Eitunganane v Ekudo and Another (Taxation Appeal/ Reference 31 of 2021) [2023] UGHCCD 178 (20 June 2023)

Key Facts

Tax Type

Issues

• The court upheld the fees for Items 25-28 (Ug. Shs. 150,000 each and Ug. Shs. 100,000 for Item 28) as agreed by the parties during pre-taxation, finding no unlawful basis to revise the amounts despite the absence of receipts.
• The court noted that Item 31 (travel expenses for receiving the taxation ruling) was excluded from the final award as the parties agreed to it being taxed off, with no evidence of disagreement presented.
• The court confirmed the award for Item 20 (attendance to receive the taxation ruling) was valid, as the adjournment was requested by the respondent and the final award excluded this item as agreed by both parties.
• The court affirmed the reasonableness of travel, accommodation, and feeding expenses (Items 29, 30, 32-34) awarded at Ug. Shs. 1,800,000 and Ug. Shs. 1,000,000, citing the presence of two counsel and the Taxing Master's judicious discretion.
• The court assessed whether the 8.5-hour attendance fee of Ug. Shs. 850,000 for the vote recount application was justified, upholding the Taxing Master's calculation based on the scheduled court time and hourly rate under the Advocates Regulations.
• The court determined whether the Taxing Master correctly applied Rule 6 (election petitions) or Rule 9 (other matters) when awarding instruction fees for a vote recount application, concluding that Rule 9 was the appropriate regulation and reducing the fee from Ug. Shs. 10,000,000 to 4,000,000.

Tax Years

Holdings

• The court reduced the instruction fees from Ug. Shs. 10,000,000 to Shs. 4,000,000, finding the original award excessive and unlawful as the matter was a vote recount (not an election petition), requiring application of Rule 9(1) instead of Rule 6 of the Advocates (Remuneration and Taxation of Costs) Regulations.
• Item 31 (travel expenses to receive taxation ruling) was excluded from the final award as it was taxed off at Shs. 1,500,000, matching the respondent's request and the agreed terms.
• The attendance fee of Ug. Shs. 850,000 for Item 17 was upheld as reasonable under Rule 12(1) of the Regulations, with the court agreeing that the taxing officer correctly calculated costs based on court-scheduled time (2:00 PM to 10:30 PM).
• The appeal succeeded only on Item 1 (instruction fees), reducing the total award from Ug. Shs. 16,726,000 to Ug. Shs. 10,726,000. All other items were confirmed as properly awarded.
• Items 29,30,32,33, and 34 (travel, accommodation, and feeding expenses) were upheld as reasonable, with the court affirming the taxing officer's discretion in awarding Shs. 1,800,000 for travel and Shs. 1,000,000 for other expenses.
• Item 20 (attendance to receive taxation ruling) was confirmed as taxed off at Shs. 200,000, with the court noting the final award excluded this item after the respondent agreed to its removal during proceedings.
• Items 25,26,27, and 28 (attorney fees) were confirmed as per the parties' pre-taxation agreement (Shs. 150,000 each for Items 25-27, Shs. 100,000 for Item 28), with no evidence presented to challenge the consented amounts.

Remedies

• The court reduced the instruction fees from Ug. Shs. 10,000,000 to Ug. Shs. 4,000,000 as the original award was found to be excessive and not in accordance with the law.
• The court did not make an order regarding the costs of the application, as stated in the judgment.

Tax Issue Category

Monetary Damages

Legal Principles

• Even if the taxing officer erred in principle, the court will only revise the award if the error substantially affected the quantum decision and upholding it would cause injustice. The judge must be convinced that the mistake was material and prejudicial.
• The court outlined that judges generally do not interfere with the taxing officer's assessment of costs unless there is an exceptional case where the officer applied a wrong principle, resulting in an award that is manifestly excessive or low. The judge emphasized that quantum of costs is primarily the taxing officer's domain due to their expertise.
• An exceptional case for judicial review of taxed costs requires demonstrating that the taxing officer explicitly or implicitly applied an incorrect principle, evidenced by an award that is clearly unreasonable in amount. The court must be satisfied that this error substantially impacted the outcome.

Disputed Tax Amount

Precedent Name

Cited Statute

• Advocates (Remuneration and Taxation of Costs) Regulations S.I 267-4 as amended in 2018, Rule 9
• Advocates (Remuneration and Taxation of Costs) Regulations S.I 267-4 as amended in 2018, Rule 12
• Parliamentary Elections (Interim Provisions) (Election Petition) Rules, Rule 3(c)
• Parliamentary Election Act, Section 1
• Parliamentary Elections (Interim Provisions) (Election Petition) Rules, Rule 4
• Advocates (Remuneration and Taxation of Costs) Regulations S.I 267-4 as amended in 2018, Rule 6
• Parliamentary Election Act, Section 60

Judge Name

Passage Text

• Given the fact that Rule 9 (1) of the Sixth Schedule to the Advocates (Remuneration and Taxation of Costs) Regulations S.I 267-4 as amended in 2018 was the applicable law, consequently the award of the sum Ug. Shs. 10,000,000 is found to have been an award which was not in accordance with the law and was thus excessive. It is set aside and the awarded amount is reduced to the sum of Shs 4,000,000 which I find reasonable in the circumstances and as it is within the ambit of Rule 9 (1) of the Sixth Schedule to the Advocates (Remuneration and Taxation of Costs) Regulations S.I 267-4 as amended in 2018.
• This appeal thus succeeds only in respect to Item 1 of Instruction fees which is the only item this court has revised. The Instruction Fees are set at Shs. 4,000,000/= meaning Shs. 6,000,000/= has been taxed off Item 1.