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RIO INSURANCE
v
UGANDA REVENUE AUTHORITY
HIGH COURT OF UGANDA AT KAMPALA
(COMMERCIAL
COURT)
HIGH COURT CIVIL APPEAL No. 12 OF 2000
(On appeal from
orders in Miscellaneous Application No.15 of 1999 arising out of TAT 6 of 1999
in the Tax Appeals Tribunal)
(Before: Honourable Mr. Justice R.O.
Okumu Wengi)
October 17, 2000
Appeals – Appeal from ruling of the Tax Appeal Tribunal –
Notice of appeal – Requirement of service of notice
The
appellant bound itself as surety to a third party in respect of taxes for a
consignment of 40,000 litres of petroleum product
in transit to Rwanda. The
appellant executed a bond in the sum of shs. 24,546,000 being customs dues
payable upon non-transit of
the fuel to Rwanda. The fuel did not exit Uganda and
the applicant was forced to pay on the bond it had executed. The appellant then
appealed to the Tax Appeal Tribunal contesting its liability to pay on the bond.
The Uganda Revenue authority did not file its defence
in time and the matter
proceeded exparte. The applicant argued that since there was default by the
defendant he was entitled to judgment
as prayed for. The Tribunal proceeded to
hear the appellant/applicant’s case exparte, in proof of its claim. The
appellant
applied for review of the Tribunals decision to hear the matter,
praying for an order of judgment in default. The Tribunal dismissed
the
application for review, whereupon the Appellant filed the present notice of
appeal in the High Court.
Held: An appeal cannot be lodged
exparte and prosecuted exparte. Both the Tax Appeals Tribunal Act section
28(1) and Order 39 (2) of the Civil Procedure Rules require Notice of an
appeal to be served on the party to the proceeding in the Court below. In the
instant case, although the proceedings
in the tribunal had proceeded exparte, on
appeal, the appellant ought to have served a notice of appeal on the opposite
party.
Appeal dismissed
Legislation referred
to:
Civil Procedure Act Section 83
Civil Procedure Rules Order 9(4),
Order 6, Order 39 (2), Order 42 rule 3(2)
Tax Appeals Tribunal Act section
28(1)
Tax Appeal Tribunal Rules 1999, Rule 30
Counsel for
Appellant: Mr. Mayega
JUDGEMENT
OKUMU WENGI, J: This appeal was brought by way of Notice titled
“Notice Of Appeal Exparte.” The Notice cited several laws namely
section
28 of the Tax Appeals Tribunal Act section 83 of the Civil
Procedure Act Rule 30 of the Tax Appeal Tribunal Rules 1999 and Orders 9(4)
and 6 and Order 42 rule 3(2) of the Civil Procedure Rules. It sought
essentially an order reversing the Tax Appeals Tribunal on the question whether
in a Tax appeal before the tribunal, where
the Uganda Revenue Authority did not
file a defence, the applicant ought to have a default judgment entered in its
favour. The facts
of this case are set out in an undated ruling and award of the
tribunal. They are simply that the appellant who was the applicant
before the
tribunal was surety to a third party who declared that a consignment of 40,000
litres of petroleum product was in transit
to Rwanda. The applicant executed a
bond in the sum of shs. 24,546,000 being customs dues payable should the fuel
not transit to
Rwanda. As night follows day as it were, the fuel never exited
Uganda and the applicant was forced to pay on the bond it had executed.
The
applicant nevertheless appealed to the Tribunal contesting its liability to pay
on the bond in the first place to pay. The matter
proceeded exparte as the
Uganda Revenue authority did not file its defence in time and was excluded. The
applicant, then pressed
that since there was default by the defendant he was
entitled to judgment and in particular judgment in money without any further
proof. The Tribunal did not accept this argument and in it’s ruling of
October 5, 1999 decided to proceed to hear the appellant/applicant's
case
exparte, in proof of its claim. The appellant was unhappy with this decision and
decided to apply for review of the Tribunals
order demanding that a judgment for
the money be entered in default. The Tribunal heard the application for this
review which it
did not entertain and dismissed it in their undated ruling I
referred to earlier. From this decision the appellant filed his Notice
of
appeal. This was partly because he was given two options namely either to
proceed with his case before the Tribunal exparte or
to appeal to this court. It
was also partly because from the beginning the appellant felt strongly that the
Tribunal had been wrong
by not entering judgment for it and calling upon it to
prove their claim.
In this appeal the Uganda Revenue Authority is named
as a respondent but the advocate who appeared before me insisted that the appeal
was exparte since the named respondent had been originally excluded from the
trial proceedings. Learned counsel Mr. Mayega also contended
that his was a
liquidated claim for refund of shs. 24,546,000 and rather than formally prove
the claim as ordered by the Tribunal
a decree for the sum ought to have been
entered in his client/s favour.
There are a number of legal problems in
this appeal the first of which is that both the Tax Appeals Tribunal Act
(section 28(1) and Order 39 (2) of the Civil Procedure Rules require
Notice of an appeal to be served on the party to the proceeding in the Court
below. I note that this was not done and the
appellant’s counsel contended
that the reason was that the other party had been locked out of the proceedings.
I do not agree
that this is correct that an appeal should be lodged exparte and
prosecuted exparte without allowing notice thereof to the side likely
to be
affected by its outcome, even if that party had been excluded by being in
default from the trial. Somehow this appeal highlights
the problem where a party
may proceed exparte and lose a case. If he appeals on questions of law the
appeal deserves some argument.
This is perhaps partly why in appeals parties
cannot just file a consent judgment in the appeal. On this ground alone I would
dismiss
this Notice of Appeal.
I also note that in the proceedings before
the Tribunal the claim was not for a liquidated sum but rather on a question
whether or
not the appellant was liable to pay the liquidated sum. There was no
prayer for a refund or even a declaration that the appellant
was entitled to
recover the sum, this perhaps being left for proceedings in consequential
relief. I also note that the question before
the Tribunal was framed in
paragraph 4 as follows
“4. Issue(s) on which a decision(s) is/are sought:
Whether the applicant is liable to pay U. Shs. 24,546,000 (Twenty four million five hundred forty six thousand) in the premises.”
There was no prayer for a refund of the sum
paid under the bond. In the "statement of Facts and Reasons in support of the
Application"
the applicant also clearly sought for a hearing in proof of his
side of the case. This side of the case was not for money but whether
he was
exempted from paying a sum of money. It is indicated at the end of the statement
that a cargo receipt note and other evidence
would be adduced in support of
certain contentions favouring exemption of the applicant from the payment.
Clearly formal proof in
order for the declaration sought to be made was
necessary.
In the circumstances the Tribunal acted properly in my view
and even if it had entered interlocutory judgment before ordering the
appellant
to proceed ex parte to prove it’s case, such judgment would not give rise
to a decree for payment of a liquidated
sum of money. I agree with the Tribunal
therefore that they would proceed to hear the appellants claim and take evidence
on the matter
if need be, and so proceed ex parte to decide the question before
it. In the result this appeal fails and an order is made remitting
the case back
to the Tribunal to proceed to hear the appellant's case exparte. The appellant
will also pay the costs of this failed
appeal. Since this matter has been
disposed of, there is no need for me to go into the other legal problems raised
in these proceedings
as necessary for my decision. Appeal dismissed
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.RTF of original document