Dembe Trading Enterprises Limited v Birungyi Kagyenda (Civil Appeal 128 of 2015) [2020] UGCA 2162 (3 August 2020)

Full Case Text

## THE REPUBLIC OF UGANDA

$\bullet$

### IN THE COURT OF APPEAL OF UGANDA AT KAMPALA

### CIVIL APPEAL NO.128 OF 2015

# (Coram: Cheborion Barishaki, Stephen Musota & Christopher Madrama, $JJA)$

#### 10 DEMBE TRADING ENTERPRISES LIMITED::::::::::::::::::::::::::::::::::::

### **VERSUS**

# BIRUNGYI CEPHAS KAGYENDA::::::::::::::::::::::::::::::::::::

(Appeal from the decision of the High Court of Uganda, Commercial Division delivered on 6th June, 2013 in Civil Suit No. 414 of 2009 by Hon. Justice Geoffrey

15 *Kiryabwire)*

$\mathsf{S}$

## JUDGMENT OF CHEBORION BARISHAKI, JA

This is an Appeal from the judgment of Geoffrey Kiryabwire, J (as he then was) delivered on the 6th day of June, 2013 in which he entered judgment in favour of the respondent in the following terms:

- 20 1. Special damages of UGX 358,383, 759.84/ $=$ - 2. Interest at 21% pa from the date of filing the suit until payment in full. - 3. $2/3$ of the taxed costs.

The facts giving rise to the Appeal as accepted by the trial Judge are that;

- 5 In 20O8 and early 20O9, the respondent was orally instructed by the appellant to provide tax consultanc.y services to the appellant involving assessments, evaluations, balancing the reductions and realization of a reasonable final tax assessment to be paid by the appellant to Uganda Revenue Authority. According to the respondent, it was agreed at commencement of the contract that the respondent's fees would be 8% on the differences between the original presumptive assessed tax and the final tax assessment. The respondent proceeded to act on the above instructions to advise on a pre-to( assessment of UGX 6,292,628,96O which had been made by URA to be paid by the appellant. 10 - That after rendering the service, Uganda Revenue Authority agreed that the appellant would pay a final tax assessment the sum of shs 705,665,962 instead of shs 6,292,628,960 as earlier assessed. The appellant paid a deposit of shs 89,000,000 as the respondent's fees who claimed shs 380,651,598 as outstanding amount. The respondent further averred that he was entitled to a remuneration oI 8o/o of the reduced tax liability which is equivalent to shs 469,651,598 as agreed with the appellant. 15 20 o

The appellant denied the respondent's claim and contended that the respondent was instructed to provide consultancy services at a fee which he was paid amounting to shs 89,000,000. The appellant counter-claimed against the respondent for breach of contract, special and general damages. The appellant averred that it had to engage a new consultancy hrm M/s T & B Tax Consultants to complete the respondent's assignment at a cost of shs 3 1,000,0OO/=. The

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- 5 appellant pleaded particulars of breach by the respondent including failure to complete provision of the services for which he was contracted despite of being adequately remunerated, failure to handover documents after termination of the contract and failurc to refund the amounts over paid. - In reply to the counter claim, the respondent sought for judgment for the admitted sums of UGX 31,000,000/= under O. 13 R 6 of the Civil Procedure Rules. He also contended that the appellant never gave them notice for the a-lleged breach of contract. It was further averred for the respondent that the agreement between the appellant and M/S T&B Tax Consultants was a sham and an afterthought by the appellant to avoid paying the respondent's agreed fees. 10 15

The grounds of appeal as they appear in the Memorandum of Appeal are:

- 1. TLLe leamed tial Judge ened in law and in fact in not properlg eualuating the euidence and therebg coming to the wrong conclusion. - 2. Tte learned tial Judge ened in low and fact in finding that the respondent had proued that remuneration had been agreed at a rate of 8o/o and as such came to a wrong conclusion. - 3. The leamed trial Judge ened in latu uthen he a uarded interest at the rate of 27o/o in a matter where tnterest had neuer been agreed and which uLas not a commercial dispute.

