[2003] UGCA 13


## THE REPUBLIC OF UGANDA

IN THE COURT OF APPEAL OF UGANDA MUZAMIRU Kibeedi

## AT KAMPALA

### CORAM:

$5$

HON. LADY JUSTICE C. K. BYAMUGISHA,JA

# CIVIL APPLI CATIONS Nos 106 and 107/2003

### **BETWEEN**

MOHAN KIWANUKA MUSISI::::::::::::::::::::::::::::::::::

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ASHA CHAND::::::::::::::::::::: $10$ :::::::::::::::::::::::::::::::::::::: and the second progressive states and

### AND

ASHA CHAND::::::::::::::::::::::::::::::::::::

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MOHANI MUSISI KIWANUKA:::::::::::::::::::::::::::::::::::

(A reference to a single Justice from the decision and order of the taxing officer 15 dated 16^th October 2003 in Civil Appeal No. 53/2001)

# RULING OF BYAMUGISHA, JA

The above two applications were filed under the provisions of Rule

<u>109(1)</u> of rules of this Court. The rule gives a right to any person who is 20 dissatisfied with the decision of the Registrar in his/her capacity as a taxing officer, to refer any matter of law or principle to a single Justice for determination as the justice of the case may require. The two

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applications were consolidated and heard together because they,raise sirnilar matters of lau, and principle. In the first application. the applicant was the unsuccessful party in this Court but he u,on on appeal when the matter \\,ent to the Supreme Court. He therefore filed a bill of costs to the 5 tune of s/zs 124,338,864/= against the respondent. At the hearing, the advocates agreed on all the iterns in the bill except item nos, l, 43 and 44. Item no. I was the instruction fee of s/ls 60,000,000/: to prosecute the appeal in this Court; item no. 43 was a fee of shs 6,390,00& allegedly charged by Allied Bank against a bank guarantee ofsfu

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l0 23 1,000,000/:and item no 44 was the sum of shs 53,866,762/=claimed as interest allegedly charged on a loan of sfts 23 1 ,000,000/= by a company called Visa Plastics at the rate of ZlYo p.a. The taxing officer in his ruling allowed shs 40,000,000/= as instruction fee on itern no.l; he also allowed item no.43 of sfts 6,390,000/: but disallowed item no.44. He taxed and 15 allowed the bill of costs at slu 46,613,000/-. Being dissatisfied with the decision, both parties filed the above references seeking a variation ofthe order made by ttre taxing officer.

I shall now deal with each reference separately beginning with that of Musisi Kiwanuka (no.106). Only one ground was raised namely that the taxing officer erred in law in refusing to award a legitimate cost incurred 20 by the applicant, i.e interest on Ug. Sfts 23 1,000,000/: being money

borrou,ed from Visa Plastics Lrd in order to obtain a bank guarantee as ordered by court.

In subrnitting on this ground, N'lr Buuule. counsel for Mr Kiu,anuka, ⁵ stated that the taxing officer misdirected himself on a matter of principle in refusing to award a legitimate cost incurred by his client. He stated that one of the principles applicable ro the taxation ofcosts as expounded in the case of Makura International Vs Cardinal Nsu buga n982lH. C. B 11 is that a successful litigant ought to be fairly reimbursed with costs ¹⁰ incurred in the case. He pointed out that one of the conditions agreed upon for stay ofexecution was a bank guarantee that was obtained from Allied Bank. He claimed that his client had no monev on his account and ^acompany Visa Plastics Ltd had to borrow the money, put it on his

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account before the bank could process the guarantee. He therefore

