[1992] UGHC 42

THE REPUBLIC OF UGANDA IN THE HIGH COURT OF UGANDA AT KAMPALA CIVIL APPEAL NO. OF 1990

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UGMA ENGINEERING CORPORATION LTD. :::::::::::::::: APPELLANT.

VERSUS

LUGAZI TOWN COUNCIL RESPONDENT. LEECEE: The Honourable Mrs. Ag: Justice ^M\* JCiyeju \* J ^U DG EM £ ^N T.

This is an appeal against the ruling of the valuation Court at Lugazi chaired by Mr. J. Arutu, dated 20/9/1990 \*.

UGMA Engineering Corporation Limited (UGMA), the appellant objected to the draft valuation list in respect of their Industrial hereditaments. Their complaint was about the rise of the rateable value from Shs. 619,888/5 \* in 198? to Shs \* 9,467,089/50 for 199O.»^< The valuation court having found that there were no reasonable grounds for the objections to the draft valuation,, dismissed the objection as being incomptent and lacking in merit. The rateable in the Darft Valuation List for 1989 was thereafter confirmed. The appellant appealed against this ruling to this ^ourt \*.

At the hearing of this appeal the appeallant was rejresented by Ar-o Nkambo Mugerwa assisted by Mr. Buyondo and the respondent,. Lugazi Town Council, was represented by Mr<-. Mbabazi, State Attorney,

The background to this case is that^Government valuer in accordance with the powers conferred upon him byS, ? of Local Government (Rating) Decree No.-5/1979 went to appellant company in ¹⁹⁸⁹ and made ^a draft valuation list in respect of their r.ndustrial hereditaments. After receipt of the valuation list. the appellant, in letter dated 18/4/90 objected to the rise of

the rateable value from the sum of Shs.619,888/50 for factory premises and residential Area to the sum of Shs.9,467,089/50.

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The objection was sent to the valuation court and it was heard on 31/8/90. UGMA was represented by Jacob Ochieno an accounts Manager with the company. He wanted to know how the Gorvernment Valuer arrived at the rateable value charged. He also informed court that they were running the company on constraints that they had not made any profits since May, 1980, he tendered in a copy of the accounts of the company. Mr. Ochieno further informed the court that the Town Council was not rendering the company any services, such as water and electricity and that the company was responsible for mainataining schools and other facilities. In conclusion he prayed that the valuer goes through the figures and re-values to a reasonable figure.

In response Mr. Eddie Nsamba - Gayiiya, Ag. Deputy Government Valuer stated that $S$ . 10 of the Decree was very clear that it was Not member of the valuer to give the basis for his valuation. The valuer looked at the asset as it is on the market, that they were not concerned with profits the company was making. He

informed court that the objector did not inform court what should be the rateable value as it is required to do under S. 13 of the Decree. He concluded by saying that the objectorhad not done his home work.

The memorandum of appeal contained the following grounds;-(1) That the chairman erred in law when interpreting the provisions

of S. 13 of Decree 3 of 1979.

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$(2)$ That the chairman erred in law when he overruled and dismissed the objection of the appellant because the appellant in law

is entitled.to a full hearing as per the doctorine of Aud Alteram Partern.

- (3) That the appellant has reasonable grounds of objecting to the Government valuer's Roll on the following grounds;- - (i) The Valuati°D ^Ts excessive in nature and arbitrary. - (ii) The appellant provides the A>wn Council with workers to maintain cleanliness which fact was never put into account•

(iii) The \* respondents do not even render the claimed services At the hearing of the appeal the 2nd and 3rd grounds of appeal were consolidated and urgued together. Counsel for the appellant's contention on the first ground was that the valuation court erred when interpreting the provisions of section ¹³ of the Local Government (Rating) Decree No.3 of 1979 \* Counsel submitted that under 13(l)(a) of the said Decree ^a person 'who isaggrieved by the inclusion of a ' hereditament in the draft... valuation list may serve ^a notice of objection on the Local Authority. At the nearing before the valuation court the appellant was noRepresented by a lawyer but that the urgv.ement advanced on of the appellant was to the effect that since the respondent was not rendering any services to the appellant it was not entitled to collect rates from lb, Counsel submitted that this was a layman's language of saying that appellant was not receiving services from Lugazi Town Council and did not see any reason of beigg included in the valuation list.

