[2020] UGCA 2156

# THE REPUBLIC OF UGANDA

# IN THE COURT OF APPEAL OF UGANDA

### AT KAMPALA

# Civil Appeal No. 0031 of 2014

(An Appeal from the decision of the High Court of Uganda (Civil Division) before Kabiito, J., dated 10th April, 2013 in Miscellaneous Causes No. 0060 of 2012)

- 1. Mayambala Mustafa - 2. Sentongo Henry Charles - 3. Mugenyi Rashid - 4. Kaweesa Yose

(Representatives of over 5000 Taxi Owners, **Drivers and Conductors**

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#### **Versus**

Kampala Capital City Authority ::::::::::::::::::::::::::::::::::::

Coram: Hon. Lady Justice Elizabeth Musoke, JA Hon. Mr. Justice Stephen Musota, JA Hon. Mr. Justice Remmy Kasule, Ag. JA

Acceived by Cotherine 25/3/2020

# JUDGMENT OF REMMY KASULE, JA

I have read through the draft Judgment prepared by the Honourable Lady Justice Elizabeth Musoke, JA.

I agree with the reasoning conclusions and the orders arrived at and made by the Honourable Lady Justice.

I have nothing useful to add thereon.

Dated at Kampala this ..., Day of ... March. 2020.

Ramyux9 for Hon: Justice Muscle

Remmy Kasule Ag. Justice of Appeal

For Hon Justice Remmy Kagula $24081202$

THE REPUBLIC OF UGANDA

# IN THE COURT OF APPEAL OF UGANDA

### AT KAMPALA

# Civil Appeal No. 0031 of 2014

(An Appeal from the decision of the High Court of Uganda (Civil Division) before Kabiito, J., dated 10^th April, 2013 in Miscellaneous Causes No. 0060 of 2012)

- 1. Mayambala Mustafa - 2. Sentongo Henry Charles - 3. Mugenyi Rashid - 4. Kaweesa Yose (Representatives of over 5000 Taxi Owners, **Drivers and Conductors**

**Appellants**

Versus

Kampala Capital City Authority ::::::::::::::::::::::::::::::::::::

Hon. Lady Justice Elizabeth Musoke, JA Coram: Hon. Mr. Justice Stephen Musota, JA Hon. Mr. Justice Remmy Kasule, Ag. JA

# JUDGMENT OF REMMY KASULE, JA

I have read through the draft Judgment prepared by the Honourable Lady Justice Elizabeth Musoke, JA.

I agree with the reasoning conclusions and the orders arrived at and made by the Honourable Lady Justice.

I have nothing useful to add thereon.

24 Bay of March 2020.<br>PIN WILLIAM CO Dated at Kampala this... Remmy I

Ag. Justice of Appeal

#### THE REPUBLIC OF UGANDA

### IN THE COURT OF APPEAL OF UGANDA

### CIVIL APPEAL NO. 0031 OF 2014

1. MAYAMBALA MUSTAFA 2. SENTONGO HENRY CHARLES 3. MUGENYI RASHID 4. KAWEESA YOSE (REPRESENTATIVES OF OVER 5000 TAXI OWNERS, DRIVERS AND CONDUCTORS)::::::::::::::::::::::::::::::::::::

#### **VERSUS**

KAMPALA CAPITAL CITY AUTHORITY::::::::::::::::::::::::::::::::::::

#### **CORAM:**

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HON. LADY JUSTICE ELIZABETH MUSOKE, JA HON. JUSTICE STEPHEN MUSOTA, JA HON. JUSTICE REMMY KASULE AG. JA

# JUDGMENT OF JUSTICE STEPHEN MUSOTA, JA

I have had the opportunity to read in draft the judgment of my learned sister 25 Hon. Lady Justice Elizabeth Musoke, JA. I agree with her reasoning and conclusions as well as the orders she has proposed. This appeal should succeed with costs in this appeal and in the lower court.

