Jaffer Brothers Limited v Departed Asian Properties Custodian Board (Civil Application 24 of 1999) [2000] UGSC 24 (7 May 2000)

## THE REPUBLIC OF UGANDA IN THE SUPREME COURT OF UGANDA **AT MENGO** {CORAM: ODER, KAROKORA, KANYEIHAMBA, U. SC.} CIVIL APPLICATION NO. 24 OF 99 **BETWEEN**

JAFFER BROTHERS LIMITED **APPLICANT**

## DEPARTED ÀSIAN PROPERTIES CUSTODIAN BOARD .......... **RESPONDENT**

$1.5$

*{An application to vary the decision of a single Judge, Midenga,* JSC in a reference from the decision of the taxing master?

## RULING OF THE COURT

The applicant has referred to this court under Rules 105(7) and 8 of the Rules of this court a decision of a single Justice; (Mulenga, JSC) on a reference from the Registrar in his capacity as taxing officer. The decision of the learned justice is dated $15^{\text{th}}$ December. 1999 in which he reduced the amount of costs awarded to the appellant by the taxing officer from Shs.16m to Shs. $4,000,000 =$

The background to the application may be stated as follows:-

Jaffer Brothers, a limited liability company whose shareholders and directors were Asians, was registered proprietors of residential premises known as plot<sup>10</sup> Hill I and on Kololo, in Kampala, hereinafter referred to as the property. Following the expulsion of Asians from Uganda by the Military Regime in 1972, the property was allegedly expropriated under the Assets of Departed Asians Decree, 1973 and vested in the Custodian Board. In 1977 the Custodian Board purportedly sold the property to one Francis Nyangweso, who in turn sold it to one Mohammed Magidu Bagalaaliwo in erabout 1980. Subsequent to the enactment of the Expropriated Properties Act, 1982, the applicant successfully applied for return of the property. On 7-12/93 the Minister of State for Finance issued to the company a letter authorising repossession of the property, and by another letter dated 25/9/94 the Minister reiterated the same with some clarification. all of which are not relevant to this application. As Bagalaaliwo did not concede that he had lost ownership of the property, the applicant filed a suit against him in the High Court, hereinafter referred to as "the principal suit". Bagalaaliwo defended the suit and successfully applied under Order. 1 r 10(2) of the Civil Procedure Rules to join the Attorney-General and the Departed Asian Property Custodian Board as co-defendants. Thereafter the three defendants took out preliminary objections to the suit which the High Court upheld with costs to all the three defendants. The applicants appealed to the Contt of Appeal which allowed the appeal. The principal suit was remitted to the High Court with an order that the High Court should rehear the suit on nierit and the Court of Appeal awarded costs against the Departed Asians Property Custodian Board, the Attorney-General and Bagalaaliwo. The Custodian Board alone appealed to the Supreme Court against that decision. Its appeal was dismissed with costs to the applicant, who then filed the bill of costs in the sum of Shs. $30,000,000/$ = but the taxing officer allowed only Shs. $16,000,000/$ as instruction fees for opposing the appeal in the Supreme Court.

Departed Asian Properties Custodian Board filed reference No. 138 of 1999 to a single justice of this court under Rule 105(1) of the Rules of this court. Mulenga, JSC heard the reference and reduced the sum of costs awarded by the taxing officer to Shs. 4,000,000/hence this reference.

Mr. Walubiri, learned Counsel for the applicant filed a Memorandum of reference containing three grounds framed as followed:-

- The assessment by the learned Justice of the Supreme Court of Shs. 4,000,000/- $(1)$ as instruction fees was manifestly inadequate because it was based on wrong principles and wrong interpretation of the judgments of the Supreme Court. - Having found that the appeal led to an authoritative precedent on the $(2)$ interpretation of Order 1 r 10(2) of the Civil Procedure Rules where there was a paucity of case law, the learned Justice of the Supreme Court erred in holding that the proceedings, in the Supreme Court were not involving or complex.

The learned Justice of Supreme Court erred in law in comparing the instant case. $(3)$ to the decision of Patrick Mekumbi\_& Another v Sole Electronics Civil. Application No. 11 of 1993 instead of at Jeast the Registered Trustees of Kampala Institute y Peparted Asians Properties Custodian Board Civil Application No. 3 of $1995.$

Counsel asked this count to set aside the ruling and orders of Mulenga JSC and restore the amount of costs allowed by the taxing officer or such costs as the court deems necessary but certainly higher than that av aided by the single Justice

It was Counsel's contention that the ruling of the single Justice was founded on wrong. principles and a mis-conception of the judgment of the Supreme Court when discussing the appeal by the Custodian Board. The single Justice was wrong to be influenced in his ruling by the fact that the arguments of Counsel for the Jaffer Brothers in the Supreme Court were written and not oral, thereby implying that written submissions take less time to prepare than oral submission

Counsel further contended that the learned Justice failed to take into account one major principle of assessing instruction fees, namely the general conduct of parties during the proceedings of a case. It was Counsel's contention that the manner in which Custodian Board conducted itself in the proceedings in all the courts meant that the applicant was forced to consider and defend the merits of the case and therefore it was the respondent's conduct which prolonged the hearing of the case.