Counsel further submitted that under 3. ³⁸ of the Decree, 'raring area' is defined to mean the area within the limits of Local Authority to which the provisions of the Decree have been

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applied \* He particularly referred me to statutory instrument io.2? ^~ volume IX at page'560 of Laws~of Uganda \* According to t.iv reaserch carried out by counsel for the appellant, the law and tn map showing the boundaries of Lugazi Town Council do not cover the :..pjpliant. Counsel for the appellant's attempts to try and produce in court the maps printed by the Department of Lands and Surveys wjs objected to by counsel for the respondent as this amounted to producing fresh evidence and the manner in which they were being tendered in court was irregular. ¹ upheld the objection for she- same reasons. Counsel for the appellant however, contended that if the appellants are outside the bounderies of Lugazi Town.-Council tnen the collection of rates from the appellant is contrary to S. ³⁸ of the Decree. That it would be sanctioning an illegality by whoever holds that Lugazi Town Council is entitled to collect rates from the appellant. Counsel referred me to the case of Eakula International Ltd, -vs- His Eminence Cardinal Nsubuga and Anor, HCB /1982/H where it was held that ^a court of law cannot sanction an illega? ity and illegality once brought to the attention of the court. overrides al3. questions of pleading including an admission iveon. Counsel submitted that the collection of the rate c'rom th« appellant is illegal and the order of the valuation court dismissing the appellant's objection fhould be set aside.

On the 2nd and 3rd ground of appeal counsel for the appellant j^r.t^nted that in Jacob Ochieno's submission before valuation court, .. tried to inform court in a layman's language that they were outside the Town Council. Jacob Ochieno informed court that the ?r should have taken into account the fact that the appellant ...0 not getting any services from the council like water and tricity. On the otherhand the appellant provides services

to the respondent for which the respondent does not pay.^h such services include the- maintainance of schools and roads. Counsel submitted that the valuation court should have taken this fact into account before deciding on whether the appellant should pay rates to the respondent in the absence of any services to the appellant. In the alternative the appellant should have been given ^a rchgto for the free services it renders to the respondent in the fo^m of maint?inace of schools, roads, supply of water and electricity.

i Counsel submitted that the proper course to be taken by the court would be to refer the matter back to the valuer so that the said factors are taken into account. On costs, counsel submitted that the court should use its discretion.

Mr. Mbabazi, counsel for the respondent submitted that the decree empowers the Local Authorities to levy rates on hereditaments, which must be in the confines of the Local Authority. The Local • Autnority causes the valuation of the properties and th\* valuation compiled should cover a period of 5 years. That the moment you are iisatisiied with the valuation you object under of the Decree. Tr..£ ; -tice of objection is supposed to guide the valuation court any amendments to the valuation list. Counsel submitted that it was under the above circumstances that this appeal has been lodged before this court from the valuation 'G^ourt. Counsel submitted that the words 'Town Council is not rendering any ..services1. appearing in Jacob Ochieno's submission have been.interpreted by counsel for thv appellant to mean that the appellant, w.-.s outside the primeters of the council. Counsel invited court to ignore this ir.cjrprvtation as being incredible that the- properties were outside tke Local Authority and could not be assessed.

-i.\t according to tne notice of \* objection there was no ground implied or-otherwise' that the appellant was outside and no facts .\crc adduced to support this contention, the statutory instruments tiie maps were not referred to the valuation court. However, the appellant expects'the valuation court to have considered those facts in absentia. Counsel invited court to disqualify the evidence put forward on this' ground by counsel for the appellant.as it was irrelevant and inadmissible. Counsel referred court to t'he case of Esso Iv-vrolioum Cp, Ltd. -vs- Ministry of Labour 19&9 QB 98 C.. A. 109

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•inich states what an appellant court should do when handling an •i.peal. That where a tribunal- gives no decision on a point there is r:o rignt of appeal, that the best the court can do is to remit the case back to the tribunal. Counsel submitted that.the appellant had no right tc urgue the grounds he urgued which were not considered **⁴ \*** oy th.\_ valuation court., that the appellant should have applied to adduce additional evidence. The appellant failed to adduce evidence and cannot blame, it .on'the valuation court. Counsel further submitted that the case of Cardinal. Nsubuga cited above did not apply to this appeal that ix ro'..?x only aPPly additonal evidence lad been adduced. Counsel conc?.ud<d by submitting that since the points argued by th-c appellant were.-not properly before court, the appeal should

be dismissed and c.ost.s be awarded to the respondent. Counsel referred c.ourt to the following cases on rates.

