Wakilii

N C Bank Ltd & 24 Ors v Kampala City Council Authority & Anor (MISC .CAUSE NO. 2 OF 2018)

High Court · [2019] UGHCCD 7 · 2019 Application Partly Allowed AI-generated summary ↓ Download Pin to watchlist Add to matter
Jurisdiction
Uganda
Case Type
Application for judicial review seeking prerogative orders of certiorari and prohibition against respondents' levy of trade licensing fees on banks and ATMs under Statutory Instrument 2 of 2017
Decision
Application for judicial review partly allowed. Items 25 and 20 of the Amendment Schedule requiring banks to pay trade licensing fees quashed as ultra vires. Items 28 and 23 requiring ATMs to pay trade licensing fees upheld for ATMs located away from bank premises. Temporary injunction vacated.

Observed later treatment

No later-treatment classification is recorded for this judgment.

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Holding

The High Court held that Statutory Instrument 2 of 2017, which required banks to pay trade licensing fees, was ultra vires the Trade Licensing Act as amended. Banking business does not fall within the definitions of 'trade', 'selling', or 'services' under the Trade Licensing Act, and as a specific statute, the Financial Institutions Act prevails over the general Trade Licensing Act. The court quashed the provisions requiring banks to pay trade licensing fees. However, ATMs located away from bank premises were held to be lawfully subject to trade licensing fees as they render a service not covered by the Financial Institutions Act licence.

Outcome

Application for judicial review partly allowed. Items 25 and 20 of the Amendment Schedule requiring banks to pay trade licensing fees quashed as ultra vires. Items 28 and 23 requiring ATMs to pay trade licensing fees upheld for ATMs located away from bank premises. Temporary injunction vacated.

Facts

Twenty-five banks challenged Statutory Instrument 2 of 2017, which amended the Trade (Licensing) Act schedules to require banks and ATMs to pay trade licensing fees. The applicants argued they were already licensed and regulated by the Central Bank under the Financial Institutions Act 2004, and the new requirement constituted double taxation. The amendment arose from the Trade (Licensing) Amendment Act 27 of 2015, which repealed section 8(2)(f) of the old law that exempted businesses requiring separate licences from trading licence fees, and extended trading licences to 'services'. The Minister of Trade, Industry and Cooperatives issued S.I. 2 of 2017 listing banks (items 25 and 28 in Part A; items 20 and 23 in Part C) and ATM machines as requiring trade licences. The applicants sought certiorari and prohibition against the respondents' enforcement of these fees.

Issues

  1. Whether the application raises issues for judicial review.
  2. Whether items 25 and 28 and items 20 and 23 of S.I. 2 of 2017 are unlawful for being ultra vires the Trade Licensing Act Cap 101 as amended by Act 28 of 2015.
  3. Whether items 25 and 28 and items 20 and 23 of S.I. 2 of 2017 are irrational and unfair.
  4. Whether item 28 Part A and 23 Part C of the Trade Licensing Amendment Schedule are irrational and unfair.

Orders

  • The writ of certiorari will issue quashing Item 25 of Part A and Item 20 Part C of the Amendment schedule that authorizes levy of Trade license fees for being ultra vires the Trade Licensing Act as amended.
  • Item 28 of Part A and 23 of Part C that authorizes levy of licence fees on ATMs is intra vires the Trade Licensing Act to the extent that trading licences will be levied only on those ATMs located away from bank premises.
  • The licence fees on ATMs identified under order (2) above shall become payable from the date of demand by the Local Authority or KCCA.
  • The respondents are prohibited from levying licence fees on Banks under the Amendment Schedule 2 of 2017.
  • The temporary injunction issued on 30th April 2018 is hereby vacated.
  • 70% of the taxed costs of this application will go to the applicants who have been successful on the substantive issues 1 and 2 to be paid by both respondents severally and jointly.

Rules and key headnotes

Judicial Review — Scope — Challenge to Delegated Legislation — Statutory Instruments
Delegated legislation does not have the status of primary legislation. A statutory instrument is the instrument of the Minister who is empowered by the enabling Act. The focus of judicial review is on the instrument and not the Act itself. An application for judicial review challenging the legality of a statutory instrument made by a Minister, who is a public official, is properly before the court.
Administrative Law — Ultra Vires — Minister's Powers — Delegated Legislation
Where an enabling Act gives authority to a Minister to amend a schedule to expand or remove businesses requiring licence fees for services or goods, the Minister acts ultra vires if the Minister includes in the schedule a business that does not fall within the statutory definitions contained in the enabling Act.
Statutory Interpretation — Generalia Specialibus Rule — Specific Statute Prevails Over General Statute
By the rule of statutory interpretation that a specific legislation over a specific subject takes precedence over general legislation (generalia specialibus rule), where two statutes regulate the same subject matter, the specific statute prevails. A general licensing statute must give way to a specific statute that provides for licensing of a particular regulated business.
Banking & Finance — Licensing — Trade Licensing — Banking Business Not 'Trade' or 'Service'
Banking business as defined in the Financial Institutions Act — accepting deposits from the public, employing deposits by lending, and presenting cheques for payment — does not fall within the meaning of 'trade', 'sell', or 'services' under the Trade Licensing Act. Had Parliament intended that banks would pay trade licensing fees, it would have said so expressly given the wide gap between trading business and banking business and the existence of a specific regulatory law, the Financial Institutions Act.
Banking & Finance — ATMs — Licensing — ATMs Located Away from Bank Premises
An ATM machine located away from bank premises is not a branch office nor is it regulated or defined by the Financial Institutions Act. ATMs do not carry out banking business in its entirety as they do not deploy deposits by lending and they do not present cheques or drafts to other banks. ATMs located away from bank premises simply render a service of dispensing money and are therefore lawfully subject to trade licensing fees under the Trade Licensing Act. However, ATMs located within bank premises are covered by the licence issued under the Financial Institutions Act.

Legislation cited (16)

Cases cited (6)

  • Amal v Equal Opportunities Commission (HCMC No. 233 of 2016)
  • Bank Mellat v Her Majesty's Treasury No. 2 [2014] A.C 700
  • Kampala Private Medical Professionals v Attorney General (HC MA 552 of 2017)
  • Stanbic Bank Ltd and others v Attorney General (HCMA No. 645 of 2011)
  • Amrit Goyal v Hari Chand Goyal (Commercial Court Civil Suit No. 432 of 2001)
  • Woolwich Building Society v Inland Revenue Commissioner No. 2 [1991] All E.R. 577

Full judgment

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

N C Bank Ltd & 24 Ors Vs Kampala City Council Authority & Anor (MISC .CAUSE NO. 2 OF 2018) [2019] UGHCCD 7 (4 March 2019)
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.