Bank of Uganda v Sudhir & Another (Taxation Reference 1 of 2023) [2023] UGSC 67 (5 May 2023)

$OV - c<sub>eff</sub> - 900 - 2023$ .

# THE REPUBLIC OF UGANDA

# IN THE SUPREME COURT OF UGANDA

## **AT KAMPALA**

#### TAXATION REFERENCE NO. 0001 OF 2023

(Arising from Tax Applications No. 6 and 7 of 2022 and Civil Appeal No. 07 of 2020)

### BANK OF UGANDA :::::::::::::::::::::::::::::::::::

#### VS.

## 1. SUDHIR RUPARELIA 2. MEERA INVESTMENTS LTD :::::::::::::::::::::::::::::::::::

(Reference arising out of the rulings of the Registrar, Her worship Ssali Harriet Nalukwago in Taxation Applications No. 6 and No. 7 of 2022 in the taxation of costs for Civil Appeal No. 7 of 2020)

#### RULING OF CHIBITA, J. S. C.

This is a reference under r. $106(1)$ and (3) of the Rules of this court from the ruling of the Registrar in her capacity as taxing officer. She taxed two bills of costs of the successful appellants (now respondents), each at $54,185,433,421$ making a total of 108,370,866,842/ (One Hundred Eight Billion, Three Hundred Seventy Million, Eight Hundred Sixty-Six Thousand, Eight hundred *forty-five Shillings.*

The reference was premised on the following grounds:

1. The taxing officer erred in law when she taxed and allowed double awards of costs to the same law firm which represented both respondents in the appeal.


- 9. The taxing ollicer erred in law and fact in assessing and allowing amounts for drawings, copies thereot attendances and perusals. - 10. The taxing oflicer erred in law in assessing and allowing Value Added Tax in the absence of a tax certificate of registration on the flle. - 11. The taxing officer erred in law and fact in assessing and allowing amounts for disbursements whlch were not proved.

The applicant sought for orders that;

I

- a. Tle decisiort of the taxing oJficer ouemtling the preliminary objection be set aside. - b. The decision of the taxing oJficer of making double awards of fees be set aside. - c. The Honorable Courl makes such deductions and / or uariations as will render the bills o/costs reasonable. - d. TIE decision of the taxing officer in awarding Value Added Tax be set aside. - e. The decision of tlrc taxing olficer in assessing and anaarding costs to the 2na Respondent in proceedings to which it was not a partA be set aside. - f. fhe decision of tLte taxing oJficer in awarding amounts for drawings, copies th.ereof, attendances and perusals be set aside and / or uaried. - g. The respondents pay the costs of this reference to the Applicant.


I ltnd it necessaq/ to give a brief background to the proceedings giving rise to this reference before considering the grounds of reference.

I

Crane Bank Ltd was licensed by the Bank of Uganda to carry out the business of a financial institution. On the 20th October, 2016, the bank was placed under statutory management by the Bank of Uganda pursuant to sections 87(3) and 88(1) (a), (b) of the Financial Institutions Act, 2OO4. On 20th January, 2017, the Bank of Uganda pursuant to s. 94 of the Financial Institutions Act placed the Crane Bank Ltd under receivership. On 30th June, 20 17, Crane Bank Ltd fiIed High Court Civil Suit No. 493 of 20 17 against the respondents wherein, it sought recovery of money allegedly misappropriated by the 1"t respondent as a director and shareholder ofCrane Bank Ltd. Crane Bank Ltd also sought the delivery of freehold certilicates of titles to 48 properties and a refund from the 2"d respondent for pa1rment made on "Void leases". On 3'd August 2OL7 , the respondents filed their defence. In their written statement of defence, they denied the allegations made against them and stated that they would raise preliminary objections against the then plaintiff Crane Bank Ltd to the effect that the Plaintiff had no locus standi no cause of action and that the suit property was barred in law.

