Mbugua t/a Ngure Mbugua & Co Advocates v Mumbi House Pharmaceuticals (K) Ltd (Environment and Land Miscellaneous Application E096 of 2023) [2024] KEELC 6475 (KLR)
The bottom line
#A Kenyan High Court confirmed lawyers earn instruction fees when hired, even if a land deal never completes, but sent the bill back for correct calculation.
What this practically means
#Executive summary
#Key legal issues
#Applicable schedule for taxing instruction fees in an uncompleted land sale/purchase transaction
Schedule 1 of the Advocates Remuneration Order applies, not Schedule 5; the advocate was entitled to full instruction fees notwithstanding non-completion of the transaction
The court found the advocate was retained for a specific transaction concerning sale/purchase of immovable property registered in a land registry, hence Schedule 1 scale fees applied. Instruction fees are earned upon receipt of instructions and are unaffected by subsequent events or the stage of the work. The client cannot escape full instruction fees merely because it transferred the brief to another firm.
Whether the taxing officer applied the correct principle in computing instruction fees
The taxing officer erred in principle by relying on an unexplained 1.36% benchmark instead of the graduated cumulative formula in Schedule 1, vitiating the certificate of taxation
Schedule 1 prescribes a graduated cumulative computation: 2% on the first Kshs.5,000,000 (or Kshs.35,000 whichever is higher), 1.5% on the balance up to 100 Million, 1.25% up to 250 Million, and 1% on the balance up to 1 Billion. The taxing officer instead taxed the fees as drawn on a 1.36% basis which is neither stipulated nor provided for in law, constituting an error of principle.
Appropriate remedy upon finding an error of principle
The entire Advocate-Client Bill of Costs should be remitted for re-taxation before a taxing officer other than Hon. Vincent Kiplagat, applying the cumulative Schedule 1 formula
Citing Kipkorir, Titoo & Kiara Advocates v Deposit Protection Fund Board, the court held that where a judge finds an error of principle, the general practice is to remit the question of quantum for decision by a taxing officer, rather than the judge undertaking the taxation himself. The court remitted the entire bill accordingly.
Legal principles established
#- Instruction fees accrue the moment an advocate is retained or instructed, regardless of whether the assignment is concluded
- Where an advocate is retained in a transaction for sale/purchase of immovable property, instruction fees are chargeable under Schedule 1 of the Advocates Remuneration Order even where the transaction is not completed
- A judge on reference should interfere with a certificate of taxation only where the taxing officer erred in principle, and should then remit the bill for re-taxation by a different taxing officer
Court orders
#- 1.The chamber summons application dated the 20th March 2024 be and is hereby allowed
- 2.The certificate of taxation arising from the Ruling delivered on the 6th March 2024 be and is hereby set aside
- 3.The Advocate Client Bill of Costs dated the 4th April 2023 be and is hereby remitted for taxation before a taxing officer other than Hon. Vincent Kiplagat
- 4.Costs of the Application shall await the outcome of the taxation
- Jurisdiction invoked
- Rule 11 of the Advocates Remuneration Order; Order 22 Rule 22 of the Civil Procedure Rules; Sections 1A, 1B & 3 of the Civil Procedure Act (reference from a taxing officer's decision)
Key timeline
#Practical implications
#Frequently asked questions
#Cite this brief
#Cite this brief
Caselaw, "Mbugua t/a Ngure Mbugua & Co Advocates v Mumbi House Pharmaceuticals (K) Ltd (Environment and Land Miscellaneous Application E096 of 2023) [2024] KEELC 6475 (KLR)", Case Analysis (2024). Chamber Summons dated 20th March 2024 [Reference]. Source: https://new.kenyalaw.org/akn/ke/judgment/keelc/2024/6475/eng@2024-10-03
Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.