Uganda Development Bank v Oil Seeds Uganda Limited (Misc. Appl. No. 610 of 1997) [1999] UGHC 62 (16 June 1999)

#### THE REPUBLIC OF UGANDA

#### IN THE HIGH COURT OF UGANDA AT KAMPALA

### MISC. APPL. NO.610 OF 1997

(Arising from Miscellaneous Application No.4 of 1993)

UGANDA DEVELOPMENT BANK APPLICANT/APPELLANT $\cdots\cdots\cdots\cdots$ -versus-OIL SEEDS (U) LTD. RESPONDENT/PLAINTIFF $\cdots\cdots\cdots\cdots$

# BEFORE:- HON. THE PRINCIPAL JUDGE - MR. JUSTICE J. H. NTABGOBA

## **JUDGMENT**

This is an appeal against the taxation of the taxing master, His Worship Stephen Musota the Ag. Registrar of the High Court in High Court Civil Suit No. 4 of 1993. (Oil Seeds Uganda Ltd vs - Uganda Development Bank). It was a party to party taxation.

The brief background to the bill of costs which was taxed is asset out below:-

Oil Seeds Uganda, Ltd, the present respondent borrowed money from Uganda Development Bank, the appellants. A dispute arose regarding the loan. The matter was referred to arbitration of one person in accordance with the terms of the loan agreement. The arbitrator made an award of Ug. Shs.300,000,000/= to the plaintiff, less interest that accrued. There was a set off and the plaintiff obtained the resultant balance.

$\cdot \cdot 2$

*Thereafter* on '12.10.94 the plaintiff instituted proceedings in the High Court seeking to set aside the award of Ug. Shs.208, \$67,424/- and to remit the award disallowing Ug. shs."1,023,644,800/- claimed by the plaintiff as the correct measure of compensation for lost opportunity. The proceedings were brought by Chamber Summons filed on behalf of the defendant by M/S. Byaruhanga & Co, Advocates. The application was dismisled by Kityo J, (REP) and an appeal went to the Supreme Court. The appellant then was still represented by M/S. Byaruhanga & Co, Advocates, but they were later dropped and the matter handed to M/S. Mugerwa, Matovu & Co, Advocates to handle. These did not go far before M/S. Bitangaro and Company, Advocates took over the instructions. They are still Counsel for the respondent in the present appeal, and were also representing the respondent before Mr. Musota whose decision is being appealed.

Back to the Supreme Court. It allowed the appeal and remitted the case back to the High Court to conduct the Chamber Summons Application dismissed by Kityo, J, (REP). The matter was handled by C. K. Byamugisha(Mrs.)J. At this juncture it is pertinent to revert to the Chamber Summons Application. It sought orders that the award made between the parties to the arbitration by J.5. Mulenga, the Arbitrator, dated 17«8.1994 "be set aside in part and be Remitted in part as follows:-

- <sup>2</sup> -

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- 1. The award of shs. $208,567,424/=$ and interest thereon against the plaintiff/applicant in favour of the defendant/respondent('now appellant') be set aside. - 2. The award disallowing shs.2,882,400,000/ $=$ claimed by the plaintiff/applicant as the correct measure of compensation for cumulative compensation for cumulative profits be remitted to the Arbitrator for reconsideration. - 3. The award disallowing shs. $1,023,644,800/$ claimed by the plaintiff/applicant as the correct measure of compensation for lost opportunity be remitted to the Arbitrator for reconsideration.

In short the task before C. K. Byamugisha, J. was two fold:-

(g) to set aside the Arbitrator's award of shs. 208, 567, 424/ $=$ and interest, and (b) to remit the two other awards of shs.2,882,400,000/ $=$ and shs.1,023,644,800/ $=$ made by J. N. Mulenga to a new Arbitrator for reconsideration. C. K. Byamugisha, J, accomplished her task with the following order:-

"IT IS HEREBY ORDERED that this application BE AND IS HEREBY ALLOWED IN PART to the extent that the said award be remitted to another arbitrator to be appointed for reconsideration of the applicant's claim for award of damages in the sum of UG. Shs. 2,882,400,000/= as correct measure of loss of profits and UG. Shs.1,023,644,800/= for loss opportunity or increased costs of borrowing".

..4

$-3-$

$\mathcal{L} = \mathcal{L}$

Consequent upon the above order, M/S. Bitangaro & Co, Advocates, as Counsel for the successful applicant (i.e. the respondents) prepared and submitted a bill of costs to the taxing master to tax which he taxed at shs.42,586,912/=, which included shs.42,554,112/= "Instruction fees to make an application to set aside an award of shs.208,567,524/=, <sup>X</sup> remit a claim of shs»2,882,400,000/= to the arbitrator and i^emit for consideration by Arbitrator an award disallowing shs.4,214,612,224/= in dispute".

