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Mukanusi v Uganda Revenue Authority (Civil Appeal Reference 5 of 2022)

Court of Appeal · [2023] UGCA 357 · 2023 Reference Partly Allowed AI-generated summary ↓ Download Pin to watchlist Add to matter
Jurisdiction
Uganda
Case Type
Reference to a single judge of the Court of Appeal from the taxing officer's ruling in a taxation application
Decision
Reference partly succeeded; the respondent's bill of costs was re-taxed and allowed at UGX 1,012,500.

Observed later treatment

No later-treatment classification is recorded for this judgment.

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Holding

On a reference from a taxing officer's ruling, the Court of Appeal held that the first bill of costs had been validly withdrawn by letter and never acted upon, so no prejudice arose from the absence of service; ground one was dismissed. The preliminary objection that the reference concerned quantum only was overruled, the reference turning on the principle of whether in-house counsel may recover professional fees. On the merits, the court held that an organisation represented by salaried in-house counsel is not entitled to instruction fees, and that attendances, drafting, perusals and professional copying flow from instruction fees and are equally not allowable; only proven disbursements are recoverable. The bill was re-taxed accordingly and allowed at UGX 1,012,500.

Outcome

Reference partly succeeded; the respondent's bill of costs was re-taxed and allowed at UGX 1,012,500.

Facts

The applicant succeeded in part on a civil appeal and was awarded half of the costs of the appeal, while the respondent, Uganda Revenue Authority, was awarded half of its costs. The respondent first filed a bill of costs on 13 November 2020 for about UGX 23,791,000, then by letter dated 24 November 2021 withdrew it on the basis that it had not been served, and filed a fresh bill on 24 November 2021. The taxing officer taxed the fresh bill and allowed UGX 5,930,000. There was no affidavit of service for the second bill; the respondent relied on WhatsApp communication and service during the taxation proceedings. The taxing officer found that the respondent's in-house lawyers were not entitled to instruction fees and taxed those off, but nonetheless allowed items such as attendances, drafting, professional copying and compiling. The applicant brought this reference challenging both the entertaining of two bills and the award of professional fees.

Issues

  1. Whether the taxing officer erred by entertaining two bills of costs filed by the respondent and taxing the second bill, which was never served on the applicant.
  2. Whether a reference confined to the quantum of taxed costs is competent under Rule 110(4) of the Judicature (Court of Appeal Directions) Rules.
  3. Whether the taxing officer erred by awarding professional fees to the respondent after finding that its salaried in-house counsel were not entitled to instruction or professional fees.

Orders

  • Ground one of the reference is dismissed.
  • The preliminary objection is overruled.
  • The respondent's bill of costs is re-taxed, instruction and professional fee items being taxed off.
  • The respondent's bill of costs is taxed and allowed at UGX 1,012,500.

Rules and key headnotes

Civil Procedure — Taxation of Costs — Interference with Taxing Officer's Discretion
A judge will not alter a fee allowed by the taxing officer merely because a higher or lower amount might have been allowed; interference is justified only in exceptional cases where a wrong principle was applied, which may be inferred from an award that is manifestly excessive or manifestly low, and only where the error substantially affected the quantum and upholding it would cause injustice.
Civil Procedure — Taxation of Costs — Withdrawal and Service of Bill of Costs
Where a bill of costs is withdrawn by letter and is never acted upon by the court, no prejudice arises to the opposing party from the absence of service of that bill, and an objection raised only after the taxation ruling may be treated as an afterthought.
Civil Procedure — Taxation of Costs — Reference Confined to Quantum (Rule 110(4))
A reference that turns on a question of principle, such as whether professional fees may be awarded to in-house counsel, is not a reference on the question of quantum only and is therefore competent notwithstanding Rule 110(4) of the Judicature (Court of Appeal Directions) Rules.
Civil Procedure — Taxation of Costs — In-house Counsel — Instruction Fees
An organisation, including a State body, represented by salaried in-house counsel is not entitled to instruction fees on taxation, because the principle of costs is to reimburse the successful party for expense actually incurred, and no instruction fee is incurred or paid where the lawyers are paid employees.
Civil Procedure — Taxation of Costs — In-house Counsel — Professional and Attendance Items
Items such as attendances, drafting of court documents, perusals and professional copying flow from and are extensions of instruction fees and are therefore equally not allowable to salaried in-house counsel; the only costs such counsel may properly claim are disbursements that are subject to proof of expenditure.

Legislation cited (2)

Cases cited (6)

  • Bank of Uganda v Banco Arabe Espaniol (Civil Application No. 23 of 1999)
  • Mugenyi v Hoima District Administration (Taxation Appeal No. 35 of 2017)
  • Attorney General v Uganda Blanket Manufacturers (Civil Application No. 17 of 1993)
  • Total (Uganda) Ltd v Uganda Revenue Authority (Reference No. 26 of 2003)
  • Inspector of Government v Godfrey Magezi (Taxation Cause No. 1 of 2015)
  • Zuberi v Returning Officer and Another [1970] EA 33

Full judgment

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The original judgment as reported. Read the original PDF before relying on any passage.

Mukanusi v Uganda Revenue Authority (Civil Appeal Reference 5 of 2022) [2023] UGCA 357 (14 August 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.