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s At the hearingof the Appeal, Mr. Ernest Kalibala appeared for the appellant while the respondent was represented by Mr. Davis Ndyomugabe. The parties frled written submissions which thev relied on.

Mr. I(alibala argued grounds 7 and 2 togcthcr and ground 3 independently. On grounds 7 and,2, he faulted the learned triai Judge for failing to properly evaluate 10 evidence on record and for finding that the respondent had provided credible evidence that remuneration for the tax consultancy services had been agreed at 8%o. That the learned trial Judge erred in referring to the burden of proof as balance of probabilities. The learned trial Judge ought to have stated that the evidential burden is on the party who asserts and that the standard of proof was 15 on a balance of probabilities. According to counsel, the trial Judge erred in not

ascribing the burden of proof to any party but rather adopting the civil standard. He added that the Evidence Act is to the effect that he who asserts must prove his assertion and it was incumbent on the respondent to prove that he discharged the burden wholly and that 8% as a rate of remuneration had been 20 agreed to between the parties.

He submitted that from the evidence adduced by the witnesses, the assignment was to offer tax consultancy services and there was clear evidence from the appellant's witnesses that in April 20O9, the respondent had stopped rendering services to the appellant for this particular assignment. Counsel added that there 25 was no doubt that the respondent rcndered partial services to the appellant

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5 which had caused a reduction of the final tax payable by the appellant to UGX I ,300,o00,oo0/=.

Counsel further submitted that the dispute was not whether 87o was payable or not but rather whethcr what had been paid was adequate for the work the respondent had done. That this was based on the fact that there was no evidence

that the 87o rate had been agreed. According to counsel, the trial Court did not investigate whether the amount paid was adequate for the work done by the respondent yet the issue was framed around sufficiency of remuneration rather than whether the claimed rate of 87o was applicable. 10

o 20

Counsel referred to an email of 5ft February,2OO9, where the respondent made reference to a figure of UGX 125,OO0,00O/= as sulficient remuneration for work he had done.

Regarding awarded interest of.27o/o p.a, counsel argued that the trial Judge was wrong to award it because interest had never been agreed and the matter was not a commercial dispute to attract interest. Counsel submitted that there ought to have been evidence given to justify an award of commercial interest at a rate similar to that charged by financial institutions. He further submitted that justilication for interest should be based on considerations like inflation which in 2009 was in the range of l2%o, the nature of the transaction, intransigent conduct of a defendant and whether the plaintiff had to borrow money or not.

Counsel for the respondent submitted that the appellant continued to engage the respondent after April 20O9 because on 22nd June 2009, the appellant 5lPage 25

- 5 forwarded a trial balance to the respondent and the hnal tax due rvas communicated on 29tl June, 2009. This was evidence that the respondent was stili engaged by the appellant and was responsible for the reduction of the tax payable. - Counsel submitted that the trial Judge was unable to find that M/ S T&B Consultants finished the work started by the respondent because they were engaged for a totally different period compared to the assignment given to the respondent. The agreement which M/S T & B are said to have been engaged was dated 18th May, 2OO9 yet the letter communicating the final tax liability referred to a meeting held on 8th May, 2009 which meant that T&B Consultants were never involved in the assignment in issue but it was instead the respondent. 10 15 - Counsel submitted that sufficiency of remuneration was premised on the fee agreed to by the parties which was 8% of the difference between the original tax assessed and the final tax payable. - Counsel further submitted that the appellant's conduct of sending the respondent customs entries for the year 2OO5 on 16th October, 2O08 after the respondent had made an offer of the 8% fee on 1st October 2O08 indicated that the appellant had agreed to the fee. He relied on Brogden V Metropolltan Railuag Cotnpang (7876-77) L. R 2 App, Cas.665 and Carlll V Carbolic Smoke Batl (1893) 1 QB 256 for the proposition that communication of acceptance is not necessary for a contract when people's conduct manifests an intention to contract. 20 25