Dated at Kampala this.................................... 30

inuo lun

Stephen Musota **JUSTICE OF APPEAL**

### THE REPUBLIC OF UGANDA IN THE COURT OF APPEAL OF UGANDA AT KAMPALA CIVIL APPEAL NO. 0031 OF 2014

# 1. MAYAMBALA MUSTAFA

# 2. SENTONGO HENRY CHARLES

## 3. MUGENYI RASHID

# 4. KAWEESA YOSE (REPRESENTATIVES OF **OVER 5000 TAXI OWNERS,** DRIVERS AND CONDUCTORS)::::::::::::::::::::::::::::::::::::

#### **VERSUS**

# KAMPALA CAPITAL CITY AUTHORITY::::::::::::::::::::::::::::::::::::

(An appeal from the decision of the High Court of Uganda (Civil Division) before Kabiito, J., dated the 10^th day of April, 2013 in Miscellaneous Cause No. 0060 of 2012)

#### HON. LADY JUSTICE ELIZABETH MUSOKE, JA CORAM: HON. MR. JUSTICE STEPHEN MUSOTA, JA HON. MR. JUSTICE REMMY KASULE, AG. JA

# **JUDGMENT OF ELIZABETH MUSOKE, JA.**

This appeal is against part of the decision of the High Court (Kabiito, J.) wherein the court declined to grant an order of refund, and to award general damages to the appellants, and instead ordered each party to bear its own costs of the suit.

### **Brief Background**

The appellants, and the over 5000 people they represent, were at all material times involved in the taxi business in the various Taxi Parks and Stages in Kampala City, as taxi owners, drivers or conductors. In March of 2012, the respondent, through its Revenue and Internal Audit Joint Committee imposed a monthly tax of Ug. Shs. $120,000/=$ on all the taxi operators in the Parks and Stages in Kampala City.

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The tax would be collected by the "Interim KCCA Taxi Management Committee and Stage Committees" under the auspices of the respondent. Those who questioned the said tax, or did not possess a payment receipt for the tax in issue, had their taxis impounded and were also stopped from operating their businesses.

Some of the taxi business operators, inclusive of the appellants and the over 5000 others, were dissatisfied with the state of affairs. They instituted Miscellaneous Cause No. 60 of 2012 in the High Court (Civil Division) for Judicial Review of the respondent's decision. In its ruling, the Court:

a) quashed the decision of the Revenue and Internal Audit Joint Committee of the respondent referred to earlier by which it was decided to impose the tax referred to earlier;

b) granted an order of prohibition and injunction against the respondent, its agents and servants from collecting any taxi park tax from the appellants operating within the City of Kampala;

c) granted an order of prohibition against the interim KCCA Taxi Management Committee from running the taxi operations of the Respondent within the City of Kampala.

However, the High Court declined to grant other orders prayed for by the appellants, namely an order for refund of the monies illegally collected from the appellants, by the respondent, and grant of general damages. The High Court also ordered each party to bear its own costs in the matter. The appellants were dissatisfied with the said decision (except as regards general damages), and lodged an appeal to this Court on the following grounds:

- The Learned Trial Judge erred in law and fact when he failed to $"1.$ order a refund of the money illegally collected by the Respondent as Taxi Park fee. - The Learned Trial Judge erred in law when he failed to award the 2. Appellants the costs of the suit."

#### **Representation**

During the hearing of this appeal, Mr. Alexander Tuhimbise, learned counsel appeared for the appellants; while Mr. Denis Byaruhanga, also learned counsel, appeared for the respondent. The 4^th appellant was in Court in person. Court gave the parties a schedule to file written submissions which they duly did. I have considered those submissions in arriving at my decision in this matter.

#### Appellant's case

### Ground 1

Counsel faulted the learned trial Judge for his failure to order the refund of money which he deemed to have been illegally collected by the respondent as Taxi Park Fee, submitting that the learned trial Judge had no discretion on the matter and his purported exercise of discretion when refusing to make the said order was erroneous and misconceived. Counsel submitted that the matter of refund is governed by law and does not call for the exercise of the Judge's discretion.

It was further submitted for the appellant that Article 152 of the 1995 **Constitution** governs the imposition of taxes and levies in Uganda, and that all purported taxes collected in non-conformity with the said Article are illegal. Illegal taxes remain the property of the persons from which they were collected. Counsel cited Article 26 of the 1995 Constitution and submitted that it protects citizens against arbitrary deprivation of property. In the circumstances he submitted that the learned trial Judge having found that the tax collected by the respondent was illegal, he was obligated to order a refund.

