[2024] UGHC 1193

**THE REPUBLIC OF UGANDA**

**IN THE HIGH COURT OF UGANDA HOLDEN AT TORORO**

**TAXATION APPEAL NO. 39 OF 2022**

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**ARISING OUT OF TAXATION APPEAL NUMBER 21 OF 2018**

**(ARISING OUT OF HIGH COURT 04 CVCA 25 DASH 2013**

**(ARISING FROM TORORO CIVIL SUIT NO. 12 OF 2012)**

**(FORMERLY CIVIL SUIT NUMBER 205 OF 2011**

**ZAKARIA ONNO::::::::::::::::::::::::::::::::::::::::::::::::::APPELLANT**

**VERSUS**

**ORLANDO DEFASI AND 5 OTHERS :::::::::::::::::::::::::::RESPONDENTS**

**RULING**

**BEFORE: HON. DR. JUSTICE HENRY I. KAWESA**

The Applicant brought this taxation appeal **under S. 62 of the Advocates Act Cap 267**, the **Advocates (Taxation of Costs) (Appeals and References) Regulations SI 267-5 Section 33** of the **Judicature Act, and section 98 CPA** seeking orders that:

The Ruling and the Orders of Her Worship Lillian Mwanda; the Deputy Registrar or taxing officer in taxation cause NO 21/2018, be set aside, the Bill of Costs be taxed afresh by the trial Judge and that the costs of the Appeal be provided for. The application is supported by the affidavit sworn by the Appellant. The application is opposed by the affidavit in opposition sworn by the 4th Respondent John Oyambi.

**Issues**

Whether the Applicant has proved grounds for this Court to be pleased to set aside the Ruling of the Registrar and the Orders made therein.

**What remedies are available to the parties**

I will begin with the resolution of the issues as here below

The first complaint raised about the taxing master is the failure to give express reasons to back her decision. In a bid to beef up their argument Counsel for the Appellant refers to the principles of law in several cases as listed here below:

***Nicholas Rosauce versus Gulam Hussein, Habib Verani v Nasmuddin Habib Viran CS6- 1995 Okoye Basil V Yaeng Margaret CA -0029 - 2017***.

The gist of the decisions in these cases is that **Section 62 (1)** of the **Advocates Act** enjoins the taxing officer to give reasons regarding how he or she exercises their discretion before arriving at the award, which in this particular case was 401,700,000/-

The law espoused by those cases is that the failure to give reasons for why a particular amount is allowed or disallowed is fatal and leads to the awarded costs being said aside

On the second limb, it is argued for the Appellant that there was no pre-taxation meeting conducted by the parties, which violates **Regulation 13(1), (2) Advocates (Remuneration and taxation of costs) (Amendment)Regulations- 2018**, which makes the taxation illegal and irregular

In their submission Counsel for the Respondent argues that whereas it is trite law that the taxing master should give express reasons in his or her decision, it is not absolute. He argues that there are cases where the reasons are in fact and sometimes clear especially where the taxing must and his or her ruling summarizes the basic factual conclusions about the items and the principles of tax taxation of the bill of costs references made to the same cases as earlier quoted by the Counsel for the Appellant further argues that the use of the word shall implies both a mandatory and directory obligation and he argues that where there is no effect or penaityfor non-compliance with the rule or regulation then the word shall is not mandatory but directory cancel refers to the case of city under several verses some key injuries and another **SCCA No. 26 of 2007** further argues that **Regulation 3 13 a sub-regulation one** from where pre-taxation originates provides that the advocates for the respective parties or the parties themselves safe and represented shall jointly identify the cost fees and expenses on which they agree if any before the taxation of the bill of costs and that from the clear reading of the said regulation nothing shows that the registrar shall be involved in pre taxation meeting.

**Resolution of the Preliminary Objections Above**

The failure by a Taxing Master to provide reasons for an award can have significant implications. Let's explore a couple of cases where this issue arose:

In the case of ***Kazina v Nakkazi (Taxation Appeal No. 34 of 2014)***, the Appellant appealed an award of Uganda shillings 65,668,602/= in Miscellaneous Cause No. 36 of 2014. The Appellant argued that the award was excessive, unconscionable, and made in disregard of the relevant **Schedule of the Advocates (Remuneration and Taxation of Costs) Regulations**. The Taxing Officer had not given reasons for the award. The Appellant sought to have the award quashed and set aside. The Respondent, however, maintained that the bill was drawn in accordance with the regulations. Ultimately the Court had to consider whether the lack of reasons affected the validity of the award.

