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Court of AppealAllowedCivil Appeal No 45 of 2005· [2009] KECA 457 (KLR)

Butt & another v Sifuna t/a Sifuna & Company Advocates (Civil Appeal 45 of 2005) [2009] KECA 457 (KLR)

Court of Appeal of Kenya
16 October 2009
EGE. M. GithinjiPWP. N. WakiAVAlnashir Visram
1,310 words in judgment
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The bottom line

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Kenya's Court of Appeal slashed a lawyer's Kshs.1 million fee for a simple winding-up petition to Kshs.150,000, ruling fees must match the work actually done.

What this practically means

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Executive summary

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This is a Court of Appeal judgment at Mombasa delivered on 16th October 2009 by a bench of Githinji, Waki and Visram, JJA, in a single judgment of the court. The appeal arose from a reference under rule 11(2) of the Advocates (Remuneration) Order in which Sergon, J had dismissed a challenge to a taxing officer's award of Kshs.1 million as instruction fee for filing a winding-up petition on behalf of the 1st appellant against the 2nd appellant. The petition named one respondent, ran to just over two pages, and was compromised within 12 days of filing. Counsel for the 1st appellant argued the fee was manifestly excessive, that the prescribed minimum under Schedule VI (1)(f) was Kshs.9,000, that no valuation supported the alleged Kshs.80 million in company assets, and that the taxing officer and the judge took irrelevant factors into account. The Court of Appeal agreed, holding the petition was normal, simple and straightforward, that the taxing officer erroneously applied the wrong Schedule VI paragraph, and that the fee was manifestly excessive, unjust and out of proportion to the work done, contrary to the Joreth v Kigano principles. The court reversed the superior court's decision of 15th April 2004, set aside the endorsement of the taxing officer's award, substituted Kshs.150,000 as the instruction fee, and awarded the 1st appellant the costs of the appeal and of the superior court. The 2nd appellant's appeal had earlier been withdrawn by consent. The binding proposition for lower courts is that instruction fees must bear a rational proportion to the work actually done and must be assessed under the correct Schedule VI paragraph.

Key legal issues

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01

Complexity of a winding-up petition for purposes of instruction fee

Holding

A short, single-respondent petition settled within 12 days is a simple, straightforward matter; it cannot justify treating the fee as complex

Reasoning

The court examined the petition itself: one respondent, eleven paragraphs over just over two pages, only two substantive paragraphs, and a single prayer for winding up. The matter settled 12 days after filing, so the only professional work was filing the petition. The judge's finding of complexity and voluminous documents had no evidential foundation and was an error of law.

p. 3
02

Correct Schedule VI paragraph and valuation of assets

Holding

The instruction fee should have been assessed under Schedule VI (1)(f) of the Advocates (Remuneration) Order, 1997 (Kshs.9,000 baseline for winding-up petitions), not paragraph 1(a)

Reasoning

Schedule VI (1)(f) governs presentation or opposition to proceedings under rule 5(1) of the Companies (winding-up) Rules, subject to the taxing officer's discretion to increase or decrease. The taxing officer instead erroneously applied paragraph 1(a). There was also no valuation before the court supporting the claim that the company's assets were worth Kshs.80 million, undermining the higher fee.

p. 3
03

Principles from Joreth v Kigano not correctly applied

Holding

The taxing officer failed to correctly apply the Joreth v Kigano principles and the judge erred in not setting the award aside

Reasoning

The taxing officer's discretion under the Remuneration Order must be exercised on correct principles; a 100,000% uplift over the prescribed minimum for a petition resolved in 12 days was completely disproportionate. The superior court's confirmation of that award, without reasons and on irrelevant considerations, was itself an error the Court of Appeal was bound to correct.

p. 3

Legal principles established

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  • Courts will interfere with an award of instruction fees that is manifestly excessive, unjust and out of proportion to the work actually done by the advocate
  • The taxing officer must apply the correct paragraph of the Advocates (Remuneration) Order Schedule VI for the nature of the proceeding; applying the wrong paragraph is an error of principle justifying interference

Court orders

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  1. 1.Appeal allowed
  2. 2.Order and decree of the superior court dated 15th April, 2004 endorsing the taxing officer's decision on instruction fees set aside
  3. 3.Instruction fee substituted with an award of Kshs.150,000/=
  4. 4.Applicant (1st appellant) to have costs of the appeal and costs in the superior court

Authorities

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Legislation

  • Advocates (Remuneration) Orderrule 11(2)
  • Advocates (Remuneration) Orderrule 11(3)
  • Advocates (Remuneration) Orderrule 93(5)
  • Advocates (Remuneration) Order, 1997Schedule VI (1)(f)
  • Advocates (Remuneration) OrderSchedule VI paragraph 1(a)
  • Companies (Winding-Up) Rulesrule 5(1)

Cases cited (2)

  • Thomas James Arthur vs Nyeri Electricity Undertaking
    Civil Appeal No. 9 of 1961
  • Joreth vs Kigano
    (2002) EALR 93
On appeal from
High Court of Kenya (superior court)
not stated
Jurisdiction invoked
Appeal under rule 11(3) of the Advocates (Remuneration) Order against the judge's decision on a rule 11(2) reference; leave obtained under that rule

Key timeline

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Practical implications

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Frequently asked questions

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Later judgments citing this (13)

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Judgments in the corpus that rely on this one. Where the Court said how it treated the authority, that is shown.

Cite this brief

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Cite this brief

Caselaw, "Butt & another v Sifuna t/a Sifuna & Company Advocates (Civil Appeal 45 of 2005) [2009] KECA 457 (KLR)", Case Analysis (2009). Civil Appeal No 45 of 2005. Source: https://new.kenyalaw.org/akn/ke/judgment/keca/2009/457/eng@2009-10-16

Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.