Obadi Enterprises v Uganda Revenue Authority and Another (Civil Suit 938 of 1993) [1996] UGHC 62 (7 October 1996)

Full Case Text

## THE . IJgPUgJC OF UGALDA

### IN THS HIGH COURT OF UGANDA AT KAMPALA

### H. C. C. S. NO. 938 OF 1993

OBADI IKTK-TPRISES PLAINTIFF

## OISUS

)

1. U. R. A.

*2. DDEGEYA* Ix^DUIG STORIES)

EgTOJEA. HCE, JUSTICE e,s. lugayizi, J

# RULING

15 This is an application in which -this Honourable ^ourt was requested to exercise its inherent powers under S» Id of the CPA. It was made by way of Ifotice of Motion under Order 48 rule 1 of the OPR, by UGA1DA REVENUE AUTHORITY (which shall hereinafter be referred to as "the applicant").

**20** The said application was accompanied by an updated affidavit which was apparently sworn by Charles Dalton Oponya an employee of the applicant.

The facts giving rise to this application were briefly as- follows.:

25 Obadi Enterprises (which is not a party to these proceedings) fil^d Civil Suit. No... 993- Pf-1993 ^gains-L the applicant and Ddegeya Trading Stores (which I shall hereinafter refer to as "the Itespondent").

30 damages, While defending itself in the above claim, the respondent also counter - claimed against the applicant and prayed court to award it special damages (which were over UGS. 30Qn/=) general punitive damages, interest and costs.

The .../2 On 12th July, 1996, 1 delivered judgment in the above respondent, succeeded in its counter - claim, and I UCS Im/- in general damages, UGS.500,OOO/- as punitive the above two items and cests only\* suit. awarded it damages J interest on

**5**

DETSJ-DANTS. 10

Subsequently, it would appear that ty consent of the applicant and the respondent, the Registrar(Civil) made an order in which he taxed the respondent's EL11 of Costs at UGS,17,790,000/- (pius 17\$ vat).

10 However, no sooner had the said Registrar done the above, than the applicant decided to request him to revise the above taxation order#

In response to the above request, the Itegistrar wrote to •• the applicant a letter dated 12th August, 1996, whose relevant parts read as follows,

> 15 **20** UI refer to yours »n taxation in the above case dated 8/3/96# You requested that the taxation be revised# However, I wish to inform you that the figure in the final bill was arrived at by consent of both counsels for Uganda Revenue Authority and that of the Plaintiff. Secondly, as far as the taxation is concerned I have already given a decision and I cannot alter it# A Revision is not possible in the circumstances. I would, therefore advise that you appeal against the said decision if you are aggrieved by it.

## P. K. K. OKSGA 3EGI3IRA11 HIGH OOUKT"

After receiving the above communication, the applicant lodged a Notice of Appeal in the High Court against the Registrar's order of taxation} and without withdrawing that order also filed this application#

axation order dated 1st August, 1996.35 At the time of hearing this application, if I understood Dr# Bddbinga correctly, hu requested court to use itsinherent under Section Id of >ho CPA end its rovisional powers under S 83 of CPA to correct an iiiustice which the applicant was about to suffor under the Registrar's t

He explained that in view of the fact that the respondent was not awarded any special damages which it had placed at ever UGS. 300m/=, it was wrong for the Taxing Officer to allow it an instruction fee that was based on the said figure and interest computed on it.

$\mathsf{S}$

$15$

$.../4$

According to the Sixth Schedule item $l(a)(iv)$ of Statutory Instrument No. 3 of 1996 (Dr. Bakibinga argued) the Taxing Master should have based the said instruction fee on the amounts I awarded to the respondent in my Judgment dated 12th July, 1996.

Dr. Baldbinga also pointed out some other areas of discomfort to the applicant in the Taxation order (e.g. where the Taxing Officer awarded UGS. $5m/$ = to the respondent when all it had done was to be present at the time of setting aside an exparte judgment) and urged court to intervene by setting aside the whole Taxation. He also requested court to send back the record to the Taxing Officer with directions as to has he should proceed afresh.