The respondents later hled H. C Misc. Application 32O of 20 19 seeking orders that: Crane Bank Ltd had no locus standi to commence actions under HCCS No. 493 of 2Ol7 against the respondents, the plaint in HCCS No. 493 of 2Ol7 did not disclose a cause of action against the respondents, that the orders sought in the suit were barred in law with costs; and costs of the application be provided for.


David Wangutusi, J, allowed the application and dismissed HCCS No. 493 of 2Ol7 for lack of cause of action, locus standi and for being barred in law. He also ordered Bank of Uganda to pay costs of the application.

I

Being dissatisfied with the decision and orders of the High Court, Crane Bank Ltd (in receivership) unsuccessfully appealed to the Court of Appeal. Still being dissatisfied with the decision of the Court of Appeal, Crane Bank Ltd (in receivership) filed civil appeal No. 07 of 2O2O to this honorable court.

With the decision of the Court of Appeal, the respondents' counsel, Kampala Associated Advocates wrote a letter to the Registrar, Uganda Registration Services Bureau dated 28th September, 2020, informing him that the receivership of Crane Bank (U) Ltd had ended on 2Oth January, 2018. The registrar was further informed that the Bank of Uganda no longer had any legal authority over the affairs of Crane Bank Ltd and that the Board of Directors and shareholders of Crane Bank Limited are back in full control of the company and its affairs. The letter therefore required the Registrar to adjust the official records accordingly.

Pursuant to the letter, Crane Bank Ltd (in receivership) made an application vide Misc. Appl. No. 32 of 2O2O and 33 of 2O2O to this court seeking orders to restrain the lst respondent from claiming, taking control, repossessing or in any way interfering with the management of Crane Bank ltd (in receivership) or its receiver until the hearing and determination of the SCCA No. 7 of 2O2O that was

pending before this court. The applications were dismissed with costs.

/

On 9th November, 2O2O, t}:.e BOU issued a memo stating that it was recommended that the 1"t respondent be progressed into liquidation and indeed, on 13th November, 2O2O, in exercise of its powers under section 99( 1) & (2) of the Financial Institutions Act, 2OO4 , placed tJ.e 1"t respondent under Liquidation and ordered for the winding up of its affairs.

Following this development, the 1"t respondent filed Misc. Appl. No. 39 and 40 of 2O2O, for a mandatory injunction and an interim injunction restraining the 2"d respondent, their agents or any one from placing the 1"t respondent under liquidation and continuing the liquidation process pending the determination of SCCA No. 7 of 2O2O. Application No. 40 was dismissed but No.39 was allowed with costs. The Applicant also frled Miscellaneous Civil Application No.02 of 202 1 seeking to amend the record by substituting the narne, Crane Bank ltd (in Receivership) with Crane Bank ltd (in Liquidation). The application was dismissed with costs.

On 1Sth September 2021, the appellant lodged a notice of withdrawal of the appeal to which the respondents demanded that the appeal be dismissed with costs. The court allowed the withdrawal of the appeal with costs to the respondents.

Pursuant to that, the respondents separately filed 2 bills of costs for taxation vide Taxation Application No. 6 of 2022 and No. 7 of 2022. At the hearing, the applicant raised a preliminarSr objection to the effect that filing of 2 separate bills of costs was illegal. The taxing

officer dismissed the P. O and gave a ruling in favor of the respondents. The taxing officer further delivered her ruling in the two applications wherein he taxed the bills of costs at 54,185,433,42L/= each. Being dissatisfied by the above ruiings, the applicant filed the present reference to me.

At the hearing, the applicant was represented by Mr. Albert Byamugisha and Ms. Goretti Asiimwe, PSA whereas the respondents were represented by Mr. Peter Kabatsi, Mr. Bruce Musinguzi and Ms. Barbara Musimenta.

They both frled written submissions.

The grounds of reference raise 3 issues, which I believe shall resolve the whole case. They are;

- 1. Whether it is perrnissible to file separate bills of costs where the same counsel represented more than one parties. - 2. Whether the taxing ofllcer erred in law or principle when taxing the bllls of costs. - 3. Whether there was an error in assessing and allowlng amounts for drawings, copies thereot attendances, perusals, disbursements and VAT.

