[2001] UGSC 21

## IN THE SUPREME COURT OF UGANDA AT MENGO

#### CORAM:

# CIVIL APPLICATION NO. 19 OF 2000 **BETWEEN**

A. H. ODER - JSC

#### 1. SUGAR CORPORATION OF UGANDA 2. RICHARD KAGIRI: $\cdots\cdots$ $\cdots\cdots$ $\cdots\cdots$

**APPLICANTS**

#### $AND$

**MILLY MASEMBE:**

$\cdots \cdots \cdots$ $\cdots\cdots$

**RESPONDENT**

(Reference to single judge against the Taxation Ruling of the Supreme court Registrar (Masalu Musene) in Civil appeal No. 1 of 2000 dated 19-07-2000).

### JUDGMENT OF ODER - JSC

This is a reference brought under Rule 105(1) of the Rules of this Court, from a decision of the taxing officer, in the Supreme Court Civil Appeal above referred to. He taxed the bill of costs of the appellant, who was the partially successful party in the appeal, at Shs. 11,161,500=. The Bill of costs so allowed included Shs. 2,000,000= as instruction fee in respect of an application by the appellant to appeal as a pauper; and Shs. $9,000,000$ = as instruction fee for the appeal. It is against the awards of the two figures as instruction fees that the reference is brought.

The brief facts of the case are these:-

The respondent, who was the appellant, sued the applicants in the High Court for damages for personal injuries and loss of property negligently caused by the applicants in a road accident in which she was a victim. The suit was successful to the extent that the applicants were found to be liable 80% for the accident. The respondent was awarded a total sum of Shs. 12,607,000= consisting of general and special damages, interests and costs.

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The applicants appealed to the Court of Appeal against the High Court decision. The appeal was successful. The Court of Appeal held the driver of the mini-bus taxi in which the respondent was a passenger, and which collided with the 1^st applicant's tractor driven by the $2^nd$ applicant's employee and servant to be more blame worthy for the accident than the $2^nd$ applicant.

It was for purposes of appealing, as a pauper, against the Court of Appeal decision that the respondent made an application to a single judge of the Supreme Court. That application was Consequently, the respondent appealed to the Supreme Court as a pauper. The granted. appeal was partially successful in the sense that the Supreme Court interfered with the Court of Appeal decision by holding the driver of the mini bus taxi, 60% to blame for the accident, and the driver of the $1^{st}$ respondent's tractor, the $2^{nd}$ respondent, 40% to blame for the accident. Never-the-less, the percentage of blame worthiness for which the Supreme Court held the driver of the mini-bus taxi responsible for the accident was higher than that for which the Court of Appeal had held him responsible.

Subsequently the respondent filed her bill of costs for her application in the Supreme Court to appeal as a pauper and for her partial success in the appeal. The Registrar of Supreme Court as the taxing officer awarded her costs to which I have already referred. It is that award in respect of instruction fees for the application to appeal as a pauper and for the appeal that have given rise to this reference.

The Memorandum of reference stated the grounds thereof as follows:

- Item 1 of the Appellants' bill of costs taxed to the tune of Shs. 2,000,000/= in $"1.$ respect of an application to sue as a pauper is in all the circumstances manifestly excessive and amounted to an error of principle. - Item 7 of the appellant's bill of costs taxed to the tune of shs. $9,000,000/=$ as $2)$ instruction fee is in all the circumstances manifestly excessive and amounted to error of principles. It is proposed to direct the court for orders that: - (a) The above mentioned decision be set aside; - (b) The reference be allowed; - (c) The applicants be awarded the cost of this application.

A reference on taxation may be made to this court on two grounds, namely on a matter of law of principle or on the ground that the bill of costs as taxed in all the circumstances. manifestly excessive or manifestly excessive. No reference may be made on a question of quantum only. These are provided for in rule 105 of the Rules of this court, whose relevant parts state:

#### Any person who is dissatisfied with a decision of the Registrar in $"105(1)$ his or her.

capacity as a Taxing Officer may require any matter of law of principle to be referred to a Judge of the court for his or her decision and the Judge shall determine the matter as the justice of the case may require.

- $(2)$ . . . . . . . . . . . . . . . . . . . . - Any person who contends that a bill of costs as taxed is in all $(3)$ the circumstances, manifestly excessive or manifestly inadequate, may require the bill to be referred to a Judge and the Judge make such deduction or addition as will render the bill reasonable. - Except as provided in sub-rule (3) there shall be no reference $(4)$ on a quantum only."

