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Uganda Revenue Authority v Shell (U) Ltd & 9 Ors [2017] UGSC 73

Supreme Court · 2017 Bill of Costs Taxed AI-generated summary ↓ Download Pin to watchlist Add to matter
Jurisdiction
Uganda
Case Type
Taxation of the respondents' bill of costs arising from a Supreme Court miscellaneous application
Decision
Bill of costs taxed and allowed at UGX 27,139,000, substantially below the UGX 228,585,393 claimed

Observed later treatment

No later-treatment classification is recorded for this judgment.

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Holding

The taxing officer held that because the bill of costs arose from an application and not an appeal, Rule 9(1) of the Third Schedule applied: the instruction fee is a reasonable sum at the taxing officer's discretion, not a percentage of the subject-matter value under Rule 9(2). The monetary value involved was only an incidental factor. The 10% basis and percentage approaches advanced by both sides were rejected. The instruction fee was reduced from UGX 188,934,384 to UGX 25,000,000 (about UGX 8.3m per firm). VAT of UGX 34,782,009 was disallowed as it was not proved paid to the tax body. The bill was taxed and allowed at UGX 27,139,000 for the three firms.

Outcome

Bill of costs taxed and allowed at UGX 27,139,000, substantially below the UGX 228,585,393 claimed

Facts

Following Miscellaneous Application No. 17 of 2014 (arising from Supreme Court Civil Appeal No. 2 of 2013), the respondents' counsel filed a bill of costs of UGX 228,585,393 against the applicant, Uganda Revenue Authority. The largest item was an instruction fee of UGX 188,934,384, calculated as 10% of a claimed subject-matter value of about UGX 1,889,384,914 said to be at stake in the application. The applicant contended that the application concerned interpretation and enforcement of the court's earlier judgment and had no value, so the instruction fee should be a reasonable sum under Rule 9(1) rather than a percentage. Three law firms acted for the respondents. The applicant conceded several items and contested the rest, including a separately claimed VAT amount unsupported by any receipt.

Issues

  1. Whether the instruction fee on a bill of costs arising from an application should be assessed by reference to the monetary value of the subject matter under Rule 9(2), or as a reasonable sum under Rule 9(1).
  2. What reasonable instruction fee and individual item amounts should be allowed on taxation.
  3. Whether a claim for VAT not proved to have been paid to the tax body may be allowed.

Orders

  • Instruction fee taxed and allowed at UGX 25,000,000 for the three firms (about UGX 8.3 million each).
  • Item 3 (copies) taxed to UGX 400,000; item 4 (affidavit) to UGX 100,000; item 6 (skeleton arguments) to UGX 100,000; item 7 (conferencing notes) disallowed; item 8 (attendance) to UGX 400,000; item 9 (attending ruling) to UGX 200,000; item 15 to UGX 200,000; item 18 (disbursements) to UGX 300,000.
  • Claim for VAT of UGX 34,782,009 disallowed for want of proof of payment to the tax body.
  • Respondents' bill of costs taxed and allowed at UGX 27,139,000 for the three firms.

Rules and key headnotes

Taxation of Costs — Instruction Fees — Applications versus Appeals (Rule 9(1) and 9(2), Third Schedule)
On taxation of a bill of costs arising from an application, the instruction fee is governed by Rule 9(1) of the Third Schedule, which allows a reasonable sum (not less than one thousand shillings) at the taxing officer's discretion; the value-of-the-subject-matter criterion in Rule 9(2) applies only to instructions to appeal or oppose an appeal.
Taxation of Costs — Subject-Matter Value as an Incidental Factor
Where a bill of costs arises from an application, the monetary value surrounding the application is only an incidental or ancillary factor; the instruction fee is not to be assessed as a percentage of that value.
Taxation of Costs — Percentage Basis Rejected
Assessing instruction fees on a fixed percentage (such as 10%) of the subject matter is not a proper basis for taxation in the Supreme Court; the sliding scale under the Advocates (Remuneration and Taxation of Costs) Rules applies only to taxation in the High Court and Magistrates Courts and offers no more than general guidance.
Taxation of Costs — Exercise of the Taxing Officer's Discretion
A taxing officer must exercise discretion judicially and not capriciously; there is no magic formula, and estimation of a reasonable fee is a matter of opinion based on experience, weighing the complexity, the work involved and the amount at stake on the peculiar circumstances of each case.
Taxation of Costs — Proof of VAT and Disbursements
A claim for VAT that is not proved by receipt to have been paid to the tax body cannot be allowed on taxation, and disbursements must be supported by receipts.

Legislation cited (4)

  • Rules of the Supreme Court, Third Schedule, Rule 9(1)
  • Rules of the Supreme Court, Third Schedule, Rule 9(2)
  • Rules of the Supreme Court, Third Schedule, paragraph 4(2) and (3)
  • Advocates (Remuneration and Taxation of Costs) Rules 1982 (S.I. No. 123/82)

Cases cited (19)

  • National Insurance Corporation v Pelican Services Ltd (Civil Reference No. 13 of 2005)
  • Francis Rutagarama Bantariza v Habre International Trading Co (Civil Application No. 21 of 2002)
  • Pardan v Osman [1969] E.A. 528
  • Attorney General Vs Uganda Blanket Manufacturers
  • Premchand Raichand v Quarry Services (No. 3) [1972] E.A. 162
  • Bank of Uganda v Banco Arabe Espanol (Civil Application No. 23 of 1999)
  • Haruna Mubiru & 3 Others v Nakato Bashira & Another (Civil Reference No. 59 of 2012)
  • Patrick Makumbi & Another v Sole Electrics (U) Ltd (Civil Application No. 11 of 1994)
  • Bank of Uganda Vs Trespert Ltd, SCCAppeal
  • Sietco v Noble Builders (Civil Application No. 31 of 1993)
  • Hope Rwabinumi v Julius Rwabinumi (Civil Application No. 1 of 2009)
  • Makula International Ltd v Cardinal Nsubuga & Another [1982] HCB 11
  • Nicholas Roussos v Gulam Hussein Habib Virani & Nasmudin Habib Virani (Civil Appeal No. 6 of 1995)
  • Alexander Jo Okello v Kayondo & Co Advocates (Civil Appeal No. 1 of 1997)
  • Paul Semogerere & Another Vs Attorney General
  • General Parts (U) Ltd v Non-Performing Assets Recovery Trust (Civil Appeal No. 21 of 2000)
  • Attorney General v Uganda Blankets Manufacturers (Civil Application No. 17 of 1993)
  • Attorney General v James Mark Kamoga & Another (Civil Application No. 2 of 2008)
  • Punjani Motors v Sam K. Njuba (Miscellaneous Application No. 1144 of 1997)

Full judgment

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Uganda Revenue Authority v Shell (U) Ltd & 9 Ors [2017] UGSC 73 (18 January 2017)
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.