5 on ground 3, counsel submitted that the respondent prayed for interest of 3o%o on the sum above and he justiired this on account of delay in honouring the terms of the contract. That there was a scheme by the appellant to take benefit of the rcspondent's professional services while not payrng for them. The trial Judge had exercised his discretion judiciously in finding that interest of 3Oo/o 10 prayed for by the respondent was excessive and for awarding at a rate ot2l%opa

from the date of hling the suit until payment in full.

In rejoinder, counsel for the appellant submitted that it was trite that civil cases are proved on a balance of probabilities and that the burden was on the one who asserts. The respondent had the burden to prove that agreed fees was g% which 15 according to the appellant, the respondent had failed to do.

Regarding completion of the assignment, counsel submitted that the respondent had performed partially. That there was no evic.leuce ,[ the respondent's involvement in this matter after April, 2009. He could not therefore claim that he completed the assignment and brought the f'inal tax liability down to UGX 20 7O5,66s,692/=.

I have studied the record of appea-l and the judgment of the lower court. I have also considered the submissions of both counsel and the authoritics that were availed to Court which have been very useful in resolving this matter.

The duty of this court as a first appellate court is to re-evaluate evidence and 25 come up with its own conclusion as enunciated in Rule 3o(1) of the court of Appeal Rules.

TlPaBe

5 I shall resolve the grounds of appeal in the order followed by counsel for the appellant in his submissions.

On grounds I and 2, the learned trial Judge is faulted for failing to properly evaluate the evidencc on record ernd further for finding that the respondent had provided credible evidence that remuneration for the tax consultancy services

had been agreed at 8% of the difference on the amount initially assessed and what was paid. 10

It was the case for the appellant that the learned trial Judge erred in referring to the burden of proof as balance of probabilities.

The law is that he who alleges a fact must prove it and the standard of proof in civil cases is on a balance of probabilities. 15

# Section lol (1) ol the Evldence Act CAP 6 provides that;

"Wtneuer desires ang Court to giue judgment as to ang legal right or liability dependent on the existence of facts uthich he or she assels must proue that those facts eist."

In JVsubuga a Kanruma. (7978) HCB 3O7, it was held that in civil cases the burden lies on the plaintiff to prove his or her case on the balance of probabilities. 20

The party who bears the burden must produce evidence to satisfy Court otherwise his or her case will fail. The facts proved must form a reasonable basis for a definite conclusion aflirmatively drawn of the truth of which the trier of fact

o ## 5 may reasonably be satished. See Bradsh aut V lfrcBra.:,an,s Ptg Ltd (1959) l0l C. L. R 298 at 3O5.

While addressing the issue as to who bears the burden of proof, the learned trial Judge stated;

"The determination of facts u)as an euidential one for uhich the burden of proof tuas that of a balance of probabilities."

The tria.l Judge rightly applied the burden of proof by stating that it was on a balance of probabilities.

Counsel for appellant submitted that to determine whether the work was completed as assigned, it was necessary to determine what was assigned and

what had been done at the time the contract was terminated. In reply, the respondent submitted that the appellant continued to engage the respondent after April 2009 because on 22"d June 2009, the appellant forwarded a trial balance to the respondent arrd the final tax due was communicated on 29s June, 2O09 which was evidence that the respondent was still being engaged by the appellant by that date. 15 20

The learned trial judge observed and correctly stated that atthough the assigrment was not reduced into writing, the existence of an ora\_l contract between the parties was not in doubt.

5 Annexture "B" of the record of appeal is a letter dated 22tt<t June, 2009 written on behalf of the appellant to onc Ngobi Jacob, a tax consultant in the respondent's firm forwarding a trial Lralance for the year 2OO8.

The final tax due of UGX 705,665,962 was communicated to the appellant on 29th June, 2009 by a letter from Uganda Revenue Authority.

