Muri Mwaniki & Wamati Advocates v Museum View Office Suits Limited (Environment and Land Miscellaneous Application 28 of 2018) [2024] KEELC 6327 (KLR)
The bottom line
#A Kenyan court awarded a law firm Kshs. 4.39 million in unpaid fees for a bank charge transaction, ruling scale fees are not calculated cumulatively and oral fee agreements are invalid.
What this practically means
#Executive summary
#Key legal issues
#Whether there were one or two sets of instructions
There were two sets of instructions: the letter of 15th January 2014 for transfer (fully paid) and the letter of 27th March 2014 for preparing and perfecting a charge (unpaid).
The court examined both instruction letters and the advocate's letter of 23rd May 2014 confirming execution of the charge instructions. The client's own replying affidavit of 13th August 2018 admitted instructing the advocate to prepare a charge. The purchase of LR No. 16115 was secured by a Jamii Bora Bank facility of Kshs. 570,000,000/- secured by the charge, confirming the second, distinct set of instructions.
Whether the taxing officer erred in awarding Kshs. 3,000,000/- on Item 1
No error: instructions were issued on 27th March 2014 so the 2009 Remuneration Order applied; for value above Kshs. 500,000,000/- fees are as agreed subject to a minimum of Kshs. 3,000,000/-, and the advocate's cumulative calculation was contrary to the notes to the scale.
The applicable scale provides that for consideration above Kshs. 500,000,000/- the fee is as agreed subject to a minimum of Kshs. 3,000,000/-. The notes forbid cumulative calculation across bands. The advocate's proposed cumulative computation of Kshs. 4,438,750/- was therefore contrary to scale 1 of Schedule 1, and the taxing officer's award of the minimum of Kshs. 3,000,000/- was a proper exercise of discretion.
Whether the taxing officer erred on Item 2 (one half of mortgagor's fees)
The taxing officer erred; the advocate, being concerned for both mortgagor and mortgagee under paragraph 33, was entitled to one half of the mortgagor's fees of Kshs. 1,500,000/-, i.e. Kshs. 750,000/-.
It was not disputed that the advocate acted for both mortgagor and mortgagee. Under paragraph 33 he may charge the mortgagee's charges plus half the mortgagor's charges. The mortgagee's fees for the value of Kshs. 570,000,000/- were Kshs. 3,000,000/-; the mortgagor's fees are half thereof (Kshs. 1,500,000/-) and the advocate is entitled to half of that, Kshs. 750,000/-. Awards under Items 1 and 2 attract VAT at 16%.
Whether Items 27 to 31 (disbursements) were properly taxed off
Items 27, 28, 29, 30 and 31 were legitimate expenses on registration of a charge and ought to have been allowed; Item 32 was a repetition of Item 31 and taxed off.
The taxing officer taxed off these items for want of supporting documents, but the client did not dispute the charge was prepared and bound, consent obtained, stamp duty paid and the charge registered; the client's own affidavit confirmed payment of Kshs. 570,000/- stamp duty. Under paragraph 69 there is no obligation on the advocate to supply documents unless the taxing officer directs under paragraph 13A. Stamp duty is an expenditure, not part of instruction fees, and could not be discounted from instruction fees.
Whether there was an agreement on fees between the parties
No agreement was proved; the payments of Kshs. 2,384,085/- related to different instructions, and the alleged oral agreement could not stand given Section 45 of the Advocates Act.
No evidence of an agreement on the charge instructions was presented; the sums paid related to the first transaction. The court also held that the advocate, though appearing in person, applied the skill of an advocate and was entitled to items contested on that ground. An agreement for a fixed fee of Kshs. 2,500,000/- would contravene Section 45(1) of the Advocates Act requiring written, signed agreement compliant with the Remuneration Order schedules.
Legal principles established
#- A court will only interfere with a taxing officer's decision where it is shown the decision was based on an error of principle or the fee was manifestly excessive or too low to justify the inference of an error of principle.
- Under paragraph 33 of the Advocates Remuneration Order, an advocate concerned for both mortgagor and mortgagee charges the mortgagee's charges plus one half of the mortgagor's charges.
- Fees for consideration or value exceeding Kshs. 500,000,000/- are as agreed subject to a minimum of Kshs. 3,000,000/-, and scale fees are calculated on the band in which the consideration lies and are not cumulative.
- An agreement between an advocate and client varying statutory fees must comply with Section 45 of the Advocates Act, being in writing and signed; no such agreement was proved here.
Court orders
#- 1.The client's chamber summons application dated 18th May 2021 is dismissed
- 2.The advocate's chamber summons application dated 9th March 2021 is allowed and his reference succeeds
- 3.The taxing officer's ruling dated 3rd July 2019 is set aside and substituted with the court's own taxation of the advocate's bill of costs dated 17th July 2018 at Kshs. 4,386,051/-
- 4.Kshs. 3,000,000/- upheld for Item 1; Kshs. 750,000/- allowed for Item 2; Items 27, 28, 29, 30 and 31 allowed; Items 32 taxed off; awards subject to VAT and to credit for the Kshs. 570,000/- paid for stamp duty
- On appeal from
- Deputy Registrar (Taxing Officer) - Hon. Bartoo
- Jurisdiction invoked
- Reference under paragraph 11 of the Advocates (Remuneration) Order against the Taxing Officer's decision of 3rd July 2019
Key timeline
#Practical implications
#Frequently asked questions
#Cite this brief
#Cite this brief
Caselaw, "Muri Mwaniki & Wamati Advocates v Museum View Office Suits Limited (Environment and Land Miscellaneous Application 28 of 2018) [2024] KEELC 6327 (KLR)", Case Analysis (2024). Not stated in the judgment. Source: https://new.kenyalaw.org/akn/ke/judgment/keelc/2024/6327/eng@2024-09-25
Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.