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Western Highland Creameries Ltd and Another v Stanbic Bank Uganda Limited [2026] UGSC 38

Supreme Court Appeal Dismissed AI-generated summary ↓ Download Pin to watchlist Add to matter
Jurisdiction
Uganda
Case Type
Second appeal to the Supreme Court from the Court of Appeal concerning the taxation of instruction fees in a party-to-party bill of costs
Decision
Appeal dismissed; the decision of the Court of Appeal upheld; costs awarded to the respondent

Observed later treatment

No later-treatment classification is recorded for this judgment.

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Holding

On a second appeal concerning taxation of instruction fees after a suit was dismissed on a preliminary point of law, the Supreme Court held that party-to-party costs are distinct from advocate-client bills, so Lumweno was distinguishable; that a taxing officer is not a mere calculator but retains discretion under section 61(3) of the Advocates Act and rule 13 of the 1982 Rules; and that where the subject-matter value is discernible from the pleadings, instruction fees are taxable on that value under item 1(a)(iv) of the Sixth Schedule whether or not the suit went to full trial. The Court declined to order a refund of monies realised under the security for costs and dismissed the appeal with costs.

Outcome

Appeal dismissed; the decision of the Court of Appeal upheld; costs awarded to the respondent

Facts

In 1995 and 1997 the respondent bank extended loan facilities to the appellants, secured by a debenture over company assets, a mortgage over land in Mbarara, and a bank guarantee. The appellants persistently defaulted, prompting recall of the guarantee, appointment of a receiver, and sale of the mortgaged property. In 2011 the appellants sued the bank (Civil Suit No. 462 of 2011) alleging fraud and illegality in enforcement, but the suit was dismissed for being time-barred and disclosing no cause of action, without a full trial. The respondent filed a bill of costs claiming instruction fees based on the subject-matter value pleaded (USD 5 million and UGX 38.8 billion). Through successive taxation references and appeals, the taxing master ultimately certified UGX 612,123,060 as costs, including UGX 499,676,356 instruction fees and VAT. The respondent realised monies under a bank guarantee lodged as security for costs. The certificate was later set aside for a hearing violation and re-taxation ordered. The appellants appealed to the Court of Appeal, which dismissed the consolidated appeal, and then to the Supreme Court.

Issues

  1. Whether the Court of Appeal erred by rendering a decision inconsistent with, and per incuriam of, the binding precedent in Lumweno & Company Advocates v Transafrica Assurance Company Limited.
  2. Whether the taxing master is a mere calculator without discretion to increase or reduce the basic fee computed under the 6th Schedule item 1(a)(iv).
  3. Whether effect was given to the judicial discretion conferred on a taxing officer under section 55(3)/61(3) of the Advocates Act.
  4. Whether a suit dismissed as time-barred and disclosing no cause of action has an ascertainable subject-matter value capable of computing a basic fee under item 1(a)(iv) of the 6th Schedule.
  5. Whether the court should order a refund of monies paid under a taxation award that was subsequently set aside by the trial judge.
  6. Whether the court condoned an illegality by allowing the respondent to retain funds procured under an order later declared illegal.

Orders

  • The decision of the Court of Appeal in Consolidated Civil Appeal No. 78 & 79 of 2014 is upheld.
  • The appeal is dismissed.
  • Costs in the Supreme Court and the two courts below are awarded to the respondent.

Rules and key headnotes

Precedent — Stare Decisis — Distinguishing an Otherwise Binding Decision
A court may decline to follow an otherwise binding precedent where the earlier decision is distinguishable on its facts or law, has been overruled on appeal, or was reached per incuriam.
Taxation of Costs — Distinction Between Advocate-Client Bills and Party-to-Party Costs
The principles governing the taxation of advocate-client remuneration do not automatically apply to the taxation of party-to-party costs, as the 1982 Rules delineate the two as distinct matters for taxation.
Taxation of Costs — Discretion of the Taxing Officer
A taxing officer is not a mere calculator of the scale in the Sixth Schedule; under section 61(3) of the Advocates Act and rules 13 and 37 of the 1982 Rules the officer retains discretion to have regard to the skill, labour and responsibility involved and to the merits of each case.
Taxation of Costs — Instruction Fees — Subject-Matter Value Where Suit Dismissed on a Preliminary Point of Law
Where the value of the subject matter is discernible from the pleadings, instruction fees are taxable on that value under item 1(a)(iv) of the Sixth Schedule regardless of whether the suit proceeded to full trial or was dismissed on a preliminary point of law.
Subsidiary Legislation — Amendment Rules Read as One with Principal Rules
The Advocates (Remuneration & Taxation of Costs) (Amendment) Rules 1996 are to be read as one with the 1982 Principal Rules, so that the discretion under rule 13 of the Principal Rules is preserved and not abolished by the amendment.
Costs — Refund of Monies Realised Under Security for Costs Pending Re-Taxation
Where a certificate of taxation is set aside and a re-taxation ordered, monies already realised by the successful party under a bank guarantee lodged as security for costs may be retained pending determination of any overpayment, and are refundable only to the extent of any excess established on re-taxation.
Appellate Review — Interference with the Exercise of Judicial Discretion
An appellate court will not interfere with a lower court's exercise of discretion unless satisfied that the court misdirected itself and thereby reached a wrong decision, or was clearly wrong resulting in a failure of justice.

Legislation cited (11)

Cases cited (18)

  • Lumweno & Company Advocates v Transafrica Assurance Company Limited (Civil Application No. 3 of 1995)
  • Attorney General v Uganda Law Society [2009] UGSC 2
  • Uganda Taxi Operators & Drivers Association v Uganda Revenue Authority (Taxation Reference No. 25 of 2017)
  • Joreth Ltd v Kigano & Associates [2002] 1 EA 92
  • Peter Muthoka & Another v Ochieng & 3 Others (Civil Appeal No. 328 of 2017) [2019] eKLR
  • Registered Trustees of Kampala Institute v Departed Asians Property Custodian Board (Civil Application No. 3 of 1995)
  • Nicholas Roussos v Gulian Hussein Habib Virani & Others (Civil Reference No. 30 of 1998)
  • Banco Arabe Espanol v Bank of Uganda (Civil Appeal No. 8 of 1998)
  • Mbogo & Another v Shah (1968) EA 93
  • Mayers v Hamilton [1975] EA 16
  • Sudhir Ruparelia & Another v Bank of Uganda [2025] UGSC 49
  • Ebrahim A. Kassim & Others v Habre International Limited [2000] UGSC 5
  • Bank of Uganda v Banco Arabe Espanol [1999] 2 EA 45
  • Attorney General & Another v James Mark Kamoga & Another (Civil Appeal No. 2 of 2008)
  • Bob Kasango v Attorney General and Another (Constitutional Petition No. 16 of 2016)
  • Pre Africa Ltd & Others [1972] EA 162
  • Nalumansi v Lule (Civil Application No. 72 of 1992)
  • Hashiam v Zanab [1954] EA 255

Full judgment

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Western Highland Creameries Ltd and Another v Stanbic Bank Uganda Limited [2026] UGSC 38 (7 August 2026) (1)
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.