Non-Performing Asset Recovery Trust v General Parts (U) Limited (Civil Application 13 of 2000) [2000] UGSC 34 (28 July 2000)

Full Case Text

## THE REPUBLIC OF UGANDA IN THE SUPREME COURT OF UGANDA AT MENGO

## BETWEEN CORAM: KAROKORA. J. S. C. CIVIL APPLICATION NO. 13 OF 2OOO

NON. PER-FORMING ASSET RECOVERY TRUST APPLICANT

GENERAL PARTS (U) LTD RESPONDENT

## RULINC OF KAROKORA J. S. C

4 .l

This is a reference under Rule 105(5) of the Rules of this court from the decision of the taxing officer in a civil appeal No. 5 of 1999, where-in the General Parts (LI) Ltd. presented a bill of costs which was taxed and allowed at a total sum of Shs. 188,927,4371=. The applicants were not satisfied with the orders of the Registrar and hence this reference, seeking variation ofthe taxing offrce's order.

The brief summary of the background to the reference is as follows: The UCB sued the General Parts (U) Ltd. to recover huge debt it owed to UCB. In the suit before the High Court, the UCB sought inter alia a declaratory judgment that it had properly appointed a Receiver/Manager, and that the ReceiveriManager did execute powers confened upon it by the UCB and sought for an order that General Parts (U) Ltd. pays to UCB the debt owing in the sum of Shs. 2,288,821,4731:. Before the conclusion of the trial in the High Court, the Non-Performing Assets Recovery Trust, now the respondent, was joined to the suit as co-plaintiffon the gound that the UCB had assigred the said debt to it under the Provisions of the Non-Performing Assets Recovery statute. In the end the High Court granted the declaration prayed for that the Receiver/I,lanager was properly appointed and should go ahead to execute the power conferred on it. The appellant's appeal to the Court of Appeal, which was against the respondent alone, was dismissed. The appellant appealed to the Supreme Court, which allowed the appeal set aside the orders of the

Court of Appeal and the High Court. The appellant was to get tA of the costs in the Supreme Court and in the lower courts.

The successful party presented a bill ofcosts ofShs. 372,903,250/: which was taxed and allowed in the sum of Shs. 188,427,4371: by the taxing officer, which is now the subject ofthis reference.

The Memorandum of reference contains 6 grounds namely:-

- (l) The taxing officer erred in relying on the judgrrent of the court as a basis for evaluating alleged difftculty and complexity involved in preparing for civil appeal No. 5 of 1999. - (2) The taxing officer failed to appreciate the context in which the phrase "l am constrained" appearing on page 24 of Mulenga, JSC's judgment was used and hence ened in law in evaluating the complexity of the CA No. 5 of 1999 and the said error occasioned an erroneous award as instruction fees. - (3) The taxing omcer erred in holding that the value of the subject matter was Shs. 3.4 billion. - (4) The taxing officer erred in not taking into account costs of the lower court allowed to the respondent. - (s) The taxing officer erred in not considering the fiurd out of which the taxed costs would be paid. - (6) The taxing officer awarded manifestly excessive instruction fees to the respondent under the circumstances as to lead the award to constitute an error in principle.

Before the substance of the reference was argued, Dr. Byamugisha, Counsel for respondent, raised a preliminary objection to the reference, because he contended that

under Rule 105(5) of the Rules of this court, the applicant was time-barred because the application should have been informally and immediately made or in writing within 7 days. He contended that in this case the letter dated 241512000 purportedly written under Rule 105(5) was not in terms of sub-rule 5 of Rule 105 as it did not state what matters of law were to be referred to the single Judge. He submitted that the reference which was filed on 8/6/2000 and set out grounds ofthe reference was out of time as it was not filed within 7 days as required by sub-rule 5 of rule 105 of the Rules of this court.

Mr. Nangwala, Counsel for the applicant submitted that the objection should be overruled, because under Rule 105(5) there is difference between a reference and an application to make a reference. A reference is made to a single Judge whereas an application to make a reference is made to a Registrar. Under sub-rule 5 of Rule 105, an application to make a reference does not take specific form; that is why application can be made informally under sub-rule 5. Furthermore, he submitted that sub-rule 5 of Rule 105 does not require the applicant to state the grounds for reference. On the issue ofthe reference being time-baned, Mr. Nangwala, Counsel for applicant, submitted that there was not time limit for making reference to a single Judge.

The ruling on the preliminary objection was reserved to be given at the time of deciding the main reference. I now proceed to give the ruling.

In my opinion an application for a reference may be made to the Registrar at the end of taxation, informally by the aggrieved party or by writing within 7 days from the date of delivering taxation. Rule 105(5) of the Rules of this court does not require the applicant to give reasons to the Registrar as to why he/she is applying for reference. In this case, taxation was delivered on 17/512000. The letter applying for a reference to the Registrar, under Rule 105(5) was written on 241512000,7 days after the taxation ofthe bill ofcosts. In the circumstances, this ground for objection has no merit.