Actually, during the hearing Mr. Peter Nkurunziza, learned Counsel for the respondent accepted Court's advice that the total of Shs.208,567,524/= plus Shs.2,882,400,000/= plus Shs.1,025,604,800/= was Shs.4,114,611,524/= and not shs.4,214,612,224/=.

This appeal challenges the taxing master's award of shs.42,554,H2/= as instruction fee under item <sup>1</sup> of the Bill of Costs. Counsel for the appellant argued the following five grounds of appeal

- 1- That the learned taxing master erred in holding that the subject matter of this case was determined and hence scale 1(a)(lv) of the 6th Schedule to Advocates(Remuneration and Taxation of Costs)(Amendment) Rules 1996 was applicable. - 2- That the learned Taxing Master misdirected himself in law and fact in awarding an instruction fee of Ug. Shs.42,554,112/ on the basis of the figure of Ug. Shs.4,214,612,224/=.

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3- That the learned Taxing Master erred in law and fact in awarding M/S. Bitangaro & Co, Advocates UG. Shs.42,334,112/= as instruction fee when they had not been instructed as of 12th October '1994.

- 4- That the learned Taxing Master erred and misdirected his mind in awarding UG. Shs.42,586,2'12/- a sum which is <sup>m</sup>anifestly excessive and contrary to law and in all circumstances indicative of the exercise of wrong principles. - 5- That the award of Shs.42,334,1'12/- in a mere application was an abuse of Court process and occasioned a miscarriage of justice to the applicant/appellant.

start I deem it convenient t© /./ - with the 3rd issue, namely, that M/S. Bitangaro & Go, Advocates were not entitled to instructions fees because they are not the ones who were instructed on 12th October <sup>1994</sup> to prepare and file the Chamber Summons application together with the supporting affidavit. In support of this ground, Mr. Serwanga, learned Counsel for the appellant argued that the<sup>A</sup> preparation of the Chamber Summons application and its filing with the attendant documents were done by M/S. Byaruhanga & Co, Advocates and that by taking over the case of the respondent later on M/S. Bitangaro & Co, Advocates did barely nothing to deserve payment of instruction fees of Shs.42,334,112/=. fact it was Mr\* Serwanga's argument also in support of his claims that the award was grossly excessive in the circumstances considering that nothing was done by M/S. Bitangaro & Co, Advocates.

With due respect to Counsel, instructions to advocates are of different kinds. They may be for preparing and filing a Chamber Summons application; they may be for reconducting or prosecuting the application, as in this case, and they could be even for mere recovery of costs as also in this case. In any case, this bill of costs is a party to party bill. It is presupposed that, at instruction, the advocate charges an instruction fee which the client pays. The claim to instruction fee is therefore made by Counsel of the successful party from the losing party to re-imburse the client who could have paid the fee to his Counsel in advance.

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I have read the two cases of Margaret Ziwa -vs- Nava Nabagesera and Yako Ntate -vs- Samu Lwanga. It is not clear to me whether what was in contention under those cases was an instruction fee or whether it was the fees earned otherwise by the advocates. In the first place the Regulation 16(1) of the 3rd Schedule of the Rules which was cited by the learned taxing master in the Nava Nabagesera case together with Regulation $3(2)$ of the same Schedule are not specifically refer to an item in the bill on instructions. Secondly, I find Regulation $16(1)$ not mandatory. It says that "the bill of costs of the first advocate may be annexed to that of the current advocate". Thirdly, there is nothing to show that either Byaruhanga and Company Advocates or Mugerwa, Matovu & Co, Advocates submitted any bill to be annexed to the bill presented by Bitangaro & Co, Advocates.

...7 It was not the duty of the last advocates to prepare and present and annex the bill for the previous advocates. Besides, it is said that Byaruhanga & Co, Advocates and Mugerwa, Matovu & Co, Advocates did not go beyond the appeal when their case was lost and a bill presented by the opposing^a& was taxed by Mr. Wankutusi, the then taxing master. The case prosecuted by Bitangaro & Co, Advocates was based on the Obstruction^ to re-argue the Chamber Summons Application, and as far as I am concerned, it would be immaterial that the 12th of October <sup>1994</sup> was included in the bill of costs as the date of instructions. What matters to me is that Bitangaro & Co, were instructed and they could have denoted the date of instruction to be the very date on which they were instructed i.e. the date of change of advocates could have sufficed.

