Wakilii

Official Receiver v Colonial Blanket Syndicate (Bankruptcy Cause No. 31-1936)

East African Court of Appeal · [1936] EACA 132 · 1936 Application Dismissed AI-generated summary ↓ Download Pin to watchlist Add to matter
Jurisdiction
Uganda
Case Type
Review of taxation of costs following successful motion to set aside fraudulent preference in bankruptcy proceedings
Decision
Review of taxation dismissed; defendants liable for Sh. 412 as taxed costs

Observed later treatment

No later-treatment classification is recorded for this judgment.

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Holding

Held that costs are an indemnity and the successful party can recover from the unsuccessful party only what he is himself liable to pay his advocate. Where the Official Receiver employed an advocate on terms limiting remuneration to Sh. 300, the defendants were liable only for that sum plus disbursements, not the full taxed amount of Sh. 589. The taxing officer was entitled to consider the agreement between advocate and client, and must satisfy himself not only that work was done but that it was reasonable and necessary.

Outcome

Review of taxation dismissed; defendants liable for Sh. 412 as taxed costs

Facts

The debtor was adjudicated bankrupt on 15 January 1937. During public examination it emerged that on 15 October 1936 he had transferred goods worth Sh. 1,395 to the Colonial Blanket Syndicate in purported discharge of his liability. The Official Receiver, as trustee, applied for authority to employ an advocate to recover the goods or their value, stating estimated costs of Sh. 300. An order was made authorizing expenditure not exceeding £15. The advocate agreed with the Official Receiver to conduct proceedings for Sh. 300 as regards the bankrupt's estate. Judgment was obtained declaring the transfer void as a fraudulent preference and ordering the defendants to pay Sh. 1,395 plus taxed costs. On taxation, the advocate's bill was taxed at Sh. 589, but the Acting Registrar, having regard to the agreement limiting remuneration to Sh. 300, allowed only Sh. 300 profit costs plus Sh. 112 disbursements against the defendants. The Official Receiver applied to review this taxation.

Issues

  1. Whether the Official Receiver could recover from the unsuccessful defendant more than the limited amount he had agreed to pay his advocate.
  2. Whether the taxing officer was entitled to have regard to the agreement between the advocate and the Official Receiver when taxing costs as between party and party.
  3. Whether the taxing officer's duty extends beyond verifying that work was done to determining whether it was reasonable and necessary.

Orders

  • Application for review of taxation dismissed.
  • Costs of the application to be paid out of the estate of the bankrupt.
  • Taxation by the Acting Registrar allowing Sh. 412 as taxed costs confirmed.

Rules and key headnotes

Costs — Party and Party Costs — Nature as Indemnity
Costs as between party and party are given as an indemnity to the person entitled to them and are not imposed as a punishment on the party who pays them nor given as a bonus to the party who receives them. The successful party is entitled to recover from the unsuccessful party only so much as he is himself liable to pay to his advocate.
Taxation of Costs — Consideration of Agreement Between Advocate and Client
In taxing costs as between party and party, the taxing officer is entitled to have regard to the agreement between the advocate and his client, particularly where the client has agreed to limit the advocate's remuneration to a specified amount.
Taxation of Costs — Duty of Taxing Officer
The duty of the taxing officer is to satisfy himself not only that the work charged for has been done, but also that it was reasonable and necessary that it should be done for the attainment of justice in the particular case. If work was not necessary, the fee for it must be disallowed.
Bankruptcy — Official Receiver — Employment of Advocate — Taxation of Costs
On taxation of costs of an advocate employed by the Official Receiver in bankruptcy proceedings, the provisions of Bankruptcy Rules rule 83 must be strictly complied with, requiring production of a certificate setting forth any special terms of remuneration agreed and a copy of the authority sanctioning the employment.
Bankruptcy — Parties to Litigation — Official Receiver as Representative of Estate
In proceedings brought by the Official Receiver to recover property for the bankrupt's estate, the parties are the bankrupt's estate represented by the Official Receiver and the defendant. Creditors who may have urged the proceedings are not parties and could not be made liable in costs.

Legislation cited (9)

  • Bankruptcy Ordinance 1930 s.22(10)
  • Bankruptcy Ordinance 1930 s.57
  • Bankruptcy Ordinance 1930 s.101(1)
  • Bankruptcy Ordinance 1930 s.116
  • Bankruptcy Rules r.77(2)
  • Bankruptcy Rules r.79
  • Bankruptcy Rules r.83
  • Rules of Court 1916 Part XIII s.111 rr.33-36
  • Civil Procedure Code s.27

Cases cited (8)

  • Harold v Smith (1858) 5 H & N 381
  • Richardson v Richardson (1895) 64 LJ P 119
  • Gundry v Sainsbury [1910] 1 KB 645
  • Ward v Lawson (1873) LR 8 Ch App 65
  • Re Duncan [1892] 1 QB 879
  • Smith v Buller (1874) LR 19 Eq 473
  • Re Lavey [1921] 1 KB 344
  • Adams v London Motor Builders [1921] 1 KB 495

Full judgment

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

Official Receiver v Colonial Blanket Syndicate (Bankruptcy Cause No. 31-1936) [1936] EACA 132 (1 January 1936)
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.