On the issue of the application to make reference to a single Judge being time-barred, I think that this ground is misconceived, because Rule 105 does not provide time-limit within which a reference must be made to a single Judge. Therefore, this ground of objection must also fail.

In the circumstances, the preliminary objection has no merit and it is accordingly ovemrled-

Tuming to the reference, Mr. Nangwala, Cotursel for the applicant argued grounds I and 2 together. He submitted that the taxing offrcer grossly misdirected himself in as far as he wrongly applied rules relating to taxing costs. He submitted that although Rule 9(2) of the 3'd schedule to the Supreme Court Rule, was relevant, he contended that it was misapplied. He submitted that whereas the rule permits the taxing officer when determining what is a reasonable sum for instruction fees to have regard to the amowrt involved in the appeal, its nature, importance and difficulty in the instant case he contended that the taxing officer based the work of the Counsel upon the judgment of the leamed Justices ofSupreme Court, but not upon the work ofthe Counsel.

On the 2'd grorurd, Mr. Nangwala submitted that the taxing officer understood the words "l am constrained" used by Mulenga, JSC in his judgment on page 19 to mean that the Counsel had done a lot of work in presentation and arguing the appeal, which was errenous on his part, because the words were not used to mean thal the Counsel had done a [ot of work. He contended that had the taxing officer realised that he was basing the work ofthe Counsel on the work of the Judge he would not have awarded such excessive amount of instruction fees. In the premises, he invited me to allow grounds I and 2.

Dr. Byamugisha, Counsel for respondent, submitted that the taxing officer was right, because as they had submitted before him, the work before the Supreme Court was difficult and complex and Counsel for applicant had not disputed the difficulty and complexity of the work before the Supreme Court when he appeared before the taxing officer. He contended that the award of Shs. 188,000,000/: was consistent with the award of Shs. 136,129,5000/= which he had given in ciyii appeal No. 5 of 1998 in General lndwtries (U)Lld v. N'PART where the amount involved in the suit was Shs.

700,000,000/=. He sought to distinguish the case of Bank of Uganda v. Banco Arabe Espanol civil application No. 13 of 1999, where instruction fees was reduced by single Judge from Shs. 200,000,000/= awarded by the taxing officer to Shs. 7,000,000/=, because this was an interlocutory order, whereas in the instant case the case was final.

Finally he submitted on grounds 1 and 2 that the taxing officer was right in his award of instruction fees as the work before the Supreme Court was difficult and complex. On the value of the subject matter in the suit, Dr. Byamugisha submitted that it was Shs. $2,228,821,473$ which was not disputed before the taxing officer by counsel for applicant. Mr. Nkurunzize, Counsel for applicant was prepared to concede to an award of instruction fees of Shs. 30,000,000/= but not Shs. 5,000,000/= which Mr. Nangwala, Counsel for applicant was now proposing.

In my opinion the issue to be resolved in grounds 1 and 2 is whether or not, the taxing officer applied wrong principles in determining the taxation of the bill of costs. This has to be determined on the basis of Rule $9(1)(2)$ of the third schedule to the Rules of this court. This Rule provides as follows:

> $(9(1)$ the fees to be allowed for instructions to make or to oppose an application shall be a sum that the taxing officer considers reasonable, but shall not be less than Shs. $1,000/=$

> (2) the fees to be allowed for instructions to appeal or to oppose an appeal shall be a sum that the taxing officer considers reasonable, having regard to the sum involved in the appeal, its nature importance and difficulty, the interest of the parties, the other costs to be allowed, the general conduct of the proceedings, the fund or person to bear the costs and all other relevant circumstances."

What is clear from the ruling of the taxing officer is that he laid emphasis on paragraph 9(2) of the 3rd schedule to Rules of this court. He never considered para. 9(1) of the 3rd schedule (supra) seriously. For instance, there is no where the taxing officer considered the work of the counsel for appellant before the Supreme Court in order to justify higher amount of fee, because a perusal of the judgment of Mulenga, JSC does not disclose that

the Coursel for appellant did a lot of work in preparing and conducting the appeal before the Supreme Court. [n fact the leamed Justice Mulenga, JSC observed in hisjudgment at page 22 as follows:

> 'Finally the learned Counselfor the appellant did not address the courl on grounds I and 2. He was contenl to adopt the arguments in his written submission to the High Coutt."

The leamed Justice ofSupreme Court tlereafter referred to the grounds and proceeded as follows:-

"With due respect to the learned Counsel, I do not think that the adoption of his argument in the High Court per se at this stage was appropriate. This is an appeal against the decision of the Court of Appeal and it is incumbent o the appellant to show where, if any, that court went v'rong."

