Kwesiga v Mugisha (HCT-01-LD-MA 31 of 2021) [2024] UGHC 1031 (30 October 2024)

### **THE REPUBLIC OF UGANDA**

# **IN THE HIGH COURT OF UGANDA AT FORT PORTAL** 3 **HCT – 01 – LD – MA – 0031 OF 2021 (ARISING FROM HCT – LD - TA – NO. 38 OF 2023) (ARISING FROM HCT – MA – 025 - 2020 AND MA. 065 OF 2019)** 6 **(ARISING FROM HCT – CV – CS – 0043 OF 2016) KWESIGA JAMES ::::::::::::::::::::::::::::::::::::::::::::: APPLICANT VERSUS**

# 9 **MUGISHA ROBERT ::::::::::::::::::::::::::::::::::::::::::: RESPONDENT BEFORE: HON. JUSTICE VINCENT WAGONA RULING**

#### 12 **Introduction:**

This ruling determines the appeal against the decision of HW Matenga Dawa Francis in Taxation Application No. 038 of 2023 where the Respondent was awarded a taxed

15 sum of shs 3,138,000/=. The appellant seeks to have the said award set aside or reduced and costs of taking out the application.

#### 18 **Grounds of the Application:**

The grounds upon which this application is premised are contained in the Notice of Motion and the supporting affidavit of Mr. Kwesiga James (the applicant) which are:

- 21 1. The bill was taxed before conducting a pre-taxation meeting which is mandatory under the Remuneration Rules. - 2. The amount awarded as instruction fees of shs 1.500,000/= was harsh, 24 excessive and inconsistent with the principles of taxation.


- 3. The amounts awarded under items 1, 3, 5, 7, 9, 11, 12, 16, 19, 20, 28, 29, 30 and 32 are contrary to the Advocates (Remuneration and Taxation) of costs 3 Rules S.1. 7 of 2018. - 4. The bill was taxed in the absence of his lawyer which was unfair.

### **Reply of the Respondent:**

6 The application was opposed by the Respondent who contended that the pre-taxation meeting was frustrated by the appellant and his lawyer who were not co-operative and that the taxation was conducted in accordance with the rules.

### 9 **Representation and Hearing:**

Mr. Kyarisiima Brian appeared for the appellant while Mr. Bwiruka Richard for the respondent. Both counsel addressed me by way of written submissions which I have

12 duly take into account.

#### **Issues:**

- **1. Whether the failure to conduct a pre-taxation meeting rendered the** 15 **award in Taxation Application No. 38 of 2023 a nullity.** - **2. Whether the awards contested by the appellant are in accordance with the Advocates (Remuneration and Taxation of Costs) Regulations as** 18 **amended by statutory instrument no. 7 of 2018.**

## **1. Whether the failure to conduct a pre-taxation meeting rendered the** 21 **award in Taxation Application No. 38 of 2023 a nullity**

### **Submissions for the Appellant:**

24 Regulation 13A of the Advocates (Remuneration and Taxation of Costs) Regulationsas as amended in 2018 makes a pre-taxation meeting mandatory. The


regulations use the verb "shall" meaning its mandatory and the consequences of none compliance renders the award irregular and liable to be set aside. This was

- 3 emphasized in *Omakenyi Silver v Osekeny Alex Micheal, Taxation Appeal No. 0044 of 2022* where court observed that; "…..*I would find that in the absence of a record or agreement on pre-taxation is an irregularity which warrants setting* - 6 *aside the taxed bill of costs*…". In this case, a pre-taxation meeting was not conducted and thus renders the whole taxation process irregular and liable to be set aside. - 9

### **Submissions for the Respondent:**

Under Regulations 13A, if a party refuses to participate in a pre-taxation meeting,

- 12 the Taxing Officer has the discretion to proceed with the taxation. In this case the appellant refused to participate in the pre-taxation meeting and court proceeded to consider the bill. - 15

