Harit Sheth Advocates v Nzioka & Co. Advocates [2020] KECA 658 (KLR)
The bottom line
#The Court of Appeal ruled that a law firm must pay Kshs 25 million in fees it had promised, because money received towards a debt counts no matter what anyone calls it.
What this practically means
#Executive summary
#Key legal issues
#Whether the professional undertakings were subsumed within the judgment of Mbogholi, J and the consent of 27th April 2016
The court held that although the undertakings were originally for Kshs 300,000,000.00, Mbogholi, J determined the total fees payable at Kshs 200,000,000.00, and the consent of 27th April 2016 provided the mechanism of payment; the outstanding Kshs 25,000,000.00 had crystallised upon receipt of the payment of Kshs 600,000,000.00.
The court traced the payments: the appellant paid Kshs 100,000,000.00 in August 2014, then Kshs 25,000,000.00 each to the respondent and Yongo under the consent. The appellant did not deny an outstanding balance of Kshs 25,000,000.00; its only defence was that the final Kshs 600,000,000.00 was interest. The court found the consent did not defer the liability where the decretal sum had effectively been received in full.
Whether the Kshs 600,000,000.00 payment was interest or part of the decretal sum
The court affirmed the finding that the payment formed part of the decretal dues, holding that money paid towards a debt cannot be unilaterally recharacterised as interest, and that interest is ordinarily paid at the tail end of a debt, not in the middle.
The court held the appellant's insistence that the sum was interest was 'splitting hairs'. There was no distinction in the character of the funds received; the decretal amount remitted stood at Kshs 2,400,000,000.00, meaning the full decretal sum had been received and the pro-rata fee obligation under the undertaking was triggered.
Whether the respondent's motion was res judicata, re-litigating matters decided by Mbogholi, J
The appeal on this ground failed; the court found no merit in the contention that the motion improperly reopened matters already determined, since the motion sought enforcement of the undertaking for sums falling due after the consent.
The claim before Sergon, J concerned the balance of Kshs 25,000,000.00 said to be payable upon receipt of further payments, a matter arising after the Mbogholi, J judgment and the consent; the motion was therefore not an attempt to re-litigate the earlier determination, and the res judicata contention did not assist the appellant.
Legal principles established
#- On a first appeal, the Court of Appeal is not bound by the trial judge's findings of fact and must reconsider and evaluate the evidence and draw its own conclusions, while making due allowance for not having seen or heard the witnesses.
- A professional undertaking given by an advocate to pay fees pro-rata as instalments of the decretal sum are received binds the advocate, and a payment received on account of the decretal debt triggers the crystallisation of the corresponding pro-rata fee payment, regardless of how the paying party labels the payment.
Court orders
#- 1.The appeal is dismissed
- 2.The appellant shall pay the costs of the appeal to the respondent
- On appeal from
- High Court of Kenya at Nairobi
- HCCC No. 187 of 2015 (O.S)
- Jurisdiction invoked
- First appeal to the Court of Appeal under the Court of Appeal's appellate jurisdiction (appeal as of right from the High Court ruling); the judgment invokes the first-appeal mandate in Selle v Associated Motor Boat Co. of Kenya
Key timeline
#Practical implications
#Frequently asked questions
#Later judgments citing this (1)
#Judgments in the corpus that rely on this one. Where the Court said how it treated the authority, that is shown.
- Christine Andree Joshi & 2 others v Sally Chebwogen Kirui [2019] KEELC 829 (KLR)[2019] KEELC 829 (KLR)15 Nov 2019
Cite this brief
#Cite this brief
Caselaw, "Harit Sheth Advocates v Nzioka & Co. Advocates [2020] KECA 658 (KLR)", Case Analysis (2020). Civil Appeal No. 122 of 2018. Source: https://new.kenyalaw.org/akn/ke/judgment/keca/2020/658/eng@2020-05-22
Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.