Clearly, the above observation in his judgment, Mulenga, JSC, shows that the Counsel before the Supreme Court did not do much work in the preparation and presentation of the appeal. Furthermore, I think IvIr. Nagwala, Counsel for applicant, was correct when he submitted that the taxing officer had based the work of the Counsel for appellant on the work of Mulenga, JSC, because the critical analysis of sections l14, l15, l4l, 154 and 156 of the Registration of Titles Act (RTA) was done by Mulenga, JSC, on his own initiative without being moved by Counsel for appellant. In view of the above, I think that the taxing officer was not correct and justified to conclude on page l9 of his ruling as follows:-

> "There is no doubt in my mind therefore that a lot of research and work was done by both sides particularly by Couwel for appellant"

Furthermore, I think that the taxing officer was in error when he understood the following passage in Mulenga, JSC's judgment:-

'I am constrained to observe that there has been unnecessary lendency to mix up matters pertaining to the debentures and those pertdining to the mortgage.'

to mean or show that the Counsel for the appellant was faced with facts which were mixed up and complex.

With due respect to the taxing officer, I do not think that the above passage in Mulenga, JSC's judgment was made in approval of Counsel's work. The passage was made in disapproval of the tendency by lawyers who mix up matters or claims pertaining to the debentures made under companies Act and those claims pertaining to mortgages ulder the RTA. The passage did not mean that the Judge fomd that the matters in the appeal were mixed up, difficult and complex as the taxing officer seemed to suggest.

In the result, grounds I and 2 succeed.

I now tum to ground 3 of the Memorandum of reference which complained that the taxing officer erred in holding that the value of the subject matter was Shs. 3.4 bitlion. Mr. Nangwala, Counsel for applicant submitted that the complaint was for declaration that the receiver/ manager was properly appointed and that therefore they should carry out their powers. The suit did not seek to recover the money. He referred to the case of Bank of Usanda v Banco Arabe Espanol SC application No. 3 o{ 1999 where the cases of Salaman v llarner & Others (1891) t oB 734 and Bozson v Altrinchan Urban Districts Council ( 1903) KB 517 inwhich each ofthese cases, it was held that once money was not determined by court, then it (money) was not subject matter in dispute upon which instruction fees should be based.

Dr. Byamugisha, Counsel for respondent submitted that the subject matter of Shs. 2,228,821,47 5/= was not disputed by Mr. Nkurunziza, Counsel for applicant, before the taxing ofiicer. He submitted that Mr. Nkunutziza, Counsel for applicant was prepare to settle at Shs. 30,000,000/= but not Shs. 5,000,000/= which Mr. Nangwala suggested before this court. He contended that the award of Shs. 188,927,43'l.1= which the taxing

oflicer awarded was reasonable and consistent with what had been awarded in Civil Appeal No. 5 of 1998 General Parts (U) Ltd v Non- performing Assets & Recovery Trust where the amount of claim was Shs. 700,000,000/: and the amount awarded as instructions fee was Shs. 136,129,5001=. He sought to distinguish this case ftom Bank of U: (supra) whicb he contended was interlocutory whilst this case was final. nda v Banco A b I

In my opinion, looking at all the judgments of each of the Justices of the Supreme Courl, in this case, the issue of the indebtedness by respondent to the applicant remained undecided. And on the authorities of Bank of Usanda v Banco Arobe Espanol kuora) Salaman v Warner & Others (supra) and Bozson v Altrinchan Urban District Council (suprd. I think that since the issue of indebtedness was not determined by the court, then Shs. 2.2 billion was not subject of dispute on appeal.

I therefore think that it was an enor of principle on the part of the taxing ofticer, while assessing the instruction fee to base the fee on the amount of indebtedness when that indebtedness never came up for determination on appeal. The issue which came up and was frnally determined by the Supreme Court was whether or not the receiver/ manager was properly appointed. [n the result, this ground succeeds.