### **CONSIDERATION BY COURT:**

Regulation 13A of the Advocates (Remuneration and Taxation of Costs) Regulations

- 18 2018 as amended (herein after referred to as the Remuneration Rules) make a pretaxation meeting mandatory and the failure to do so renders the taxation irregular with the consequential effect of being set aside. The said regulation provides that:

### 21 *"13A. Pre-taxation meeting of advocates or parties*

- *(1) The advocates for the respective parties or the parties themselves, if unrepresented, shall jointly identify the costs, fees and expenses on* 24 *which they agree, if any, before the taxation of abill of costs.* - *(2) For every taxation, the taxing officer shall record thecosts, fees and expenses that are identified in sub-regulation (1) if any, and then*


## *proceed to tax the costs, fees and expenses on which there is no agreement, if any."*

3 Therefore, parties or the advocates are required to comply with the above procedure before a bill is considered by the taxation officer. (See: **Walakira Jacob v Nakalanzi Rose, High Court Taxation Appeal No. 02 of 2019).**

The fundamental question is – what is the effect of none compliance with the said procedure on the award made by the taxing officer? The regulation uses the verb 9 *"shall"* implying that it is a mandatory requirement with the effect that none compliance renders award irregular or illegal. However, the regulation does not provide consequences for none compliance with the said procedure. Therefore, 12 recourse should be made to the interpretation of such verb in legislative drafting or statutes.

- 15 The rules to consider in examining the efficacy of such the verb *"shall"* were laid down by the Supreme Court in **Supreme Court Election Appeal No. 26 of 2007, SitenbaSebalu v Sam K. Njuba&Anor** where court considered Rule 6 (1) of the 18 Parliamentary Election Petition rules which was to the effect that a notice of presented of the petition was to be served within 7 days and the rules used the verb 'shall' where court stated that: - 21 *"The Act does not provide for the consequences of failure to comply with the provision. It is for the court, therefore, to determine if the legislature intended the provision to be mandatory, in which case failure to comply with* 24 *the provision would render the petition null and void; or if the provision is directory, in which case non-compliance would only be an irregularity that*


*may be curable, for example by extension of time for special circumstances…..*

**The courts have overtime endeavoured, not without difficulty, to develop some guidelines for ascertaining the intention of the legislature in** 6 **legislation that is drawn in imperative terms. One such endeavour, from which the courts in Uganda have often derived guidance is in the case of** *The Secretary of State for Trade and Industry vs. Langridge* **(1991) 3 All** 9 **ER 591, in which the English Court of Appeal approved a set of guidelines that are discussed in** *Smith's Judicial Review of Administrative Action* **4 th Ed.1980, where at p.142 the learned author opines that the court must** 12 **formulate its criteria for determining whether the procedural rules are to be regarded as mandatory or as directory notwithstanding that judges often stress the impracticability of specifying exact rules for categorizing** 15 **the provisions. The learned author then states –**

*"The whole scope and purpose of enactment must be considered and one must assess the importance of the provision that has been disregarded,* 18 *and the relation of that provision to the general object intended to be secured by the Act. In assessing the importance of the provision, particular regard may be had to its significance as a protection of* 21 *individual rights, the relative value that is normally attached to the rights that may be adversely affected by the decision and the importance of the procedural requirement in the overall administrative scheme established* 24 *by the statute. Although nullification is the natural and usual*

*consequence of disobedience, breach of procedural or formal rules is likely to be treated as a mere irregularity if the departure from the terms*

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*of the Act is of a trivial nature or if no substantial prejudice has been suffered by those for whose benefit the requirements were introduced or* 3 *if serious public inconvenience would be caused by holding them to be mandatory or if the court is for any reason disinclined to interfere with the act or decision that is impugned."*(Emphasis is added)*."*

The supreme court also cited with approval the postulates by Lord Steyn in *Regina vs. Soneji and another* [2005] UKHL 49 (HL Publications on Internet)

