Asige Keverenge & Anyanzwa Advocates v Leisure Lodges Limited
The bottom line
#Kenya's Court of Appeal confirmed that lawyers must account for client money they hold, even when it comes from company liquidators.
What this practically means
#Executive summary
#Key legal issues
#Whether the Advocates acted for the respondent or for the interim liquidators personally
The Court affirmed that the funds were deposited with the Advocates in their capacity as advocates for the respondent; the interim liquidators acted for the company, not personally.
The letter of 15 February 2001 was on the respondent's letterhead, identified the source of the funds as the respondent's, and instructed the Advocates to hold the money in a joint interest-earning account pending instructions on legal matters. The interim liquidators, appointed over the company, did not act in their personal capacity. The timing of the letter, a day before the liquidation was discharged, did not alter the character of the transaction.
Whether the Advocates were bound to render an account
Yes. Having found the money belonged to the respondent as client, the Advocates were under a legal and professional duty to account; in the absence of explanation, the court could conclude no disbursement was made.
Relying on Mohamed Faki Khatib and Kim Jong Kyu, the Court held that an advocate with a fiduciary duty to account must satisfactorily discharge it with a proper paper trail. The Advocates filed no affidavit showing where the funds were banked or how disbursed, despite being given the opportunity by the trial court, so the order to render accounts within 30 days was proper.
Legal principles established
#- Funds received by an advocate on behalf of a client attract a fiduciary and professional duty to account, and the advocate must have a proper paper trail of monies received and paid out.
- Where funds of a company in interim liquidation are transmitted to advocates on the company's letterhead by interim liquidators acting for the company, the advocates-client relationship is with the company, not the liquidators personally.
Court orders
#- 1.Appeal dismissed with costs to the respondent
- 2.Judgment of the High Court of 23 June 2017 ordering the Advocates to render accounts within 30 days left undisturbed
- On appeal from
- High Court of Kenya at Mombasa
- High Court Civil Case No. 279 of 2004 (O.S.)
- Jurisdiction invoked
- First appellate jurisdiction under the Constitution and the Court of Appeal's appellate jurisdiction over High Court civil decisions
Key timeline
#Practical implications
#Frequently asked questions
#Cite this brief
#Cite this brief
Caselaw, "Asige Keverenge & Anyanzwa Advocates v Leisure Lodges Limited", Case Analysis (2022). Appeal 111 of 2019. Source: https://new.kenyalaw.org/akn/ke/judgment/keca/2022/901/eng@2022-05-13
Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.