I accordingly overrule the third ground of appeal and will now proceed to the first ground which is that "the learned Taxing Master misdirected himself in law and fact in holding that the subject matter of this case was determinable and hence scale 1(a)(iv) of the . Sixth Schedule of the Regulations was applicable. <sup>11</sup>

Ironically, in the bill taxed by Mr. Wankutusi in favour of the appellant as a result of the case dismissal by Kityo, J, (RIP) as aforementioned, Counsel for the appellant based the taxation of instruction fees on the subject matter of 4,214,612,224/ which now Counsel for the appellant disputes as the subject matter of the suit.

- <sup>7</sup> -

What are the facts? The Chamber Summons Application sought the orders that:-

$\mathcal{L} = \mathcal{L}^{\mathcal{L}}$

- (a) The award of Shs. 208, 567, 424/ $=$ and interest thereon against the plaintiff (present respondent in favour of defendant (present appellant) be set aside. - (b) The award disallowing the sum of Shs.2,882,400,000/= claimed by the plaintiff as the correct measure of compensation for cumulative loss or loss of prospective profits be remitted to the Arbitrator for reconsideration. - (c) The award disallowing shs. 1,023,644,800/= claimed by the plaintiff as the correct measure of compensation for lost opportunity be remitted to the Arbitrator for reconsideration.

Mr. Serwanga for the appellant contends that the Chamber Summons does not concern a determinable value; that it is about an order for remitting for reconsideration. Again, with respect to Counsel, the Chamber Summons application is a suit in which the plaintiff applicant has been awarded sums of money and the respondent's claims to some has been disallowed. In short, the sums involved and about which the Chamber Summons application is are:-

- (a) award of Shs. 205, 567, $424/$ = - (b) award disallowed of shs.2,882,400,000/ $=$ and - (c) award disallowed of shs. $1,023,644,800/$ =.

If the Chamber Summons application is about these figures as to which party should get them or which should lose them, then the figures from the determinable subject matter of the suit.

- 8 -

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I am afraid, I cannot fault the Taxing Master in basing his taxation of the instruction fee on paragraph 1(a)(Iv) of the 6th Schedule. I dismiss the first ground and proceed now with ground 2, which is "that the learned taxing master misdirected himself in law and fact in awarding an instruction fee of UG. Shs.4-2,834,112/= on the basis of the figure of Shs.4,214,612,224/=. But for the mathematical error of addition, I find no misdirection on the part of the Taxing Master, in view of my decision on the first ground but also taking into consideration that the formular had been followed in the same case on behalf of the appellant. I dismiss the second ground. I pass on to the 4th ground.

I do not agree that the total award of Shs.42,586,912/= was manifestly excessive. It was arrived at using the correct formular. I am aware that Counsel for the appellant bases his argument on the fact that M/S. Bitangaro & Co, did barely nothing on the case and should therefore not deserve so much as shs. 4-2,334,1^2/= fee under the first item on the bill of Costs. I need not repeat my decision earlier in this judgment that the formular used is correct, the figures forming the basis of award were ascertainable before Mr. Wankutusi and Mr. Musota, in 1995 and this year, respectively; the appellant who presented in <sup>1995</sup> "the bill of costs cannot this time challenge it merely because the shoe is on the other foot. I therefore dismiss the 4th ground of appeal as having no merit.

- <sup>9</sup> -

As for ground 5 of the appeal the appellant argues that the award of shs. 42,334,112/= in a mere application was an abuse of Court process and occasioned a miscarriage of justice to the appellant. In support of ground <sup>5</sup> argued together with ground 4, Mr. Serwanga argued that the instruction fee was allowed by the taxing master without any deductions; that the principles in the case of Makula International Ltd, -vs - His Emminence Cardinal Nsubuga & another Civil Appeal No. <sup>4</sup> of <sup>1981</sup> at page <sup>21</sup> were not followed. It appears to me that where the correct formulae is employed in a case where the subject matter is ascertainable, then what remains is the discretion of the taxing master to deduct or not to deduct which cannot be interferred with unless it has been applied wrongly. Since I have already decided that the amount of the subject matter was ascertainable as Shs. 4,114,611,524/= and that the applicable provision was Schedule 6 paragraph 1(a)(IV), and since I cannot find any misapplication of his discretion by the taxing master I do not think that there has been any breach of any o^ the principles enuniciated in the Makula International, Ltd, case at p.21. In particular *I* cannot see any inconsistency between this case and cases decided before. I particularly refer to the bill of Costs in this same case taxed by the taxing master on presentation on behalf of the appellant in 1995\*

I accordingly dismiss this appeal with Costs to the respondent.


<sup>11</sup> -