Counsel contended that the law is that illegally imposed taxes have to be refunded to the people they were collected from with interest, and there were several precedents where that legal position was applied. He relied on URA vs. Uganda Taxi Operators & Drivers Association (UTODA), Supreme Court Civil Appeal No. 0013 of 2015 where the Court ordered the tax authority to refund the illegally imposed tax. He further relied on

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Uganda Taxi Operators & Drivers Association (UTODA) VS. URA, Court of Appeal Civil Appeal No. 0015 of 2015 where the Court ordered the Commissioner General to refund the tax she had illegally collected.

Counsel asked this Court to find that the learned trial Judge had erred when he declined to order for refund of the illegally imposed taxes.

#### Ground 2

Counsel submitted that the learned trial Judge had erred not to award the costs of the suit to the appellants, when there was no justification for such an order. He conceded that the award of costs in civil matters is discretionary pursuant to Section 27 of the Civil Procedure Act, Cap. 71, but submitted that the exercise of such discretion ought to have been judiciously and not arbitrarily done.

It was further contended for the appellants that although the award or denial of costs is at the discretion of the Judge, there must be some ground upon which the Judge should base his/her discretion. Counsel submitted that the principle is that a successful party can only be denied costs if it has been proved that, but for his or her conduct, the action would not have been brought. See: UDB vs. Muganga Construction Company [1981] HCB **35.** In further support of his submissions, counsel relied on an excerpt from the Book by the learned Author Richard Kuloba titled Judicial Hints on Civil Procedure, 2^nd Edn at page 96 which states that:

"So the law as to costs as it is understood by the Courts in Kenya, is this, that where a plaintiff comes to enforce a legal right and there has been no misconduct on his part- no omission or neglect, and no vexatious or oppressive misconduct is attributable to him, which would induce the court to deprive him of his costs- the court has no discretion and cannot take away the Plaintiff's rights to costs. If the Defendant in action, however innocently, has infringed a legal right of the plaintiff, the plaintiff is entitled to enforce his legal right and in the absence of any reason such as misconduct, is entitled to the costs of the suit as a matter of course: Hamilton and Barth JJ in Bernard and Co. vs. Souza Junior and Dias (1911-12) 4 KLR 54 at 56, 58 (November 1911)." Counsel submitted that there was no ground for the learned trial Judge to depart from the settled principle that costs follow the event. He prayed to this Court to find that the learned trial Judge erroneously exercised his discretion on costs, and to deem it fit to award the costs of this appeal and in the lower Court to the appellants.

In conclusion, counsel prayed that this Court allows the appeal, sets aside the impugned orders of the trial Court, and orders the respondent to refund the illegally collected taxes to the appellants with interest at Court rate. He also asked for the costs of this appeal.

### Respondent's case

The respondent opposed the appeal.

## Ground 1

It was the case for the respondent that the learned trial Judge properly addressed himself to the law and evidence before him and exercised his discretion judiciously regarding the prayer for refund of the monies in question. Counsel contended that the exercise of the learned trial Judge's discretion should not be interfered with lightly by this Court as the appellants were asking it to do. He relied on **Uganda Development Bank vs** National Insurance Corporation & G. M Combined (U) Ltd, Supreme Court Civil Appeal No. 0028 of 1995, where it was held that a court of appeal should not interfere with the exercise of the discretion of a judge unless it is satisfied that the judge in exercising his discretion has misdirected himself in some matter and as a result has arrived at a wrong decision, or unless it is manifest from the case as a whole that the judge has been clearly wrong in the exercise of his discretion and that as a result there has been an injustice.