- 9 where it was noted that; *"Having reviewed the issue in some detail I am in respectful agreement with the Australian High Court that the rigid mandatory and directory distinction,* - 12 *and its many artificial refinements, have outlived their usefulness. Instead, as held in Attorney General's Reference (No.3 of 1999), the emphasis ought to be on the consequences of non-compliance, and posing the question whether* - 15 *Parliament can be fairly taken to have intended total invalidity."*

The Court also adopted the view expressed in the Australian High Court case of

- 18 *Project Blue Sky Inc. vs. Australian Broadcasting Authority* (1998) 194 CLR 355, where, after referring to the mandatory and directory classification of statutory provisions as outmoded, that court said – *"… a court, determining the validity of* - 21 *an act done in breach of a statutory provision, may easily focus on the wrong factors if it asks itself whether compliance with the provision is mandatory or directory, and if directory, whether there has been substantial compliance. A better* - 24 *test for determining the issue of validity is to ask whether it was a purpose of the legislation that an act done in breach of the provision should be invalid….. In*


### *determining the question of purpose, regard must be had to the language of the relevant and the scope and object of the whole statute."*

Therefore,the overall consideration is that court examine (a) the whole statute and the object/purpose of the statute; (b) the consequences of such failure or none 6 compliance; (c) the likely injustice or prejudice it shall occasion to the opposite party; (d) the inconvenience that the public would face if such is treated as a mandatory requirement among other considerations.

- 9 In the present case, I have considered Regulation 13A and the entire remunerations rules and found that the purpose of a pre-taxation meeting was to ensure that the exercise is participatory and saves court's time. It was intended to ease taxation by - 12 giving parties an opportunity to sit, discuss and agree on sums which are within the rules and where they fail to agree on some of the items, then court would only consider those items which are contested by the parties. - 15

Although the head note to Regulation 13A states that "*Pre-taxation meeting of advocates or parties"* the contents of the provision do not convey the meaning that 18 the procedure can only be attained through a meeting. What the provision conveys is that the advocates for the respective parties or the parties themselves, if unrepresented, shall jointly identify the costs, fees, and expenses on which they 21 agree, if any, before the taxation of a bill of costs. This provision requires joint identification of agreed-upon costs, fees, and expenses by advocates (lawyers) for each party (if represented) or parties themselves (if unrepresented). It means that 24 before taxation of a bill of costs, the parties have to review and discuss costs, fees, and expenses, identify areas of agreement (if any), and document agreed-upon items.

 The purpose of this procedure is that joint identification promotes transparency and streamlines the taxation process; agreed-upon costs reduces potential disputes; it 3 also increase efficiency, and encourage cooperation as parties take active role. The Taxation Officer focuses on disputed items as the agreed-upon costs will be excluded from the taxation process. Whereas a meeting can facilitate face-to-face discussion, 6 immediate clarification of issues, efficient negotiation, and prompt resolution of disputes, parties can choose the most convenient and efficient method, considering factors like distance and logistics, time constraints, complexity of issues, cost and 9 expense considerations, and opt to comply with the requirement differently, such as through written correspondences, telephone conversations, and exchange of documents.

In my understanding, Regulation 13A did not limit or take away the powers of the taxing officer from considering a bill even without a pre-taxation meeting depending

- 15 on the circumstances of the case. Such circumstances may include where a party defaults, frustrates, is uncooperative, or in other ways demonstrates a lack of commitment to having, attending or participating in a pre-taxation meeting. Rules - 18 54 of the Advocates (Remuneration and Taxation of Costs) Regulations even allows the Taxing Officer to proceed ex-parte and provides that; *The taxing officer shall have power to proceed to taxation ex parte in default of the appearance of either* - 21 *or both parties or their advocates, and to limit or extend the time for any proceedings before him or her, and for proper cause to adjourn the hearing of any taxation from time to time.* Therefore, where a party defaults on appearance or 24 where he or she frustrates the taxation even in the absence of any pre-taxation - hearing, the taxing officer has the powers to proceed and tax the bill. It is thus my


consideration that a pre-taxation hearing/meeting is a procedural requirement which the taxing officer should ensure to provide for, before considering the bill, but where

