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ELCPartially AllowedMisc Application No 1519 of 2001· [2018] KEELC 340 (KLR)

Maina Murage & Company Advocates v Mae Properties Limited [2018] KEELC 340 (KLR)

High Court of Kenya
6 December 2018
KBK. BOR
998 words in judgment
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The bottom line

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A Kenyan court confirmed that lawyers can only charge one instruction fee per transaction and must prove disbursements with receipts when billing clients.

What this practically means

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Executive summary

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This is a first-instance taxation of an advocate's bill of costs dated 20th December 2001, referred to the High Court under paragraph 12 of the Advocates Remuneration Order after the Court of Appeal held that the advocate had instructions to draw two sale agreements, a charge and a debenture over property known as L.R. No. 7785/10, and directed that the bill be taxed accordingly. On 28th June 2018 the parties agreed that the court should tax the bill. The dispute centred on the applicable schedule: the advocate claimed Schedule 1 scale fees as a completed conveyancing transaction, or in the alternative a reduced scale fee for work completed in substance; the client maintained the transaction was uncompleted, attracting Schedule V. The court found that although the advocate prepared the sale agreements (Kshs. 208,000,000 and Kshs. 104,000,000), an undated transfer, the charge and the debenture, none were executed by Mae Properties Limited or Vigasio Limited; the transaction was therefore uncompleted and Schedule V applied. Applying Rule 20 and Rule 18(f) of the ARO, and following Joreth Limited v Kigano & Associates on the single instruction fee rule, the court taxed one instruction fee of Kshs. 5,400,000/-, taxed the charge at Kshs. 2,280/- and the debenture at Kshs. 3,360/- at Kshs. 120 per folio, and disallowed disbursements for want of receipts. With 16% VAT, the bill was taxed at Kshs. 6,270,542.40/-.

Key legal issues

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01

Applicable schedule for taxation where the transaction was not completed

Holding

Schedule V applies because the transaction was uncompleted; the advocate is not entitled to scale fees but only fees for work actually undertaken

Reasoning

The documents prepared - the sale agreements, transfer, charge and debenture - were never executed by Mae Properties Limited or Vigasio Limited. Rule 18(f) of the ARO prescribes Schedule V remuneration for uncompleted non-contentious business. The applicant's alternative plea that work was completed in substance and entitled him to the scale fee or a 10% reduction was rejected on this factual finding.

p. 1
02

Whether separate instruction fees are chargeable per document

Holding

Only one instruction fee is chargeable, assessed having regard to care and labour, length and number of papers, importance, complexity and other circumstances

Reasoning

Following Joreth Limited v Kigano & Associates (CA No. 66 of 1999), instruction fees cannot be multiplied for each document emanating from the same instructions. The court taxed a single instruction fee of Kshs. 5,400,000/- after considering the structure of the aborted transaction, the interests of vendor and purchaser, and the duration of proceedings.

p. 2
03

Proof of disbursements

Holding

Disbursements were disallowed because unproved by receipts and folios in photocopying not particularised

Reasoning

The advocate bore the burden of substantiating disbursements. No receipts were availed, and the number of folios photocopied was not stated, so the item could not be allowed. Per-folio drafting fees under Schedule V (Kshs. 120 per folio) were allowed: 19 folios for the charge and 28 for the debenture.

p. 2

Legal principles established

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  • Instruction fee is a static item chargeable once only, however many documents arise from the same instructions
  • In uncompleted non-contentious transactions, remuneration is prescribed under Schedule V of the Advocates Remuneration Order

Court orders

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  1. 1.Item 1 (instruction fees) taxed at Kshs. 5,400,000/-, with Kshs. 869,800/- taxed off
  2. 2.Item 2 (charge document, 19 folios) taxed at Kshs. 2,280/-, with Kshs. 3,992,438.75/- taxed off
  3. 3.Item 3 (debenture, 28 folios) taxed at Kshs. 3,360/-, with Kshs. 3,991,358.75/- taxed off
  4. 4.Disbursement item disallowed for want of receipts and particulars of folios
  5. 5.The Applicant's bill of costs dated 20th December 2001 taxed at Kshs. 6,270,542.40/- inclusive of 16% VAT

Authorities

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Legislation

  • Advocates Remuneration OrderRule 20
  • Advocates Remuneration OrderRule 18(f)
  • Advocates (Remuneration) (Amendment) OrderSchedule V; Schedule 1; paragraph 12

Cases cited (1)

  • Joreth Limited –v- Kigano & Associates
    CA No 66 of 1999
Jurisdiction invoked
Paragraph 12 of the Advocates Remuneration Order - reference to the High Court for taxation of the advocate's bill of costs

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, "Maina Murage & Company Advocates v Mae Properties Limited [2018] KEELC 340 (KLR)", Case Analysis (2018). Misc Application No 1519 of 2001. Source: https://new.kenyalaw.org/akn/ke/judgment/keelc/2018/340/eng@2018-12-06

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