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ELCAllowedELC No. 740 of 2014· [2017] KEELC 1890 (KLR)

Garo Co-operative Savings Credit Society Ltd v J.D Murimi & Co. Advocates & another [2017] KEELC 1890 (KLR)

Environment and Land Court
31 July 2017
936 words in judgment
View original judgmentRead on Kenya Law Watch case
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The bottom line

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A Kenyan court ruled an advocate must pay Kshs 2.575 million for withholding money promised in a professional undertaking over a fee dispute.

What this practically means

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Executive summary

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The plaintiff, registered owner of LR No.209/7141/4, sued the defendant advocates to enforce a professional undertaking dated 28th March 2011 by which the defendant, acting for the purchaser (Mastermind Tobacco (K) Ltd), undertook to remit Kshs.17,550,000/= being the balance of the purchase price upon successful transfer of the lease and vacant possession. The transaction completed around January 2012; the defendant paid Kshs.14,975,000/=, leaving Kshs.2,575,000/=. The defendant refused to release the balance, first asserting a lien for legal fees allegedly owed by his client, and in submissions contending the plaintiff failed to hand over the property free of encumbrances, specifically an unpaid water bill of Kshs.3,190,602.15 due to Nairobi City Water and Sewerage Company Ltd. The interested party supported the defendant's position on the water bill. The court framed three issues: whether the defendant should honour the undertaking, whether the water bill affected its enforcement, and who should settle any such bill. Relying on Kenya Re-insurance Co-operation v Muguku Muriu, the court held a professional undertaking is a separate contract unaffected by fee disputes between advocate and client, and that the undertaking given was unambiguous. The sale agreement distinguished the registered owner from the beneficial owner/vendor (Ofafa Maringo Housing Co-operative Society Limited), which had bought the property in 2003; clause 16.4 placed disclosure obligations on the vendor, so any outstanding water bill fell on the vendor. Judgment was entered for the plaintiff against the defendant for Kshs.2,575,000/= with interest at court rates from January 2012 until payment in full, and the defendant was ordered to bear the costs of the suit.

Key legal issues

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01

Whether an advocate may retain funds the subject of a professional undertaking on account of legal fees owed by his client

Holding

No; the undertaking is a separate contract and disputes over fees with the client cannot excuse non-honouring of the undertaking.

Reasoning

The defendant claimed a lien for fees, but the court held that any fee dispute lies between the advocate and his client and cannot be visited on the third party beneficiary of the undertaking. The undertaking given was unambiguous and unequivocal, and reliance was placed on the Kenya Re-insurance decision.

p. 2
02

Whether an outstanding water bill on the property could defeat enforcement of the undertaking

Holding

No; the obligation to settle any outstanding water bill lay with the beneficial owner/vendor, Ofafa Maringo Housing Co-operative Society Limited, not the registered owner plaintiff.

Reasoning

The sale agreement distinguished the registered owner from the beneficial owner who was described as vendor, having purchased the property in 2003. Clause 16.4 placed the disclosure obligation on the vendor and/or registered owner; as the property had already been sold to the vendor, disclosure obligations fell on the vendor, not the plaintiff.

p. 2

Legal principles established

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  • A professional undertaking is a separate contract which should not be affected by any disputes between the person undertaking and his client.

Court orders

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  1. 1.Judgment entered in favour of the plaintiff against the defendant in the sum of Kshs.2,575,000/=
  2. 2.Interest at court rates from January 2012 until payment in full
  3. 3.Defendant to bear costs of the suit

Authorities

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Legislation

  • Civil Procedure ActOrder LII
  • Advocates ActCap 16

Cases cited (1)

  • Kenya Re-insurance Co-operation Vs Muguku Muriu T/A V.E Muguku & Co. Advocates
    (1996) eKLR
Jurisdiction invoked
Order LII of the Civil Procedure Act Cap 21 Laws of Kenya; Advocates Act Cap 16 (enforcement of professional undertaking)

Key timeline

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Practical implications

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Frequently asked questions

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Cite this brief

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Cite this brief

Caselaw, "Garo Co-operative Savings Credit Society Ltd v J.D Murimi & Co. Advocates & another [2017] KEELC 1890 (KLR)", Case Analysis (2017). ELC No. 740 of 2014. Source: https://new.kenyalaw.org/akn/ke/judgment/keelc/2017/1890/eng@2017-07-31

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