### tesue--orre

# Whether it is permissible to file separate bills of costs where the same counsel represented more than one parties.

The thrust of the applicant's counsel's submissions was that the taxing officer erred when she held that the hling of two separate bills of costs by the sarne counsel who represented both respondents did not offend Paragraph 17 to the third schedule of the rrles of this

court. He argued that under that law, the taxing officer is not only prohibited from taxing two bills of costs, his/her jurisdiction is limited to establishing whether separate proceedings were taken by or on behalf of any two those parties and consider whether the separate proceedings were necessary and proper. Counsel prayed court to set aside the ruling on the preliminary objection and one of the bills of costs.

In response, it was counsel for respondents' contention that paragraph 17 to the third schedule makes no such prohibition for the taxing officer to allow the filing of two bills of costs, but rather, that it simply a-llows her to review the bills of costs and disallow any costs which were unnecessarily incurred.

Counsel further argued that the 2"d respondent was not party to some proceedings, therefore, this was a case where separate proceedings were taken out. He explained that the respondents were two independent parties and therefore were entitled to file separate bills of costs as was done in the case of John l{afeero Sentongo v Shell and Uganda Petroleum Co Ltd Civll reference 1 of 2OO8. Consideration.

Before delving into the merits of this issue, I shall first reproduce the key part of the registrar's ruling which is subject to contention. She observed as follows;

".... Paragraph 17 of the 3'd schedule to the Judlcature Supreme Court Rules does not bar the registrar from taxlng 2 bills of coats.... I therefore flnd no merit in the preliminary objectlons and dismiss the same with costs."

It is clear from the above submissions that resolving this issue would require court to interpret Paragraph 17 of the 3.a schedule.

Paragraph L7 to the Thlrd Schedule of Rules of this court provides for taxation of costs in cases that involve two or more parties being represented by the same counsel. It reads as follows;

ttWhere the same advocate is employed for two or more parties and separate proceedings are taken by or on behalfofany two of those parties, the taxing officer shall consider in the taxation of that advocate's blll of costs whether the separate proceedlngs were neceasary and proper; and if he or she is of oplnion that any part ofthe costs occasioned by them has been unnecessarily or improperly incurred, then that part shall be dlsallowed."

In statutory interpretation, it is trite that where statutory words are plain and unambiguous, the judge is required to give the words of the statute, their natural and ordinary meaning. See Lord Diplock in; Abley v Dale, 20 L. J. C. P (N. S) 233 [185U, Duport Steel vs Strs, QBD 198O.

I shall break down the above provision to give it its ordinary meaning. "Where llhe s41ne advocate is employed for two or more parties and separate proceedinss are taken bv or on behalf of anv two of those parties, (emphasis mine)

The word "and" has genera-lly a cumulative sense requiring the fulfillment of all the conditions that it ioins together. See: lshwar Stngh Blndra v State of U. P, AIR 1968 SC 1450, 1454.

The use of the word "Ard" in the above excerpt means that the provision is to be applied only in situations where separate


proceedings have been taken out by any two ofthe parties. This also falls under the common law principle for construing legislation of Expressio unius exclusio alterius, a maxim which means "the express mention of one thing excludes others". It follows that, because the law expressly provides that separate proceedings must have been taken, excludes the reverse.

The other piece of the provision reads as follows;

"the taxine officer shall consider in the taxation of that advocate's bill of costs whether the separate proceedings were necessarv and p.rgEr;

and

"if he or she is of opinion that any part of the costs occasioned bv them has been unnecessarilv or improperly incurred, then that part shall be disallowed.'

The remaining piece of the provision provides for steps to be taken by the taxing officer after establishing that separate proceedings were taken.

From the wordings of the provision, it is clear that under no circumstances may counsel representing two or more parties file more than one bill of costs. The law only requires the taxing officer to firstly, examine whether it was necessary and proper for the parties to take separate proceedings. Secondly, If the taxing officer is of the opinion that any part of the costs has been superfluously or wrongly occasioned, he or she is required to disallow that part.