On grounds 4 and 5, I think Rule 9(2) of the 3'd schedule to the Rules of the Supreme Court Rules is relevant. The complaint in ground 4 was that the taxing officer never took into account costs of the lower courts which had been allowed to the respondent. Mr. Nangwala counsel for applicant submitted that the Supreme Court had allowed % of the costs in the Supreme Court and courts below. However, he contended that the aspect of these costs in the lower courts were not taken into account by the taxing officer. Moreover, he submitted that the ruling did not take into account the frrnd out of which the costs would be paid. Dr. Byamugisha, for respondent, submitted that neither party relied on the costs in the lower courts and therefore he contended that there was nothing to take into account on the issue of failure by the taxing officer to consider from which fund the costs would be paid. In my opinion although the order of the Supreme Court was that the applicant mtJst pay y4 of costs in the Supreme Court and in the lower courts, there is nothing in the ruling of the taxing offficer to show that he took into consideration the costs in the lower courts. As it was observed by Mulenga, JSC in Barlr of Usanda v Banco Arabe EsDanol (surr.a) at page 14 where there is an order to the effect that the losing party must pay specified costs in the appellate court and in the lower courts like it was ordered in this case, then the taxing officer ought to have regard to other costs, including costs in the lower courts, if awarded, in order to assess what is a reasonable fee. This will give an overview of the costs in the whole litigation rather than confine his mind to a segment thereof indicated in the ruling. There is no indication in the ruling that the taxing officer considered the costs which would be awarded in the lower courts or which had been awarded in those courts, but this issue had not been raised in the lower courts. Therefore it caffrot be raised at this stage.

Furthermore, although Mr. Nkurunziza, Counsel for respondent/applicant had invited the taxing officer not to award excessive costs against a statutory body as such award would hamper it, the taxing ofticer considered this fact, but held rightly so, in my view, that everybody who goes to court must be treated equally before the law irrespective ofone's status in society. I would hasten to add that, in any case, the applicant was not a charitable body, but a trust created to recover funds from debtors, which funds inctude interest bank rates chargeable to any debtors. ln the result, I would not find any merit in this ground.

I now tum to ground 6 which complained that the taxing officer awarded manifestly excessive instruction fee to the respondent wrder the circumstances as to lead the award to constitute an error in principle. As I have already observed while discussing grourd 3 that the taxing officer based the assessment of costs on the indebtedness the respondent owed to UCB of Shs.2,288,821,4'731=. He erroneously thought that the subject matter in the appeal was recovery ofthe debt of Shs.2,288,821,473l=, whereas the subject matter in the litigation was for declaration as to whether or not the receiver/manager had been properly appointed as a result of which he could carry out his powers ofreceivership.

()

In view of the foregoing I hold that it was an error of principle on the part of taxing officer, while assessing the instruction fee to base the instruction fee on the amount of indebtedness, which was not determined by the Supreme Court. Therefore, in the circumstances, I think that in all fairness the award of Shs. 250,000,000/= as instruction fee was manifestly excessive.

The issue now is the assessment of the instruction fee which should have been awarded to the respondent. For purposes of consistency, the Supreme Court has been reluctant to permit manifestly and excessive instruction fee the taxing officers have been awarding. For instance in Patrick Makumbi & Anor v Sole Electronics (U) Ltd Civil Aoolication No. I I of 1994 (unreported) the reference was made to a single Judge of this court from an order of the taxing officer who had allowed a fee of Shs. 12,000,000/= for instruction fee to appeal. In his ruling Manyindo, DCJ., observed that the appeal had been against an interlocutory order and the appellant had succeeded on a point of law which the respondent had easily conceded. He reduced the instruction fee to Shs. 2,000,000/=. In Thc Repistered Trustees of Kampala Institute v DAPCB Civil Apqlication No. 3 of 1995 (SQ (unreported) this court sitting on a reference from a single Judge upheld the decision of the single Judge reducing a fee of Shs. 70,000,000/: allowed by the taxing officer for O instruction to appea l, to Shs. 7,000,000/=. ln Bank of Usandq v Bqnco Arabe Espanol civil Application No.23 of 1999 (unreported) the taxing officer had awarded Shs. 200,000,000/= as instruction fee for prosecuting the appeal. It was held by the single Judge on a reference to him that it was an error of principle on the part of the taxing officer while assessing the fee to be allowed for instruction to appeal, to have regard to the amount claimed in the principal suit, when the amount was not involved in the appeal. The instruction fee to prosecute the appeal was reduced from Shs. 200,000,000/= to shs. 7,000,000/=. In Jaffer Brothers v the DAPCB Civil Application l3 of 1999 (unreported) an awarded of Shs. 30,000,000/= by taxing officer was reduced to shs. 4,000,000/: by Mulenga, JSC on a reference to a single Judge. However, this amount of instruction fee to appeal which had been reduced by the single Judge was enhanced to Shs. 10,000,000/= by the court. ln Noble Builders U) Ltd v Sietco Civil Aoo lication No. 16 of 2000 an

award of Shs. 60,607,000/= by taxing officer as instruction fee to appeal was reduced to Shs. 5,607,000/:.

In the instant case, I think that like in the case of Bank of Usanda v Banco Arabe Espanol (supra) the instruction fee to appeal was based on an error of principle in that the taxing officer based instruction fee on respondents' indebtedness to UCB which was not in issue on the appeal. Moreover, as I have already observed, Counsel for appellant before the Supreme Court did not do a lot of work in preparation and prosecution of the appeal. Therefore considering all the above and the fact that % of costs before the Supreme Court and in the lower courts were allowed, I think that this reference would be allowed. I would reduce the taxed costs from Shs. 188,927,427l: to Shs. 5,000,000/=. I would award costs ofthis reference to the applicant. I so order accordingly.