Similarly, in the case of ***Okoya versus Nyayenga (Civil Appeal No. 0029 OF 2017***), the Taxing Officer did not provide reasons for item No. 54 in the award. The Appellant appealed, arguing that the lack of reasons warranted a review of the award.

In both instances, the absence of reasons for the award raised concerns about transparency, fairness, and the legality of the decision. When a Taxing Master fails to give reasons, it becomes challenging to assess whether the award is justified or whether there are grounds for appeal. Consequently, parties may seek to have the award set aside Or taxed down based on the lack of adequate explanation failure by a Taxing Master to provide reasons for an award can have significant implications. Let's explore a couple of cases where this issue arose:

In the case of ***Kazina v Nakkazi (Taxation Appeal No. 34 of 2014***), the Appellant appealed an award of Uganda shillings 65,668,602/- in Miscellaneous Cause No. 36 of 2014. The Appellant argued that the award was excessive, unconscionable, and made in disregard of the relevant **Schedule of the Advocates (Remuneration and Taxation of Costs) Regulations**. The Taxing Officer had not given reasons for the award. The Appellant sought to have the award quashed and set aside. The Respondent, however, maintained that the bill was drawn per the regulations. Ultimately, the Court had to consider whether the lack of reasons affected the validity of the award.

Similarly, in the case of ***Okoya V Nyayenga (CIVIL APPEAL No. 0029 OF 2017***), the Taxing Officer did not provide reasons for item No. 54 in the award. The Appellant appealed, arguing that the lack of reasons warranted a review of the award2.

In both instances, the absence of reasons for the award raised concerns about transparency, fairness, and the legality of the decision. When a Taxing Master fails to give reasons, it becomes challenging to assess whether the award is justified or whether there are grounds for appeal. Consequently, parties may seek to have the award set aside or taxed down based on the lack of adequate explanation 12.

**Please note that the specific impact of this failure can vary depending on the circumstances of each case and the applicable legal framework**.

This positon was discussed in\_***Okoya Bazil Versus Nyayenga Margarethigh Court Of Uganda (Arua)Civil Appeal No. 0029 Of 2017, Justice Stephen Mubift***

opined that:

*'Considering that the process of taxation of costs relies heavily on the discretion of the Taxing Officer, the parties have a right to know the considerations upon which that discretion was exercised, in short, to understand them. At the very least, the Taxing Officer must be able to justify his or her decision’*.

The giving of reasons is one of the cornerstones of the judicial function and a central aspect of the rule of law (*see* ***Breen v. Amalgamated Engineering Union [1971] 2 QB 175 at 191). In Stefan v. General Medical Counsel [1999] 1 WLR 1293, Lord Clyde*** stated as follows:

*"The advantages of the provision of reasons have often been rehearsed. They relate to the decision-making process, in strengthening that process itself, in increasing the public confidence in it and in the desirability of the disclosure of error where error exists. They relate also to the parties immediately affected by the decision, in enabling them to know the strengths and weaknesses of their respective cases and to facilitate appeal where that course is appropriate."*

Therefore, parties are entitled to know on what grounds the costs have been awarded. An appellate Court is also entitled to the assistance of the Taxing Officer by an explicit statement of the reasons for deciding as he or she did.

The duty imposed on a Taxing Officer to give reasons is a function of the rule of law and therefore of justice. Its rationale has two principal aspects. The first is that fairness surely requires that the parties, especially the judgement debtor, should be left in no doubt why they have to pay the quantum awarded. This is especially so since without reasons the judgement debtor will not know whether the Taxing Officer has misdirected himself or herself and thus whether he or she may have an available appeal on the substance of the award. Where no reasons are given it is impossible to tell whether the Taxing Officer has gone wrong on the law or the facts, the judgment debtor would be altogether deprived of his or her chance of an appeal unless the appellate Court entertains the appeal based on the lack of reasons itself. The second is that a requirement to give reasons concentrates the mind; the resulting decision is much more likely to be soundly based on the material before the Taxing Officer than if it is not. The Taxing Officer must enter into the issues canvassed before him or her and explain why he or she preferred one case over the other.

