Punjani Motors Limited v Sam K . Njuba (Miscellaneous Taxation Appeal 1144 of 1997) [1998] UGHC 27 (14 April 1998)

Full Case Text

## THE REPUBLIC OP UGANDA

IN THE HIGH COURT OP UGANDA HOLDEN AT KAMPALA

KESCELLEHECUS APPLICATION NO. H44 OP 1997

(Arising from ffisc. Application No 459 of 1997)

In the matter of Client/Advocate Bill of Costs

## BETWEEN

PUNJANI MOTORS LTD APPELLANT

## VERSUS

SM! K. N. JUBA RESPONDENT BEFORE: T^HCNCTgCTE AG,.. JUSTICE.1.0. MALINGA

allowing costs in favour of the Respondent in the sum of Shs 11,700,000.= . The background was that between 10th December, 1996 This is an appeal from the decision of the Registrar of the High Court as Taring Master in Miso. Application No. -459 of 1997 and 14th April, 1997 the Respondent, an advocate, rendered some legal services to the Appellant, that is;-

- **D** Sub-divided plot 32 Jinja Road intp two plots namelly plot 32 A Jinja Road and plot 95 Yusuf lule/fcitante Road. - **2)** Secured the release of the original title deeds for plot 32 Jin ja Road mortgaged to the Crane Bank Ltd for the purposes of completing the first instructions.

On 12th June, 1997 the Road and Shs 4,600,000 for securing the release of the original title deed from Crane Bank Ltd, and Shs 787,000.= for Value Added Tax malting a total of Shs 11,700,000.-. Respondent filed an application by Notice- of Motion for the taxation of the Advocate/Client costs. Finally on 8th December, 1997, On 29th April, 1997 the Respondent delivered to the Appellant a bill.of costs of Shs 5,400.= for the sub-division of plot 32 Jinja

already paid and ordered the applicant to pay His Worship D. W. Wangutsi, the Registrar of the High Court as Taxing Master allowed the bill in the Sum of Shs 11,700,000.= less Shs. 1,872,000.= the balance of Shs 9>828,000.=.

S. I, 258 - 64 These rules are The grounds of the appeal were that: — The Appellant brought the instant appeal under S. 61 (1) of the Ad Advocates Act Cap. 258 and rr. 3 and 4 of the Taxation of Costs (Appeals and References) Rulesj saved by S. 83 (2) of the Advocates Act, 1970 and are listed as item 4 in Part II or the schedule 3 to the Act.

- i) That respondent was not entitled to costs at all; - 11) There was no proper and extracted order; - iii) There was no hill of costs lodged subsequent to obtaining and extracting an order; - iv) The Taxing Master erred in law when ho held that the Respondent was entitled to abondon his earlier bills; - **V)** The Taxing Master erred in lav/ when he seemed to rely on the Respondent's affidavit in support of an application for an order, but which had not been specifically made part of the taxation proceedings; - vi) The Taxation Master erred in law and fact when he held that the payment made by the Applicant was part-payment; - vii) item charged fall under the 5th Schedule; and The Taxation Master was in error when he heJd that the - viii) The Taxing Master erred in law when he allowed a claim, for unpaid VAT.

In the alternative, but without prejudice to the above, the Appellant maintains that the costs allowed by the Taxing Master in this case were grossly excessive and prays for an order that they be reduced considereably.

The Appellant's Chamber sumions v/as supported by the affidavits of Mohammed H. R. Pun jani, a director of the Appellant and that of Tibaf.juka K. Ateenyi both dated 22nd December, 1997, In reply the Respondent filed an affidavit of Sam K. Njuba dated 14th January 1998.