## (1 ) V/hitCline. Retreads Ltd. -vs~ President of Valuation Court 1968 EA 5¹⁷

- (2) Re an Application by Attorney General of Kenya 1958 EA 529 - (3 ) Chester House -vs- Nairobi City Cbuncil 196^ EA 582

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Mr. Buyondo, counsel for the appellant in reply submitted that **before valuation is carried <xiut the Local Authority should know** the boundaries and court should also know the boundaries set down under the law and that once this question of law is brought before court it cannot be ignored.

After hearing the submissions by both parties my task now is to decide on the merit or demarits of this appeal. The objection which was heard by the valuation court was contained $\ddot{\phantom{a}}$ in the letter dated 18/4/1990 written to the nown Clerk, Lugazi Town Council on behalf of the resident director of the appellant. I shall reproduce the main body of the letter as it formed the basis for the objection.

## "SUB: THE LOCAL GOVERNMENT (RATE) DECREE NO.3 OF 1979 - VALUATION ROLL FOR LUGAZI TOWN

We refer to your letter Ref: LUG/FIN/85 dated 30th March, 1990 regarding the above subject. During 1987, we paid Assessment Ratus of U. Shs.619,888.50/= for Factory Premises and Residential Art.a as per your demand Note No.9/87 LUG/FIN/35.

The rise from U. Shs.619,888.50 in previous year to "Williams of the rise from U. Shs.619,888.50 in previous year to U.ons.9,467,089.50/= for the current year is abnormal. We have had been furnished any details of the basis on which the rateable value has been so brastically increased.

We dute been rinning the corporation with meagre resources and maintaining a large workforce. We are paying Graduated Tax for all employees, saies Tax on sales, Tax on imports etc. as per existing rules.

You are aware we are running an industry which still needs to be cas plately rehabilitated. The buildings are in very bad state and results complete rehabilitation. We are spending a lot of money to just maintain them.

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are aggriev ^d by ^c your order. We seek redressal of our ...i-.i-.r-v grievance. In the meantime, we bsall pay the dues ''Under PrcUst" in four monthly instalments (due to financial constraints), we seek your co-peration.

At the hearing of the objection on 31/8/90 Jacob Ochino, Accounts Man.p.r for the appellant addressed the valuation court but did not summon any witnesses although he was warned to do so by the valuation court. Jacob Ochieno informed court that they objected to the rate which was levied to their buildings and wanted to know now it was arrived at and. secondly the council was not rendering any services to the objector. When the Government valuer was replying to the objector's submission he stated that under S. ¹⁰ of the Decree it was not mandatory for him to give a basis of his valuation and this was ^supported by the valuation court in the foilwing words, page ¹ of

th-. 1'uling

"As indicated by the Government Valuer and rightly too, S. ¹⁰ of the Decree (Decree 3/79) gives the formula used by the Government valuer at arriving' at a rateablj^taitjie. If the objectors cared they should have looked up the Decree."

I agree with the valuation court that S. 10 sets out a formula but do not agree that once you knew ^Lji? formula then you can .i.-.u ...sk the valuer how he applied the said formular to a particular . "u? hereditament. If the section was interpreted strictly a ; suggested then the whole purpose of S. 13 would be defeated. convinced that the appellant was entitled to an explanation : r-.. valuer as to how he arrived at that rate especially *i* ¹ ■■ of th. fact that the rate was more than ¹⁰ times than the .,r- vicus- •rtftev