- l5 defended the interest of 2lo/o as being a legitimate cost incurred by the applicant. He criticised the taxing officer for not allowing the item and he invited Court to re-consider the issue bearing in mind that a legitimate cost ought to be reimbursed. - In reply Mr Rezida, leamed counsel for Asha Chand, supported the decision of the taxing officer of disallowing the interest of 2l %o. He referred to a letter dated 20/08/03 that was produced at the time of 20

hearing the taxation. TIre letter in question ri'as addlessed to the applicant (Musisi Kirvanuka) and it set out the tenns of the guarantee but it did not mentiorr the interest of 21 o/o. He also refen'ed to a letter dated 0l/07103 lronr Visa Plastics addressed to the applicaut. It, too, did not mention the 5 interest of 2l '/o. Furthennore, there was a legal morlgage on the applicant's property situated on Plot No. 14 Ngabo Road in Kololo in it lent money to Visa Plastics Ltd at the interest of 21 ok. He invited court to dismiss the reference by stating that costs must be confined to what is l0 reasonable in the circumstances ofeach case. favour of Allied Bank. He also pointed out that the bank did not state that

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are that a litigant ought to be fairly reimbursed with costs that have been Iegitimately incurred in litigation. The burden is on the party who is 15 claiming the item in question to satisfu the taxing officer that the particular expense was legitimately incurred. In dealing with the issue of interest, the taxing officer referred to the letter from Allied Bank dated 20s August 2003 addressed to Mr Musisi Ki'\*'anuka. He pointed out quite rightly in my view that the letter did not mention interest of 21 oh. There 20 was no correspondence between the applicant and the bank that it had lent money to.him at the interest rate of 2l o/o. The company Visa Plastics Ltd, which allegedly borrowed the money for onward transmission to the The legal principles laid down in various authorities with regard to costs

applicant, must had done so on consideration known between it and the applicant. It must have been some private arangement in rny vieu, u4rich cannot be called a legitimate cost u,ithin the meaning envisaged by the authorities that have dealt rvith the subject. I was not persuaded in the 5 circumstances of this case that the interest of 2l Yo was a legitimate cost incurred by Mr Musisi Kiwanuka. I will not, therefore, interfere with the order made by the taxing officer.

As regards the second reference, it had six grounds. Thfe are tfre 10 following: -

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- 1. The award by the Iearned taxing officer ofsls 40,000.000/= as instruction fees ryas manifestly excessive and unjust. - 2. The learned taxing officer erred in basing the taxation on the work done in the Supreme Court viz; alleged new - ¹⁵ ^pri nciples/p reced en t rvhen his duty was to make an award based on the work done in the Court of Appeal as the Supreme Court would tax a bill for work done in that court, - 3. The learned taxing officer erred in rewarding counsel for the appellant for vlhat he termed a new precedent in our - jurisprudence that a Minister can disregard a regulation governing the exercise of his powers under an Act of parliament which matter was purely an innovation of flis Lordship Mulenga

When the matter came for final disposal, Mr Rezida learned counsel for Asha Chand, submitted that the award of shs $40,000,000/$ = as instructions fees was manifestly excessive. He complained that the learned taxing officer ignored a fact that was brought to his attention in that the respondent had claimed shs 70 million as instruction fees in the Supreme Court and 40,285,000/= in the High Court. Learned Counsel pointed out that this was a pertinent question to be considered when taxing a bill of costs. He relied on the ruling of Mulenga JSC in the case of Bank of Uganda Vs Arabe Espanol (supra) where the learned Justice set out sufficient guidelines. Counsel cited a number of other authorities such as Departed Asian Property Custodian Board Vs Jaffer Brothers Ltd, **TAXABLE METALLIN** Civil No.13/99(unreported) where 16 million shillings was reduced to 4 millions; The Registered Trustees of Kampala Institute Vs Departed Asian Property Custodian Board Civil Appeal No.3/95(unreported) $\label{eq:1} \begin{split} \mathcal{L} = \mathcal{L} = \mathcal{L} \end{split} \quad \begin{split} \mathcal{L} = \mathcal{L} \end{split}$ **Sections** of the **Explanation Explanation**

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Counsel pointed out that in the case of The Registered Trustees of CARDICADE ACCOUNTING TO COMMISSION Kampala Institute the property involved was in the city of Kampala and entre suite de la provincia de la constante was a commercial building.

where instruction fees of 70 million was reduced to 4 million.

