Lubulellah & Associates v Gilbi Construction Company Limited (Miscellaneous Application E156 of 2023) [2024] KEELC 4243 (KLR)
The bottom line
#The High Court confirmed that a fee clause in a property sale agreement does not bind or limit a lawyer who merely drafted the document.
What this practically means
#Executive summary
#Key legal issues
#Privity of contract - whether the advocate drafting a sale agreement is bound by its terms
The doctrine of privity of contract does not apply against the advocate; the sale agreement binds only the vendor and purchaser.
The court applied the doctrine of privity of contract as elaborated in Savings & Loan (K) Ltd v Kanyenje Karangaita Gakombe, noting the agreement was between the vendor and Five Zero Zero Investment Ltd. The advocate was not a party nor an intended beneficiary, and drafting or attesting a contract does not make an advocate a party or impose its burdens on him. The exceptions to privity were inapplicable because the advocate was not intended to benefit under the contract.
Whether a fees clause in a sale agreement constitutes a retainer agreement under Section 45 of the Advocates Act
No retainer agreement existed; Section 45 requires an agreement in writing signed by the client, made between advocate and client, and the sale agreement did not qualify.
Adopting the Court of Appeal's exposition in Omulele & Tolo Advocates v Mount Holdings Ltd, the court held a retainer agreement must be an agreement between the advocate and the client fixing remuneration, in writing and signed by the client or agent. The sale agreement was a contract between vendor and purchaser contracting at arm's length, and only those parties can enforce rights or incur liabilities under it. Holding otherwise would violate the clear provisions of the Advocates Act.
Legal principles established
#- An advocate retained to draft a sale agreement does not become a party to that agreement merely by crafting or attesting it.
- A retainer agreement under Section 45 of the Advocates Act must be in writing, signed by the client or authorised agent, and be an agreement between advocate and client only; a clause in a sale agreement between third parties does not amount to a retainer agreement.
Court orders
#- 1.The decision of the Taxing Officer made vide Ruling delivered on 19th January 2024 is set aside
- 2.The Advocate/Client Bill of Costs dated 6th June 2023 is referred to another taxing officer, other than Hon. J Omollo (DR), for taxation in accordance with the applicable Advocates Remuneration Order
- 3.Costs of the reference to the Applicant
- Jurisdiction invoked
- Inherent jurisdiction to review a Taxing Officer's decision by way of reference under the Advocates Act and Advocates (Remuneration) Order
Key timeline
#Practical implications
#Frequently asked questions
#Cite this brief
#Cite this brief
Caselaw, "Lubulellah & Associates v Gilbi Construction Company Limited (Miscellaneous Application E156 of 2023) [2024] KEELC 4243 (KLR)", Case Analysis (2024). Misc Application No E156 of 2023. Source: https://new.kenyalaw.org/akn/ke/judgment/keelc/2024/4243/eng@2024-05-16
Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.