Wakilii

Kazina v Nakkazi (Taxation Appeal No. 34 of 2014)

High Court · [2015] UGCOMMC 84 · 2015 Appeal Allowed AI-generated summary ↓ Download Pin to watchlist Add to matter
Jurisdiction
Uganda
Case Type
Taxation appeal from a Taxing Master's award of costs in Miscellaneous Cause No. 36 of 2014
Decision
Taxation award set aside and remitted to Taxing Master for reassessment under Fifth Schedule

Observed later treatment

No later-treatment classification is recorded for this judgment.

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Holding

The High Court held that the Taxing Master erred in applying the First Schedule to assess advocate's fees where no conveyance was completed. The First Schedule item 2 applies only to completed conveyances (transfers), and where a conveyance is not completed for any reason, the Fifth Schedule governs assessment of fair and reasonable fees. The word 'conveyance' is statutorily defined as 'transfer' and requires preparation and completion of a transfer instrument. A sale agreement alone does not constitute a completed conveyance. The appeal was allowed on grounds one, two and three; the taxation award was set aside and remitted to the Taxing Master for reassessment under the Fifth Schedule.

Outcome

Taxation award set aside and remitted to Taxing Master for reassessment under Fifth Schedule

Facts

The Appellant engaged the Respondent to represent her as purchaser of land comprised in Busiro Block 432 Plot 10 at Bugabo for a purchase price of UGX 985,000,000. The Respondent drafted a sale agreement dated 7 August 2014 which was executed by the parties. The sale agreement provided that UGX 200,000,000 had been paid and the balance would be paid less costs of land remediation to be assessed by an independent quantity surveyor. The remediation costs were assessed at sums exceeding or approaching the purchase price. The transaction was not completed and the contract was cancelled or repudiated. The Respondent sought to tax her advocate/client bill of costs claiming UGX 49,800,000 as instruction fees plus other amounts. The Taxing Master applied the First Schedule item 2 to the Advocates (Remuneration and Taxation of Costs) Regulations, awarded instruction fees of UGX 49,250,000 (being 5% of UGX 985,000,000) plus one-third uplift, totalling UGX 65,668,602. The Appellant appealed challenging the use of the First Schedule where no conveyance was completed.

Issues

  1. Whether the Taxing Master erred in law and fact when he applied the First Schedule to the Advocates (Remuneration and Taxation of Costs) Regulations to assess instruction fees where there was no completed conveyance.
  2. Whether the Taxing Master erred in law and fact in not applying the Fifth Schedule to the Advocates (Remuneration and Taxation of Costs) Regulations which was the relevant schedule.
  3. Whether the award of costs of Uganda shillings 65,668,602/= was excessive, unconscionable and oppressive and made in disregard of the relevant schedule.
  4. Whether the Respondent was entitled to instruction fees when she allegedly lacked a valid practising certificate at the relevant time of the transaction.

Orders

  • Appeal allowed on grounds one, two and three.
  • Ground four of the appeal dismissed.
  • Award of the Taxing Master set aside.
  • Matter remitted to the Taxing Master to tax the bill of costs in accordance with regulation 14(e) and the Fifth Schedule of the Advocates (Remuneration and Taxation of Costs) Regulations.
  • Costs of the appeal awarded to the Appellant.

Rules and key headnotes

Taxation of Costs — Advocates' Fees — Proper Schedule for Incomplete Conveyance
Where a sale or purchase of land is not completed by execution and registration of a transfer instrument, an advocate's instruction fees are not assessable under the First Schedule item 2 of the Advocates (Remuneration and Taxation of Costs) Regulations, which applies only to completed conveyances, but must be assessed under the Fifth Schedule in accordance with regulation 14(e), based on what is fair and reasonable having regard to work done.
Advocates (Remuneration and Taxation of Costs) Regulations — Meaning of 'Conveyance' and 'Completed'
Under regulation 20(2) of the Advocates (Remuneration and Taxation of Costs) Regulations, the word 'conveyance' shall be read and construed as 'transfer'. A conveyance is completed only when the transfer instrument transferring title to freehold or leasehold property is prepared and completed, not merely when a sale agreement is executed. Regulation 14(a) prescribes fees for sales, purchases, mortgages and debentures 'completed'; regulation 14(e) prescribes fees under the Fifth Schedule for business 'not completed'.
Sale of Land — Completion — Conditions Precedent
A sale agreement for land which provides for payment in instalments and for adjustment of the purchase price based on remediation costs to be assessed contains conditions precedent to completion. The fact that the agreement recites that the vendor 'sells' and the purchaser 'buys' does not mean the sale is 'completed' for purposes of assessing advocates' fees under regulation 14(a) where the parties severally undertook obligations to consummate the contract and those obligations were not fulfilled.
Taxation of Costs — Consideration — Conditional Purchase Price
Where a sale agreement stipulates a total consideration subject to reduction by the cost of remediation to be assessed by an independent quantity surveyor, it is erroneous for a Taxing Master to use the gross stated consideration as the quantum for calculating percentage-based instruction fees without accounting for the contractual provision reducing that consideration.
Taxation of Costs — Limits of Taxing Master's Inquiry
On taxation of an advocate/client bill of costs, the Taxing Master's jurisdiction is to ascertain whether there was a completed conveyance and which schedule to apply. The Taxing Master has no jurisdiction to inquire into the legality or genuineness of the grounds for failure to complete the conveyance or to determine which party was responsible for non-completion.
Appeals — New Points of Law and Mixed Questions of Law and Fact
A court may exercise its discretion to allow a new point of law to be raised on appeal where the court is satisfied it has before it all the facts bearing on the new contention. However, where the new point is one of mixed law and fact and further facts could influence the judgment, and one party has omitted to place such facts before the lower court because the issues as framed did not render them material, leave to raise the new issue ought to be refused.

Legislation cited (21)

Cases cited (11)

  • Makula International Ltd v Cardinal Nsubuga (1982) HCB 11
  • Solomon Chaplin Lui v Tekplan Ltd (High Court Miscellaneous Application No. 825 of 2013)
  • MTN Uganda Ltd v Three Ways Shipping Group Ltd (High Court Civil Suit No. 503 of 2012)
  • Hounga v Allen [2014] UKSC 47
  • J.B. Byamugisha T/A J.B. Byamugisha Advocates v National Social Security Fund (High Court Civil Appeal No. 16 of 2013)
  • Simon Tendo Kabenge v Mineral Access Systems Uganda Ltd (High Court Civil Suit No. 275 of 2011)
  • Christine Bitarabeho v Edward Kakonge (Supreme Court Civil Appeal No. 4 of 2000)
  • North Staffordshire Railway Co v Edge [1920] AC 259
  • Standard Bank and Others v Attorney General (High Court Miscellaneous Application No. 645 of 2011)
  • Western Highland Creameries Ltd v Stanbic Bank (U) Ltd (High Court Taxation Appeal No. 10 of 2013)
  • Premchand Raichand Ltd v Quarry Services of East Africa Ltd [1972] EA 162

Full judgment

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Kazina v Nakkazi (Taxation Appeal No. 34 of 2014) [2015] UGCommC 84 (12 June 2015)
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.