THE REPUBLIC OF UGANDA

IN THE HIGH COURT OF UGANDA AT KAMPALA

(COMMERCIAL DIVISION)

MISC. APPLICATION 815 OF 2012

(ARISING FROM HCCS 568 OF 2012)

NATIONAL SOCIAL SECURITY FUND …………………….. APPLICANT

VERSUS

JOSEPH B. BYAMUGISHA t/a

J.B. BYAMUGISHA ADVOCATES ……………………….. RESPONDENT

BEFORE HON. LADY JUSTICE FLAVIA SENOGA ANGLIN

RULING

This application was made under 0.36 rr 3 (1) (2) (4) and 0.52 rr1 and (3) C.P.R. Seeking orders of court to grant the Applicant unconditional leave to appear and defend HCCCS No. 568/20 brought by the Respondent against the Applicant.

Costs of the application were also applied for.

The application was supported by the affidavit of Mark Martin Obia which was relied upon together with a supplementary affidavit dated 12.02.13.

The application was opposed by the affidavit of Dr. Joseph Byamugisha dated 06.02.13 plus an affidavit in rejoinder dated 14.02.13.

All the affidavits referred to above are lengthy and I will not bother to reproduce the contents.  Suffice it to state that they were wholly and adopted by the parties.

Written submissions were filed by either party.

The Applicants gave a background to the application as arising from the ruling of the Registrar in respect of the Client/Advocate Bill of Costs which was filed by the Respondent.

The Bill of Costs was taxed and allowed at shs.497,510,054/- , which the Applicant objected to on the ground that the figure was arrived at without following the correct legal principles and in total disregard of the Applicant’s objections that are set out in paragraph (e) of the submissions.

It is on the basis of that ruling that the Respondent filed C.S. 568/12, seeking to recover the amount awarded by the Registrar, together with interest, Penal value added tax and costs of the suit.

It was the Applicants further submission that, the Respondent also filed separate bills of costs for services rendered in different courts and some are still pending taxation.  Refer to paragraph (a) (i) and (ii) page 3 of the submissions.

In addition the Respondent filed C.S. 526/2012 to recover another shs. 379,817,359/-, which bill, according to the Applicant had been consolidated with another Bill between the same parties arising from arbitration proceedings.

The suits have since been referred back to High Court by the Supreme Court for hearing on merits, following the overturning of the Arbitral award.

On the other hand, the Applicants have also appealed the rulings of the Registrar and the appeals are still pending disposal.

It is the Applicants contention that, since the proceedings are before different Judges, there is a threat of contradictory decisions being made.

In respect of the application, it was submitted that the Applicant had established that there are triable issues and there is a good defence on the merits, involving difficult points of law and that the amount is disputed requiring taking of Accounts to determine.

The case of Kotecha vs. Muhammed [2002] IEA 112 was relied upon for support.  Counsel emphasized that in arriving at her decision, the Registrar abused her discretion by failing to follow the laid down principles of taxation and the taxation rules.  Makula International vs. Cardinal Nsubuga and Another [1982] HCB 11 and Shumuk Investments Ltd vs. Noble Builders and Others HCCA 24/10 – were cited in support.

Thereafter, Counsel for the Applicant went into details of how the instruction fees were assessed contending that the assessment was based on the wrong value of the subject matter.  And that the wrong monetary exchange rate was also applied.  - The case of Joreth Ltd vs. Kigano and Associates [2—2] IEA 92 was relied upon.

It was also pointed out how the computation of fees ought to have been done, after which, Counsel contended the Registrar ought to have considered whether to increase or reduce it.

Further that the Penal Tax was wrongly awarded by the Registrar as it is a preserve of the Commissioner General of Uganda Revenue Authority. S.66 (6) of the Value Added Tax Act Cap 349 and Art. 152 (1) of the Constitution were relied upon.

It was also contended that the Respondents’ action was time barred as it was brought 6 years after the cause of action arose.  S.3 of the Limitation Act was cited.

In addition, it was argued that the Respondents contract to provide legal services to the Applicant was never approved by the Attorney General contrary to Art. 119 (5) of the Constitution and the contract was accordingly a __ - as per the case of Nsimbe Holdings Ltd vs. Attorney General and IGG Constitution Petition 2/2006; and could not be condoned due to illegality – as established by the case of Active Automobile Spaces Ltd vs. Crane Bank and Rajesh Pakesh SCCA 621/2001.

Finally, it was the submission of the Applicant that the suit was incompetent for failure of the Respondent to serve the Applicant with the statutory notice envisaged under S.2 of the Civil Procedure and Limitation (Miscellaneous Provisions) Act.

Adding that C.S. 568/2012 was based on an illegal, irrational and most erroneous award, Counsel prayed court to grant the application so that Applicant can contest the suit on merits.

Opposing the application, Counsel for the Respondent submitted that the question to determine in applications of this nature is whether the Applicant had established a bonafide triable issue of law or fact in the grounds set out or whether they amount to a mere show only intended to buy time and abuse court process.  He relied upon the case of Peter Bibangamba vs. Fulgence Mungereza (Receiver / Manager) Nile Mining Ltd Misc. Appl. 103/12.

Going through the facts of the case, they emphasized that the Applicant should not be concerned with allocation of cases in court, insisting that the issue before court is “whether this is a proper case for unconditional leave to be granted to the Applicant to defend the suit.

It was then argued that since the suit is based on a bill fixed and allowed at shs. 497,570,054/- and is for recovery of the amount – and since the bill has not been set aside or altered by court, “the certificate of the taxing officer was the final as to the amount of costs covered there and court may make any order it thinks fit …. including …. an order that the judgment be entered for the sum certified to be done with costs."

Upon careful consideration of the application, the supporting affidavits and affidavits in reply, coupled with the submissions of the parties, the application was allowed on condition that, the Applicants give a guarantee for the payment of the sums due with interest at 6% from the date of this ruling until the guarantee is issued on 24.07.14.

The defence should also be filed on that same date.  Costs will abide the outcome of the main suit.

Reasons for the ruling:

The Applicant’s Counsel made it clear that Applicant is willing to pay once the issue of what is actually owing has been determined.  This raises a triable issue.

The Applicant also appealed against the taxation ruling of the Registrar, and the appeal is pending judgment.

If leave to appear and defend is not granted, the appeal(s) will be rendered nugatory.  Therefore the balance of convenience also demands that application be allowed.

FLAVIA SENOGA ANGLIN

JUDGE

10.07.14