- I further note that there was an email from the respondent dated Sth February, 2009 communicating the final tax due as shs 1,300,000,000/ =. The respondent also prepared an assessment to a tune of 1,695,171,O60 marked as annexture "A1'. During cross examination, the respondent was asked when he stopped working for the appellant and he stated that when the hnal tax of Shs. 7O5 10 - Million was arrived at on 29th June,2OO9. Annexture'A3", dated 29th June, 2OO9 is the URA audit. All thcsc corrcspondenccs show that the respondent continued to render services to the appellant in respect of this particular assignment beyond April 2OO9. 15

I agree with the learned trial Judge's finding that the respondent completed the work as instructed by the appellant which was to reduce the tax liability of the appellant. a 20

> Counsel for respondent argued that the trial Judge was unable to f,rnd that M/S T&B Consultants finished the work because they were engaged for a totally different period compared to the assignment given to the Respondent. He added

that the agreement pursuant to which M/S T & B are said to have been engaged was dated 18th May, 2009 yet the letter communicating the final tax liability 25

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5 referred to a meeting held on Sth May, 2009 which meant that T&B Consultants were never involved in the assignment but it was instead the respondent.

The trial Judge found that M/S T&B Consultants were engaged for a totally different period (2OO8-2O10) compared with the assignment given to the plaintiff (2OO5-2OO7\ and did not therefore finish the work of the plaintiff now respondent.

DWl, Zia Uwera the appellant's Business Development Director testified that T&B were brought in around the end of May 2009 to complete the audit hndings for 2OO5/2OO7. 10

I have looked at the agreement at page 87 ofthe Record ofAppeal between Dembe Enterprises Ltd and T&B Consultants dated 18th May, 2OO9 rn which T&B was supposed to provide tax consultancy services to the appellant. However I note that attached to the said agreement is a receipt showing payment of UGX 3f ,000,000/= to T&B Consultants by the appellant for tax consultancy services of domestic taxes and customs for the period 2OO8-2OlO.

I therefore, do not agree with counsel for the appellant that T&B was engaged to complete the audit for the period 2OO512007 because the said receipt does not reflect so. Secondly the tax consultancy agreement between the appellant and T&B Consultants was dated 18th May, 2OO9 yet the letter communicating the final tax liability from Uganda Revenue Authority to the appellant stated that the audit had been completed and a review of the issues had been carried out with URA audit tearn on 8th May, 2009. o 20 25

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- 5 It is therefore clear that the final tax position was arrived at way before the appellant engaged T&B Consultants. I agree w'ith the learned trial Judge that M/s T&B Consultants were engaged for a totally different period (20O8-2010). They cannot be said to have finished the work started by the respondent as the appellant would wish to portray. - 10 Counsel for the appellant submitted that what was actually in dispute was not whether 87o fee was payable or not but rather whether what had been paid was adequate for the work the respondent had done.

On their part, counsel for the respondent stated that the resolution of the issue of sufficiency of remuneration was premised on determining the fee that was 15 agreed by the parties.

In resolving the matter, the learned trial Judge held that performance was rendered and part payment made. On Sth February, 2009 there was an email from the plaintiff stating that his fees were based on the 8o/o rate. On the other side there is no similar email on the flat rate of UGX 125,000,OOO/=. The trial 20 Judge also noted an inconsistency by the appellant on this figure because in the pleadings it was stated to be shs 120,O0O,O00/=.

In assessing the evidence of a witness his consistency or inconsistency, unless satisfactorily explained, will usually, but not necessarily, result in the evidence of a witness being rejected. Minor inconsistencies will not usually have the same

2s effect, unless the trial Judge thinks they point to deliberate untruthfulness. It is open to a trial Judge to find out whether a witness has been substantially 12 lPage

## 5 truthful even though he lied in some particular respect. See Constcrnti no Okwel Alias Magendo V Uganda, SCCA No,72 oJ 799O

In his witness statement, Anil Damani, the Managing Director of the appellant's company stated that the actual consultancy fce had not been agreed on but the respondent would be paid for each assignment completed. Further that the 10 respondent was adequately compensated in the total sum of UGX gg,ooo,ooo/= for the assignments that were completed and he abandoned the assignment in April 2009 when the appellant refused to pay the consultancy fee at the go/o rate.