On that day Mr. March, On this latter date the Respondent did not again appear and the court decided to proceed to consider the appeal without hearing the Respondent. However on 27th February 1998 neither Mr. Rwankolc nor his client appeared, the court further adjourned the hearings to 6th March, 1998. The court did not sit and hearing was rescheduled for 20th 1998 with notice to the Respondent. Babigumira argued the appeal in the presence of Mr. Rwarkole, who could not be heard. The hearing v/as then adjourned to 27th February 1998 to enable Mr. Rwankole take out a practising certificate. At the hearing the Respondent appeared by Counsel, albeit one without a valid Practising Certificate. This was on 15th January 1993 when Mr. Rwankole appeared for the Respondent.

Mr. Babigumira,learned Counsel for the appellant submitted that the Respondent was not entitled to any costs at all. It was his submission that under S. 14 of the Advocates Act, 1970, it is an offence for an advocate to practise without a valid practising certificate and S. 68 prohibits the award of costs to such an advocate. Counsel relied on paragraph 5 of Ateeny1s affidavit that Kir. San K. Mjuba only renewed his practising certificate for the year 1997 were given early in 1997. on 11th April, 1997 and on the statement in paragraph 10 of Lie. Mjuka's affidavit that the work was completed on 14th April, 1997 i » and Mr. Punjani's statement that the instructions for the work

Section 14(1) of the Advocates Act, 1970, provides:

"Any Advocate not in possession of a valid Practising Certificate or whose Certificate lias been suspended or cancelled who practises as an Advocate shall be guilty of an offence. "

Provided that no prosecution shall be cornenced under the provisions of this subsection before the first day of March next following the expiry of the validity of an advocate's practising certificate if Ahe reason such advocates is, not in possession of ajralicL. Certificate is only because he has neglected to renew the Certificate which expired on the tliirty-first day of December previous . ^^PpJljQir.st\_\_day of Jjarch

It is also For the The question to be dete: nined is when the instructions were received and the work done. Appellant it was contended that the work was done between January and February 1997. It is not disputed in this case that Mr. Sam K. NJuba renewed his Practising Certificate in 1977 on 11th April 1996. not contested that Mr. Njuba had a Practising Certificate which expired on 31st December 1996. A Director of the Appellant, E. H. K. Punjani in paragraphs 3, 2 and 3 of his affidavit stated:

- "2. that Hr. Sari K. N juba to have our plot No 32 Jinja Hoad subdivided. recall that in January, 1997 we instructed - **3.** the original titles mortaged to Crane Bank DTD, for purposes of completing the first instructions." THAT in February, 1997 we instructed him <gain to obtain

Mr. Tubaijuka K. Ateenyi in. paragraph 5 of affidavit states:

**"5.** THAT the Respondent's services to the Appellant were rendered in January, 1997 but the Respondent only renewed his Practising Certificate for the year 1997 in April of

that year (see Annexture ,:A")> and the Respondent is as a matter of lav/ not entitled to any costs at all.1'

The Respondent on the other hand in paragraph 9 and 10 of Ms affidavit states:

- "9. THAT, with regard to the services to the applicant it is not true as alleged that I had no Practising Certificate since the instructions were given to me in 1996 while possessing the Practising Certificate of that year and application in 1995 as the letter from City Council Copies of dated 9th April, 1995 to the applicant, letter is marked ,sAfi\* following rejection by City Council to the Applicant's - "10. 1997 while Practising Certificate had already been issued to mol See Annextore THAT, the work was completed on 14th April,

The Respondent further deponea in paragraph 11 and 12 as follows:

- 5th June, 1997 a new Practising Certificate had been issued and likewise taxation made while in possession of the same. ,:11< THAT in any case when this molter was filed in court on - is therefore irrelevant since it docs not disclose when the application for renewal of the Practising Certificate was made which was in February 1997\* t:12. THAT Anncxture :,AK

The Appellant does not deny that' Mr. lljuba had a Practising Corti- . ficate during 1996. Tho question for determination is just when the instructions were given to Mr. Hjuba or his firm of Advocates? The Appellant says that the instructions were given in early 1997 but Mr. Njula has deponed that he received the instructions in December, 1996. The Appellant has the onus to prove that the

*I* have therefore no instructions were given early 1997, but it has not discharged that burden on a balance of probabilities. option but to accept the version of the Respondent that the instructions were given in December, 1996.