The factors which govern taxation of instruction fees are stated in paragraph $9(1)$ , (2) and (3) of the Third Schedule to the Rules of this Court. They are:

- The fee to be allowed for instructions to make support or oppose any $"(1)$ application shall be a sum that the Taxing Officer considers reasonable but shall not be less than Shs. $1000=$ . - $(2)$ The fee to be allowed for instructions to appeal or to oppose an appeal shall be a sum that the Taxing Officer considers reasonable, having regard to the amount involved in the appeal, its nature importance and difficulty the interest of the parties, the other costs to be allowed, the general conduct of the proceedings, the fund or person to bear the costs and all relevant circumstances. - The sum allowed under sub paragraph (2) shall include all the work $(3)$ necessarily and properly done, in connection with the appeal and not otherwise chargeable including attendances correspondence perusals and consulting authorities."

Both the applicants and the respondent filed written submissions under rule 93 ofthe Rules of this Court in support of their respective cases. However. at the hearing of the application, Counsel for the parties were granted leave to address the Court to clarily certain issues, and they did so.

It is, perhaps, proper at this stage for me to reiterate briefly some pertinent principles applicable to review of taxation, which is now my task in this reference. Counsel should do well to bear them in mind when deciding to make, and/or framing grounds of ^a reference. The first is that save in exceptional cases a judge does not interfere with the assessment of what the taxing officer considers to be reasonable fee. This is because it is generally accepted that questions which are solely of quantum of costs are matters with which the taxing officer is particularly suited to deal and in which he has more experience than the judge. Consequently a judge will not alter a fee allowed by the taxing officer, merely because in his opinion he should have allowed a higher or lower amount. Secondly, an exceptional case is where it is shown expressly or by inference that in assessing and arriving at the quantum ofthe fee allowed, the taxing officer exercised, or applied, a wrong principle. In this regard, application ofa wrong principle is capable ofbeing inferred from an award of amount which is manifestly excessive or manifestly low. Thirdly, even il it is shown that the taxing officer erred on principle, the judge should interfere only on being satisfied that the error substantially affected the decision on quantum and that upholding the amount allowed would cause injustice to one of the parties.

I shall now proceed to consider ground I of the reference first.

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Under this ground it is argued in the applicant's written submission that the respondent's application to appeal as a pauper was not a difficult one. It did not take much time to prepare and argue it by her counsel in court, and was readily granted. [n view ofthe provisions of paragraph 9(l) of the Third Schedule to the Supreme Court Rules concerning instruction fee to be allowed for any applications, only a minimal fee ought to have been allowed for this item. The case of - Bank of Uganda v.s Banco Arabe Espaniol, ,Supreme Court Civil Application No. 23 of ,999 (SCC) is relied on for this submission. In that case one of the items for reference was instruction fee for opposing an application for security for costs. The Registrar had awarded Shs. 6,000,000: on reference it was reduced to Shs. 300,000=. Unlike the present one, that application

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it is contended was contested and involved more work. Moreover, in the instant case, the respondent would be getting full instruction fee in the appeal. It is suggested, therefore, that Shs. 200,000= should adequate as reasonable for this item.

When asked by the Court to clarify the point why a person who has successfully applied to appeal as a pauper should ask to be paid costs of such application, whereas if he/she loses the application she would, presumably, be unwilling or unable to pay costs for the application to the opposite party, on the ground that he/she made the application as a pauper. Mr. Luwero counsel for the applicants at the hearing of this reference, submitted that he would have opposed any award of costs to the respondent for the application to appeal as a pauper. Although she was represented by counsel at the hearing of that application, it appears that counsel did so, because he was served with notice for the hearing of the application. In any case, learned counsel contended, no costs were incurred by the pauper applicant other than advocate-client cost. She did not incur party - to - party costs, now being claimed.

The respondent's counter arguments made in the written submission were that the Registrar's award on this item was fair and reasonable. Although it was an interlocutory application the amount allowed was not excessive. The respondent relied on the cases of - Nobel Builders (U) Ltd. vs Sietco Taxation Reference 16/2000 (SCU) (unreported); and Attorney General vs Uganda Blanket Manufacturers Ltd. Civil Application No. 17 of 1993 (SCU) (unreported); Nicholas Rousons vs Gulamhussein Civil Application No. 6 of 1995 (SCU) (unreported. It is also contended that the case of - Bank of Banco Arabe Espaniol (supra) is distinguishable from the instant, **Uganda** $v_S$ because in that case Court reduced an award of Shs. 6,000,000= to Shs. 300,000= instruction fee to oppose an application for security for costs. The reduction was made because the Taxing Officer had based his decision on matters outside the confines of paragraph 9(1) of the Third Schedule to the Supreme Court Taxation Rules, which requires that such costs should be determined according to the actual work done in order to The Taxing Officer had taken into consideration support or oppose the application. extrinsic matters not required by law in taxation applications. That did not happen in the instant case. It is also contended that the applicant's submission that the cost of the pauper's applicant should be reduced to Shs. 200,000= because the appellant would be getting full instruction fee for prosecuting the appeal is without merit, because if this court

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were to uphold such an argument, costs would no longer be awarded for all interlocutory applications, such as the present one now being claimed, since, by their very nature' they are applications pending a main suit or appeal'

On the issue of justification for the respondent wishing to be paid costs for the application which she made as a pauper, Mr. Wakida, counsel for the respondent in this reference, gave four reasons for such justification. First, the application to appeal as a pauper was necessary because the present respondents had won in the court of Appeal. The applicant then had to appeal to the supreme court without any money because the court of Appeal had condemned the respondent to pay costs of the appeal in that cou( and in the High Court.