DW1,, Zra Uwera, the appellant's Business Development Director, testified that the parties had orally agreed at a figure of shs l25,0OO,OOO/=.

15 I find the evidence adduced by the appellant's witnesses full of contradictions and incon sistencies.

On l"t October, 2008, the respondent wrote a letter to the appellant,s company in which he proposed the fee of 8% of the difference between shs 5,407,061,957 /= and the final tax assessed. However during cross examination, 20 DW7, zra Uwera informed court that the said letter was never replied to but instead she sent the respondent work on 16th October, 20O8.

I lind that the appellant's conduct of sending work to the respondent without contesting the proposed fee of 8%o of the difference between Shs 5,407,061,957 and the final tax assessed amounted to acceptance of the respondent's proposal.

25 since the respondent completed the work as assigned, he is entitled to the fees as assessed by the learned trial Judge.

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5 Grounds I and 2 of the appeal fail.

On ground 3 of the appeal, the learned trierl Judge rvas faulted for awarding interest at the rate of 2lok p.a in a matter where interest had never been agreed and which was not a commercial dispute.

It was submitted for the appellant that there ought to have been evidence given

to justify an award of commercial interest similar to that charged by financial institutions. 10

The learned trial Judge held that the plaintiff prayed for special damages of UGX 380,65 1,598 and interest at 3O%o p.a from the date of breach till payment in full and costs. That the amount prayed for was excessive and granted interest at 21o/o pa from the date of filing the suit until payment in full.

## Section 26 oJ the Clvll Procedure Ad Cap 7I provides that;

- l. Where an agreement for the paAment of interest is sought to be enforced, and the Court is of opinion that the rate agreed to be paid is harsh and unconscionable and ought not to be enforced bg legal process, the Court maA giue judgment for the pagment of interest at such rate as it may think just. - 2. Where and insofar as a decree is for the pagment of moneg, the Court mag, in the decree, order interest at such rate as the Court deems reasonable to be paid on the principal sum adjudged from the date of the suit to the date of the decree, in addition to any interest adjudged on such pincipal sum for any period prior to the institution of the suit, with further interest at such rate as the Court deerns reasonable on the aggregate sum so adjudged from

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5 the date of the decree to the date of pagment or to such earlier date as the Court thinks Jit.

The oral contract between the parties was for provision of tax consultancy services. The plaintiff (norv respondent) was entitled to a fee upon completion of the service. The appellant disputed the amount payable and only paid part of the fees. This resulted in delay of payment of the balance, in his pleadings in the lower Court, the respondent sought to recover both the outstanding balance and interest at 3Oo/o p.a from the date of breach till payment in full and costs. The trial Judge awarded the claimed principal amount and interest at 2l%o p.a from the date of filing the suit until payment in full. The appellant argued that the Judge acted erroneously in awarding interest.

In my view, this was a commercial transaction for provision of services. Section 33 of the Judicature Act grants the High Court unlimited jurisdiction to grant all such remedies as any of the parties in a case is entitled to in respect of any legal or equitable claim brought before it.

## E. E Seaton. ISC, tn JK Patel V Spear Motors Llmltcd Ciutl Appeal No.4 ot I99I held as follows: 20

"The time Luhen the amount claimed was due from is the date from which interest should be awarded. In the instant case that date was the last time uhen the parties agreed on the total balance due. This was 4th Februory 1986. I would therefore autard interest at the rate of 30o/o on the amount

15 lP,rge

awarded from 4th February 1986 until payment in full plus costs of the appeal and in the lower Court."

