Automated Summary
Key Facts
This case centered on the legal distinction between a 'retainer' (oral instruction/employment of an advocate) and a 'retainer agreement' (written contract fixing fees). The Court of Appeal held that the parties' relationship was governed by an oral retainer, not a retainer agreement as ruled by the High Court. The court emphasized that while the unwritten agreement created a fiduciary relationship under the Law of Agency, the absence of a written retainer agreement (required by Section 45 of the Advocates Act) meant the appellant (law firm) retained the right to tax its bill of costs. The appeal overturned the High Court's ruling that barred taxation due to alleged retainer agreement.
Transaction Type
Retainer for legal services
Issues
- The court addressed whether an oral retainer, evidenced by monthly fee payments, could be classified as a retainer agreement under Section 45 of the Advocates Act. The High Court held that the monthly payments created a retainer agreement, but the Court of Appeal overturned this, distinguishing between a retainer (oral/inferred from conduct) and a retainer agreement (must be written and signed).
- The Court of Appeal clarified that the onus to prove a retainer agreement lies with the party asserting its existence (here, the respondents). Since the respondents failed to produce a written agreement, the court concluded that the relationship was governed by a retainer, not a retainer agreement.
- The Court of Appeal found that the High Court erred by introducing the issue of a retainer agreement (not pleaded by the respondents) and instead should have focused on whether a retainer relationship existed. This procedural misstep invalidated the High Court's conclusion.
- The Court of Appeal held that under a retainer (not a retainer agreement), the appellant retained the right to tax their bill of costs. The High Court's bar on taxation was overturned, and the appeals were allowed with costs, dismissing the respondents' motions.
Holdings
The Court of Appeal allowed the appeal, set aside the High Court's ruling that barred the appellant from taxing their bills of costs, and dismissed the respondents' applications with costs. The court held that the relationship between the parties was a retainer (oral/inferred from conduct) rather than a retainer agreement under section 45 of the Advocates Act. Since the retainer was not reduced to a written agreement, the previous conclusion of a retainer agreement was erroneous, and the appellant retained the right to tax their costs.
Remedies
- The ruling and order of Omollo J. dated 16th September, 2015 is set aside.
- The appeal is allowed with costs. The ruling and order of Omollo J. dated 16th September, 2015 is set aside. The applications dated 12th February, 2015 filed in the High Court are dismissed with costs to the appellant.
- The applications dated 12th February, 2015 filed in the High Court are dismissed with costs to the appellant.
Legal Principles
- An oral retainer relationship creates a fiduciary duty between the advocate and client, as outlined in Halsbury's Laws of England. This fiduciary relationship implies the advocate acts as the client's agent, and the client's principal, with rights and obligations governed by the Law of Agency. The court clarified this applied to the unwritten retainer in this case.
- The court emphasized that the burden of proving the existence of a retainer agreement lies with the party asserting its validity. In this case, the respondents failed to discharge this burden as they could not demonstrate a written retainer agreement as required by section 45 of the Advocates Act. The absence of such written evidence meant the relationship was governed by an oral retainer, not a binding retainer agreement.
Precedent Name
- IEBC & Another v. Stephen Mutinda Mule & 3 others
- Kenya National Capital Corporation Limited v. Albert Mario Cordeiro & Another
- Njeru Nyaga & Company Advocates v. John Ngure Kariuki
Cited Statute
- Advocates (Remuneration) (Amendment) Order
- Evidence Act
- Advocates Act
Judge Name
- Asike-Makhandia
- W. Ouko
- K. M'Inoti
Passage Text
- In this case, it is common ground that there was no written but oral agreement regarding the retention and payment of the appellant's fees by the respondent. There was therefore no retainer agreement as envisioned by section 45 of the Advocates Act but simply a retainer.
- To that extent the appeal is allowed with costs. The ruling and order of Omollo J. dated 16th September, 2015 is set aside. In lieu thereof the applications dated 12th February, 2015 filed in the High Court are dismissed with costs to the appellant as well.
- The resolution of this dispute appears to us to turn on the definition of two concepts; a retainer and a retainer agreement and the rights of the parties thereto.
Damages / Relief Type
Appeal allowed with costs; applications dismissed with costs to the appellant.