It was contended for the respondent that even where this Court has a different opinion on the question of ordering refund of the monies in question than the trial Court, that mere difference of opinion would not be a sufficient ground for interfering with the trial Court's exercise of discretion, since the Court had proceeded judiciously. The trial Court considered that ordering a

refund would cause economic, political and social repercussions which could affect the respondent and its management of the City; it also considered that the appellants had benefited from the services provided by the respondentthat directly impact on the transport sector. Counsel suggested that the respondent could not be ordered to refund the monies in question, like was done to Uganda Revenue Authority (URA), in the cases cited by counsel for the appellant because the manner of handling of revenue by the two agencies was different. Thus while the revenue collected by URA is sent to the consolidated fund, revenue collected by the respondent is spent on the management and provision of vital social services such as construction, repair and maintenance of roads in the city for the benefit of the Public. Counsel contended that the appellants do not dispute that they benefitted from the services provided by the respondent.

In conclusion, it was submitted for the respondent that the learned trial Judge had proceeded properly when he failed to order a refund of the money collected by the respondent from the appellants from February 2012 to April 2013.

#### Ground 2

As regards, the learned trial Judge's refusal to award costs, counsel contended that he had refused to award costs in exercise of his discretion, which was permissible by law. He submitted that for this Court to interfere with the said exercise of discretion as it was being invited to do by the appellants, it must satisfy itself as was decided in Clouds 10 Limited vs. Standard Chartered Bank (U) Ltd, Supreme Court Civil Appeal No. 0035 of 1992 that the learned trial Judge had, in exercising his discretion, erred in principle or taken into account irrelevant factors which are material. In the present case, counsel contended that the appellants had failed, in their submissions to show that there were such errors made by the learned trial Judge.

Counsel for the respondent, therefore, asked this Court to uphold the decision of the learned trial Judge to order each party to bear its own costs as it was properly arrived that.

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All in all, Counsel for the respondent submitted that the present appeal lacks merit, and prayed to this Court to dismiss it with costs to the respondent.

## **Rejoinder**

It was contended for the appellant that the suggestion by counsel for the respondent that it was right for a court of law to refuse to order a refund of money on grounds that such an order would cause political chaos was wrong and unknown in our jurisdiction.

Counsel further reiterated his earlier submissions.

# **Resolution of the Appeal**

I have carefully studied the Court record, considered the submissions of counsel for either side, the law applicable, the authorities cited, and those not cited which are relevant to the determination of this appeal. I am alive to the duty of this Court as a first appellate Court, which was stated in Kifamunte Henry vs Uganda Supreme Court Criminal Appeal No. 10 of 1997 as follows:

"The first appellate court has a duty to review the evidence of the case and to reconsider the materials before the trial judge. The appellate Court must then make up its own mind not disregarding the judgment appealed from but carefully weighing and considering it."

Further, on any appeal from a decision of the High Court acting in exercise of its original jurisdiction, this court may reappraise the evidence and draw its own inferences. See: Rule 30 (1) of the Judicature (Court of Appeal Rules) Directions, S. I 13-10.

I now proceed to a consideration of the grounds of appeal.

### Ground 1

This ground relates to the trial Court's failure to order the respondent to refund to the appellants, the monies it had collected in illegal taxes from them. There is no dispute that the respondent collected monies from the appellants which it had no business collecting. Logically, it follows that the

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appellants had been the victims of the respondent's wrongs of collecting illegal taxes.

The 1995 Constitution enjoins courts of law to ensure that victims of wrongs are adequately compensated. (See: Article L26 (2) (c)). The Constitution does not give an allowance for any wrongdoer not to compensate his or her victim. Even, government agencies, like the respondent must compensate their victims once found in the wrong. It is for the wrong doer to shoulder his or her burden to compensate the victim.

Therefore, in the present case, having found that the appellants had been the victims of payment of illegal taxes to the respondents, the law obligated the trial Court to order a refund of the monies they had collected. I accept the submissions for the appellants that the learned trial Judge had no discretion on the matter as the law provided sufficient guidance on the matter. All the learned trial Judge had to do was to follow the law.

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With respect, I am unable to agree with the logic applied by the learned trial Judge that because the monies illegally collected from the appellants may have been used to provide social services in the City, which the appellants may have benefitted from, then the appellants could not be refunded their monies although the respondent had illegally collected the same. It may be true that the respondent provides very valuable social services, but the provision of those services is funded using monies which have been lawfully collected or allocated to the respondent. To hold otherwise would be absurd.