Dated at Mengo this . . . . .. .[ Day of ....... September.........., 2000. P--

A. N. KAROKORA, JUSTICE OF THE SUPREME COURT,

# THE REPUBLIC OF UGANDA IN THE SUPREME COURT OF UGANDA AT MENGO

## BEFORE: HON. JUSTICE G. W. KANYEIHAMBA, J. S. C. CIVIL APPLICATION NO. 16 OF 2000

### BETWEEN

NOBLE BUILDERS (U) LIMITED>>>>>>>>>>APPLICANT

#### AND.

>>>>>>>>>>>>>>>>>>>>>>RESPONDENT SIETCO >>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>

(A reference to a single judge arising from the decision of the Registrar as Taxing Officer, dated 17th, May, 2000)

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

This is a reference to me under rule 105 (1) of the Rules of this court, from a decision of the learned registrar as a taxing officer. Following the judgment of this court in interlocutory matters in Civil Application No. 31 of 1995 and Civil Application No. 34 of 1995, the respondent who was the successful party in both applications but the loser in the main appeal, namely, Civil Appeal No. 31 of 1995, presented a bill of costs which the registrar taxed and allowed in the sum of Shs. 60,607,000. The applicant, being dissatisfied with the orders of the registrar, has applied to this court by way of reference and asked for a variation of the registrar's orders.

$\overline{2}$

The background to the reference is as follows: In the main appeal and cross-appeal, Civil Appeal No. 31 of 1995, Sietco, the present respondent, was the unsuccessful appellant, while the present applicant was the successful respondent. During the proceedings of the main appeal and cross appeal, it became necessary for the parties to file two separate applications on procedural matters and on both the respondent was successful. At the conclusion of the main appeal and cross appeal, the successful party, now the applicant, presented a bill of costs which was taxed and allowed in the sum of 330,068,500. Thereafter, the respondent in this reference presented a bill for costs in the two applications for the total sum of Shs. 402,360,000 which the learned registrar taxed and allowed in the sum of 60,607,000, and that is what is the subject of this reference.

$\mathcal{L}^{\mathcal{A}}$

The Memorandum of Reference contains two grounds framed as follows:

- That the taxing master, while taxing items 1 and 23 of the bill of $\frac{1}{2}$ costs, committed the following errors in principle, - (a) He considered the value of the subject matter in the appeal in awarding instruction fees for the interlocutory applications. - (b) He considered that the awarding of low sums would be an abuse to the high esteem of the Supreme Court, - (c) He considered that high sums should be awarded in order to keep advocates from prolonging their arguments in the Supreme Court for the sake of it.

- (d) He applied the wrong set of rules in taxing the items on the bill, as the matter was properly governed by the old Supreme Court rules and thus awarded erroneous sums. - That item 1 of the bill of costs as taxed to the tune of $2-$ Shs. 25,000,000/= and item 23 to the tune of Shs, 35,000,000 and the whole bill to the tune of Shs. $60,607,000/$ = were manifestly excessive.

$\leftarrow \leftarrow$

The Memorandum of Reference was supported by an affidavit sworn by one Innocent Kihika of Byenkya, Kihika and Co. Advocates of Kampala. For the applicant, My Byenkya submitted that the current bill of costs which is the subject of the reference arose out of interlocutory proceedings before the main appeal was heard and disposed of. The proceedings to which item I relates was about whether or not the respondent, then appellant, in the main suit, was under an obligation to serve on the then respondent, now the applicant, a record of appeal. The application took about two hours to be heard and the court found in favour of the respondent. The other application from which item 23 in the bill of costs arose was also filed by Noble Builders, the present applicant, and they unsuccessfully sought to have the appeal of the present respondent who were the then appellant struck out.

Mr Byenkya submitted that the hearing of that application was completed in one morning. On the reasons given by the registrar for his orders in this application, it was Mr. Byenkya's contention that the learned registrar took into account matters which he should not have done and consequently erred in law. Counsel contended that the subject matter of the appeal was not in issue in the two interlocutory matters

With regard to ground 2 of the reference, Mr. Byenkya submitted that the sums of Shs. 25,000,000 and Shs. 35,000,000 allowed for relatively simple applications, each of which took some two or three hours a morning to complete were manifestly excessive. Mr. Byenkya cited the cases of Bank of Uganda v. Banco Arabe Espanol, Civil Application No. 23 of 1999 (Mulenga J. S. C.) (unreported), and Civil Application No. 48 of 2000 (Kanyeihamba, J. S. C.), (unreported), and Jaffers Brothers Ltd v.

