RULING TAXATION REFERENCE NO

IN THE HIGH COURT OF THE UNITED REPUBLIC OF TANZANIA (COMMERCIAL DIVISION) AT DAR ES SALAAM TAXATION REFERENCE NO. 17182 OF 2024 (Originating from Taxation Cause No. 6263 of 2024) BETWEEN S.E.C (EAST AFRICA) CO. LIMITED ………….……..……………..1ST APPLICANT XIAO CHUN TIAN………………………………………..…………….2ND APPLICANT WENXI SUN………………………..……………………………….……3RD APPLICANT XIAO SHUANG SUN………………………………………………..….4TH APPLICANT NTULI WILLIAM MWANKUSYE….………………………………….5TH APPLICANT VERSUS GABRIEL PONSIAN MAKUNDI……………………..…………………RESPONDENT RULING Date of Last Order: 12/02/2025 Date of Ruling: 21/03/2025 HON. GONZI, J. Under Order 7(1) and 7(2) of the Advocate Remuneration Order GN No.263 of 2015, the Applicant filed this reference praying for the following orders: 1 i. That this Honourable Court be pleased to determine this reference, quash the ruling and finding the Taxing officer (Hon. J. M. Minde, Taxing officer) dated 27/06/2024 in Taxation Cause No. 6263 of 2024. ii. Any other Reliefs (remedy) this Court deem fit and just to grant iii. Cost of this Application The quintessence of this matter is that in October 2023, the Respondent herein lodged Petition No. 65 of 2023 which was before Hon. U. J. Agatho, J. The petition was contested by the Applicants herein and the hearing was conducted by way of written submissions. The matter ended in favour of the Respondent herein whereby in April 2024 he lodged a bill of cost claiming for TZS. 32,040,000.00. On 27th June, 2024, the Taxing Officer of this Court issued the Ruling in Taxation Cause No. 6263 of 2024 thereby Awarding the Respondent TZS .17,440,000/=. The Ruling in Taxation Cause No. 6263 of 2024 is now being challenged before me vide these reference proceedings. The Applicants have advanced the following grounds: 2 i) That the taxing officer erred in law for exercising her discretion on wrong principle of taxation whereby granted an amount of Tshs. 17,440,000 to the Respondent ii) That the amount taxed by the Taxing Officer of Tshs. 17,440,000/= is excessive and unsubstantiated by the Respondent, for the Taxing officer to grant them same as appearing in the ruling of Taxation cause No 6263 of 2024 iii) That the Taxing Officer erred in law from departing on the prescribed scale and exercise the discretion without there being an order or facts to warrant the amount taxed iv) That the Taxing officer ought to dismiss the claims for being excessively placed and falling outside of the provided parameters. The application was supported by an affidavit sworn by Mr. Emmanuel Mbuga, Advocate for the Applicants. On the other hand, upon the Respondent being served with the reference, he filed a counter affidavit Sworn by Mr. Mutakyamirwa Phelemon, Advocate for the Respondent denying the allegations contained in the Applicant's affidavit. 3 The hearing proceeded by way of Written Submissions., Mr. Mbuga, Learned Advocate, represented the Applicants. The Respondents were represented by Mr. Mutakyamirwa Phelemon, Learned Advocate. I thank both Learned Counsel for the submissions timely filed. Mr. Mbuga adopted his affidavit and submitted that an application for reference ought to be determined when there is a point of law or on the ground that the bill as taxed was manifestly excessive or inadequate. He referred the court to the case of Gold Africa Ltd v Eb-Hance Co. Ltd, Taxation Reference of 2714 of 2024 at page 9. He submitted that that the Taxing officer used her discretion on the wrong principles as in the Commercial cause No. 65 of 2023 the dispute was not of liquidated sum hence the taxing officer ought to have followed 11th schedule item (k) and the amount subject to taxation was supposed to be TZS. 1,000,000/= only. He argued that, however, the taxing officer taxed TZS. 15,000,000/= while the matter lasted in court for only 4 months as portrayed at page 5 of the Ruling. He submitted that the taxing officer ought to have considered the time used for hearing. The Learned Counsel for the Applicants argued further that as the matter was argued by way of written submissions, each party complied with the time frame thus less than a month was used contrary to taxing officer’s reasoning. 4 Mr. Mbuga, Learned Advocate, submitted further that at page 5 of the Ruling, the Taxing officer ruled that the matter was complex as it involved a cross- petition without stating how complex the matter was. He argued that this violated the rule in Trace Associate Ltd & 2 others v Rosemary Tryphone, Taxation Reference No 09 of 2023 at page 17. He prayed for the Instruction fees to be revised from TZS 15,000,000/= and instead an amount of TZS. 1,000,000/= be taxed as per the law. On the second ground of challenge, Mr. Mbuga submitter that there is a point of law involved since the taxing officer granted costs at the scale of TZS. 1,000,000/= being the costs for attending the bill of costs. He argued that the amount was not computed neither were parties heard on that matter thus the ruling be set aside. On the third ground of challenge, Mr. Mbuga submitted that the Taxing Officer awarded TZS. 400,000/= as the costs for the respondent’s four appearances in court. He submitted that the amount is excessive as the law prescribes TZS. 50,000/= per each day of attendance in Court under the Eighth schedule item 3(a). He argued that there was no evidence which was provided to justify more amount in respect of appearance, as per section 46 5 of the Advocates Renumeration Order. He therefore, prayed for the bill of cost