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ELCDismissedEnvironment and Land Miscellaneous Application E029 of 2022· [2023] KEELC 17603 (KLR)

Njuguna & Partners Advocates v Populite International Ltd & 2 others

Environment and Land Court
25 May 2023
LMLucy N. Mbugua
1,482 words in judgment
View original judgmentRead on Kenya Law Watch case
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The bottom line

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What this practically means

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Executive summary

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The applicant advocates filed a reference dated December 2, 2022 seeking to set aside the taxing officer's ruling of November 21, 2022, which upheld the Respondents' objection to the advocate-client bill of costs dated February 15, 2022, and to have the bill remitted for taxation. The bill arose from instructions to defend ELC Case No. 1023 of 2014 (Ukulima Co-operative Savings & Credit Limited v Populite International Limited) and related proceedings. The applicant contended that the letter of June 24, 2015, endorsed 'approved' by the 1st Respondent, merely indicated minimum instruction fees and did not amount to a fee agreement, and that the taxing officer ignored the agreement of April 15, 2015 in which the 2nd and 3rd Respondents assumed joint and several liability for fees. The Respondents maintained that the June 24, 2015 letter was a valid fee agreement for Ksh. 1,293,900 and Ksh. 5,280,000 for the two consolidated suits, which was duly paid, and that section 45(6) of the Advocates Act barred taxation. The court held that correspondence can constitute a fee agreement if it meets section 45(1) requirements, and that the signed, stamped letter fixing fees was a binding agreement. The taxing officer was found not to have erred in principle. The reference was dismissed with costs to the Respondents, the ruling to apply in Misc. EO28 of 2022.

Key legal issues

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01

Whether a letter endorsed 'approved' by the client constitutes an agreement for fees under section 45(1)

Holding

It does; the letter of June 24, 2015, signed and stamped 'approved' by the 1st Respondent, was a valid fee agreement

Reasoning

The court held that a fee agreement need not be a single document titled as such; a memorandum in writing, including correspondence, suffices if it fixes the fee payable. The letter referred to instruction fees for both ELC suits, was signed and endorsed with the 1st Respondent's stamp as 'approved', and no further agreement or variation followed. It therefore met section 45(1) requirements of writing and client signature.

p. 3
02

Effect of an existing fee agreement on taxation of an advocate-client bill

Holding

Taxation is prohibited; the taxing officer correctly declined to tax the bill

Reasoning

Section 45(6) of the Advocates Act bars taxation of a bill of costs where a fee agreement exists between advocate and client. Since the June 24, 2015 letter was a valid agreement, the taxing officer did not err in principle in upholding it and refusing to tax the applicant's bill of costs.

Legal principles established

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  • Correspondence can constitute a valid fee agreement under section 45(1) of the Advocates Act if it is in writing, signed or endorsed by the client, and discloses offer, acceptance and consideration
  • Section 45(6) of the Advocates Act prohibits taxation of a bill of costs where there is an agreement for fees between advocate and client

Court orders

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  1. 1.The applicant's reference dated December 2, 2022 is dismissed
  2. 2.Costs of the reference awarded to the Respondents
  3. 3.The ruling to apply in the other file, Misc. EO28 of 2022

Authorities

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Legislation

  • Advocates Actsection 45(1)
  • Advocates Actsection 45(6)

Cases cited (4)

  • Shiva Enterprises v Mwangi Njenga & Company Advocates
    [2020] eKLR

    A fee agreement need not be one document; correspondence aimed at fixing fees suffices

  • Ali Mohammed Egal v Maina & Onsare Partners Advocates
    [2021] eKLR

    Cited by applicant on whether correspondence amounts to a fee agreement

  • Njogu & Company Advocates v National Bank of Kenya Limited
    [2016] eKLR

    Court of Appeal upheld an advocate-client fee agreement construed from a letter

  • Zaku & Nzaku Advocates v Tabitha Waithera Mararo as Trustee of Tracy Naserian Kaaka (minor) & others
    [2020] eKLR

    A section 45 fee agreement is a contract whose terms must be clear, unambiguous and consensual

Jurisdiction invoked
Advocates Act, section 45; reference against a taxing officer's decision

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, "Njuguna & Partners Advocates v Populite International Ltd & 2 others", Case Analysis (2023). Environment and Land Miscellaneous Application E029 of 2022. Source: https://new.kenyalaw.org/akn/ke/judgment/keelc/2023/17603/eng@2023-05-25

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