On the other hand, apart from conceding a mathematical immacuracy, which inadvertently inflated the Taxing Officer's award by UGS. 100,000/=, Mr. Muhwezi counsel for the respondent opposed this application.

First of all he argued that since the Taxing Officer's award was entered by consent of both parties herein, it could not be set aside in these proceedings. It could only be set aside in a fresh suit where either fraud or undue influence was shown to have existed at the time of agreement between the parties concerned. He cited the case of Brooke Bond Liebig(T) Ltd v Mally [1975] $E. A. 266.$

Secondly, Mr. Muhw zi also believed that this court carnot in this case invoke its revisionary powers under Section 84 of the CPA because none of the conditions set thereunder have been 35 shown to exist in this application.

*5* 10 Thirdly, the said advocate pointed out that the most contentious sum now (i.e. in item No. 1 of the respondent's Dill of Costs) which the Taxing Officer alle-.^ed was lawfully allowed in the sense that it complied with the provisions of the Sijcth Schedule item 1(a) iv of Statutory Instrument IIo. 3 of 199\$. As a result, he saw n« reason why the applicant should seek court's orders to interfere with it.

therefore -argod court to dismiss this application. 11^ that as it may, I wish to point out a few things at this- .5\*^\*t^\*\*\*>.

15 20 First of all, when I closely examined the affidavit which accompanied this application, I was surprised to find that it was pot dated as is required hy -Section 6 of the Co;:imisstonerg. fpil Oaths. (Advocates) Act (Can However I did not think that such a defect is so grave as to render the said affidavit incompetent; for I believe that despite that oraisstan. the dopanont swore the affidavit as the affidavit declares. In any c<&sox the ethoi" side did not "rats© eny ob:iectziz>n to regard to the said omission.

Secondly, at one point I did not know what to think of what is on the record. On the one hand it bears a lotice of Appeal while on the other it alse shows this application; and finally them is e rofuost for revision under Sootion of the QPA> Ed wonder, ISuhwe^i was also some what at a loss as to what was happening herein!

Irrespective of all the a'jove confusion. Section S4 -of thn CPA provides as follows,

appears "The High Court may call for the record of any case which has been determined Ly any magistrate's court and if such court to have -

> exercised a jurisdiction not vested in it in law; «r (a)

- failed to exercise a jurisdiction so vested; or 35 (b) - (c) acted in exercise of its .jurisdiction illegally or vri-th material irregularity or injustice,

the High Court may revise the said case and may make such order therein as it thinks fit:

Provided that no such power of revision shall be exercised

- (i) unless the parties shall first be given the Apportunity of being heard; or - (ii) Where, from the lapse of time or other cause the exercise of such powers would involve serious hardship on any person".

Of course it cannot be denied that the proceedings of the lower court which gave rise to this splication are before me 15 presently. However, the crucial question to investigate is whether those proceedings can be faulted under any of the paragraph in section 84 above?

If they can, then this would be a proper case for revision, otherwise not.

On a perusal of the said proceedings, I am satisified that they can be faulted under paragraph (c) of Section 84 above. This is because, in my view, the Registrar of the High Court "acted in exercise of" his "jurisdiction" in those proceedings "with injustice" when he decided to endorse an instruction fee in 25 the respondent's Bill of costs which was not based on the amount averded in the head suit (i.e. UGS. 1.5m/=) but on the amount in the counter - claim and interest thereon (i.e. over UGS. $700m/$ =+)

If the above is left uncorrected, it would in the end cause a situation whereby while the respondent would, in respect of the head suit, only collect UGS. 1.5 $\mu$ /=, its advocates would walk home with $\varepsilon$ cool UGS. 1%+/=. All this would be at the expense of the applicant who would have to pay the said two sums (i.e. the damages and the very high costs).