On the second ground, the learned Counsel for the applicant submitted that when it came to the proceedings in the Supreme Court, there were no local leading authorities on the case and therefore Counsel for the applicant had to carry out extensive research in other jurisdictions to justify and give reasons and authorities for their submissions. Counsel submitted a list of some 29 authorities which he claimed he had researched into from diverse jurisdictions discussing order 1 r 10(2) of the Civil Procedure Rules.

Mr. Walubiri, submitted further that the respondent had been added as a party either with its own consent or initiative and its Counsel had taken the leading role, in arguing and making submission on the merits of the case without ever protesting that it should never have been made a party. It is only when the appeal to the Supreme Court was lost by the respondents that the Custedian Board belatedly began to protest that it should never have been made a party to the suit in the first place. Counsel submitted that the full participation of respondent's Counsel in all the proceedings as if he were the Senior Counsel for all the defendants had the effect of prolonging the case and increasing costs.

Counsel further submitted that the taxing officer had been correct because he followed the right principles and once this is shown, his award should not have been interfered with.

He contended that the single Justice was wrong to emphasize the time spent in court on the basis that there had been written submission. He submitted that preparing such written submissions must also count. The judgment in the Supreme Court had created a precedent which the single justice acknowledged. Counsel for the applicant carried out research into this new and complicated matter which involved research and interpretation. In cases of this nature costs awarded in other cases have been higher. He submitted that the single Justice was wrong in following the decision in Makumbi case (supra) instead of following Registered, Trustees of Kampala Institute v DAPCB (supra), because the two cases were not comparable to the instant case. He contended that the case of Makumbi never led to any authority and the appeal was dismissed within 2 minutes and there were no protracted written or oral argument by any of the Counsel. He contended that Registered Trustee Kampala Institute (supra) was more comparable to the instant case because it interpreted section 1(c) of the Expropriated Properties Net No. 9 of 1985 The Kampala Institute case (supra) came out with authoritative decision as to who qualified to repossess property under the Act. The case set a precedent on the question of law just like the present case, which set a precedent as to the interpretation of Order 1.1 10(2) (supra). Both cases involved serious research and interpretation of the Legal provisions. So he contended that it was wrong to equate Makumbi case with the instant

case. The nearest this case could be compared with is Kampala Institute case (supra). where a fee of Shs 7,009,000<sup>cc</sup> awarded by the High Court was confirmed in 1<sup>cc</sup> although the Supreme Court observed that the amount awarded was on a low side the never interfered with it as the award was not based on wrong punciple or bad polics. However, considering 5 years since 1993 when Shs 7,000,000 - was av aided and the inflation now. Counsel submitted that the award of Shs 16,000,000 by the taxing officer was reasonable. In the circumstances the reference should be allowed with costs. set aside the award by Mulenga, JSC and substitute the taxing officers' award or a bigher figure than what Mulenga, JSC awarded

Hon, Ssekandi, learned Counsel for respondent opposed the application. He submitted that under rule 105(4) of the Supreme Court Rules, 1996 there shall be no reference on the question of quantum of costs. The single Justice of this court was only correcting error of principles applied by the taxing officer but this application is on quantum. The taxing officer had applied the wrong principles when he took into account the value of the property in the principal suit namely two billion shillings. The taking officer had also been influenced by what Justice Kanveihamba, JSC had stated in his judgment which was not relevant in considering what costs to award to the appellant. The single Justice was only concerned with whether the taxing officer had complied with the requirements of Rule 9(2) of the $3^{11}$ schedule (Rule 104) of the Supreme Court Rules which the taxing officer had misconstrued. The taxing officer considered such irrelevant matters as the location of the property and the fact that the Kabaka was occupying the property. The learned Counsel submitted with regard to the question of the time spent in court on proceedings and contended that there is no fixed rule. Each case must be judged on its own merit. There is no fixed time. It has to be reasonable. The single Justice was correct to hold that in an interlocutory matter of the nature-before the Supreme Count costs should be minimal

Hon. Ssekandi contended that on the 2<sup>nd</sup> ground of reference, the taking officer did not allude to the complicated nature of the suit not to the fact that a lot of research had been done in order to create a new precedent. Therefore the second ground is misconceived.