to be dismissed entirely with costs. In reply, Mr. Phelemon Mutakyamirwa, Learned Advocate submitted that the Taxing Officer, at page 5 of the typed ruling, gave the reasons for departing from the provisions of the Eleventh schedule of the Advocates Remuneration Order, particularly item 1(k). He argued that the Taxing Officer had considered the period or the life span of the case, the amount of research involved, particularly after involvement of the cross petition, and complexity of the matter. He relied on the case of Eco Bank Tanzania Limited Versus Double Company Limited & 3 others, commercial Reference No. 2 of 2019. Mr.Mutakyamirwa, Learned Advocate, submitted that instruction fees are agreed upon and paid before appearing in Court. Therefore, even where a matter is argued by way of written submissions, it doesn’t make any difference to the one argued orally. He proceeded to distinguish the case of Gold Africa (Supra) as it ended on preliminary objection stage unlike the Commercial Cause No. 65 of 2023 which was heard on merit. Mr. Philemon Mutakyamirwa, Learned Advocate, submitted that in Commercial Cause No. 65 of 2023 they were litigating for shares worth 6 Tanzanian shillings One Billion and Two Hundred Million Only (TZS 1,200,000,000/=) thus awarding TZS. 1,000,000? = as the Applicant asserts would be absurd. Mr. Mutakyamirwa, Learned Advocate, submitted further regarding costs for attending the bill of costs. He submitted that the amount does not require any hearing so as to be determined as there should be an end to litigation. On the issue of appearance/attendance costs, Mr. Mutakyamirwa was of the view that the same is more than transport costs. He argued that it includes compensation and time taken for hearing of the case. He relied on Mohammed Hussein Suleiman v The Agakhan Hospital, civil case no 292/2001. He prayed for the application to be dismissed with costs. By way of rejoinder Mr. Mbuga, Learned Advocate, submitted that the issue of appearance for bill of costs is governed by the 8th Schedule under item 3(a) of the Advocates Remuneration Order where the amount of TZS. 50,000/= is the set scale. He argued that no reasons were provided whatsoever by the Taxing Officer to deviate from the scales provided. He argued that the matter being in the commercial court should not have been 7 charged excessively as the law does not provide special privilege for commercial cases. He further rejoined that the time spent in court should not be taken into consideration rather the time parties have appeared for hearing. That marked the end of the Written Submissions. After hearing the submissions by both Counsel, I will now proceed to determine the matter in controversy between the parties herein. I will start with the amount awarded as instruction fees whereby the Respondent was awarded TZS. 15,000,000/= instead of TZS. 1,000,000/=. I have gone through the impugned ruling and the Taxing Officer at page 5 of the typed ruling gave her reasons for departing from the provision of the Eleventh Schedule of the Advocate Remuneration Order. The Taxing Officer held: “I took liberty to go through the proceedings of Miscellaneous Commercial Cause No.65 of 2023 and noted that the suit took almost four months in Court that is from 27th October, 2023 when it was filled to 23rd February, 2024 when the Court deliver its’ decision. The Petition was in deed complex as the Respondent with his reply to the petition filed cross petition grudged more research from the Applicant’’ 8 The Applicant in the submissions in chief complained that the Taxing Officer had used the life span of the case to award TZS. 15,000,000/=. I have gone through the Ruling and the Taxing Officer did not solely consider the life span of the case but also other relevant factors such as complex nature of the matter. The Taxing Officer further elaborated how complex the matter was as the Respondent had filed his reply to the petition together with a Cross Petition thus making both parties indulge in more research. I subscribe to the finding by the Taxing Officer that indeed a cross petition is similar to a fresh petition hence it made the matter complex. Thus it could be said that the Respondent had thereby filed a fresh matter against the Applicant. With the complexity of the matter, the Taxing Officer was justified to raise the fees scales higher beyond the statutorily fixed amounts. Also, I concur with Mr. Philemon Mutakyamirwa, Learned Advocate, that indeed the instruction fees ordinarily ought to be charged before the Advocate conducts the hearing of the matter. Therefore, whatever the mode of hearing eventually takes place whether oral or written, the instruction fees presumably already paid to the Advocate would not change. At any rate, I do not accept the argument by Mr. Mbuga, Learned Advocate, that arguing a petition by way of written submissions is easier than arguing the same petition orally before the court. There is no justification therefore to pay an 9 advocate lesser amount of instruction fees simply because the hearing proceeded by way of written submissions. Hearing of a petition whether orally or by way of written submissions to me would entail the same amount of labour and research, if not more. I therefore find that the Taxing Officer correctly treated the advocate’s fees at the same amount in respect of written submissions like oral submissions. Whereas the Taxing Officer was justified to raise the amount of instruction fees from the one prescribed in