$\overline{4}$

Departed Asians Property Custodian Board, Civl Application No. 24 of 1999 (S. C.), (unreported), in support of his submissions.

$\mathcal{F}^{-1} \mathcal{G}$

The respondent filed an Affidavit in Reply sworn by one Fredrick Sentomero on the 20th July, 2000. The Affidavit in Reply simply denied the errors allegedly made by the registrar as deponed in Mr. Kihika's affidavit in support of the application. It supported the orders of the registrar, contending that he based his orders on correct principles and exercised his discretionary powers properly in relation to taxation matters.

Mr. Serwanga represented the respondent. He contended that it was not true that the registrar based his findings and orders on the subject matter in the suit or indeed, on any of the matters complained of in the applicant's Memorandum of Reference, supporting affidavit or submissions on his behalf. He submitted that the registrar founded his taxation orders on paragraph 9 (1) of the $3rd$ Schedule of the Rules of this court and that rule gives a taxing officer very wide and unfettered discretionary powers to tax a bill in a manner he considers reasonable. Counsel contended that the rule does not lay down any conditions which the registrar should follow. He submitted that the only issue which should concern court should be whether or not the registrar had exercised

his discretion judiciously and, it was counsel's contention that the learned registrar had done so.

Mr. Serwanga further contended that whereas the matter complained of had been mentioned in the summing up of the registrar, the registrar had not taken them into account when making his final ruling. Counsel contended that the authorities cited by counsel for the applicant, namely Bank of Uganda v. Banco Arabe Espanol, Nos 23 and 48 (supra), and Jaffer Brothers Ltd v. Departed Asians Property Custodian Board, Civil Application No. 24 of 99 (S. C), (unreported), are distinguishable from the present application in that in those other cases, the learned taxing officers took into consideration matters which were outside the principles of taxation in the applications whereas in this case the registrar did not do so.

In my opinion, there are two straightforward issues in this application which need to be resolved. These are, whether or not the taxing officer applied the wrong principles or rules in determining the taxation of the bill presented to him and whether or not the amounts allowed on items 1 and 23 in the bill of costs submitted on behalf of the respondent are manifestly excessive.

The judgment and the ruling for which the bill of costs was presented and taxed, dealt with mere applications and not the merits of the main suit. Consequently, the principles which should have governed the taxation of the costs in the two applications are those found in paragraph 9 of the Third Schedule to the Rules of this court. That paragraph provides as follows :-

The fee to be allowed for instructions to make, support or $\omega$ $(1)$ oppose any application shall be the sum that the taxing officer considers reasonable but shall not be less than Shs. 1000.

The fee to be allowed for instructions to appeal or to oppose $(2)$ an appeal shall be a sum that the taxing officer considers reasonable, having regard to the amount involved in the appeal, its nature, importance and difficulty, the interest of the parties, the other costs to be allowed, the general conduct of the proceedings, the fund or persons to bear the costs and other relevant circumstances".

## In his ruling, the learned registrar stated,

"I now turn to the main items, (1) and (23), where a sum of Shs. 200,000,000 is claimed under each. I have carefully followed and considered the arguments of both Mr. Byenkya and Mr. Serwanga. I have also read the case of Premchand Raichard v. Quarry Services (1972) E. A. 62, quoted by Mr. Serwanga, and a similar case of Patrick Makumbi And Another v. Sole Electronics. (U) Ltd. Civil Application No. 17 of 1993 (S. C), (unreported). It has been held and emphasized that a successful litigant should be fairly reimbursed, which remuneration must be such as to attract recruits to the profession...in the circumstances, and considering that each case has to be taken on its own peculiarities in arriving at a reasonable sum to be awarded as costs, I find the sums of Shs. 100,000 and Shs.500,000 proposed as instructions fees under items (1) and (23) by Mr. Byenkya to be miserably low. To award such sums would not in anyway attract recruits to the profession, but would definitely be an abuse of the high esteem in which the Supreme Court is held. This is the final court in the land and so reasonable costs must be awarded so that advocates just do not keep on prolonging arguments in the Supreme Court for the sake of it. At the same time, whereas this court has to be consistent in its awards, one has to take into account inflation which has reduced the value of the shilling. Nevertheless, I equally find and hold that the figures of Ug. Shs. 200,000,000 each, proposed by Mr. Serwanga is on the other hand on a very high scale. In view of what I have outlined, I am inclined to award a sum of shs.

$25,000,000$ , as reasonable costs under item (1), and shs *35,000,000, as reasonable instructions fees under item (23).* "

In my opinion, there can be no doubt that the learned taxing officer took into consideration the wrong principles and did not apply the correct rule. Instead of proceeding under paragraph $9(1)$ , he applied paragraph $9(2)$ and went beyond it to consider and be guided by extraneous matters such as the prestige of this court and the desire to attract people to the legal profession. It is not unusual for this court to decide a suit or a petition and award no costs. This, in no way, adversely affects the prestige of the court. I would have thought the reverse to be true namely, that where costs are kept low in the courts, litigants and their counsel would be encouraged to come forward and litigate.