The extent to which this duty to give reasons applies will vary according to the nature of the bill of costs to be taxed, in the light of the circumstances of the case. The Taxing Officer's reasons need not be extensive if the decision makes sense. The degree of particularity required will depend entirely on the nature of the issues falling for decision. In the instant case though, the most striking feature of the taxation by the Taxing Officer is that the award is unreasoned and unexplained.

Whereas in certain contexts, reasons for allowing certain items in a bill of costs and the corresponding quantum can properly be inferred, however, this is not possible in the present case. There is substantial prejudice occasioned to a judgement debtor where the reasons for the award are totally lacking or so inadequately or obscurely expressed as to raise a substantial doubt whether the decision was taken after due consideration by the Taxing Officer.

Secondly, a judgement debtor is substantially prejudiced where the considerations on which the award is based are not explained sufficiently clearly to enable him or her reasonably to assess the prospects of succeeding in an appeal. Thirdly, a judgment debtor is substantially prejudiced by an award in which the considerations on which it is based are not explained at all or sufficiently clearly to indicate what, if any; impact they may have in relation to the decision of future taxation of bills of costs.

In light of the duty to give reasons, even when the Taxing Officer chooses to deliver asummarized taxation ruling, he or she should at a minimum by way Of reasons provide an outline of the principles that have guided allowing or rejecting items in the bill of costs, a summary of the basic factual conclusions about the items and a statement of the reasons which have led to assessment of the quantum awarded.

The circumstances under which a Judge of the High Court may interfere with the Taxing Officer's exercise of discretion in awarding costs were restated by the Supreme Court in the case of ***Bank of Uganda v Banco Arabe Espanol, S. C. Civil Application No. 23 of 1999(Mulenga JSC)*** to be the following:

Save in exceptional cases, a judge does not interfere with the assessment of what the taxing officer considers to be a 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 fitted 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 of the fee allowed, the taxing officer exercised, or applied a wrong principle. In this regard, the application of a wrong principle is capable of being inferred from an award of an amount that is manifestly excessive or manifestly low.

Thirdly, even if 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.

Furthermore, the principles of taxation of advocates' bills have time and again been stated by the Courts on references. The same were outlined in the case of ***Nicholas Roussos v Gulam Hussein Habib Virani SCCA NO 6 OF 1995*** cited by Counsel for the Respondent which was taken from the case of ***Makula International Ltd v. Cardinal Nsubuga and Another (1982) HCB.11*** as follows:

The Court will only interfere with an award of costs by the taxing officer if such costs are so low or so high that they amount to an injustice to one of the parties. Costs must not be allowed to rise to such a level to confine access to the Courts only to the rich. That a successful litigant ought to be fairly reimbursed for costs he or she has to incur.

That the general level of remuneration of advocates must be such as to attract recruits to the profession, and finally; that as far as possible there should be some consistency in the award of costs. It is against these principles that this Court shall resolve the issues.

Just like in the case before me the taxing master did not write down the reasons for her award there is no taxation ruling on the entire file though there is a schedule showing the taxation was done there isn't a single indicator as to what informs these awards in the circumstances this Court is constrained leaving to consider the grounds of appeal given that procedural irregularity that is so glaring on the record has clearly pointed out by my brother *Justice Mubiru* above, it is prudent that the reasons which guided the award ought to have been given. It is not even possible in the case before me to assess and know whether the rules were followed by the conduct of a pre taxation meeting in any form. It was held and I do agree with the Court for the Applicant that this is one of those cases whereby this Court must intervene and set aside the award for purposes of the need for following the ruling and to ensure transparency.

I therefore sustain the objection and order that the award be set aside and the entire file be remitted back to the taxing master who is the Ast. Registrar of this Court to conduct a fresh taxation meeting and go ahead to conduct fresh taxation of the entire bill of cost following the taxation Rules.

I so order.

Dr. Henry I Kawesa

**JUDGE**

**28/03/2024**