Dibagh Singh And Bros Limited v M/S Sekabanja & Co. Advocates (Taxation Reference 9 of 2023) [2024] UGHCLD 179 (26 June 2024)

#### THE REPUBLIC OF UGANDA IN THE HIGH COURT OF UGANDA AT KAMPALA [LAND DIVISION] TAXATION REFERENCE NO. HCT-00-LD-TR-0009-2023 (ARISING FROM TAXATION APPLICATION NO.185 OF 2021) (ARISING FROM CIVIL SUIT NO.094 OF 2007)

## DIBAGH SINGH & BROS CO LIMITED::::::::::::::::::::::::::::::: APPLICANT VERSUS

# M/S SEKABANJA & CO. ADVOCATES::::::::::::::::::::::::::::: RESPONDENT

#### BEFORE: HON. JUSTICE BERNARD NAMANYA

### RULING

- 1. The respondent filed an Advocate/Client Bill of Costs of Ushs 4,226,837,336, which the learned Assistant Registrar, His Worship Kagoda Ntende Samuel M ("the Taxing Officer"), taxed and allowed at Ushs 1,175,031,184. Being aggrieved with the decision of the Taxing Officer, the applicant brought this taxation reference seeking to set aside the Taxation Ruling dated 7 November 2023. The reference is brought under Section of 62 (1), (2) of the Advocates Act and Rules 3 and 4 of the Advocates (Taxation of costs) (Appeals and References) Regulations. - 2. The reference is supported by an affidavit of Mr. Efumbi Musa, sworn on the 22 November 2023. It is opposed by the respondent through an affidavit in reply sworn by Mr. Sekabanja Edward Kato on the 20 December 2023. - 3. The brief background to the reference is that the respondent provided legal services to the applicant in respect of Civil Suit No.94 of 2007: Dilbagh Singh Brothers (Uganda) Limited v. Departed Asians Property Custodian Board, The Attorney General, Erinest Lubwama & Daily Bread Ltd. The respondent handled the matter up to the point of presentation of the last

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defence witness, when on the 22 October 2018, the applicant instructed M/s Turinawe, Kamba & Co Advocates, to take over conduct of the matter. On the 1 November 2019, Justice Henry I. Kawesa delivered judgment in favour of the applicant. The Judge ordered the defendants to pay compensation of Ushs 315,000,000, interest at the rate of 18% from the date of judgment, and costs of the suit.

- 4. The gist of the applicant's case is that the Advocate/Client Bill of Costs allowed at Ushs 1,175,031,184 is excessive and not commensurate with the work done by the respondent. - 5. It is the law that a Judge will not normally interfere with what the Taxing Officer considers to be a reasonable fee save in exceptional cases. This is because, it is generally accepted that, questions which are solely of quantum of costs, are matters which the Taxing Officer is more particularly suited to handle, and in which the Taxing Officer has more experience than the Judge. It is only in exceptional cases that a Judge will interfere with the award of a Taxing Officer, and where it is shown that in assessing and arriving at the quantum of the fee allowed, the Taxing Officer exercised or applied a wrong principle, resulting in the award being manifestly excessive or manifestly low, thus causing injustice to one of the parties. See Bank of Uganda v. Banco Arabe Espanol, Supreme Court Civil Application No. 23 of 1999 (per Justice Joseph Mulenga, J. S. C). - 6. In a recent decision by the Supreme Court of Uganda in the case of Bank of Uganda v. Sudhir Ruparelia and Another [2023] UGSC 18 (per Justice Mike J. Chibita), the following general principles on assessing instruction fees were set out:

- a) The instruction fee should cover the Advocates' work, including taking instructions as well as other work necessary for presenting the case for trial or appeal, as the case may be. - b) There is no mathematical or magic formula to be used by the Taxing Officer to arrive at a precise figure. Each case has to be decided on its own merit and circumstances. - c) The amount of the subject matter involved may have a bearing. - d) The Taxing Officer has discretion in the matter of taxation but he must exercise the discretion judicially and not whimsically. - e) The Taxing Officer owes it to the public to ensure that costs do not rise above a reasonable level so as to deny the poor access to court and must be such as to attract recruits to the profession. - f) In so far as practicable, there should be consistency in the awards made. - 7. The Taxing Officer must give reasons for his or her decision (see Alexander Okello v. M/s Kayondo & Co. Advocates, Supreme Court Civil Appeal No.1 of 1997). In the Bank of Uganda case (supra), the court further held as follows:

"[…] it is at the discretion of the Taxing Officer to determine what he or she considers a reasonable sum as instruction fees […] 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 specified amount ought to speak for itself by giving reasons."

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- 8. Having regard to the principles for the award of instruction fees, I am satisfied that this is an exceptional case that calls for the intervention of a Judge in the decision of the Taxing Officer. The award of Ushs 1,175,031,184 to M/s Sekabanja & Co Advocates is manifestly excessive. If the decision of the Taxing Officer were to upheld, it would occasion injustice to the applicant, and deny the poor, access to the Courts. I note that, whereas the Court awarded Dibagh Singh & Bros Co Limited, compensation of Ushs 315,000,000, it is now confronted with the prospect of having to pay its former lawyers, M/s Sekabanja & Co Advocates, fees of Ushs 1,175,031,184. The amount of Advocates' fee is about 3.7 times the compensation awarded by the Court! Lastly, the Taxing Officer did not give reasons for his decision as required by the law (see Bank of Uganda case, supra). - 9. Accordingly, it is my decision that: - a) The Taxation Ruling by His Worship Kagoda Ntende Samuel M delivered on 7 November 2023 is set aside. - b) The Advocate/Client Bill of Costs filed by the respondent in Taxation Application No.185 of 2021 is remitted to the learned Assistant Registrar to conduct a fresh taxation hearing. - c) In respect of this application, each party shall bear its own costs.

| IT IS SO ORDERED. | | | |-------------------|-----------------|--| | | BERNARD NAMANYA | | | | JUDGE | | | | 26 June 2024 | | | | | |

#### Delivered by E-mail:

| Counsel for the applicant: | jturinawe@gmail.com | |-----------------------------|-------------------------| | Counsel for the respondent: | dmunanura@sekabanja.com | | | email@sekabanja.com |