Those instructions entitled the advocate making a written application to the Kampala City Council to authorise the sub-division of plot 32 Jin3a Road and writing to the Morgagee separate titles would be made for the sub-divided plots. It is possible that all there applications could have been made in December, 1996. In any case it has not been shown that they were done early in 1997. Whet then is the effect of the work not being completed until 14th April 1997? application. During the time the application was pending before the Council, the Advocate could not be said to bo doing anything in respect of those instructions so as to deprive him of his costs in What is important is the sub-division of the plot on 14th April, 1997, the Advocate had renewed his Practising Certificate cn 11th April 1997 having subnitted Ins application for renewal in February, 1997. The Advocate having made his application in December 1996, the Kampala City Council could taka any length of tine to act on that asking for the original of the deed to enable it to be presented to tie Registrar of titles for cancellation and in its stead two terms of S .68 of the Advocates Act, 1970. that by the tine the Council and the Registrar of Titles completed The instructions were for the advocate to sub-divide plot 32 Jinja Road and to secure the release from the mortagage of the original title deed.

I agree that 3.68 of the Advocates Act us interpreted by Ssekandi J. in Dukeera ^and C!o r Advocates vs Life Jkisurancc Corporatnon in 1979 H. C. B. 198 and approved by the Supreme Court in Alfred.. Qlwora(vs Civil Appeal ITo 25 of 1992

received instractions when he was in possession of a valid practising certificate. He acted on the instructions while ho still had a valid certificate and the work was completed after he had renewed contended that that L the vzork remoincd pending with other authorities during a valid practising cortineate, the advocate can not recover Iiis costs through tic court though the client enjoys the fruits of the advocate's services. Section 68 not the ease here end this distinguishes his practising certificate, because It is however, prohibits the recovery of costs by an advocate who practises without a valid practising certificate. In this case the advocate of the A.ct only prevents an advocate from recovering costs for work actually done when ho had no valid practising certificate. That is ™VS^Dr.. Kiny;ata period when the advocate had no

*&*

I therefore find that Advocate had n valid practising certificate entitled to recover liis costs. The fir^t ground of appeal there- &lt; fore fails. . at all times when he acted for the Appellant and was therefore

**i**

Mr. Babugunrira argued grounds (ii) and (iii) together and I will there nee no bill of costs lodged subsequent to obtaining and extracting an order.K also consider them together. These arc- thut:;(ii) there was no pro;" and extracted order; and (iii)

Armed with that orCur an advocate Master, which was not done in this case. an advocate, Miscolleneous Cause No 7C of 1973; (1978) E. C. B. 193. Lie. BaJiuzanaira argued that sc 56 and 57 of the Act provide that-1-0- Advocate to .recover his costs as against his client, mast first apply to court and extract an order. can then file an action to recover lib loos as taxed by the Taxing He referoi to In, re Jfukc?"

In this ease the Advocate sent a. bill uf costs to his client on 29t. April 1997. On 12th June 1997 the Advocate filed *a* Notice of Motio:

sing certificate. He acted on the instructions while ho still had a valid certificate and the work was coEploted after he had renewed. contended that that L the work remainod pending with other authorities during a Section 63 his practising certificate, because not the case here and this distinguishes Bjxbj'n.dn valid practising certificate, the advocate can not recover his costs through tic court though the client enjoys the fruits of the advocate's services. It is however, prohibits the recovery of costs by cel advocate who practises without a valid practising certificate. In this case the advocate received instructions when he was in possession of a valid practiof the Act only prevents an advocate from recovering costs for work actually done when he had no valid practising certificate. That is .\_vs Brm.. period when the advocate had no

I therefore find that Advocate had at all times when he acted for the Appellant and was therefore entitled to recover his costs. The fir^t ground of appeal there- \* fore fails. a valid practising certificate

