Wakilii

Afriland First Bank (U) Limited v Luzige and Others (Civil Appeal 2 of 2022)

High Court · [2022] UGCOMMC 129 · 2022 Appeal Allowed AI-generated summary ↓ Download Pin to watchlist Add to matter
Jurisdiction
Uganda
Case Type
Appeal from a ruling of the Registrar as Taxing Officer in taxation proceedings arising from Miscellaneous Cause No. 63 of 2021
Decision
Bill of costs struck out; matter resolved in favour of the appellant

Observed later treatment

No later-treatment classification is recorded for this judgment.

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Holding

The High Court allowed the appeal and struck out the respondents' advocate-client bill of costs. The court held that where a dispute arises as to whether instructions were given for work billed, the Taxing Officer must refer the matter to a judge rather than proceed with taxation. The court found no enforceable fee agreement existed between the parties as the alleged agreement did not comply with section 51 of the Advocates Act. Further, the court held that any pre-incorporation contracts relating to procuring the banking licence were not binding on the appellant absent evidence of adoption, and any claim could only be maintained against the promoters.

Outcome

Bill of costs struck out; matter resolved in favour of the appellant

Facts

In 2015, Afriland First Group SA engaged Plinth Consultancy Services Limited to incorporate a subsidiary bank in Uganda. Plinth retained the respondent advocates who incorporated the appellant bank and provided company secretarial services. The parties agreed these services were paid in full. A dispute arose over whether the respondents were instructed to procure the banking licence and whether fees for that service were paid. The respondents served an advocate-client bill of costs on the appellant. The appellant applied for leave to have the bill taxed, which was granted. Before the Taxing Officer, the appellant raised a preliminary objection that there was no proof of instructions to procure the licence and that the Taxing Officer lacked jurisdiction to determine liability. The Taxing Officer overruled the objection on grounds of estoppel and directed taxation to proceed. The appellant appealed.

Issues

  1. Whether the learned Registrar as Taxing Officer failed to exercise a jurisdiction vested in him or did so illegally or with material irregularity or injustice.
  2. Whether there was an enforceable fee agreement between the appellant and the respondents.
  3. Whether the respondents' legal fees for services rendered in procuring the appellant's banking licence are recoverable by taxation of the respondent's advocate-client bill of costs.

Orders

  • Appeal allowed.
  • The respondents' advocate-client bill of costs struck out as against the appellant.
  • Costs of the appeal and of the impugned taxation proceedings awarded to the appellant.

Rules and key headnotes

Taxation of Costs — Jurisdiction of Taxing Officer — Disputes as to Retainer
Where a dispute arises as to whether an advocate was duly instructed to perform the work billed, the Taxing Officer must refer the matter to a judge for determination rather than proceed with taxation. The Taxing Officer's jurisdiction is limited to determining quantum of fees where there is no dispute as to retainer or where costs have been duly awarded by court order.
Taxation of Costs — Reference to Judge — Statutory Mechanism
Under Order 50 rule 7 of the Civil Procedure Rules and section 62(2) of the Advocates Act, if any matter arising out of taxation appears to the Taxing Officer proper for the decision of a judge, the Taxing Officer may refer the matter to a judge who may either dispose of it or refer it back with directions.
Advocates' Fee Agreements — Formal Requirements for Enforceability
A fee agreement between an advocate and client for non-contentious business is not enforceable unless it complies with section 51(1) of the Advocates Act: it must be in writing, signed by the person to be bound, and contain a certificate signed by a notary public confirming that the nature of the agreement was explained and understood. An advocate who obtains or seeks to obtain a benefit under an unenforceable agreement is guilty of professional misconduct.
Advocate-Client Bills of Costs — Right to File in Absence of Valid Fee Agreement
In the absence of a valid, enforceable fee agreement, an advocate is not prevented from presenting an advocate-client bill of costs for taxation. The right to file such a bill is granted by section 57 of the Advocates Act and can only be excluded by execution of a valid remuneration agreement pursuant to section 50 of the Act.
Pre-Incorporation Contracts — Binding Effect on Company
Pre-incorporation contracts are not binding on a company unless the company adopts them after incorporation and registration. Under section 54(1) of the Companies Act 2012, a contract purporting to be made on behalf of a company before it is formed has effect as one made with the person purporting to act for the company. Adoption may be shown by words or acts of corporate officers showing assent, such as knowingly accepting benefits or performing obligations under the contract.
Pre-Incorporation Contracts — Liability for Fees Arising from Unadopted Contracts
Where a company has not adopted a pre-incorporation contract relating to services rendered before incorporation, any claim for fees arising from that contract can only be maintained against the promoters of the company, not against the company itself.

Legislation cited (19)

Cases cited (15)

  • Father Nanensio Begumisa and Others v Eric Tiberaga (Supreme Court Civil Appeal No. 17 of 2000)
  • Lovinsa Nankya v. Nsibambi [1980] HCB 81
  • Khan & Katiku Advocate v. Central Electrical International Ltd, Misc. Application No. 41 of 2004; [2005] eKLR
  • Ratemo Oira & Company Advocates v Kenya Steel Fabricators Limited, H.C Misc. Civil Application No. 78 of 2008; [2014] eKLR
  • Fides Legal Advocates v Kampala Capital City Authority (Taxation Appeal No. 40 of 2015)
  • Shell (U) Ltd and Others v Muwema & Mugerwa Advocates and Solicitors and Another (Supreme Court Civil Appeal No. 2 of 2013)
  • Kituuma Magala & Co. Advocates v. Celtel (U) Ltd [2001-2005] 3 HCB 72
  • Byenkya Kihika & Co. Advocates v Gandesha (Civil Appeal No. 19 of 2014)
  • Lakhman Bhimji v Manor Developments Ltd (Miscellaneous Application No. 105 of 2010)
  • Kelner v. Baxter (1866) L.R.2 C.P. 174
  • Howard v. Patent Ivory Manufacturing, (1888) 38 ChD 156
  • Phonogram Limited v. Lane [1982] QB 938
  • Royal Mail Estates Ltd v. Maples Teesdale [2016] 1 WLR 942
  • Braymist Limited and Others v. Wise Finance Company Limited [2002] Ch 273; [2002] 2 All ER 333; [2002] 3 WLR 322
  • McArthur v. Times Printing Co., 51 N.W. 216 (Minn. 1892)

Full judgment

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Afriland First Bank (U) Limited v Luzige and Others (Civil Appeal 2 of 2022) [2022] UGCommC 129 (4 April 2022)
Source: this page presents Wakilii’s issue analysis and metadata for a publicly reported Ugandan judgment. Any AI-generated summary is marked as such. Judgment text is sourced from the Uganda Legal Information Institute (ulii.org). Wakilii is not affiliated with ULII.