In any, event, the fact that a matter is coming to court for the first time does not make as case complicated. The single Justice gave reasons for his ruling and should therefore not be interfered with. Counsel further submitted that since the principal suit is still pending and we do not know what will happen when it is heard, it would be wrong and unnecessary for this court to interfere with the exercise of a discretion by the single-Justice.

Having heard both Counsel on the reference and reviewed the authorities available on taxation of costs, we agree with Counsel for the respondent, that a number of principles which the learned single Justice of this court took into account were correct. In one opinion the taxing officer was wrong in taking into account such matters as the value of the property; the area where it was situated and the status of persons who may have resided therein. However, on the other hand we think that the learned single Justice was not correct to make a distinction between an interlocutory matter and the merits of any given case as being a true or fair guide in assessing costs. In some cases an interlocutory hearing of a case can be more prolonged and costly than the eventual hearing of the substantive case on merit. Therefore this is not a criterion that can be decisive in any given case even though it may be a rough guide. We also think that it is not fair to make a decision on costs basing it on whether the submissions of a party or its Counsel were oral or written. A written submission may take as much effort, time and money in preparing as an oral submission and vice vasa. Each case must be looked at from the points of view of its own facts and circumstances.

We agree that the conduct of parties in a case is relevant when it comes to the amounts of costs incurred in the prosecution of that case. It is obvious that Counsel for respondent in this reference assumed the role of leading Counsel in all the proceedings prior to this reference and in our view, a respondent whose Counsel plays such a role must be distinguished from one who protests that he or a client represented should be made a party and if forced to be joined, keeps his or her submissions to the fact of being joined. and leaves, the merits of the case to those he or she believes were properly joined. We believe that it was mainly the submissions and conduct of the respondent which prompted

the applicant to carry out research and discover the number of relevant and applicable authorities he cited in his submissions when the appeal was before the Supreme Court.

In our opinion the taxing officer's assessment of Shs.16,000,000 as instruction fees appears to be on the high side but we equally believe that the sum of Shs.4,000,000 allowed by the single Justice is far too much below what we could have expected afterthe successful appeal in the Supreme Court. We think that the learned single Justice of Supreme Court was wrong to compare Makumbi case (supra), where the appeal before the Supreme Court had lasted only two minutes, i.e. where Counsel for applicant went to court and conceded to crucial points of law that the trial Judge had based his decision on a point not raised by the applicants. The appeal in Makumbi case ended there and then within two minutes. We think that the Registered Trustee of Kampala Institute y DAPCB (supra) which set a precedent on the interpretation of Section 1(c) of the Expropriated Properties Act No. 9 of 1987 was more comparable to the Jaffer Brothers y The DAPCB (SC) Civil Appeal No. 9 of 1998 before the Supreme Court, which set a precedent as to the interpretation of Order $1 \times 10(2)$ of the Civil Procedure Rules. Both cases involved serious research and interpretation of the legal provisions of the law which had not been interpreted before in our jurisdiction. Although the research carried out in Jaffer Brothers' case (supra) concerned an interlocutory matter, there is no doubt that it involved complex, and involving issues which were raised by Counsel for respondent. In the Registered Trustees of Kampala Institute case (supra) the award of Shs.7,000,000/ by Platt JSC, was considered to be on the lower side. However, the Supreme Court did not interfere with it, because the award had not been based on wrong principles. In our view, considering the 5 years since 1995 when Shs.7,000,000 was awarded as instruction fees and the inflation now, we think that an award of Shs.4,000,000 $\pm$ as costs awarded by the single Justice was on the lower side.

For the above reasons, this reference ought to succeed. We set aside the Orders of the single Justice and substitute the same with our ruling in favour of the applicant and Order that the sum of Shs.10,000,000/ $\pm$ (Ug. Shs. Ten million only) with costs be awarded to the applicant.

Dated at Mengo this $\frac{1}{2}$ $\mathcal{M}^{(1)}$ $\ldots$ Day of

$\mathcal{C}$

$\mathcal{L}_{\mathbf{F}} \mathcal{L}_{\mathbf{A}} \mathcal{L}_{\mathbf{A}} \mathcal{L}_{\mathbf{A}} \mathcal{L}_{\mathbf{A}}$ A. O. H. ODFR. JUSTICE OF THE SUPPLAIN COUPT

$\mathbf{t}_{\mathbf{t}} = \mathbf{t}_{\mathbf{t}} = \mathbf{t}_{\mathbf{t}}$ A. M. KAROKORA. JUSTICE OF THE SUPREMIE COURT. *E. W. KANYE HAMBA* JUSTICE OF THE SUPPLAIF COURT.