Wakilii

Bank of Uganda v Sudhir & Another (Taxation Reference 1 of 2023)

Supreme Court · [2023] UGSC 67 · 2023 Reference Allowed AI-generated summary ↓ Download Pin to watchlist Add to matter
Jurisdiction
Uganda
Case Type
Reference to a judge from the ruling of the Registrar sitting as taxing officer, under r.106(1) and (3) of the Rules of the Supreme Court
Decision
Taxation Reference succeeds; bill under Tax Application No. 6 struck out, instruction fees and VAT reduced/recomputed, item 48 remitted to the taxing officer

Observed later treatment

No later-treatment classification is recorded for this judgment.

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Holding

On a reference from the Registrar's taxation of two bills of costs totalling over UGX 108 billion, the Supreme Court held that an advocate representing two or more parties may not file more than one bill of costs; the bill under Tax Application No. 6 was struck out. The taxing officer erred in principle by treating the value of the subject matter as the "amount involved in the appeal"; instruction fees of UGX 45,860,682,730 were set aside and substituted with UGX 500,000,000, and interlocutory fees reduced to UGX 5,000,000 per matter. Attendances, perusals and copies form part of instruction fees, unproved disbursements were disallowed, and VAT assessed without a registration certificate was set aside.

Outcome

Taxation Reference succeeds; bill under Tax Application No. 6 struck out, instruction fees and VAT reduced/recomputed, item 48 remitted to the taxing officer

Facts

Crane Bank Ltd, after being placed under statutory management, receivership and later liquidation by the Bank of Uganda, sued the respondents in the High Court for recovery of allegedly misappropriated funds and delivery of property titles. The High Court dismissed the suit for want of locus standi and cause of action, a decision upheld by the Court of Appeal. Crane Bank (in receivership) appealed to the Supreme Court (Civil Appeal No. 7 of 2020) and, through numerous interlocutory applications, contested the receivership and liquidation. The appellant later withdrew the appeal, which was dismissed with costs to the respondents. The respondents, both represented by the same firm, filed two separate bills of costs (Taxation Applications Nos. 6 and 7 of 2022), each taxed by the Registrar at UGX 54,185,433,421, totalling over UGX 108 billion. Bank of Uganda referred the taxation to a judge, challenging the double bills, the instruction fees based on the subject-matter value, and items for drawings, attendances, disbursements and VAT.

Issues

  1. Whether it is permissible to file separate bills of costs where the same counsel represented more than one party.
  2. Whether the taxing officer erred in law or in principle when taxing the bills of costs.
  3. Whether there was an error in assessing and allowing amounts for drawings, copies thereof, attendances, perusals, disbursements and VAT.

Orders

  • The taxing officer's decision overruling the preliminary objection is set aside.
  • The taxing officer's decision making double awards of fees is set aside.
  • Instruction fees in Civil Appeal No. 7 of 2020 are set at UGX 500,000,000.
  • Instruction fees for interlocutory matters are set at UGX 5,000,000 per matter.
  • The award of VAT is set aside and a new VAT is set at 18% on items 1-5.
  • Items 1-2, 4, 6, 9, 11, 14, 18, 20, 22, 24, 26, 29 and 30 under drawings, and items 32-47, are set aside.
  • Item 48 shall be returned to the registrar for proper consideration.
  • Costs of the Taxation Reference are awarded to the applicant.

Rules and key headnotes

Costs — Taxation — Same advocate for two or more parties — Separate bills of costs
Where the same advocate is employed for two or more parties, that advocate may not file more than one bill of costs; any extra costs occasioned by separate proceedings must be included in a single bill for the taxing officer to examine whether they were necessary and proper.
Costs — Instruction fees — Meaning of "amount involved in the appeal"
The value of the subject matter does not constitute the "amount involved in the appeal" for the purpose of assessing instruction fees unless that amount was itself an issue or question to be determined in the appeal.
Costs — Reference on taxation — Interference with award
A judge on a reference will interfere with a taxing officer's award where it discloses an error of law or principle, or where the bill as taxed is manifestly excessive or manifestly low in the circumstances.
Costs — Taxing officer's discretion — Duty to give reasons
Although the assessment of instruction fees in interlocutory matters lies within the taxing officer's discretion, that discretion must be exercised judicially on sound principles, and the order must give reasons so that the parties know the considerations on which it rests.
Costs — Drawings, copies, attendances and perusals
Attendances, correspondence, perusals and consulting authorities form part of instruction fees and may not be separately taxed; fees for copies of documents are recoverable only where more than one party, employing separate advocates, must be served.
Costs — Disbursements — Proof required
Disbursements must be shown separately and supported by receipts produced at the time of taxation, and no disbursement that has not been paid at the time of taxation may be allowed; unproved disbursements are illegal and must be set aside.
Costs — Value Added Tax on costs — Proof of registration
A taxing officer may not assess Value Added Tax on a bill of costs in the absence of the advocate's VAT certificate of registration produced at the time of taxation.

Legislation cited (16)

Cases cited (21)

  • John Kafeero Sentongo v Shell and Uganda Petroleum Co Ltd (Civil Reference No. 1 of 2008)
  • Bank of Uganda v Banco Arabe Espanol [1999] 2 EA 45
  • Attorney General v Uganda Blanket Manufacturers Ltd (Civil Application No. 17 of 1993)
  • Concorp International Ltd v Eastern and Southern Africa Trade and Development Bank (S.C. Civil Reference No. 7 of 2013)
  • Attorney General & Anor v James Mark Kamoga & Anor (Civil Appeal No. 2 of 2008)
  • Raichand v Quarry Services of East Africa Ltd [1972] EA 162
  • Nalumansi v Lule (S.C. Civil Application No. 12 of 1992)
  • Hashim v Zandi [1954] EA 255
  • Kabanda v Kammura Melvin Consulting Engineers (Supreme Court Civil Application No. 24 of 1993)
  • Makumbi v Sole Electrics (U) Ltd [1990-1994] 1 EA 306
  • National Insurance Corporation v Pelican Services Ltd (2000) 2 EA 236
  • Mutyanga Khrumbi v Attorney General (Civil Reference No. 34 of 2017)
  • Mbale Resort Hotel (U) Ltd v Babcon (U) Ltd (Civil Reference No. 18 of 2018)
  • First American Bank of Kenya v Shah [2002] 1 EA 64
  • Electoral Commission v Kidega Nabinson James (H.C. Civil Appeal No. 26 of 2016)
  • Makula International Ltd v His Eminence Cardinal Nsubuga & Anor (Civil Appeal No. 4 of 1981)
  • Abley v Dale (1851) 20 LJCP 233
  • Duport Steels Ltd v Sirs [1980]
  • Ishwar Singh Bindra v State of U.P, AIR 1968 SC 1450
  • Ibori v Ogburu [2004] 15 NWLR (Pt.895)
  • Chief S.O. Adedayo v Peoples Democratic Party (2013) LPELR-20342(SC)

Full judgment

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Bank of Uganda v Sudhir & Another (Taxation Reference 1 of 2023) [2023] UGSC 67 (5 May 2023)
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.