## I wish to reiterate my view which I expressed in **Bank of Uganda v.** Banco Arabe Espanol, Civil Application No. 48 of 2000 that,

"Once it is conceded that the disputed costs are in connection with an application, then the reasonableness of the taxing officer in relation to an application must be judged within the confines of paragraph 9 (1). The costs should be determined according to the instructions and the actual work done in order to make support, or *oppose an application.*"

Any reference to any other matter, whether the subject matter of the litigation, advocates prolonging arguments in the Supreme Court, taking inflation into account, recruits to the profession, esteem of the Supreme Court and the like, become irrelevant and, in so far as the registrar in this application listed them as matters to be considered in taking costs in interlocutory applications, I must agree with the submission of counsel for the applicant that he, the learned registrar, erred in law by failing to confine his findings and orders within the bounds permitted by the rules of taxation.

$\overline{7}$

I agree with the views of my learned brother, Mulenga J. S. C., which he expressed in Departed Asians Property Custodian Board v. Jaffer Brothers Limited, Civil Application No. 13 of 1999 (S. C), (unreported), thus.

"where a taxing officer expressly bases his opinion on a wrong principle resulting in allowing too high or too low an amount the court will intervene."

I agree with the submissions by Mr. Byenkya, counsel for the applicant, that when Mr. Serwanga, counsel for the respondent, cited Jaffer Brothers Ltd. v. Departed Asians Property Custodian Board, Civil Application No. 24 of 1999, which varied the decision of a single judge on a taxation application, in support of the learned registrar's ruling, he misapplied that authority which is confined to instructions' fees and the actual work done, and does not attempt, in any way, to travel outside the boundaries of the principles and rules of taxation as the ruling in this reference does. In my view therefore, ground 1 (a), (b) and (c) ought to succeed.

On ground 1 (d), counsel for the applicant submitted that, in determining the value of the other items on the bill of costs, the learned registrar applied the current scales instead of those which were applicable at the time the suit was commenced in the courts. For the respondent, Mr. Serwanga contended that this matter had not been raised in the learned registrar's chambers and that, in any event, and I agree, that costs are awarded and taxed for the actual work done and not for the work which ought to have been done. In my opinion, where the work is done today, present scales of fees must be applied even if the proceedings were commenced before revision of those scales. In my view therefore, there is no merit in paragraph (d) of ground 1 of this reference. Therefore this

ground ought to be dismissed and it is not necessary for me to say anything more about it.

I now turn to ground 2 in the Memorandum of Reference.

For the applicant, Mr. Byenkya submitted that even if the registrar had applied the correct principles and rules, his awards in the taxation were still manifestly excessive and ought not to be allowed.

Counsel contended that both applications were of a simple nature. The first application which dealt with the record of appeal took about two hours to argue a mere application to strike out the appeal because an essential step in the proceedings had not been taken. Mr. Byenkya contended that whereas the second application appeared novel and complicated, the issues therein were dealt with expeditiously by the court. Counsel cited a number of authorities in which it has been held that where the taxed costs are manifestly excessive, the court will intervene. The cited cases include the two applications already mentioned in Bank of Uganda v. Banco Arabe Espanol, (supra), Departed Asians Property Custodian Board v. Jaffer Brothers Ltd, (supra), and the The Registered Trustee of Kampala Institute v. Departed Asians Property Custodian Board, Civil Application No. 3 of 1995 (S. C.), (unreported). Mr. Byenkya finally contended that, considering that the taxed costs in the main appeal, with certified two counsel was only Shs. 330,068,000, the award by the registrar of the sum of Shs. 60,000,000 as instructions fees for mere applications on interlocutory matters was too excessive.

For the respondent, Mr. Serwanga vigorously opposed this ground. He submitted that paragraph 9 (1) of the $3rd$ Schedule to the Rules of this court does not lay down any conditions which the registrar must follow. He contended that on a mere reference, the court's role is only confined to a consideration of whether or not the registrar exercised his discretionary powers judiciously. Counsel further contended that the applicants' criticism of the award is an attack on the quantum of costs and that unless it can be shown that there was an error in principle, the registrar's orders ought not to be interfered with simply because the applicant does not like them. It was Mr. Serwanga's contention that the proceedings in the two applications were precipitated by the intransigence of the applicant in failing to follow or accept the proper procedures. Counsel submitted that the application to strike out his clients' appeal lasted for about four hours and they had to do a lot of research and cite a number of authorities. Counsel contended that that application contained seventeen grounds each of which had to have special pleadings and submissions, and that since any of them could have been successful and the appeal could have then been struck out, the taxed costs of Shs. 35,000,000 for this particular item were amply justified.