I therefore hold that the learned trial Judge had no discretion to deny the appellants a refund of their monies as he was obligated by law to order for the said refund.

However, as to the quantum of the money to be refunded, I find that the appellants did not conclusively traverse how much money would be refunded in their pleadings in the lower couft. The receipts attached to the affidavits in support of the application in the lower court were in respect of the illegal taxes collected for a period of one month only. Therefore, the quantum of

money to be refunded has to be properly investigated upon presentation of evidence by both sides of the dispute.

In this connection, Rule 32 (1) of the Judicature (Court of Appeal **Rules) Directions S. I 13-10** is relevant. The rule provides that:

"On any appeal, the court may, so far as its jurisdiction permits, confirm, reverse or vary the decision of the High Court, or remit the proceedings to the High Court with such directions as may be appropriate, or order a new trial, and make any necessary, incidental or consequential orders, including orders as to costs."

As is apparent, this Court has powers pursuant to the above rule, to remit proceedings to the High Court with appropriate directions. This is a case where the exercise of such powers is necessary to conclusively determine the amount of money to be refunded to the appellants by the respondent. I would therefore order that the file in this case be remitted to the High Court which will investigate and determine the amount of money the respondents shall refund to the appellants.

Ground 1 is therefore allowed in the terms stated above.

### Ground 2

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This ground arises from the learned trial Judge's decision to order that each party bears its costs. Both parties conceded that the award or denial of costs is, by law, at the discretion of the Court. (See: Section 27 of the Civil **Procedure Act, Cap. 71).** The principles upon which such discretion is exercised are now well established and were discussed in Besigye Kizza VS. Museveni Yoweri Kaguta and Electoral Commission, Presidential Election Petition No. 1 of 2001 where Odoki, C. J observed that:

"It is well settled that costs follow the event unless the court orders otherwise for good reason. The discretion accorded to the court to deny a successful party costs of litigation must be exercised judicially and for good cause. Costs are an indemnity to compensate the successful litigant the expenses incurred during the litigation. Costs are not intended to be punitive but a successful litigant may be deprived of his

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## costs only in exceptional circumstances, (See Wambugu vs. Public Service Commission [L972] E. A. 296)."

t'r

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I have not found a decided case where the exceptional circumstances which justiflT a denial of costs to the successful party were exhaustively enumerated, But in Wambugu (supra), the exceptional circumstances were that the successful party had not given notice to the other party before instituting the suit. Similarly, in public interest cases like Presidential Election Petitions, the successful parV may be denied costs. I also find instructive the case of UDB vs. Muganga Construction Company [1981] HCB 35, relied on by the appellants wherein it was held that a successful pafi could only be denied costs, if it is proved that, but for his or her conduct, the action could not have been brought. Although it is a High Court decision, and therefore not binding on this Court, I find the reasoning therein highly persuasive.

In the present case, the respondent imposed an illegal tax on the appellants. Those who were opposed to the [ax were met with highhandedness, and had their taxis impounded. Out of desperation, they incurred costs in instituting the suit in the lower Court as a way of having their concerns addressed. This is a case where the discretion to award costs must have been exercised in the appellants' favour. I would therefore set aside the learned trial Judge's order and award costs in this Court and the Lower Court to the appellants.

- In view of the above analysis, I would allow this appeal on all grounds and make the following orders: - a) The respondent shall refund all the monies collected from the appellants by way of the illegal tax. - b) The amount in (a) shall be determined by the High Court on the basis of evidence presented by the parties. The case file is therefore remitted to the High Court for that purpose.

c) The total amount determined in (a) shall attract interest at 15olo per annum from the date of the Judgment in High Court Miscellaneous Cause No. 0060 of 20t2 until payment in full,

d) The respondent shall pay the costs of this appeal and in the Court below.

## Decision

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As Hon. Justices Musota, JA and Kasule, Ag. JA agree, this appeal is allowed in the terms proposed hereinabove. r,

Dated at Kampata this...........}-,\*.huv or /Ynv-C.l^. ,oro.

Elizabeth Musoke Justice of Appeal

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