Wakilii

Patrick Makumbi and Another v Sole Electrics (L) Ltd. (Civil Application No. 11 94)

Supreme Court · [1999] UGSC 46 · 1999 Reference Allowed in Part AI-generated summary ↓ Download Pin to watchlist Add to matter
Jurisdiction
Uganda
Case Type
Reference to a single judge of the Supreme Court from a decision of the Taxing Master on a bill of costs, under Rule 109(2) of the Rules of the Court.
Decision
Reference allowed in part: instruction fee reduced, commercial transaction levy award set aside, and applicants awarded three-quarters of the costs of the reference.

Observed later treatment

No later-treatment classification is recorded for this judgment.

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Holding

On a reference from the Taxing Master, the single judge held the instruction fee of Shs. 12,000,000 manifestly excessive because the appeal was against an interlocutory order and was conceded on a straightforward point of law within minutes; this disclosed a misdirection of principle and the fee was reduced. The value of the suit property was immaterial as the respondent claimed only a right to bid again, not a proprietary interest. A paying party's financial status is not a relevant taxation consideration. Commercial transaction levy may be allowed only as a disbursement on proof of payment, so the levy awarded before payment was set aside, to be presented again when paid.

Outcome

Reference allowed in part: instruction fee reduced, commercial transaction levy award set aside, and applicants awarded three-quarters of the costs of the reference.

Facts

The respondent company was a tenant of Kampala City Council premises on Nasser Road. The Council advertised the premises for sale by tender; the second applicant was declared the successful bidder. The respondent alleged that the first applicant, then the Council Town Clerk, had colluded with the second applicant to rig the sale. After being served notice to vacate, the respondent sued in the High Court seeking declarations that the sale was illegal and that it remained the lawful tenant. The second applicant obtained an order striking out the part of the plaint relating to the bidding. The respondent appealed to the Supreme Court; the appeal was conceded by the applicants' counsel within about thirty minutes when it emerged the trial judge had decided on a point not raised, and the matter was remitted to the High Court. The respondent was awarded costs of that appeal. The Taxing Master taxed the bill at Shs. 13,854,000, including an instruction fee of Shs. 12,000,000 and commercial transaction levy of Shs. 1,800,000. The applicants referred the taxation to a single judge.

Issues

  1. Whether the instruction fee of Shs. 12,000,000 awarded by the Taxing Master was manifestly excessive given that the appeal was against an interlocutory order and was conceded on a point of law.
  2. Whether the Taxing Master ought to have taken into account the financial status of the first applicant in assessing costs.
  3. Whether commercial transaction levy may be allowed as a disbursement before it has been paid and receipts tendered.

Orders

  • Grounds 1, 2 and 5 succeed; the instruction fee is reduced.
  • Ground 4 (financial status of the first applicant) is rejected.
  • Ground 3 succeeds; the award of Shs. 1,800,000 as commercial transaction levy is set aside and may be presented again for taxation at an appropriate time.
  • The reference is allowed to that extent.
  • The applicants are awarded three-quarters of the costs of the reference.

Rules and key headnotes

Costs — Taxation — Review of Taxing Master's assessment — Grounds for interference
An appellate court or judge on a reference will not interfere with a Taxing Master's assessment of costs unless he has misdirected himself on a matter of principle; but where the quantum of the assessment is manifestly extravagant, a misdirection of principle may be a necessary inference.
Costs — Instruction fee — Assessment principles and Taxing Master's discretion
There is no mathematical formula for fixing an instruction fee; each case turns on its own circumstances, including the complexity of and research required for the matter, and the Taxing Master's discretion must be exercised judicially, balancing fair reimbursement of the successful litigant against the public interest in keeping costs at a level that does not deny the poor access to court.
Costs — Instruction fee — Relevance of value of subject matter
The value of the suit property is immaterial to the instruction fee where the successful party claimed no proprietary interest in it but only a right to participate in a future bidding process.
Costs — Taxation — Irrelevance of paying party's financial means
The financial status of the party liable to pay costs is not a relevant consideration for the Taxing Master, since a successful party is entitled to costs regardless of whether they may ultimately be recovered.
Commercial transaction levy — Recovery as disbursement on taxation — Proof of payment
Commercial transaction levy under the Finance Decree No. 14 of 1972 may be allowed on taxation only as a disbursement, and only on proof of payment; an advocate cannot be reimbursed for a levy not yet paid, so taxation of the item must be deferred until it is paid and receipts issued.

Legislation cited (5)

  • Supreme Court Rules r.109(2)
  • Finance Decree No. 14 of 1972 s.1(1)
  • Finance Decree No. 14 of 1972 s.2(3)
  • Taxation of Costs Rules (Supreme Court) para.4
  • Civil Procedure Rules Order 6

Cases cited (6)

  • Premchand Raichand v Quarry Services of East Africa Ltd [1972] EA 162
  • Nalumansi v Sulaimani Tule (Civil Application No. 12 of 1992)
  • Khatijabai Jiwa Hasham v Zenab [1957] EA 255
  • Connie Kabanda Vs. Kananura Melvin Consulting Engineers, Civil Application No. 24/199? Supreme Court (unreported)
  • Steel Construction and Petroleum Engineering Ltd v Uganda Sugar Factory Ltd [1970] EA 141
  • Attorney General v Uganda Blanket Manufacturers (Civil Application No. 17 of 1993)

Full judgment

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Patrick Makumbi and Another v Sole Electrics (L) Ltd. (Civil Application No. 11 94) [1999] UGSC 46 (19 May 1999)
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.