The issue of whether the property was to be returned to its former owners 20 or to remain with the Departed Asian Property Custodian Board was not addressed by court. The court was interpreting the provisions of

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Expropriated Properties Act. In the same way, the appeal in the matter now before couft involved the interpretation of the same legislation and not the value of the subject matter of the suit. He further submitted that the taxing officer put the value ofthe property at I billion shillings and 5 yet there was evidence that the respondent bought the property at sizs 50,000/: He concluded that there was an error regarding the value of the subj ect matter.

In reply Mr Buwule, learned counsel for the respondent, supported the 10 taxing officer's award of 40 million shillings as being reasonable. He pointed out that the subject matter of the suit was the recovery of property comprised in Plot 2 hnpala Avenue Kololo and therefore its value had to be taken into account in determining the appropriate professional fees. He further submitted that it is erroneous for Mr Rezida to state that the appeal l5 involved the interpretation of the Expropriated properties Act whereas not. It was his submission that the value which the Registrar used was the sum of Us \$ 350,000 which the High Court had awarded plus mesne profits calculated at slzs 23 1,000,000/=. He concluded that the case was complex and therefore the Regisnar exercised his discretion properly.

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The @lI g. Ir-tborities available show that there is no mathematical formula to rif;ri.rarltrE\*rrtranr! into be used in assessing instruction fees. But the factors to be taken .r\_lr'..r.dl'iE+4rF.,lril-'rl!it :---ry.\*.1F.\_ri!:i1. !:,:r\r&.t,.\.

account are set out under rulc 108(l) and (2) of the Rules of this Court and the scales set out in the Third Schedule thereof. The Ieamed taxing officer u,as alive to the law and the principles that govem the award of instruction fees. However, his application of the lara' to the circumstances 5 ofthe appeal has caused me concerl

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Essentially the respondent filed his counter-claim in the High Court in which he sought a number of declarations. One of the declarations that he sought was whether the Cerlificate of repossession issued to the applicant ¹⁰ under the Expropriated Properties Act( Cap 87 Laws of Uganda(Revised edition) was proper. His contention was that it deprived him of propefy without any provision being made for payment of adequate compensation. The work that was done by the parties in this court ought to have guided the taxing officer in the assessment of the instruction fee ¹⁵ and not the precedent that the case established in the Supreme Court. The parties filed written submissions in this Court. The appeal involved the interpretation of the Expropriated Properties Act and the Regulations made thereunder. There is nothing in the judgement of this Court that alluded to the value of the property. As both counsel submitted, the 20 evidence that was adduced to prove mesne profits that was finally awarded by the High Court; the purchase price paid by the respondent to the seller ix 1978 and the offer by the Dutch Government to buy the

property at \$350,000 or rent it at \$350 in 1993 were not conclusive evidence of the value of the subject matter of the suit property.

Iam inclined to accept the submissions Mr Rezida that the appeal fell under the category of the Registered Trustees of Kampala Institute cases and therefore an instruction fee of shs $40,000,000/=$ was not reasonable in the circumstances of the appeal. The learned taxing officer also took into consideration matters that were not directly connected with the work done by counsel in this Court. Such factors as the rate of the

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dollar against the Uganda shilling or the precedent that the appeal finally $10$ established in the Supreme Court were of no consequence. I would accordingly interfere with the award by reducing the same to shs $6,000,000/$ =. This finding disposes of the first five grounds of appeal.

I will now deal with the last ground. This concerned the award of shs 15 6,390,000/= as bank charges for the guarantee. I have looked at the record of the proceedings before the taxing officer and the submission made on the item by Mr Rezida. The objection he made against the claim was that the letter from the bank dated 20/08/03 amounted to an alteration or addition to a bill of costs. The taxing officer overruled him on that point. 20 No appeal or complaint has been lodged on this point. I think the expense

was legitimately incurred and I have found no fault with the decision of the taxing officer's decision.

Doing the best that I can, the respondent's bill of costs will be reduced to shs 12,613,000/= and I hope this sum will adequately remunerate counsel who represented him in this Court.

The second application is partly allowed by setting aside the taxing officer's order and substituting it with an order of shs 12, 613,000/= as the respondent's bill of costs.

Dated at Kampala this. (Aday of Dec. 2003.

C. K. B **Justice of Appeal**

$10$

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