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Jacob Ochieno had also submitted that the council was not rendering them any services, and this counsel for the appellant interpret d it to mean that they were outside Lugazi Town Council coundaries and no r te should be collected from them. I must say that the objector's case was very poorly presented before the valuation court. Some of the statements made by ir. Ochieno could mean anything, unfortunately the valuation court did not try to assist this layman. From the rulings the court was the dial of the manager itself disappointed at the manner in which the objection was handled, the life star I shall quote from the chairman's ruling, page 1 last paragraph $\mathcal{L}_{\mathcal{L}}(x_1, x_2, \ldots, x_n)$ The imagine UGMA" making an objection like this one. まま 学生 こうかい コーロー アー・コール $9$ million shillings is at stake but this company does not $11 + 11 + 11$ seem to see the need for services of a lawyer. Why do that company run like this? I am not suprised at the revelation that this company has not made

advantage in the set of the set of the set of at manifold $\mathcal{L}$ and $\mathcal{L}$ and $\mathcal{L}$ and $\mathcal{L}$ and $\mathcal{L}$ and $\mathcal{L}$ and $\mathcal{L}$ and $\mathcal{L}$ and $\mathcal{L}$ and $\mathcal{L}$ and $\mathcal{L}$ are set of the set of th

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$11^{1}$ ... From S. 17 of the decree, the valuation court is given a lot of responsibil by, during the hearing of the objection, I shall reproduce the section for charity.

a particular to all a state of

a position of the states.

any profits since $1980$ .

$"7(1)$ The valuation court shall summon the orjector and the valuer in such manner as may

- be prescribed, and shall, - (a) $P$ xamine such witnesses, on oath or solemn affirmation - (b) call for the production of such documents :- and - (c) afford such other opportunity of being heard, to the objector and the valuer.

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$\mathbf{1}$ as it may deem necessary for the just decision of the objection"

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It is clear from the quoted section that the whole purpose of the valuation court hearing the objection is to make sure that it makes a just decision regarding the objection. The valuation Jourt having undertaken to hear an objection which was not properly presented as it did not state the amendments desired to remove the objection as required by S. $13(2)$ of the Decree, I think the court should have tried to assist the objector to put his objection properly so that a just decision is made. The way the whole objection was bungled it is possible that the objector may have been trying to tell the valuation court that they were outside the council boundaries, who knows. I would like to turn to the case cited by counsel for the appellant of Makula International which counsel for the respondent said that it did not apply to this case as they had been no additional evidence adduced by the appellant. I agree with counsel for the respondent that there was no evidence on record to determine the new issue raised by the spelland whether the appellant was within the boundaries of the Tous Council or not. Although the appellant claims that it wes reased before the lower court in a laymans' language, unfortunately that language was not understood by the valuation Fourt and it was not therefore considered. However applying the present case to that of Makula International, I think the coint raised by the appellant is very important because if it turned out to be true as alleged then it would touch the foundation based. This possible illegality having been brough+ $+o$ +he on which this case is/attention of this court can not be ignored based. but in view of the fadt that there is no evidence on record this is a matter which should

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be referred back to the valuation court for appropriete action. The whole case rotates on this point.

$\cdot$ counsel for the respondent and they have provided me with a good background to cases of this nature.

As was stated by counsel for the respondent not much evidence was adduced before the lower cnurt to enable court tha properly consinder the objection. This was mainly due to cor manner in which the objection was presented. The question I feel coming to my mind at this stage is whether there was a fair hearing of the objection before the valuation court. Having gone through the evidence on record as I am entitled to to as the first appellate court case of Selle -ys- Associated Motor Boat Co. 1968/ EA 123 refer I have found that the objector was entitled to an explanation from the valuer as to how he arrived at the new rates and failure to do amounted to a miscarriage of justice.

Secondly the issue of the appellant being outside the bounderies of Lugazi Town Council having been brought to the attention of this court cannot be ignored as it is an important legal.

For the reasons narrated above this appeal must succeed. The valuation court's rolling is set arithmed the case is remitted to the valuation court for a fresh rehearing.

Each party should bear its own cests of this appeal.

M. KIREJU AG: $J U D G E$ . $15/6/92.$ 15/6/92 Judremen+ Delivered Before;-Mr. Nkambo Fugerwa - For Appellant Mr. Mbobizi - For the Respondent Absent Mr. Oburu - Court Clerk.

Minem.

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