 The advocate is required to include the extra costs arising from the separate proceedings in the bill of costs for the taxing officer to examine and tax.

I shall now examine whether the present case falls within the ambits of the law in issue.

The taxing officer erred in law when she taxed 2 bills of costs. It is on record the 2na respondent was not a part of some interlocutory matters and this would only entitle the 1"t respondent to the extra costs involved in those proceedings. The Registrar's ruling on the P. O is hereby set aside. Consequently, the bill of costs under taxation Application no. O6 is hereby struck off the record and the holdings of the registrar on the sarne are thus set aside. I shall allow the bill of costs under Tax Application No.7 because it embraces all the costs. Issue one is therefore answered in the negative.

#### ISSUE TWO

### Whether the taxine officer erred in law or principle when taxine the bills of costs.

This issue embraces grounds 2,3,4,5,6,7and 8.

Learned counsel for the applicant, submitted that the taxing officer erred in law and principle when she failed to follow the well settled principles of taxation hence awarded excessive instruction fees. He argued that it was wrong for the taxing officer to rely on the monetary value of the subject matter in assessing the instruction fees which was not in issue before this court. That the appeal in this court involved interpretation of sections of the Financial Institutions Act


regarding receivership. He relied on the cases of Bo,nk of Ugando u Bqnco Atabe Espanol [199912E,A 45 at 50, Attortteg @netp.l <sup>u</sup> Uganda Blanket Manufacturer1 Cfiil Appllcatlon No. 77/93, Concorp Intenratlonql ltd a Eostern and Easterzt o,nd Southern Aftico trqde and. d.eaelopment Bq.nk, S. C. C reterence No. 7 of 2073.

..

It was counsel's further contention that the taxing officer wrongfully awarded excessive instruction fees of 50,0OO,OO0 / for each application to the respondents in miscellaneous applications nos. 32, 33, 39and 02. He submitted that those interlocutory matters were not complex at all to warrant such exorbitant instructions fees. He recommended that court considers an amount of 2,000,000/ as instruction fees for each application.

In response, learned counsel for the respondents, submitted that the taxing master considered the principles of taxation in her ruling as she relied on decided cases of this court which all espouse the principles of taxation in the appellate courts. He argued that she correctly considered the value of the subject matter of the appeal against the respondents and correctly followed the principle of consistency regarding 8-lOo/o of the subject matter as a basis for the award of instruction fees.

Counsel further stated that the appeal before this court was against the Court of Appeal 's decision which upheld the High Court decision to dismiss the suit for recovery of money and freehold titles from the respondents. That the taxing officer was therefore right to base her decision on the value of the subject matter. Counsel also argued that

the fee was awarded deservedly because the appeal was long and drawn out with 8 applications.

It was his further contention that any error in the computation of the costs did not significantly alter the total award and as such does not go to the root of the award.

Regarding the interlocutory matters, learned counsel submitted that it was evident from the bills of costs that the taxing officer reduced the amounts sought for signihcantly thereby arriving at a reasonable sum. He concluded by citing the case of Bank of Uganda (supra) and urged court not to interfere with the registrar's decision as she was the best fitted to handle taxation matters.

### Conslderation.

It is well settled law that a reference on taxation may be made to this court on two grounds i.e. a matter of law or principle or on the ground that the bill of costs as taxed is manifestly excessive or manifestly low in the circumstances. This is rooted in R. 106(1) and (3) of the Rules of this court. It provides that;

(11Anv Derson who ls dissatisfied with a decision of the resistrar in his or her caDacitv as <sup>a</sup> taxing olficer mav require anv matter of law or principle to be referred to a iudge of the court for his or her decision and the Judge shall determine the matter as the Justice of the case may require.

substantiallv affected the decision on quantum and that upholdinE the amount would cause inlustice to one of the parties.

