because if the taxing officer, at his/her pleasure decides either or not to invoke her discretion as provided in the said proviso, and since has no duty to provide reasons in that respect, as per Order 48 of the ARO, then all other provisions of the law regarding remuneration of advocates would be at the mercy of the taxing officer when computing the one-sixth of the bill of costs, otherwise, the same would be rendered nugatory. This will amount to arbitrariness in the application of Order 48 of the ARO contrary to the principles enshrined in the cases of Benjamin Elikana Masota @ Benjamin Masota vs Omega Fish Limited (supra) and Mwita s/o Mhere v. Republic (supra), in the latter case the Court of Appeal held that: 10 ‘Judicial discretion is the exercise of judgment by a judge or court based on what is fair under the circumstances and guided by the rules and principles of law; the court has to demonstrate, however briefly, how that discretion has been exercised to reach the decision it takes’ It is also paramount, at this juncture, to categorically state that the duty of the court in determining the bill of costs presented to it for taxation purposes is mainly to assess valid costs in light of the law and evidence adduced. The taxing officer and the court, in general, should avoid sweeping conclusions on claims as may be brought by an erroneous interpretation of Order 48 of the ARO. The Court is further required to determine a bill of costs properly filed on merits, out of which excessive amount of claims presented shall be disallowed, and a reasonable/acceptable amount of the bill of costs presented should be allowed. Disallowing the whole bill of costs because the taxing officer has disallowed one-sixth of the total amount of the bill of costs presented is distasteful to justice. In addition, the said Order 48, if interpreted by disallowing the whole bill of costs just because one-sixth of the same has been disallowed, it defeats even the sections of its principal legislation, that is the Advocates Act, Cap. 341 R.E. 2019. For instance, section 56(1) of the Act provides that: “If the business covered by any agreement made pursuant to section 54 is business done, or to be done, in any action, the amount payable under the agreement shall not be received by the advocate until the agreement has been examined and allowed by a taxing officer of the 11 High Court, and if the taxing officer is of the opinion that the agreement is unfair or unreasonable, he may require the opinion of the Remuneration Committee to be taken thereon and may on receipt of such opinion reduce the amount payable thereunder, or order the agreement to be cancelled and the costs recovered thereby to be taxed as if the agreement had not been made.” Under section 56 of the Act, the taxing officer is allowed to reduce the amount considered unfair or unreasonable, or order the agreement to be cancelled and costs to be recovered thereby to be taxed as if the agreement had not been made. This means that whatever amount the taxing officer taxes off from the bill of cost, the remaining amount, however trifling, will be accordingly taxed and awarded to a deserving party. There is no provision in the principal legislation that allows the whole bill of costs to be disallowed because the amount taxed off exceeds a particular amount of percentage of the bill of costs. It is thus an observation of this court that Order 48 of the ARO is ultra vires the main legislation and, in a proper case, it may be contravening section 36(1) of the Interpretation of Laws Act, Cap. 1 R.E. 2020. For that reason, and as the law currently stands, it is a view of this court that if more than one-sixth of the bill of costs is disallowed, and the taxing officer opts not to invoke the discretion under the proviso to Orders 48 and order 12 of the ARO, reasons of the decision to that effect must be 12 categorically stated before the whole bill of costs, which include court fees, is disallowed. Besides, it would be premature, and an abrogation of justice, if the taxing officer will disallow the whole bill of costs on the basis that the amount taxed off exceeds one-sixth of the whole bill of costs, without invoking the taxing officer’s discretion, as provided in the proviso to Order 48 of the ARO, to disregard the amount of the instructions fee included in the amount taxed off from the total amount of the bill of costs. At this twinkling, though bypassing, it is also healthy to comment that the provisions of Order 48 of the ARO, have been crafted in such a manner that it invites ambiguity especially where the word “taxation” is used/placed in the Order, and how the phrase “…may be disregarded in the computation of the amount taxed of(sic) that fee in the computation of the one-sixth.”, has been crafted. Reverting to the present case, the learned counsel for the Applicant faulted the taxing officer’s decision of allowing and taxing TZS 4,520,000/= as costs of the suit, but after taxing off TZS 2,670,000/= which was more than one-sixth of TZS 7,190,000/= being the total amount presented in the bill of costs. It was submitted that one-sixth of the said amount was TZS 1,198,333.3 and since the amount taxed off (TZS 2,670,000/=) was more than the said one-sixth, then the whole bill off cost should have been disallowed. The above line of argument was according to the Applicant’s counsel interpretation of order 48 of the Advocates Remuneration Order. The said position was also taken by this court in the cases of David Livingstone 13 Memorial and Bagamoyo Zoological Society Park Ltd vs Dodsal Hydrocarbons and Power (T) Pvt Ltd (supra), and the Registered Trustees of Winners Chapel International v. Maria Mathias and 137 others, Civil Reference No. 06 of 2023(unreported). This court notes its position in the above decisions of this court on disallowing the bill of costs if more than one-sixth of the total amount presented is disallowed. However, the said decisions did not address the proviso to Order 48 of the ARO. Also, even though the Applicant’s counsel did not agree with the taxing officer’s decision, but did not address the effect of the proviso to the main