the scales, the question is whether the extent of such departure from the prescribed fee scales was reasonable in this case? It is not disputed that the Petition involved declaratory orders hence not liquidated claims. The instruction fees was awarded to the tune of TZS. 15,000,000/= from TZS. 1,000,000/=prescribed in the fees scales. That is 15 times more. Did the factors taken into consideration by the Taxing Officer justify the multiplication of the instruction fees by 15 times? I find the amount a little bit on the higher side and constitute a greater departure from TZS. 1,000,000/= prescribed in the scales. In my view, the factors considered could not catapult the amount 15 times more. I reduce the Instruction fees to TZS. 10,000,000/=. On the second ground the Applicant submitted that the Taxing Officer granted TZS. 1,000,000/= as the costs for attending bill of cost which was 10 not computed neither were the parties heard on that cost item. The respondent argued that there should be an end to litigation thus there was no need to litigate on the costs of the Bill of Costs. I have taken into consideration this contention in line with Order 55(3) of the Advocates Remuneration Order GN No. 263/2015. The same is for fees in respect of taxation of costs, and I quote: “Fees for attending taxation shall not be included in the body of the bill of cost, but the item shall appear at the end and the amount left blank for completion by the taxing officer.” Going through the impugned ruling (last paragraph of page 5), I have found the phrase, “costs for this TSHS. 1,000,000”. The Taxing Officer, therefore, unilaterally awarded TZS. 1,000,000/= as costs of the Bill of Costs. Was it wrong? I do not think so. The Bill of Costs/Taxation of Costs is an application and therefore, ordinarily, attracts the same amount of costs like the other applications which is not more than TZS. 1,000,000/= and that is the amount that the Taxing Officer awarded in her discretion. The costs of Bill of Costs are not litigated between the parties and are left blank until the Taxing Officer in her exclusive jurisdiction and guided by the law, completes that cost component. I therefore find no faulty by the Taxing Officer in this 11 aspect. I decline to accept the argument by the Applicant’s Counsel 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. The essence of Order 55(3) of the Advocates Remuneration Order is to prevent the costs of the Bill of Costs from being litigated again. The Learned Counsel for the Applicants argued that parties were not heard on it. Now, I wonder how could they be heard on an item which the law prescribes that it should have been left blank. How could the parties be heard in support or opposition to the amount left blank!? There was no amount specified under that heading to enable the parties to make arguments thereupon. The fact that the law requires that item to be left blank at the time of presentation of the Bill of Costs is a clear indication that it was not intended to be litigated upon but rather to be left to the exclusive discretion of the Taxing Officer exercised judiciously. Hence, I find no merit on this ground. Thirdly the Applicant submitted that the taxing Officer awarded TZS. 400,000/= as appearances costs contrary to Order 46 which requires TZS. 50,000/= for appearances. I have gone through the Ruling at page 5: “In regard to Court attendance costs charged under items 2 to 5, the applicant charged the items at a flat rate of Tshs. 250,000/= each. The learned counsel 12 for the Respondent contested the same be taxed at Tshs. 5000/- each. As parties argued the petition by way of written submissions under items 3(a) of the Eight schedule to the order the items taxed at Tshs. 100,000/- make a sum of Tsh. 400,000/=. Item 3(a) of the Eighth Schedule under the Advocates Remuneration Order GN 263/2015 provides: “(a) In ordinary cases, per 15 minutes or part thereof: 50,000/=” The taxing Officer has not assigned reasons for awarding TZS. 400,000/= for the 4 times attendance instead of TZS. 200,000/=. What rationale has she used in reaching the said decision? Discretion should be utilized judiciously. Without reasons, the discretion cannot be said to have been used judiciously. I, therefore, find this ground meritorious. I allow attendance costs of TZS. 50,000/= per each date of appearance in Court. The 4 days of appearance, therefore, fetch a total of TZS. 200,000/= The costs of disbursements and filing fees which were amply supported by documents are left intact. In fine, the application partly succeeds. The instruction fees are reduced from TZS. 15,000,000/= to TZS. 10,000,000/=. The costs of attendance in Court by the Applicant for the 4 days are reduced from TZS. 13 400,000/= to TZS. 200,000/=. The other costs awarded by the Taxing Officer with respect to disbursements and costs of the Bill of Costs are left intact. Hence, there is reduced TZS. 5,200,000/= from the TZS. 17, 440,000/= Costs Awarded to the Respondent by the Taxing Officer. The Respondent shall, therefore, be entitled to reimbursement of his costs at the tune of TZS. 12,240,000/=. Each party to bear its own costs in this application. It is so ordered. A. H. GONZI JUDGE 21st March, 2025 Ruling is delivered in Court this 21st day of March, 2025 in the presence of Ms. Specioza Ndunguru, Advocate h/b for Mr. Hance Mrindoko, Advocate for the Applicant and also h/b for Mr. Philemon Mutakyamirwa, Advocate for The Respondent. A. H. GONZI JUDGE 21st March, 2025 14