I doubt whether the above sceverio would represent

$.../6$

$\mathsf{S}$

$10$

In my opinion, The Advocates (Rumuneration. And Taxation $\mathsf{S}$ of Costs) Rules, 1982, and Statutory Instrument No. 3 of 1995, were brought into force for the purpose of determining fair remunerations for advocates in respect of work done, but not to cause undue hardship or injustice to parties in a given situation. (See also Misc. Cause No. 737 of 1981 - In the Natter of an 10 application to set aside an award of costs - Haji Musa Sebirumbi v Joe Schteza ! Another where similar sentiments were expressed by this court).

For the above reasons therefore, I have no choice but to order that the taxation in respect of the respondent's Bill of Costs 15 which was allowed by the Registrar of the High Court at UCS.17,790,000/= plus 17% VAT, is unjust and is hereby set aside.

I have also discovered that the said Bill of costs did not strictly follow the provisions of Rule 45 of The Advocates Remuneration And Texation of Costs) Rules, 1982, in that it did not 20 provide separate columns for service charges and professional charges (those two were clamped together). I believe that is one of the reasons why the said Bill of Costs is confusing.

The above apart, a number of items in the said Bill of Costs were either highly exaggerated (e.g. items 3, 5, 9, 23, 25, 40, $25$ only to mention a few) or, repeated e.g. 31 $\ell$ 38 etc and while others, like items 6, 11, 22, 31, etc, were supposed to be proved, items 7, 11, 21, 24, 32, 34, 37, 38 should nover have been included. Other items like 13, 14, 15, 16, 17 were as per court record, bogus.

For the above reasons also, I hereby order that the second respondent's said Hill of costs is also invalid; and is hereby quashed.

The second respondent should prepare a fresh Eill of Costs which is honest and done according to law; and the same should be submitted to the legistrar of the High Court who would then tax it 35 in the presence of both parties herein in the light of the contents of this revisional order.

5 < I also order that the respondent shall pay the costs of this matter«

> Sgd: 3. LUGAYIZI JUD®. 7/10/96 E.

7/10/95 (com as before) 10

IS?,.. I-jJthxvezi

Lfy- reasons I apply for leave to appeal to the Court ef Appeal, are that,

- 15 (1) S. 34 of the CPA <res not satisfied*T* especially abaut the injustice caused. Taxation ruJ.es are express on what taxation should be based on. - (2) -Conditions of sotting aside consent order were not satisfied. consented• 20 There was no allegation of fraud or uiduo influence exercised on counsel for U1A wh< - (3) New areas of defect in the taxation not raised by the applicant have been cited in the ruling.

The application was also wrongly brought before this court under S. 1CQ. of the CPA and Order 43 of the GPP when express provision for revision is provided for under a statute.

Finally order of cost is also unjust in that the resoordent committed no wrong.

## Dr^aldtQJ^

Section 34 of CPA was satisfied. I oppose this application.

be based on claim or judgment. 30 In this case Instruction fees can instruction fees should have been based on judgment.

-</8

Alternatively the respondent did not prove that he was paid UGS.15m/= as instruction fees in the head suit.

Secondly, here what was attacked was that the Registrar had recorded a consent order contrary to remuneration rules; and this is a valid ground for setting aside the consent order.

Thirdly court has power to examine all matters on $10$ record in revision; and some of these heed not have been raised in the arguments.

As regards allegation that the application herein was brought wrongly, court exercised it revisionary matters herein to correct an injustice.

Order of court on costs is justified. There are lots of irregularities in Bill of Costs and/why it was drawn. If counsel wanted costs should have been awer . . against it.

application for leave to appeal should be I pray dismissed.

#### Ir. Muhwezi

This court was not entertaining evidence of what was awarded but was rather to be concerned with whether taxation order should be set aside or not.

Court must call for record as fact.

#### $25$

## Court:

Having heard both counsels on this matter I sincerely believe leave to appeal should not be granted. There are no merits in Mr. Muhwezi's grounds above. In the circumstances the application above is dismissed. 30

> $S_{\text{gd}}: \quad \underline{\text{E. S. LUGAYIZI}}$ JUDŒ. $7/10/19\%$ .

$\mathsf{S}$