The principles that govern the quantum of instruction fees as regards appeals are well laid in Paragraph 9(2) and (3) of the Third schedule to the Rules of this court. It reads as follows;

"(2) The fee to be allowed for instructions to appeal or to oppose an aPPeal shall be a sum that the taxlng officer considers reasonable. havins regard to the amount involved in the appeal its nature, importance and difliculty, the lnterest of the parties, the other costs to be allowed the general conduct of the proceedings the fund or Derson to bear the costs and all other relevant circumstances. (emphasis mine)

l3) The sum allowed under subparagraph (2) of this paragraph shall include all the work necessarily and properly done in connection with the appeal and not otherrnise chargeable, including attendances, correspondence, perusals and consultlng authorities.

This court has Iabored in numerous authorities to explicate the above Iaw and set out general principles of assessing of instruction fees as follows;

- The instruction fee should couer the aduocates' work, including taking instructions as well as other work necessary for presenting the case for tial or appea\ as the case may be. - There is no legal requirement for awarding the Appellant a higher brief fee than the Respondent, but it would be proper to award the Appellant's Counsel a slightly higher fee since he or she ha.s the responsibilitg to aduise his or her client to clwllenge the decision. - There is no mathematical or magic formula to be used bg the Taxing Master to arriue at a precise figure. Each case t;l:,s to be decided on irs own merit and circumstances. For example, a lengthg or complicated case inuoluing lengthg preparations and research will attract high fees. - The amount of the subject matter inuolued mag haue a beaing. - The Taxing Master hos discretion in the matter of taxation but he must exercise the discretion judicially and not whimsically. - The Taxing Master owes it to the public to ensure that costs do not rise aboue a reasonable leuel so as to deng the poor access to court and must be such as to attract recntits to the profession. - In so far as practicable there should be consistencg in the awards made.

(See Raichand a Quqrry Sendces of Eost Aft'lca Llmlted and others [19721 EA 762, Nalumansl a Lule S. C Ciuil Appllcatlon No. 72 of 7992, HashJo,m u Zandb [1954 EA 255 qnd Ko,bo,nd.a v Kanrrnura Meluln Consultlng Englneers Supreme Court Clull

Appllcatlon No. 24 of 1993), Attorneg General us Uganda Blanket Manufacturers Ltd (1973), Ctall Appltcatlon no. 17 of 7993, Mqkumbl and o,nother u Sole Electr-lcs (U) Ltd, F99O-19941 1 EA 306. Bank of Uganda as Banco Arabe Espanol, Clvll Appllcatlon no. 33 of 7999, Nqtlonal Insuarance Corporatlon as, Pellcan Seruices llmtted (2OOO)2 EA 236, Muutanga Khrumbl us Attorneg General, Clull reference No. 3a of 2077, Mbqle Resort HoteltU) ltd as. Bq.bcon (u) Llmlted, Clutl ReJerence No. 78 of 2O78.

Guided by the above principles, I shall examine the taxing master's holdings and determine whether this case presents exceptional circumstances as required by the law.

She observed as follows;

"[ have looked at the ruling of this court regarding dismissal of the appeal. It is evident that the appeal was dismissed, lt is also clear that the dismissal was to return Crane Bank Ltd shares to the shareholders. I have looked at the grounds of appeal to determine what exactly Crane Bank Ltd sought from court....it is clear that the failure of Crane Bank Ltd to succeed in this case meant that it would not resover the money it claimed against the respondents. It also meant that the land it was claiming would not be dellvered. more specifically, what was placed before this court was determination of whether Crane Bank ltd could claim the amounts so stated in the High Court plaint.

She then concluded thus;

# "I therefore believe that each ofthe respondents bills are correct to refer to the subject matter as UGX 458,60618271259 I and to calculate LOo/o of that figure for the sum of instructlon fees."