3 for practical reasons it cannot be held, court has the powers to proceed and consider the bill in the absence of such pre-taxation hearing. I therefore disagree with learned counsel for the appellant that the failure to conduct a pre-taxation meeting renders 6 the award irregular and liable to be set aside.

In the present case when the bill came for taxation on 1/11/2023, learned counsel for 9 the applicant indicated he was never served with the bill and court ordered that he be served in court and the matter was adjourned to 16/11/2023. On 16/11/2023, the current learned counsel for the applicant did not appear and Mr. Bwiruka for the 12 judgment creditor indicated that a pre-taxation could not be conducted because counsel for the judgment debtor (applicant now) was not co-operative. The applicant was present and informed court that his lawyer was absent and prayed for an 15 adjournment. The Registrar indicated that he would make a ruling and the matter was adjourned to 19/12/2023. On the said day, the applicant's lawyer was absent and the taxing master proceeded to tax the bill. It is clear that the pre-taxation meeting 18 was frustrated by the appellant was not committed to the process who now wants to

- use it as a basis to have the award set aside. The appellant if at all he was committed to having a pre-taxation meeting had the opportunity to raise the matter it in court - 21 before the taxing officer. I therefore find that the failure to carry out a pre-taxation meeting which was frustrated by the appellant cannot be a basis to have the award set aside. I thus resolve this issue in the negative.


**2. Whether the awards contested by the appellant are in accordance with the Advocates (Remuneration and Taxation of Costs) Regulations as** 3 **amended by statutory instrument no. 7 of 2018.**

## **Item 1: Award of shs1,500,000/= as instruction fees:**

It was contended for the appellant that the award of 1,500,000/= as instruction fees 6 was excessive. The remuneration rules talk about 300,000 as the minimum. Mr. Bwiruka, learned counsel for the Respondent contended that the application involved perusing various records and decisions of court. That as such the award of

9 shs 1,500,000/= as instruction fees is not excessive or inconsistent with the award in similar applications. That costs should be reasonable and fairly to reimburse the party and the amount awarded is not excessive. (See: *Makula International Ltd v*

12 *His Emminence Cardinal Nsubuga& Anor (1982) HCB 11*).

It is settled law that, save in exceptional cases, a judge should not interfere with the 15 assessment of what the taxing officer considers to be a reasonable fee. 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. **(***See*

- 18 *Bank of Uganda v. Banco Arabe Espanol, S. C. Civil Application No. 23 of 1999 and Thomas James Arthur v. Nyeri Electricity Undertaking, [1961] EA 492).*An exceptional case is where it is shown expressly or by inference that in assessing and - 21 arriving at the quantum of the fee allowed, the taxing officer exercised, or applied a wrong principle. Application of a wrong principle is capable of being inferred from an award of an amount which is manifestly excessive or manifestly low. **(See Gulu** - 24 **Institute of Health Science versus Bwomu Gerald HCCA No. 163 of 2016).**


In **Taxation Appeal No. 003 of 2013, The Administrators of the Estate of the Late Barbara Lakeli Vs. JWB Kiwanuka & 3 others** court it was stated that:

- 3 **"***In this particular case the law granting discretionary power to the taxing master to award costs taking into consideration "all other relevant circumstances" was repealed. It means in my humble view that the taxing master is restricted now only* - 6 *to apply schedule six of the current regulations and award costs only as set out under those regulations. Nothing more nothing less….. In my view a taxing master cannot award costs less than what is stipulated under the rules. What has to be ascertained* - 9 *therefore is the fee chargeable in contentious matters in High Court under the current rules."* - 12 In *Centenary Rural Development Bank Ltd v Biira Khighambo, High Court Tax Appeal No. 027 of 2022* court stated thus**:** *"It is my understanding that under the current legal framework where parties are represented by advocates, the taxing* - 15 *master must conduct the taxation of a bill of costs to the fullest extent possible in compliance with the Advocates (Remuneration and Taxation of Costs) Regulations as amended in 2018. Any discretion allowed to the taxing master should be* - 18 *judiciously exercised guided by established taxation principles, case law to ensure awards that are fair, reasonable and proportionate to the expenses incurred by a successful party in defending or prosecuting a given suit."* - 21

In *Makumbi and another v Sole Electrics (U) Ltd [1990–1994] 1 EA 306, Justice Manyindo DCJ, JSC* (as he then was) detailed the principles to be followed thus; 24 *"The principles governing taxation of costs by a Taxing Master are well settled. First, 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. Second, there is no legal requirement for awarding the*

- 3 *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 has the responsibility to advise his or her client to challenge the decision. Third, there is no mathematical* - 6 *or magic formula to be used by the Taxing Master to arrive at a precise figure. Each case has to be decided on its own merit and circumstances. For example, a lengthy or complicated case involving lengthy preparations and research will attract high* - 9 *fees. In a fourth, variable decree, the amount of the subject matter involved may have a bearing. Fifth, the Taxing Master has discretion in the matter of taxation but he must exercise the discretion judicially and not whimsically. Sixth, while a* - 12 *successful litigant should be fairly reimbursed the costs he has incurred, the Taxing Master 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. However, the level of remuneration must be* - 15 *such as to attract recruits to the profession. Seventh, so far as practicable there should be consistency in the awards made.* - 18 The application where the impugned bill of costs arose from was an interlocutory application. It was an application for interim stay which was dismissed by the Assistant Registrar with costs to the Respondent. The applicable schedule is the 6th - 21 Schedule of the Advocates (Remuneration and Taxation of Costs) Regulations as amended in 2018. Item 9 (2) of the said schedule provides that; "*for instructions to make or oppose interlocutory applications under items 1 to 9 in this Schedule, the* - 24 *fees shall be not less than 300,000 shillings."* Therefore, the regulations set the minimum instruction fees in such applications as shs 300,000/= and there is no set maximum. Therefore, any award in that regard above 300,000/= falls in the


discretion of court which must be exercised in accordance with the established principles of taxation. The application was filed by Notice of Motion and the

- 3 Respondent only filed an affidavit in reply. There were no submissions filed. Learned counsel for the Respondent appeared in court only once. He only made brief oral submissions. I therefore find no uniqueness in the application that could attract - 6 an award of shs 1,500,000. I find an award of shs 1,000,000/= sufficient as instruction fees. I thus tax off shs 500,000/- from item 1.

## 9 **Items 3, 5, 7 ,9, 11, 12, 16, 19, 20, 28, 29, 30 and 32:**

I have considered the record of court and the taxed bill of costs. I have found that the awards in those items were within the confines of the remuneration rules. As

12 regards service, there was effort to serve counsel where he declined service and later he was served at Court. Therefore, the Respondent was right to claim reimbursement for the cost incurred in serving him. I therefore find no issue with the 15 awards.

The appeal thus partly succeeds with the following orders:

- **1. The award of shs 3,318,000/= is set aside and the award in item 1 reduced** - 18 **to shs 1,000,000/=.** - **2. The Respondent is thus awarded a sum of shs2,818,000/= as the taxed costs for Misc. Application No. 0025 of 2020.** - 21 3. **Each party shall bear own costs since the appeal only succeeded on one item and failed on the rest**.

It is so ordered.

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**Vincent Wagona**

**High Court Judge.**

3 **FORTPORTAL DATE: 30/10/2024**