Wakilii

Aladam Enterprises Ltd. v S.G.S. (U) Limited and Others (Civil Application No. 20 of 2005)

Court of Appeal · [2005] UGCA 110 · 2005 Application Partly Allowed AI-generated summary ↓ Download Pin to watchlist Add to matter
Jurisdiction
Uganda
Case Type
Reference to a single Judge under rule 109(1) of the Court of Appeal Rules from a decision of the Taxing Master on costs
Decision
Reference allowed in part; instruction fees reduced to Shs. 4,000,000 and disbursements struck out

Observed later treatment

No later-treatment classification is recorded for this judgment.

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Holding

On a reference under rule 109(1), the single Judge held that although the Taxing Master correctly identified the principles governing instruction fees, she misapplied them to the facts: she failed to take account of other costs payable, considered only the importance of the appeal rather than its nature, importance and difficulty as a whole, used the seniority of counsel instead of the hypothetical counsel test, and could not reconcile an 18 million award on appeal against 3 million on cross-appeal over the same subject value. The instruction fee was reduced to Shs. 4,000,000. The Shs. 400,000 disbursements were struck out for want of receipts as required by the Third Schedule.

Outcome

Reference allowed in part; instruction fees reduced to Shs. 4,000,000 and disbursements struck out

Facts

The applicant sued the respondents in the High Court for breach of contract claiming Shs. 387,184,429. It was awarded Shs. 352,000 special damages and Shs. 50,000,000 general damages with interest at 15%, plus costs. Both parties were dissatisfied; the applicant's appeal to the Court of Appeal was dismissed with costs and the respondents' cross-appeal was allowed with costs. The respondents presented a bill of costs of Shs. 59,043,457, which the Taxing Master taxed and allowed at Shs. 21,008,500, including Shs. 18,000,000 as instruction fees and Shs. 400,000 as disbursements. The subject value of the appeal was taken to be the Shs. 50,000,000 awarded by the High Court in totality of costs and damages. The applicant brought a reference to a single Judge of the Court of Appeal challenging the instruction fees as manifestly excessive and the disbursements as unproven.

Issues

  1. Whether the Taxing Master's award of Shs. 18,000,000 as instruction fees was manifestly excessive owing to misapplication of the applicable principles.
  2. Whether the award of Shs. 400,000 as disbursements was properly allowed in the absence of proof by receipts.

Orders

  • Award of Shs. 18,000,000 as instruction fees reduced to Shs. 4,000,000.
  • Award of Shs. 400,000 as disbursements struck out.
  • Shs. 100,000 awarded to the applicant as costs for this reference.

Rules and key headnotes

Costs — Taxation — Instruction Fees — Application of Guidelines under Third Schedule paragraph 9(2)
A taxing officer must not only state but correctly apply the guidelines for instruction fees, including considering the nature, importance and difficulty of the appeal as a whole and accounting for other costs payable; misapplication of correct principles justifying intervention where it produces a manifestly excessive award.
Costs — Taxation — Hypothetical Counsel Test versus Seniority of Counsel
In assessing instruction fees the taxing officer must apply the hypothetical counsel test rather than the actual seniority of the counsel who appeared; reliance on counsel's seniority leads to a wrong award.
Costs — Taxation — Complexity of Appeal
The fact that a judgment is heavily researched and detailed, or that both sides filed detailed written submissions, does not by itself make a case complex or involve complicated points of law for the purpose of awarding higher instruction fees.
Costs — Taxation — Disbursements — Proof by Receipts
Under paragraph 4 of the Third Schedule it is a mandatory requirement that receipts for disbursements be produced before taxation, and no disbursement that has not been paid at the time of taxation may be allowed; unproven disbursements must be struck out.
Costs — Taxation — Consistency of Awards over Same Subject Value
Where the subject value of an appeal and a cross-appeal is the same, a wide and unexplained disparity in the instruction fees awarded for each is irreconcilable and warrants review and reduction.

Legislation cited (5)

  • Court of Appeal Rules rule 109(1)
  • Court of Appeal Rules Third Schedule paragraph 9(2)
  • Court of Appeal Rules Third Schedule paragraph 4(2)
  • Court of Appeal Rules Third Schedule paragraph 4(3)
  • Court of Appeal Rules Third Schedule paragraph 11

Cases cited (5)

  • Premchand Raichand Ltd v Quarry Services of East Africa Ltd (No. 3) [1972] EA 162
  • Habre International Trading Company Limited v Francis Rutagarama Bantariza (Civil Application No. 7 of 2003)
  • Simpsons Motor Sales (London) Ltd v Hendon Corporation [1964] 3 All ER 833
  • Jaspal S. Sandhu v Noble Builders (U) Ltd (Civil Application No. 59 of 2002)
  • Uganda National Examinations Board v Mparo General Contractors (Civil Reference No. 99 of 2003)

Full judgment

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Aladam Enterprises Ltd. v S.G.S. (U) Limited and Others (Civil Application No. 20 of 2005) [2005] UGCA 110 (16 May 2005)
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.