$\langle \mathbf{x} \rangle = - \langle \mathbf{x} \rangle$ (38)

I therefore find that the trial Judge in awarding the respondent interest at 21% pa from the date of filing the suit until payment in full exercised his discretion judiciously.

10 It was also the appellant's contention that the instant suit was not a commercial dispute.

The jurisdiction of the Commercial Court is provided for under Regulation 4(1) Constitution (Commercial Court) (Practice) Directions of the $S-I$

**Constitutional 6** provides as follows;

- "The business of the Commercial Court shall comprise all actions arising out of 15 or connected with any relationship of a commercial or business nature, whether contractual or not, and include, but not be limited to - *a) the supply or exchange of goods and services* - b) banking, negotiable instruments, international credit and similar *financial services;* - *c) insurance, reinsurance;* - *d) the operation of stock and foreign exchange markets* - *e) the carriage of goods (by water, land air); and* - *f) foreign judgments and commercial arbitration questions.*"

$e^{-\frac{1}{\lambda}}$

$\mathsf{S}$ 5 I agree with counsel for the respondent that the instant case concerned a contract for services. It therefore falls within the ambit of a commercial dispute. Ground 3 of the appeal fails.

The appeal has no merit and should be dismissed.

Since Musota, JA agrees and Madrama .-IA substantially agrees, this appeal is dismissed with costs here and in the Court below. The Judgment and orders of the trial Judge are upheld. 10

## It is so order

a..-\ Dated at Kampala this day of.... .....2020

HON. MR. JUSTICE CHEBORION BARISHAKI JUSTICE OF APPEAL

#### THE REPUBLIC OF UGANDA

## IN THE COURT OF APPEAL OF UGANDA

#### CIVIL APPEAL NO. 128 OF 2015

#### DEMBE TRADING ENTERPRISES LTD ::::::::::::::::::::::::::::::::::: $\mathsf{S}$

#### **VERSUS**

#### BIRUNGYI CEPHAS KAGYENDA :::::::::::::::::::::::::::::::::::: 10

#### CORAM:

# HON. MR. JUSTICE CHEBORION BARISHAKI, JA HON. JUSTICE STEPHEN MUSOTA, JA HON. MR. JUSTICE CHRISTOPHER MADRAMA, JA

## JUDGMENT OF JUSTICE STEPHEN MUSOTA, JA

I have had the benefit of reading in draft the judgment of my learned brother Hon. Mr. Justice Cheborion Barishaki, JA.

I agree that for the reasons he has given and the orders he has proposed, this 20 appeal should be dismissed with costs to the respondent here and the court below.

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

Stephen Musota **JUSTICE OF APPEAL**

## 5 THE REPUBLIC OF UGANDA,

### IN THE COURT OF APPEAL OF UGANDA AT KAMPALA

#### CIVIL APPEAL NO 128 OF 2015

## [ARISING FROM HIGH COURT COMMERCIAL DIVISION CIVIL SUIT NO 4L4 OF 2OO9l

# 10 (CORAM CHEBORION BARISHAKI, STEPHEN MUSOTA & CHRISTOPHER MADRAMA)

DEMBE TRADING ENTERPRISES LIMTTED} APPELLANT

VERSUS

BIRUNGYI CEPHAS KAGYENDA} RESPONDENT

#### JUDGMENT OF CHRISTOPHER MADRAMA IZAMA

I have read in draft the lead judgment of my learned brother Hon. Justice Cheborion Barishaki, JA and I agree with facts, analysis and concur with the decision in the judgment save for my dissent on the issue of the quantum of interest only.