It is evident from the above extracts, that the taxing master relied on the value of the subject matter to arrive at the quantum of instnrction fees. I respectfully disagree with the taxing officer. The amount involved in the appeal or subject matter of a case is indeed one of the factors a taxing officer may rely on to arrive at the quantum of instruction fees. Be that as it may, the value of the subject matter was not the question for determination in this court. The question before this court in Civil Appeal No. 07 of 2O2O was mainly the determination of the scope of the powers of a receiver under the Financial Institutions Act.

The High Court Civil Suit No. 0493 of 20i7, which involved the monetary subject matter was never heard on its merits. The respondents frled HCMA No.320 of 2019 challenging the locus standi and existence of Crane Bank ltd (in receivership). Court held that the plaintiff was nonexistent and therefore could not institute any suit. Court further held that there was no cause of action. It is important to note that the appeal in the Court of Appeal and the subsequent appeal to this court emanated from the above ruling which sprung fresh questions for determination revolving around receivership under the Financial Institutions Act. The aim of the appellant in both

appellate courts was for court to set aside the Ruling and order that the case be heard on its merits in the High Court. The monetary value involved in the Principal suit in the High Court could not therefore, be a dependable factor in the awarding of instruction fees.

This kind of error by the taxing officer is not strange to this court. The learned justices of this honorable court have labored to set straight what the phrase "amount involved in the appeal" means.

In the case of Bank of Uganda vs Banco Arabe Espanol(supra), Mulenga JSC when dealing with a similar scenario observed as follows;

"Undoubtedly, in hls ruling the learned taxing ollicer took the view that the monetary claim in the principal sum was "the amount involved in the appeal" wlth respect, however, this was a misdirection. Although the principal suit and therefore, the monetary claim therein, was sound to be and was actually affected by the outcome of the appeal, the monetary clalm was not involved in the appeal. it was not an issue or a question to be determined in the appeal."

In another, case of Attorney General & Anor vs James Mark Kamoga & Anor, Ctvtl Appeal No. O2 of 2OO8, Justice Okello stated as followsl

"... I agree wlth the above interpretation of subparagraph 2 of paragraph 9 as to what constitutes "the qmount lnuoloed ln the

appe@l." It can be deduced from the above passage that the test to be applied to determine what constitutes the amount involved in the aDrreal is a question whether the amount was an issue or a ouestion to be determined in the appeal. The sole damages awarded in the appeal or the value of then subject matter of the appeal as argued by Mr. TibaiJuka, do not constitute "the amount involved in the appeal" unless they were issues for determination in the appeal.

## See also; Mbale Resort Hote(U)ltd as Brrbcon (U) Ltmtted,, Taxatlon Clotl ReJerence No.78 of 2O18.

The case evidently does not pass the test set out by Okello JSC in the above text and holding as such was not only a misdirection, but also an error of principle on the part of the taxing officer.

Having settled the above, I shall now examine whether the award of 45,860,682,7301 was manifestly excessive as claimed by the applicant.

Instruction fees is the money paid to an advocate for the work done on a given case. Difficulty of a case or the amount of work done by an advocate is one of the most important factors when assessing the qualltum of instruction fees. The amount of research done in a complex case is not the same as in a non-complex one and both advocates cannot be paid the same. It is also noteworthy that just because counsel does research before hling pleadings and then files pleadings, is not of itself necessarily indicative of the complexity of the matter as it may well be indicative of the advocate's unfamiliarity with basic principles of law and such unfamiliarity should not be turned into an advantage against the opponent (See: Flrst American Bank ofKenya v. Shah and others, 12OO2l I EA 64).

It follows that in instances; where the responsibility entrusted to counsel in the proceedings is quite ordinary and calls for nothing but normal diligence such as must attend the work of a professional in any field; where there is nothing novel in the proceedings on such a level as would justify any special allowance in costs; where there is nothing to indicate any time-consuming, research-involving or skill engaging activities or where there is also no great volume of crucial documents which counsel has to refer to, there is no need for a boosted quantum of instruction fees. See; Mublru J in Electoral Commission vs Kldega Nabinson James H. C Civil Appeal No. O26 of 2016.