In assessing costs under paragraph 9 (1) of the 3rd Schedule to the Rules of this court, there are two items to consider, besides reimbursements for expenses and incidentals such as transport and court fee charges. In my opinion, the two items are instructions fees and the actual amount of work Jaffer Brothers Limited v. Departed Asians done by counsel. In Property Custodian Board, Application No. 21 of 99 (supra), we said,

"In our opinion the taxing officer's assessment of shs. 16,000,000 as instruction fees appears to be on the high side." However, we further observed,

"We think that the Registered Trustee of Kampala Institute v. Departed Asians Property Custodian Board (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 v. The Departed Asians Property Custodian Board Civil Appeal No. 9 of 1998 before the Supreme Court, which set a

precedent as to the interpretation of the legal provisions of the law which had not been interpreted before in our jurisdiction. Although the research carried out in the Jaffer Brothers' case 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, J. S. C.,* 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 the Jaffer Brothers' case we allowed a sum of Shs. 10,000,000 in costs. I have already stated in this judgment that the learned registrar based his ruling on wrong principles and therefore cannot stand. Be that as it may, it is still necessary to assess the amount of work which would be expected to be done before the two decisions which gave rise to this reference were reached. In my view, it is not enough for counsel to claim that a lot of research or work was done without showing some proof of that research or work. Nor is it enough, in my opinion, for counsel to claim that submissions before court took so many hours in a day or several days. Each case must be judged according to its merits. One counsel may deliberately or otherwise prolong arguments where another may do the task in half or less the time. Some litigants and counsel are by nature, by inclination or by competence, fast or slow on the uptake and it would be wrong, in my view when assessing costs, not to take an objective view of the professional work, and how it was done. The conduct of the parties and their counsel need to be taken into account when determining what costs to award.

$\ldots \mathbb{F}_q$

According to the submissions of counsel and the record of proceedings, the two matters which were of an interlocutory nature involved the questions of whether a necessary step in the appeal proceedings had been taken so as to compel a party to serve appropriate documents and, the other concerned an application to strike out the appeal. These are not uncommon occurrences in our courts but even if they were, that would not be the reason for awarding high instructions fees, because even a novel legal point can be disposed of in minutes rather than hours or days.

## In his ruling, the learned registrar remarked,

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"I find the sum of Shs. 100,000 and Shs. 500,000 proposed as instructions fees under items $(1)$ and $(23)$ by Mr. Byenkya to be miserably too low. I equally find and hold that the figures of Shs. 200,000,000 each, proposed by Mr. Serwanga is, on the other hand, on a very high scale."

With respect, I entirely disagree with the view expressed by the learned registrar. All things being equal, I would have found the figures of Shs. 100,000 and Shs. 500,000 to be within the acceptable boundaries of costs for interlocutory or application matters. On the other hand, sums of Shs. 200,000,000 are ridiculously high and, certainly very astronomical, as far as instructions fees and the work which was to be and was done are concerned. My reaction to the figures proposed by counsel is quite the opposite of that of the learned registrar. I would have found Shs. 500,000 normal and Shs. 200,000,000, extraordinarily high and unacceptable.

Time and time again, this court has criticised the claims and awards of high costs in our courts. I have already referred to some of our decisions on the subject in this ruling. The following cases are also relevant in considering awards of costs; Patrick Makumbi And Another v. Sole Electronics, Civil Application No. 11 of 1994, and the Attorney General v. Uganda Blanket Manufacturers (1975) Limited, Civil Application No. 17 of 1993.

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Considering that the costs in the main appeal from which the interlocutory applications in this reference arose were taxed and allowed in the sum of Shs. 330,068,500 against the unsuccessful appellant who is now the respondent in this reference, the bill of costs submitted by the same party's counsel for taxation in the staggering sum of Shs. 402,360,000 is extraordinarily colossal and professionally unjustified.

In my view, the taxed costs awarded to the respondent in the sum of Shs. $60,607,000/=$ are manifestly excessive. Therefore, ground 2 of this reference ought to succeed.

For the reasons I have given, this reference ought to succeed. I set aside the orders of the taxing officer and substitute the same with my own in favour of the respondent and order that the sums of Shs. 2,000,000 (two million) for item $(1)$ on the bill of costs and Shs. 3,000,000 (three million) for item (23) on the bill of costs, be awarded to the respondent so that, all in all, the total consolidated awarded costs become Shs. 5,607,000. The applicant shall have costs of this reference.

DATED at MENGO this 25th DAY of JULY, 2000

Gu Marry Michaula G. W. KANYFIH JUSTICE OF THE SUPREME COURT

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