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Court of AppealDismissedCourt of Appeal at Nairobi, Civil Appeal (2019)· [2019] KECA 302 (KLR)

Ratemo Oira & Co Advocates v Magereza Sacco Society Ltd

Court of Appeal of Kenya
11 October 2019
2,973 words in judgment
View original judgmentRead on Kenya Law Watch case
AI-assisted case brief
·~12 min to read original · ~4 min brief

The bottom line

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Kenya's Court of Appeal confirmed lawyers only earn full instruction fees when a property deal actually completes, not just when hired.

What this practically means

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Executive summary

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This Court of Appeal judgment resolves whether an advocate is entitled to full instruction fees upon receipt of instructions regardless of whether the underlying transaction completes. Magereza Sacco Society Ltd engaged Ratemo Oira & Co. Advocates for the purchase of land allegedly valued at Kshs.8.8 billion; the purchaser failed to pay the agreed Kshs.300 million deposit, no sale agreement or transfer was executed, and the transaction collapsed. A Deputy Registrar taxed the advocate's bill at Kshs.100,000/= as instruction fees, applying Rule 18(f) and Schedule V of the Advocates (Remuneration) Order 2009; the High Court (K. Bor, J) upheld that taxation on reference. The advocate appealed on 26 grounds, contending that instruction fees are earned on engagement and must be pegged to the value of the subject matter under Schedule I. The Court of Appeal, per Waki, Warsame and Sichale, JJA, dismissed the appeal. It held that Rule 18(a) remuneration for sales or purchases of immovable property arises only when property passes on execution of a valid contract and completion of conveyancing formalities; since there was no conveyance, only Rule 18(f)/Schedule V remuneration applied. It reaffirmed that an appeal from a judge on reference from a taxing officer is akin to a second appeal under Section 72(1) of the Civil Procedure Act, that a taxing officer's decision attracts deference absent an error of principle, and that an advocate is entitled to a reasonable fee commensurate with work done. The Court found the award fair and neither court in error, dismissed the appeal with costs to the respondent.

Key legal issues

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01

Entitlement to full instruction fees on receipt of instructions in an uncompleted non-contentious conveyancing transaction

Holding

Full instruction fees pegged to the value of the subject matter are not payable where the conveyance is not completed; only Schedule V remuneration under Rule 18(f) applies

Reasoning

Rule 18(a) remuneration for a sale or purchase of immovable property arises only once property passes upon execution of a valid contract and completion of conveyancing formalities vesting legal title. Since the sale agreement and transfer were never executed and the deposit was never paid, the transaction was uncompleted and Rule 18(f)/Schedule V governs. The instruction fee of Kshs.100,000/= was fair remuneration for the minimal, early-stage work actually done.

p. 4
02

Whether the High Court erred in principle in upholding the Taxing Officer's discretion

Holding

No error of principle was shown; the Judge correctly identified the grounds for interfering with a taxing officer's discretion and found no justification for interference

Reasoning

Interference with discretion is warranted only where the judge acted on wrong principles, the amount is so high or low as to cause injustice, there is a defect in the decision on merits, or the discretion was not exercised judiciously. Here both courts correctly found the transaction incomplete, applied the correct rule and schedule, and the award was not manifestly low given the scope of work done.

p. 5
03

Standard of review on an appeal from a judge's reference from a taxing officer

Holding

The appeal is akin to a second appeal governed by Section 72(1) of the Civil Procedure Act, allowable only if the decision is contrary to law, fails to determine an issue of law, or there is a substantial procedural error

Reasoning

Following Kipkorir Titoo & Kiara Advocates v Deposit Protection Fund Board, the Court confines itself to questions of law or substantial procedural defects. The appellant identified no such error; both courts below correctly applied the Advocates (Remuneration) Order and exercised discretion properly.

p. 3

Legal principles established

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  • In non-contentious conveyancing, where the transaction is not completed, an advocate's remuneration falls under Rule 18(f) and Schedule V of the Advocates (Remuneration) Order 2009, not Schedule I pegged to the value of the subject matter
  • An appeal from a judge on reference from a taxing officer is akin to a second appeal and can only be allowed on the grounds specified in Section 72(1) of the Civil Procedure Act
  • A judge will not interfere with a Taxing Officer's decision on taxation unless it is based on an error of principle

Court orders

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  1. 1.The appeal is dismissed
  2. 2.Costs of the appeal are awarded to the respondent
On appeal from
High Court of Kenya
Reference under Rule 11(2) of the Advocates (Remuneration) Order 2009, ruling dated 31st May 2017 (K. Bor, J)
Jurisdiction invoked
First appeal to the Court of Appeal from a High Court reference under Rule 11(2) of the Advocates (Remuneration) Order 2009

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, "Ratemo Oira & Co Advocates v Magereza Sacco Society Ltd", Case Analysis (2019). Court of Appeal at Nairobi, Civil Appeal (2019). Source: https://new.kenyalaw.org/akn/ke/judgment/keca/2019/302/eng@2019-10-11

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