The appeal in issue was withdrawn before hearing, therefore, not as much work was done by the advocate in this court as would have been, if the appeal had been argued too its logicat conclusion.

It is trite that the instruction fees should not be too excessive so as to discourage the public from accessing the courts of law and not too low to demoralize new recruits to the profession. See; Makula Internatlonal vs. His Eminence Cardinal lYsubuga & Auor, Clvil Appeal No. 4 of 1981.

The award of 45,860,682,730/ in the circumstances was excessive, oppressive and punitive. It amounts to an injustice to the applicant and must be interfered with.

From the foregoing, I hereby set aside the sum of 45,860,682,730/ as instruction fees and substitute the same with an award of 500,000,o00.

On the issue of the excessiveness of instruction fees in regards the interlocutory matters. The taxing officer awarded 5O,O00,O0O/ as instruction fees to the respondents for each of the interlocutory applications. Miscellaneous Application no. 33 of 2020 sought for interim orders to restrain the 1st respondent from taking over Crane Bank Ltd, Miscellaneous application no. 32 of 2O2O sought for orders to restrain the lst respondent from taking over Crane Bank Ltd, Miscellaneous application no. 39 of 2O2O, sought to restrain Bank of Uganda from liquidating the Appellant and Miscellaneous application no. 02 of 2O2l sought to amend the record of Appeal by substitution of a name.

The law governing assessing of instruction fees in interlocutory matters is Paragraph 9(1) to the Third Schedule to the Rules of this court. It provides as follows;

"The fee to be allowed for instructions to make, support or oppose any aPPlication shall be a sum that the taxing oflicer considers reasonable but shall not be less than one thousand shillings."

It is clear from the above, that it is at the discretion of the taxing officer to determine what he or she considers a reasonable sum as instruction fees in interlocutory matters. As stated earlier, it is trite that the discretion should be exercised judiciously and not whimsically. It must also be based on sound principles.

The taxing officer did not give reasons for her decision. 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. The order awarding a specihed amount ought to speak for itself by giving re asons.

The miscellaneous applications were not intricate as to attract 50,000,000/ as instruction fees. The awards were exorbitant and unreasonable and the same are hereby set aside. I find a sum of 5,000,0OO/ per interlocutory matter a reasonable sum for instruction fees.

### Issuel

## Whether there was an error in assessing and allowlnE amounts for drawings. copies thereof. attendancee, perusals. disbursements and VAT.

The thrust of counsel's submissions on this issue was that it was erroneous for the taxing master to allow amounts for drawings, copies thereof, attendances and perusals yet same were

incorporated in instruction fees as provided in Paragraph 9 (3) to the third schedule.

On disbursements, counsel's contention was that the taxing officer wrongfully allowed amounts for disbursements which were not proved as required by the law. Counsel also queried the taxing officer's award for conferencing notes in items 1 and 2 under drawings since both parties never filed conferencing notes.

On the issue VAT, it was counsel's submission that the taxing master erred when she assessed VAT in the absence of counsel's VAT certificate of registration and that the same should be disallowed.

In response, counsel for the respondents submitted that the learned taxing oflicer assessed the amounts using High Court scales as she correctly relied on paragraph 9(a) of the third schedule which is to the effect that provides that other costs shall be awarded in accordance with the scale set to in High Court (Advocates Remuneration and Taxation of Costs) Amendment Regulations, 2018.

Regarding disbursements, counsel responded that paragraph 11(1) of the third schedule a-llows such costs, charges and disbursements as have been reasonably incurred for the attainment of justice. That the amount of 5,OO0,OOO is commensurate to the nature of appeal that was and the numerous interlocutory applications filed by the applicant.


On the issue of VAT, Counsel submitted that the absence of the VAT certificate of registration of counsel on file was not more than a technicality. He argued that counsel is a registered tax payer and duly attached his certificate to the record of reference.

#### Consideratlon.

#### Drawings, copies thereof, attendances and perusals.

Counsel argued that drawings, copies thereof and perusals are part of instruction fees. He cited Paragraph 9(4) to the Third Schedule.

