Reference filed on: 18th December 2019.

Rules: 114, 84(1) & (2) and 85 of the East African Court of Justice (EACJ) Rules of Procedure, 2013.

Subject matter: The absence of the eighth schedule in the Court Rules of Procedure, 2013 and its effect on taxation in matters at the Appellate Division.

The Applicant, Secretary General of the East African Community (EAC) contests against instruction fees of USD 328,900 awarded to the Respondent (Hon. Margaret Zziwa) on 4th June 2019 in Taxation Cause No. 1 & No. 2 of 2019. The Applicant challenges the fees for allegedly being unreasonable, excessive and unprecedented in the history of this Court and if allowed to stand will have grave repercussions against the financial affairs of the Community and prospective litigants.

The Respondent opposes the Reference for being incompetent and invites the Court not to interfere with the award as the taxing officer took into account all factors that existed in the case before him and acted judiciously in considering the relevant legal principles to the matter, so as to award the appropriate amount.

On 19th February 2020 during a hearing it was noted that, the bill of costs that was taxed was construed under the third schedule rather than the eighth schedule due to the lacuna in the 2013 Rules. Parties were allowed to file written submission and to make oral highlights on the absence of the eighth schedule in the Court Rules of Procedure, 2013 and its effect on taxation in matters at the Appellate Division, to guide the Court on what framework the Appellate Division should follow in this taxation.

On 26th May 2020 oral highlights were made and the Applicant submitted inter alia that, there must have been credible reasons on the provision for the eight schedule, otherwise it would have been provided for all taxations be done under one schedule (the third schedule). The omission of the schedule caused it desired purpose not to be met and all the taxation of bills of costs done in the absence of the 8th schedule since the 2013 Rules came into force are an injustice to litigants.

Further, in the absence of the relevant schedules it’s wrong to assume all taxing officers are bound to adopt the same mitigation measures. The Court’s efforts of mitigating the effect of this lacuna by ruling that costs of litigation in the Appellate Division should be taxed in accordance with universally accepted principles, was not good enough since the principles governing taxation are not in entirely reflected in Rule 9(2) of the 3rd schedule.

Contextualising his submission to the Reference he concludes inter alia that, there was no schedule of fees that should have properly guided the taxing officer. If the taxation of costs, inclusive of the instruction fees had been properly done and in accordance with the 8th schedule the punishment exacted on the Community by the taxing officer would not have arisen. Worse at a time of great financial difficulties in the Partner States compounded by prediction of further economic groom arising out of COVID-19 pandemic.

In addressing the gaps, the Applicant recommends lessons be borrowed from other jurisdictions that require verification of work done by the taxing officer, transparency and instruction fees be claimable by proof of receipts. He prays the Court to concur with his submissions and alleviate the Community from the financial penalties imposed on it and which has given rise to this Reference.

The Respondent argued that, costs are awarded at the discretion of the Court and they follow the event. The Respondent being the successful party was granted costs for the Appellate Division and the First Instance with certificates of two Counsels. Events that led to the successful appeal were prompted by the Applicant conduct, it cannot therefore be the same Applicant lamenting about injustice. The Applicant should also think of the injustice the Respondent faced that prompted to come to Court and the embarrassment, inconvenience, mental anguish and reputation damage.

Further that, much as the level of costs needs to be kept reasonable and affordable, it does not mean excessive costs can never be awarded in deserving cases like the instance where the Respondent had to hire two law firms to seek justice at a great expense. Authorities cited by the Applicant on Court’s duty to keep costs as low as possible in order not to scare litigants are distinguishable from this Reference which raised important issues considered for the first time in this Court.

The title on the 3rd schedule creates an impression that the third schedule and the principles therein can be applied to the instance taxation. Further, errors in the rules not to be at the detriment of the litigants. However, the lacuna was addressed by a ruling of this Court that stated, in the absence of the eighth schedule, the Appellate Division should have costs in that division taxed in accordance with universally accepted principles which are taken cognisance of in Rule 9(2) in the 2013 Rules. The ruling binds this Court by the principle of stare decisis.

Further argued, the taxing officer was objective in his approach, dealt with each item one after another and taxed them accordingly with reasons. The principles governing instruction fees in contentious litigations mirror to a considerable extent the terms of Rule 9(2) of the third schedule. The Applicant made bare statements without substantiating the alleged violation that the taxing officer flouted the known principles to be observed in taxation of costs.

During the taxation all factors such as the difficulties and complexity of the issue, length of the trial, value of the subject matter and other factors which may affect the fairness of an award of costs which the law obligates the taxing officer to take into account were all considered. The instance case involved a large volume and magnitude of evidence and research carried out was on a new area of law in the dispute resolution mechanism in the region. The appeal was complex thus involved monumental research and the Reference took three years to conclude. The amount claimed as instruction fees was not exorbitant and unreasonable it was awarded having regard to the various items. The issue of requiring proof of receipts to justify the fees was not among the grounds upon which this Reference is premised thus, be disregarded because the only complaint is the excessive fees.

This litigation took place way back from 2014 long before this COVID-19 pandemic came into place, it has nothing to do with the taxation of costs. The Applicant should honour the award in accordance with Article 38(3) of the EAC Treaty and a directive of the 37th Council of Ministers that the award be honoured and already part of the payment has been made to the Respondent. The Applicant has never applied for a stay of execution and the appeal is not an automatic stay of proceeding. The Applicant humbly pray for dismissal of this Reference with further costs and the award honoured undisturbed.

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