Secondly, the application was not experte. It was interpartes. The application was unsuccessfully opposed by the present applicants' counsel, at the hearing of that application Mr. Serrwadda, with the result that the application was granted with costs. Moreover, the respondent was represented by counsel at the hearing of that application'

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Thirdly, there was no appeal either against the order allowing the respondent to appeal as ^a pauper or the order for costs. lfher application to appeal as a pauper was rejected, she would not have appealed to the supreme court. lt was, therefore, an important application.

Fourthly, rule 9 of the Supreme Court Taxation Rules is wide enough to allow costs for any application without distinguishing classes of applications,

^Iam persuaded by the arguments ofthe learned counsel for the respondent in justification for the respondent,s claim for instruction fee for her application to appeal as a pauper. The issue which remains to be considered is whether what the taxing officer awarded her should be upheld or reduced. That is what I shall now proceed to deal with'

The taxing officer's award, the object of the complaint in ground I of this reference' was made in the lollowing terms

"Mr. llukida cktimel Shs. 12,01t0,000= ul4uing that it was lrawn on scule tnl thul the tine taken b Prepare arul argue was taken into ccottnl

Mr. Luwero, in reply argued that it was a simple application to sue as a pauper was simple and that award of Shs. 200,000= would suffice. As far as which applications are concerned, the relevant provision is paragraph 9(1) of the Third Schedule to the Supreme Court Rules. It provides ..... There is a wealth of authorities in matters of this nature. The general practice, nevertheless is that usually applications which are interlocutory in nature, attract less fees than the real appeal. the cases of - Patrick Makumbi vs Sole Electronics, Supreme Court Civil Application No. 11 of 1994; and that of -Attorney General vs Uganda Blanket Manufactures (1975) Ltd.; Civil Application No. 17 of 1993, are relevant. They outlined the general principles which guide courts in taxation of this nature be in applications or substantive appeals.

In the taxation reference of - Noble Builders (U) Ltd. vs Sietco, Civil Application No. 16 of 2000 awarded Shs. 2,000,000= and Shs. 3,000,000= respectively for two miscellaneous applications. Since this was a recent award, and if the courts have to abide by the principle of consistency awards as outlined in the case of - Attorney General vs Uganda Blanket Manufacturers quoted above, then I find and hold that a sum of Shs. 2,000,000= would be reasonable instruction fees in - Civil Application No. 22 of 1999. So I tax off a sum of Shs. $10,000,000 =$ from item (1)."

In the instant case, bearing in mind all the principles I have referred to above and those stated in the various cases cited in this Ruling, including the necessity for consistency in taxation of costs, it is my view that the sum of Shs. 2,000,000= allowed by the taxing officer on item $(1)$ is so manifestly excessive as to indicate an error in principle entitling this court to interfere. The application by the respondent to appeal as a pauper was apparently a simple one and one which must have taken a short time to prepare and to argue in court, as the respondent's learned counsel has submitted. Would a hypothetical counsel capable of conducting the application in question be willing to insist on the kind of high fee sometimes demanded by counsel of pre-eminent reputation or the one allowed by the taxing officer in the instant case? Then one must estimate what fee such a hypothetical character would be content to take on the brief. See - Premchand Raichand Ltd. vs Quamy Services No. 3 (1972) EA. 162; and Simpson Motor Sales (London) Ltd. vs Herchen Corporation (1960) 3 AU E & 833.

In the instant case I think that the taxing officer gave too much weight to the necessity for consistency with awards of costs in other interlocutory applications with the result that the award he made here was excessive in the circumstances of the instant case.

In the circumstances, I would reduce the instruction fee on item (1) to Shs. $400,000=$ .

