Ratemo Oira & Co Advocates v Magereza Sacco Society Ltd [2019] KECA 302 (KLR)
The bottom line
#Kenya's Court of Appeal confirmed lawyers only earn full instruction fees when a property deal actually completes, not just when hired.
What this practically means
#Executive summary
#Questions the Court framed
#The issues the Court set itself to decide, in its own words.
- 1.Whether an advocate is entitled to full instruction fees upon receipt of instructions, with the subsequent progress of the matter being irrelevant
- 2.Whether the correct remuneration schedule was Schedule I or Schedule V of the Advocates (Remuneration) Order 2009 for an uncompleted conveyancing transaction
- 3.Whether the High Court and the Taxing Officer erred in principle in taxing instruction fees at Kshs.100,000/= for an aborted transaction
Key legal issues
#Entitlement to full instruction fees on receipt of instructions in an uncompleted non-contentious conveyancing transaction
Full instruction fees pegged to the value of the subject matter are not payable where the conveyance is not completed; only Schedule V remuneration under Rule 18(f) applies
Rule 18(a) remuneration for a sale or purchase of immovable property arises only once property passes upon execution of a valid contract and completion of conveyancing formalities vesting legal title. Since the sale agreement and transfer were never executed and the deposit was never paid, the transaction was uncompleted and Rule 18(f)/Schedule V governs. The instruction fee of Kshs.100,000/= was fair remuneration for the minimal, early-stage work actually done.
Whether the High Court erred in principle in upholding the Taxing Officer's discretion
No error of principle was shown; the Judge correctly identified the grounds for interfering with a taxing officer's discretion and found no justification for interference
Interference with discretion is warranted only where the judge acted on wrong principles, the amount is so high or low as to cause injustice, there is a defect in the decision on merits, or the discretion was not exercised judiciously. Here both courts correctly found the transaction incomplete, applied the correct rule and schedule, and the award was not manifestly low given the scope of work done.
Standard of review on an appeal from a judge's reference from a taxing officer
The appeal is akin to a second appeal governed by Section 72(1) of the Civil Procedure Act, allowable only if the decision is contrary to law, fails to determine an issue of law, or there is a substantial procedural error
Following Kipkorir Titoo & Kiara Advocates v Deposit Protection Fund Board, the Court confines itself to questions of law or substantial procedural defects. The appellant identified no such error; both courts below correctly applied the Advocates (Remuneration) Order and exercised discretion properly.
Legal principles established
#- In non-contentious conveyancing, where the transaction is not completed, an advocate's remuneration falls under Rule 18(f) and Schedule V of the Advocates (Remuneration) Order 2009, not Schedule I pegged to the value of the subject matter
- An appeal from a judge on reference from a taxing officer is akin to a second appeal and can only be allowed on the grounds specified in Section 72(1) of the Civil Procedure Act
- A judge will not interfere with a Taxing Officer's decision on taxation unless it is based on an error of principle
Court orders
#- 1.The appeal is dismissed
- 2.Costs of the appeal are awarded to the respondent
The bench
#One judgment of the whole court — no separate or dissenting opinions.
- On appeal from
- High Court of Kenya
- Reference under Rule 11(2) of the Advocates (Remuneration) Order 2009, ruling dated 31st May 2017 (K. Bor, J)
- Jurisdiction invoked
- First appeal to the Court of Appeal from a High Court reference under Rule 11(2) of the Advocates (Remuneration) Order 2009
Relief refused
#Setting aside or varying the taxation of instruction fees at Kshs.100,000/= and remuneration based on the value of the subject matter (Kshs.8.8 billion)
The transaction was never completed, so Rule 18(f) and Schedule V applied, not Rule 18(a) and Schedule I; the Judge and Taxing Officer exercised discretion correctly and the amount was fair remuneration for the scope of work done
Costs
The appeal is dismissed with costs to the respondent.
Quotable passages
#Verbatim from the judgment, each located to the page it appears on in the official PDF — so these can be cited and checked directly.
The remuneration of an Advocate in respect of a sale or a purchase of immovable property or an interest therein under Rule 18 (a), can only occur once property passes to the purchaser upon execution of a valid contract of sale
The only available option is remuneration under Rule 18 (f). The learned Judge was correct in so holding.
This Court is of the view that it is only in contentious suits where an advocate becomes entitled to an instruction fee the moment, he is instructed but not in instances like the present case
However, it must be noted that an Advocate will be entitled to payment of a reasonable fee which is commensurate with the work done.
We therefore agree with the sentiments of the learned Judge as follows:
The appeal is hereby dismissed with costs to the respondent.
Key timeline
#Practical implications
#Frequently asked questions
#Cite this brief
#Cite this brief
Caselaw, "Ratemo Oira & Co Advocates v Magereza Sacco Society Ltd [2019] KECA 302 (KLR)", Case Analysis (2019). Court of Appeal at Nairobi, Civil Appeal (2019). Source: https://new.kenyalaw.org/akn/ke/judgment/keca/2019/302/eng@2019-10-11
Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.