"The sum allowed under subDaragraph l2l of this aragraph shall lnslude aU the work necessarily and properlv done in connection with the appeal and not otherwise chargeable attendances, authorities." correspondence, perusals and including consulting

From the foregoing, drafting of court papers or drawings would fall under instruction fees however, the same specifically provided for under paragraph 10.

Paragraph 10 provides that; It is trite that if a specific provision conflicts with a more general one in the same or an earlier statute, the specific provision prevails. See: Ibori V. Ogburu l2OO4l 15 NWLR (PT.895), Chtef S. O Adedayo & Ors. v. People Democratic Party & Ors. (2O13f LPELR-2O342(SC)

"The fee for drawin a document shall include the preparation ofall copies for the use ofthe party drawing it and for flling and

# senrice when onlv one other Dartv or one advocate for other parties has to be senred; but where there are additional parties, fees may be charged for making the necessary additional copies.

My understanding of Paragraph 10 above, is that, the fee that the taxing oflicer allows as drawing fees includes the amount for copies thereof. The taxing officer may only allow an additional fee to cater for copies, if there are more than one party to setve, and even then, those parties must have employed more than one advocate.

In the present case, the applicant was one party. This follows that all monies allowed by taxing officer for copies thereof were an error in law. Items 4,6,9, LL,L4,t8,2O,22,24,26 and 29 are hereby set aside, Item 30 under drawings was work done in the Court of Appeal and cannot be billed in this court. Further, fees allowed for attendances and perusals were awarded illegally as the same form part of the instruction fees. Consequently, items 32-47 are hereby set aside. It is also on record that there were no conferencing notes done therefore, Item 1 and 2 under drawings are also set aside.

Regarding disbursements, it was counsel's contention that the taxing officer wrongfully allowed amounts for disbursements which were not proved as required by the law.

Paragraph 4 to the third schedule to the Rules of this court. It reads as follows;

the bill of costs. (U Dlsbursements shall be showrn separately at the foot of

- t2l Receipts for all disbursements shall be produced to the taxine officer at the time of taxation. - (31 No dlsbursement shall be allowed which has not been paid at the time of taxation.

Properly documenting these costs is crucial in a legal case in order to make an accurate determination of the client's losses and create an understanding of claimed damages.

It was an agreed fact that there was no proof of the disbursements or production of receipts at the tax hearing. The amount arrived at by the taxing officer is therefore illegal and set aside. Item 48 of the bill of costs shall be remitted back to the taxing master for proper assessment.

On the issue of VAT, it is trite law, that the before issuance of VAT, a VAT certificate ought to be presented as proof of Counsel's law firm's VAT registration status, In the instant case, Counsel for the respondents did not produce a VAT certificate when the bill of costs was being taxed and yet the taxing master awarded VAT at 8,265,040,691 /.1find this procedurally wrong. Counsel attached a copy of the tax certificate on the record before me. This has been used in consideration of a new VAT on items 1-5 in the bill of costs.

The application is allowed with the following orders;

1. The Taxing officer's decision overruling the P. O is hereby set aside.

- 2. The Taxing officer's decision of making double awards of fees is hereby set aside. - 3. Instruction fees in Civil Appeal No. 7 of 2020 are set at $500,000,000/.$ - 4. Instruction fees for interlocutory matters are set at $5,000,000/$ per matter. - 5. The award of VAT is set aside and a new VAT is set at 18% on items $1-5$ . - 6. Items 1-2, 4, 6, 9, 11,14,18,20,22,24,26,29 and 30 under drawings, 32-47 are hereby set aside. - 7. Item 48 shall be taken back to the registrar for proper consideration.

In the premises, I am satisfied that the Taxing Master did not exercise powers judicially. The Taxation Reference therefore succeeds as indicated above.

Costs of the Taxation Reference are awarded to the Applicant. Dated at Kampala this ... 5th day of May. $...2023$

Hon. Mike J. Chibita JUSTICE OF THE SUPREME COURT

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