I shall now move to consider ground 2 ofthe reference

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ln the applicants' written submission under this ground, it is conceded that the appeal was important to the respondent, but it is contended that the appeal was not complex and did not involved different questions law. The appeal involved contributory negligence in which there are many authorities in this Country. Moreover the fact that the appeal was handled by a number of advocates would not attract a high instruction fee. lt is also contended that the appeal was not a difficult one and hearing took only one day. The amount involved was Shs 6,945,020:, not Shs. 12,607,500= as claimed by the applicants. The test in awarding instruction fee is stated in - Premcharul Raichand LltL vs Quury Services (supra); and simpsons Motor sales (London) Ltd Herdon corporation (supra) and Rank of ugarula ts Banco Arabe Espaniol (supra). lt should be followed. lt is further contended that the l\*' applicant's ability to pay the instruction fee was a principle wrongly applied by the taxing offrcer because the cost taxed and allowed by the taxing officer were manifestly excessive and extravagant. tt is submitted for the applicants that the instruction fee should have been Shs. t,000.000=

In reply, it was submitted, in writing, for the respondent that the applicants conceded that this was an important appeal for the applicants. The Court of Appeal had allowed the applicanrs, appeal and the respondent had to appeal to the supreme court as a pauper. As such the respondent would have feared to appeal against the 2'd applicant a powerful and wealthy corporation. But against all odds, she sought the wisdom ofthe Supreme Court and obtained justice in the end. The subject matter of the suit was Shs, 12, 607,500= which is what the raxing officer took into accounl. It is submitted that the instant case should attract an instructions fee similar to the ones awarded by this court in - Jaffer Brothers Lt[ vs Deptnetl Asians Property Custodian Boanl' misc. Application No' I3D9 (SCU) (unreporred), and Registered Trustees of Kampala Institute vs DAPCB. Civil ApPlication No. 3/95. (^SCU) (unrePorted)

ln my view, the value of the subject matter of the appeal is Shs. 12,607,500= not Shs. 6,945,020= awarded by the Supreme court. The former was awarded by the High court, against which the applicants successfully appealed to the Court of Appeal'

As provided by sub - paragraphs 9(2) and (3) of the Third Schedule to the Rules of this Court. the fee to be allowed for instructions to appeal or to oppose an appeal should be a sum that the taxing officer considers reasonable, having regard to the amount involved in the appeal, its nature, importance and difficulty, the interest of the parties, the other costs to be allowed, the general conduct of the proceedings, the fund or person to bear the costs and all relevant circumstances. The sum so allowed should include all the work necessary and properly done, in connection w2ith the appeal and otherwise including attendance, correspondences, perusals and consulting authorities.

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The provisions of this sub-paragraph and the principles on taxation to which I have already referred in this Ruling are the governing factors on which the respondents taxation of the cost of the appeal should be based. In his ruling allowing Shs. $9,000,000=$ , the taxing officer said:

"Complexity of the matter should be demonstrated by the points of law involved. In this case, I find and hold that although the case came up to the Supreme3 Court, whereby the judgments of both the High Court and Court of Appeal were reversed, nevertheless the issues remained basically those of The law in this area is rich in this Country, with very many negligence. precedents.

So I would not classify this case as a complex are. Nevertheless by virtue of the fact that the case gone through all the courts is a clear indication that substantial work was done. So the fees of Shs. 1,000,000= would be too low for such work in the present case, irrespective of the value of the subject matter. There are many other considerations court has to consider, such as the importance of the case and the interest of the parties. All these factors are outlined in paragraph 9(2) of the Third Schedule to the Supreme Court Rules. There is no doubt that the appellant, who struggled to the extent of applying successfully to be exempted from paying the fees and deposit, was greatly interested in the outcome of the case. And so as to fund or party to meet the costs, which is another factor to be considered. It is my view that the Sugar Cooperation of Uganda Limited, a big company supplying sugar all over is a position to pay the costs.

Be that as it may, the figure of Shs. $71.000.000$ = claimed by the appellant is too high in the circumstances. I am in the circumstances and in view of what I have outlined inclined to award a sum of shs.9.000.000= as instruction fees under item $(6)$ ."

In my view, the sum allowed by the taxing officer is so excessive as to amount an error in principle for the following reasons:

Firstly, it is far out of proportion with the value of the subject matter of the of the appeal, which was Shs. 12.607.500=. Secondly as the taxing officer himself found, this was not ^a complex appeal. Thirdly, the taxing officer appears to have given too much weight to the importance of the appeal to the respondent for the reason that the respondent struSgled to appeal as a pauper.

Fourthly, the fact that the applicants were a big Sugar Cooperation supplying sugar all over, and was therefore, easily able to pay whatever it was asked to pay was given undue weight.

ln the circumstance, taking into account all the principles laid down in sub-paragraphs (2) and (3) of the Third Schedule and in the various cases I have referred to, I consider that the sum allowable for item (6) should be reduced. The sum ofShs. L000.000= suggested by the respondents would, on the other hand, be too low. I would therefore allow the sum of two million shillings(Shs.2,000,000=) as instruction fee for the appeal.

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lt the result, it is ordered that the respondent be and is awarded the sums of Shs 400.000: and Shs.2.000.000: as instruction fees for the application to appeal as a pauper and to appeal respectively in this case.

l)atal ut Mengo this: . . . ,lu! 2t)01

## A. H.0. ODER JLISTICE OF THE SUPREME L'OURT