Rock Petroleum (U) Limited v Uganda Revenue Authority (Civil Appeal 4 of 2017)

Supreme Court · [2018] UGSC 67 · 2018 Appeal Dismissed ✦ AI-generated summary ↓ Download

Jurisdiction

Uganda

Case Type

Second civil appeal to the Supreme Court from a Court of Appeal decision on the taxation of costs and instruction fees

Decision

Appeal dismissed; the judgment and orders of the Court of Appeal, including the reduced instruction fee of Shs. 3,000,000 and the refund order, upheld

The full judgment

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Holding

The Supreme Court dismissed the appeal and upheld the Court of Appeal. An order requiring URA to render an account did not amount to a liquidated monetary award capable of forming the subject matter for instruction fees. In a representative suit, costs are recoverable only against parties; non-parties who never instructed counsel ('free riders') cannot be used to inflate the fee. Although the Court of Appeal wrongly attributed reliance on complexity to the taxing master, its ultimate reduction of the fee to Shs. 3,000,000 was sound because the award lacked an evidential basis and rested on wrong principles. The refund of costs already paid was a permissible consequence of setting aside the award, not a new ground requiring a fresh hearing.

Facts

Rock Petroleum (U) Ltd obtained a representative order to sue Uganda Revenue Authority by Originating Summons on behalf of petroleum companies, challenging the legality of excise duty collected under the Excise Tariff (Amendment) Act No. 5 of 2008 and seeking a refund of monies collected. The High Court answered the questions posed, held part of the collection unlawful, and ordered URA to render an account and refund the excess collected, with costs. On taxation of the appellant's costs, the taxing master awarded instruction fees of Shs. 5,818,419,105, reduced on reference to a High Court Judge to Shs. 5,000,000,000. On appeal, the Court of Appeal reduced the instruction fee to Shs. 3,000,000 and ordered a refund of costs already paid to the appellant, holding that the suit produced no liquidated monetary award and that non-party beneficiaries were 'free riders' who could not enlarge the fee. The appellant appealed to the Supreme Court.

Issues

Whether the Court of Appeal erred in finding that the High Court made no monetary award in Originating Summons No. 9 of 2009.
Whether the subject matter for taxation of costs in a representative suit is confined to the monetary interest of the party authorised by court to represent others.
Whether the Court of Appeal erred in interfering with the discretion exercised by the taxing master and the High Court Judge.
Whether the instruction fee of Shs. 3,000,000 awarded by the Court of Appeal was so manifestly low as to amount to an error in principle.
Whether the Court of Appeal erred in ordering a refund of costs already paid where the relief was not pleaded and the appellant was not heard on it.

Orders

Appeal dismissed with costs.
Judgment and orders of the Court of Appeal upheld.

Key headnotes

Civil Procedure — Costs — Taxation — Subject matter for instruction fees

An order requiring a party to render an account is not a liquidated or specific monetary award, and where a suit results in no ascertainable sum it cannot supply a monetary subject matter on which instruction fees may be pegged.

Civil Procedure — Costs — Representative suits — Costs against non-parties

In a representative suit, instruction fees and costs are recoverable only in respect of parties to the suit; the interests of non-party beneficiaries who never instructed counsel ('free riders') cannot be used to enlarge the representing party's claim for costs.

Civil Procedure — Costs — Taxation — Certificate of complexity

A higher instruction fee fraction premised on the complexity of a matter may only be applied where the advocate has applied for and obtained a certificate of complexity from the court; the certificate is a mandatory pre-requisite that must be determined before taxation.

Civil Procedure — Costs — Appellate interference with taxation

An appellate court may interfere with a taxation decision where the taxing officer applied a wrong principle, which may be inferred from an award that is manifestly excessive or manifestly low, provided the error substantially affected the quantum and upholding it would cause injustice.

Civil Procedure — Costs — Restitution of costs paid on reversal

Where a costs award is set aside on appeal, the appellate court may order the refund of costs already paid; such an order is a consequence of the verdict on the grounds argued and is not a new ground requiring a fresh hearing or breaching the right to be heard.

Legislation cited (4)

Excise Tariff (Amendment) Act No. 5 of 2008
Advocates (Remuneration and Taxation of Costs) Regulations reg.6(ix)
Judicature (Court of Appeal) Rules r.102(c)
Constitution of the Republic of Uganda art.44

Cases cited (7)

Kifamunte Henry v Uganda (Criminal Appeal No. 10 of 1997)
Bogere Moses and Another v Uganda (Criminal Appeal No. 1 of 1997)
Bank of Uganda v Banco Arabe Espanol (Civil Appeal No. 8 of 1998)
Bank of Uganda v Banco Arabe Espanol (Civil Appeal No. 23 of 1999)
Shell (U) Ltd and 9 Others v Muwema & Mugerwa Advocates & Solicitors & another (Civil Appeal No. 2 of 2013)
Makula International Ltd v His Eminence Cardinal Nsubuga and Rev. Dr. Kyeyune (Civil Appeal No. 4 of 1981)
Holder v Benorjee [1871] ER 711

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