enactment in Order 48 of the ARO. As regards the Applicant’s complaint that the taxing officer erred in not disallowing the whole bill of costs after disallowing more than one-sixth of the bill of costs, it is a view of this court that the said complaint or submission is misconceived in the light of the reasoning of this court herein above. It should be noted that the total bill of costs was TZS 7,190,000/= and the taxed-off amount was TZS 2,670,000/= which was more than one-sixth being the total amount presented in the bill of costs. However, in the said amount (TZS 7,190,000/=), TZS 4,500,000/= was the advocate’s instructions fee out of which 1,400,000/= was taxed off by the taxing officer. Therefore, before validating, but working on, the Applicant’s complaint that the whole bill of costs should have been disallowed, the said TZS 1,400,000/= being the amount of instructions fee taxed off by the taxing officer, should be disregarded from the amount taxed off from the total amount of the bill of costs presented. 14 The amount taxed off from the total amount of the bill of costs presented is 2,670,000/=. Then TZS 1,400,000/=being an amount of instruction fee taxed off is hereby deducted from TZS 2,670,000/= as a way of disregarding it in calculating one-sixth of the total amount of the bill of costs. Then the remaining amount would be TZS 1, 270,000/= being total amount taxed off. Then, since one-sixth of the total amount of the bill of costs is TZS 1,198,333.3, then, it goes without saying, but let it be said anyway, that TZS 1,270,000/= being the amount taxed off is far below the one-sixth that requires the whole bill of costs to be disallowed. Under the circumstances, this court cannot fault the taxing officer for not disallowing the whole bill of costs as argued by the Applicant’s counsel. Therefore, the Applicant’s complaint that the whole bill of costs should be disallowed lacks merit and is thus dismissed. The other ground of reference challenges the instructions fees of the advocate of TZS 3,100,000/= allowed by the taxing master as being exorbitant and that the taxing officer took the highest percentage without stating reasons thereof. Before deciding whether to interfere with the decision of the taxing officer on instruction fees awarded, this court is mindful of the laid down principle that the taxing officer’s discretion on allowing the instruction fees may only be interfered with if it is proved that he/she had acted on the wrong principle, or applied wrong consideration when allowing the instruction fee. Moreover, in addressing the discretion of the taxing officer, the Court of Appeal of Tanzania in Tanzania Rent A Car Limited vs Peter Kimuhu (Civil Reference 9 of 2020) [2021] TZCA 103 (6 April 2021) referring 15 to the decisions of the Attorney General v. Amos Shavu, Taxation Reference No. 2 of 2000, the East African Development Bank v. Blue Line Enterprises, Civil Reference No. 12 of 2006 (both unreported) and Premchand Raichand Ltd and Another v. Quarry Services of East Africa Ltd and Others (No.3) [1972] 1 E.A. 162 observed that: ‘As argued by both counsels for the parties, it is a general rule that the award of instruction fees is peculiarly within the discretion of a taxing officer and the Court will always be reluctant to interfere with his decision, unless it is proved that the taxing officer exercised his discretion injudiciously or has acted upon a wrong principle or applied wrong consideration.’ Backsliding to the present case, the record before the court elucidates that Civil Case No. 06 of 2022 in respect of which costs subject matter of this application were awarded, was filed in May 2022 and determined in January 2023. This means that it took almost eight months to be determined. Besides, after reviewing the record of the said case, and given the nature of the case, it is a view of this court that the case did not involve intricate matters and thus it was not proper for the taxing officer to apply the highest rate of percentage available without explaining why the lowest was not preferred. The Court of Appeal decisions in Tanzania Rent A Car Limited vs Peter Kimuhu (supra) and East African Development Bank v. Blue Line Enterprises (supra) are relevant. It is thus a view of this court that under the circumstances of the matter, the lowest rate in the relevant item of the schedule to the ARO was the appropriate rate to be applied by the taxing officer. 16 In addition, given the nature of the suit filed by the Applicant, the instructions fee was properly charged under item five (5) of the Ninth Schedule to the ARO. In the said schedule a claim of the liquidated sum ranging from TZS 30,000,000/= to TZS 70,000,000/= the rate allowed for instructions fee is between 8%-10% of the claimed amount. Therefore, as alluded to hereinabove, the lowest rate is appropriate under the circumstances of this case, and the lowest rate is 8%. So if 8% is calculated from the amount claimed (i.e. TZS 31,000,000/=), the amount of TZS 2,480,000/= should have been taxed as the instructions fee. Therefore, the instructions fee is thus taxed at TZS 2,480,000/=, instead of TZS 3,100,000/= allowed by the taxing officer. As regards item 1 of the bill of costs, the taxing officer allowed TZS 300,000/= to draft a written statement of defence. This court rules that the same should have been taxed off by the taxing officer because it was supposed to be included in the advocate's instructions fee. Moreover, the 8th schedule to the ARO relied upon by the taxing officer does not apply to claims based on liquidated sums as in the present case. It is the Ninth (9th) Schedule to the ARO that applies, and the instructions fee was charged in accordance with the said Ninth Schedule. Therefore, item 1 of the bill of costs was wrongly allowed and is hereby taxed off. Items 2, 4, 5, 6, 8, and 11 of the bill of costs were properly taxed as presented, and items 10 and 14 of the bill of costs were properly taxed off for the non-appearance of the Respondent’s advocate. As regards item 7 of the bill of costs, the same should have been taxed off because the task accomplished was part and parcel of the advocate’s 17