#### 20 I would further like to add a few words of my own.

## Ground 1 of the appeal.

z5 On the question of whether there was an agreement between the parties to remunerate the respondent with 8% of the difference between the tax assessed and the actual tax reduced after the rendering of consultancy services by the respondent, the applicable law is section 48 of the Advocates Act Cap 267, which applies to agreements with respect to remuneration of an advocate in a non - contentious matter. Section 48 of the Advocates Acts stipulates that:

#### 5 48. Agreements with respect to remuneration for noncontentious business.

(1) Notwithstanding any rules as to remuneration for the time being in force, an advocate and his or her client may, either before or after or in the course of the transaction of any noncontentious business by the advocate, make an agreement as to the remuneration of the advocate in respect of that transaction.

- (2) The agreement may provide for the remuneration of the advocate by a gross sum, or by commission or percentage, or by salary or otherwise, and it may be made on the terms that the amount of the remuneration stipulated in the agreement for either shall or shall not include all or any disbursements made by the advocate in respect of searches, plans, travelling, stamps, fees or other matters. 10 - (3) The agreement may be sued and recovered on or set aside in the like manner and on the like grounds as an agreement not relating to the remuneration of an advocate; except that if on any taxation of costs the agreement is relied on by the advocate and objected to by the client as unfair or unreasonable, the taxing officer shall inquire into the facts and certify them to the court, and if on that certificate it appears just to the court that the agreement should be cancelled, or the amount payable under it reduced, the court may order the agreement to be cancelled, or the amount payable under it reduced, and may give such consequential directions as it thinks fit. 15 20

(4) This section shall be read subject to the provisions of section 74.

25 Section 48 (2) (supra) allows the agreement to provide for the remuneration of the advocate by a gross sum, or by commission or percentage. Further section 1 (i) of the Advocates Act defines non contentious business to mean:

> (i) "noncontentious business" means any business done by an advocate other than contentious business;

Because contentious business is defined, I shall set it out the definition in section 1 (c) of the Advocates Act which stipulates that: 30

> (c) "contentious business" means any business done by an advocate in any court, civil or military, or relating to proceedings instituted or intended to be instituted in any such court, or any statutory tribunal or before any arbitrator or panel of arbitrators;

> > 2

5 The consultancy services rendered was not contentious business but noncontentious business and the agreement thereof was governed by section 48 of the Advocates Act which allows a remuneration agreement between a client and an advocate to provide for a percentage of a given amount to be the remuneration of the advocate. The only issue was whether there was such an agreement and I agree with the finding of my learned brother that the agreement in respect to the 8% quantum of remuneration for the consultancy services was proved to the required standard in civil disputes. 10

## Grounds 2 and 3 of the appeal on award of interest

on the issue of the award of interest. The rationale for the award of interest is compensation for loss on account of deprivation of the money in all instances and the percentage will be dictated by the peculiar circumstances of each case by applying the doctrine of restitutio in integrum. This was held in Riches v Westminster Bank ttd [1947] 1AILER 469 HL at 472 where Lord Wright stated that

'"' the essence of interest is that it is a payment which becomes due because the creditor has not had his money at the due date. It may be regarded either as representing the profit he might have made if he had had the use of the money, or, conversely, the loss he suffered because he had not that use. The general idea is that he is entitled to compensation for the deprivation. . .'

In the circumstances, the respondent was deprived of an income for a substantial period of time and the award of interest should represent the loss he suffered as a result of the deprivation of funds. Interest is payable from the time the money became due and payable. Further, interest can be awarded at a bank rate for fixed deposit as if the respondent had the prudence to invest the due sum in a fixed deposit account or other securities. 25 a 30

In the premises i would find that the award of interest at21%o is excessive in the circumstances and in my judgment I would substitute the award with an

a 15

award of 14% per annum. I would partially allow the appeal on this aspect of $\mathsf{S}$ interest only and reduce the interest accordingly.

In the final result, I concur that the appeal substantially fails save for the reduction in interest and I concur with the rest of the terms of the judgment of Cheborion Barishaki, JA and have nothing further to add.

10 Dated at Kampala the $\frac{3}{8}$ day of $\frac{4}{8}$ 2020

**Christopher Madrama Izama**

**Justice of Appeal** 15