Mr. Babuguaira argued grounds (ii) and (iii) together and I will there was no bill of costs lodged subsequent to obtaining and extracting an order." also consider them together, Those jug that!:(ii) there wan no pro;" and extracted order; and (iii)

to court and extract an order. Araud with that oruur an advocate which was not done in tills case. an advocatey Miscollencous Cause ho 72 of 1973? (1973) E. C. B. 193. Mr. BaJaigunira argued that ss 56 and 57 of the Act provide that ^0:' Advocate to .recover his costs as against his client, must first apply Master, can then file an action to recover liis ie^s as taxed by the Taxing Ke refercd. to Iii ro Jafigr

In tliis ease the Advocate sent a bill of costs to his client on 29t.' April 1997. On 12th June 1997 the\* Advocate filed a Notice of Moiio: seeking tho bill of costs to be taxed. This was done by the Taxir Master on 8th December 1997\* The Appellant argues that it still remains for the advocate io file a suit for the recovery of the cost T do think that this applies to advocate/client bill of costs\* • Subsection (2) of S. 59 provides

> Tho Certificate of the taxing officer by whom any bill hr thereby, and the court may make such order in relation thereto els it thinks fit *9* including, in a cas.e where retainer is not disputed, an order that judgement be entered for the sum certified to be done in costs. **H** been taxed shall, unless it is sot aside or altered by th court, be final and to the amount of tho costs covered **'(2)**

from his client. There is therefore merit in this ground\* I will These are that: was entitled to abandon his earlier bills and next dead with grounds (iv) and (vi) together. (iv) the faxing Master erred in law when he held that the Respond^' It would t erefore be necessary for the advocate after obtaining a taxing certificate to file a suit for the recovery of the costs

(vi) the Taxing Manter erred in law end fact when he held that tho payment made by the Applicant wan part payment.

sent another for Shs 11,700,000.= . Unforinnately counsel did not adduce any evidence on these points It seems that the real complained is that the advocate had earlier sent to his client a bill of costs for shs 1,872,000.= but later However, tho Taxing Master had this to say in his ruling. The first bill was apparently outside the Advocates ^enumeration and Taxation Rules 19&2, S.l 12. of 19o2 as amended and the second bill was within those rules«

Advocates claims Shs 11,700,000.= on instruction fees. Tho . Respondent Punjani Motor ltd disputes tie figure and claims t' "In this bill of costs the applicant M/'s Sam K. Njuba and Co.

the exact figure should bo Shs 1,872,000#= which was paid.

he property was valued at 1 billion# The background is that the applicant did give instructions to the (sic) namely to sub-divide LRV 483 Pol. 24 Plot 32 Plots 32 A Jinja ^oad and Plot 95 Yusuf ££sppiident JinjaRoad into two plots as Lule Koad. X

further instructed to obtain the original deed mortgaged to Crane Bank Ltd. The applicant was

That these services were rendered is net disputed. xt is also not in dispute that Ll/s Kjuba & Co. Advocate demanded payment in the sum of Shs 1,872,000.:

What is in dispute is the subsequent demanded for Shs 11,700,000.= .

an option to pay outside the rules. The respondent refused the earlier demand. sent a cheque which the counsel for the applicant took as a part payment, Sfeeord shov/s that Jd/s Hjuba actually wrote opting out of charging a thing - that the rules frown at. to take the option. Thea applicant then decided to file the bill. It is then in fact even after fixture of the bill of costs that he Prom the foregoing it is clear tint after the sub-divisions of the plot and retrieval of the titles, the applicant gave the respondent In this ho was of course undci

had now filed a bill of costs. Having refused the option tc pay outside the rules, the respondent coded not make good by paying the abandoned bill after the applies

It is because of the foregoing tint the court holds the bill right!' brought for taxation.t:

**»**

I think that the to pay Accordingly a bill cf costs for taxation by the court, grounds (iv) and (vi) must fail. Taxing Ilnstur was right in treating the bill of costs filed in court as properly before the court and treating the Shs 1,872,000-= recdyed after filing of the bill of costs for taxation os part-payment, ^t was because .the client refused the fees demanded outside the rules that the advocate was forced to file

Mr. Babigumira submitted that the- Taxing Mester He argued that it is now settled, that evidence in one case is not Supreme Court Civil Appeal Ho 19 of 1995*•* Unfertunaother Affidavit. Ground (v) is that the Taxing Master erred in law when ho seemed to . rely on the respondent's affidavit in support of an application for an order but which had not been specifically made part of the taxation proceedings. seemed to have relied on an affidavit lodged in court in support of the notice of motion for an order that the bill of costs be taxed ounsel did not shew how the Taxing Master relied on this tely, evidence in another - Sue Lwero Gr^yjyy.crcs>. L;td. ys Ma^beni

hwerci Green. Arros ltd y£ raruibeni . Corporation and Hessaiia. Issa jl (J967) E. A. 555 decided that evidence in a preliminary application can not be evidence in the trial of the main suit. However in this case the affidavit referred to was in support of the Notice of Motion for an order that the bill of costs be taxed. This is the application which resulted in the taxing of the bill of costs. There was no other hearing of the Notice of Motion and so the registrar us Taxing Officer was right to make ro references to the affidavit filed in support of the Notice of Hotie Under r.8 of the Advocates (Bonuncratjon and Taxation of costs) and client without any order for that purpose. Accordingly this Co.\*. vs,.£eral. •Rules, 1982 the Taxing Officer may tax costs os between advoo-ato

*70*

ground of appeal must fail.

In ground (vii) Mr. Babigumira argued that the Taxing Master erred in holding that the bill of costs items fell under the fifth schedule of the Rules as amended by S. 1.3 of 1996. The Respondent in his affidavit said that the items fall under the first schedule.

Scales in the first schedule are according to 12 (a) for sales, purchases mortageges and debentures completed. This cannot therefore be applicable to sub-division, without selling, of a property or negotiating with a mortgagee for the release of the title deed still subject to be mortgage for purpose of its cancellation and being replaced with two new titles representing the two new sub-divisions of the original plot. These are not provided for in the first, second, third or fourth schedules. Rule 12 (e) provides in part that:-

"in respect of other deeds or documents including settlements and of all other business of a non-contentious nature the re-numeration for which is not hereinbefore provided for, the renumeration shall be that prescribed in the fifth schedule to these Rule."

Accordingly the items in the bill of costs in this case would be charfed under the fifth schedule as the Taking Master rightly did. This ground of appeal also fails.

In ground (viii) Mr. Babiguminar gued that there was a sum allowed by way of value added tax (VAT), but there was no evidence that Counsel had paid it to the URA or that he was registered for VAT purposes. Counsel cited Patrick Makumbi & Amor Vs Sole Electrics (U) LTD. Supreme Court Civil Application No. 11 of 1994 in which Manyindo D. C. J. said:-

"In my judgment if the CTL has not been paid at the time of taxation then taxation of that item should deferred until the CEL is paid and receipts issued."

$11$

I CgTGO. ground. The award of shs 702,000.= for VAT is set aside. 1'hc item may be presented again for taxation at an appropriate time., that is after paying VAT and obtaining a receipt therefore *ar* the advocate proves to be Taxing Master that he is duly registered for VAI. VAT is the same os STITvd-ich it replaced, is merit in tils Accordingly there

The fifth schedule in prescribiig fees in respect of business the renumeration for which is not otherwise prescribed, allows for matters of a non-contentious nature such as it was in this case; the sum of Shs 11,700,000.= word grossly excessive and it was prayed that the same be reduced considerably. finally and in the alternative it was subedited for the appellant that the costs allowed in this case in favour cf the advocate in

Such foe for instructions as may be fair and reasonable having regard to the cere and labour required, the number and length of papers to be perused, the nature or importance of the matter involved, the interest of the and oil other cir-**•'•(a)** parties, complexity of the matter, cuestonecs of the case.,:

are clear. well as other work necessary for presenting the application for division to the Kamp a City Council and its relevant Committee or Committees presenting the papers for sub-division to the Registrar of As Manyindo J • said figure • Each case has to be Jaciucd on its own merit and circunstances. 'j-'he value of the subject matter involved nay have a bearing. As a result the Taxing Officer has discretion in the matter of the taxation, but as always the discretion lias to ba exercised judically, Fatrick Mafeniki,A- M1PX. above, t ere is nb mathematical or magic formular to be used by the Taxing Master to arrive at a precise The principles governing taxation of costs in a case such as this The instructions foe should cover the Advocate's work including taking instructions as xitles.

to the affidavit of Mr. Sam K. In these as worth Shs 1 billion. divide the plot. from Annexture "A,! not successfully carried out. of the undividetd- plot was in the region of 1 billion. circumstances it cannot be said that the taxing master was wrong in instruction fee for sub-dividing a plot In this case it would appear that the Appellant wishes to sell part of plot 32 Jinja Road and for that purpose it was necessary to subdivide the plot. allowing Shs 5,400,000.= Similarly I find that the Taxing Master was entitled to allow Shs 4,600,000.= for instructions fee for obtaining the release of the original title deed from the mortgagee bank for the purpose of better carrying out the first instructions to subahis ground of appeal therefore fails. Njuba, it appears that the Appellant had earlier in 1995 given these same instructions to sub-divide the plot to another firm of advocates, but ihose instructions were notsuccessfully carriedout. '■'•he value

The result is therefore that the appeal succeed to the extend that ide and it is ordered the Taxing Master. cut of nine grounds presented. As the appeal has succeeded only inhis own costs of the appe al. the sum of Shs 782,000allowed for VAT is set that the Respondent can not execute the T Xing Certificate unless he first files a suit for the recovery of the costs as determined by '■L'his means that the Appellant succeeds in two a small part I order that each party to bear

Ag. Judge

**I** 1

## 14th A.pril 1998

I direct that the ruling herein bo read to the panties by the Deputy Registrar (Civil) as I will be away in Gulu.

> 1.0. MADII'iGA Ag. Judge 14th April 199S

**■n -?**

## **THE REPUBUC OF UGANDA IN THE HIGH COURT OF UGANDA AT KAMPALA MISC. APPLICATION NO. 1144 OF 1997 IN THE MATTER OF CLIENT / ADVOCATE BILL OF COSTS BETWEEN**

| PUNJANI MOTORS LTD | | APPELLANT | |--------------------|--------|------------| | | VERSUS | | | SAM K. NJUBA | | RESPONDENT | | | | |

## **DECREE**

THIS APPEAL coming this 19th day of June, 1998 for final disposal before His Lordship I. O. MALINGA Judge of the High Court at Kampala, in the presence of SAM K. NJUBA ESQ the Respondent and PATRICK BARUGAHARE Counsel for the Appellant.

## IT IS HEREBY ORDERED AND DECREED that:-

- **1.** The sum of UG. SHS. 782,000/= allowed for VAT is set aside. - **2.** The Respondent cannot execute the taxing certificate unless he first files a suit for recovery of costs as determined by the taxing master. - 3. Each party to bear his own costs of appeal.

1998. ftk T **'**.....day GIVEN under my hand and the seal of this court this **.0**

**REGISTRAR**

WE CONSENT TO THE ABOVE DECREE

M/S KATUREEBE, BABIGUMIRA BARUGAHARE & CO. ADVOCATES P. O BOX 9356, KAMPALA.

**DRAWN & FILED BY:- M/S SAM K. NJUBA-ADVOCATE 4™ FLR NATIONAL INSURANCE CORP. BLD. PILKINGTON ROAD P. O BOX 1824 KAMPALA.**