1. By a plaint dated 29/08/2019, the plaintiff claimed from the defendant a sum of Kshs. Kshs. 40,000,000 on account of agreed legal fees, which the Defendant has failed to settle. The claim has as its basis an Agreement dated 7th September 2021 for the provision of legal services by the plaintiff to the defendant.
2. The Defendant did not enter an appearance or file a defense, despite being served through substituted service as directed by the Court on 11th October 2023. Consequently, interlocutory judgment was entered against the Defendant on 21st November 2023.
3. On 9th October 2024 formal proof took place virtually. Mr. Joseph Kimani Wachira, the plaintiff’s managing partner, testified on behalf of the plaintiff. He adopted his witness statement dated 22nd July 2024 and testified that he is an Advocate of the High Court of Kenya and practices in the name and style of Wachira & Mumbi Advocates. That his firm entered into a client/advocate fee agreement with the Defendant on 7th September 2021. Under the terms of the agreement, the Plaintiff was retained to provide legal representation and consultancy services to the Defendant in various matters. The Plaintiff claims a total sum of Kshs. 40,000,000 as agreed legal fees, which the Defendant has failed to settle.
4. The Plaintiff filed submissions dated 16th October 2024 which the Court has considered. It was submitted that the plaintiff entered into an agreement with the defendant on 7th September 2021 for the supply of legal services which included representation and consultation in various matters. Despite the plaintiff performing its part of the agreement, the defendant had failed to perform its part by failing to pay for the agreed fees and eventually withdrawing its instructions after the plaintiff demanded the settlement of its fees.
5. Regarding formal proof, the Court in the case of Samson S. Maitai & Another v African Safari Club Ltd & Another [2010] eKLR, Emukule J observed: -
“……. I have not seen a judicial definition of the phrase "Formal Proof". "Formal" in its ordinary Dictionary meanings - refers to being "methodical" according to rules (of evidence). On the other hand, according to Halsbury's Laws of England, Vol. 15, para, 260, "proof" is that which leads to a conviction as to the truth or falsity of alleged facts which are the subject of inquiry. Proof refers to evidence which satisfies the court as to the truth or falsity of a fact. Generally, as we well know, the burden of proof lies on the party who asserts the truth of the issue in dispute. If that party adduces sufficient evidence to raise a presumption that what is claimed is true, the burden passes to the other party who will fail unless sufficient evidence is adduced to rebut the presumption.”
6. In Rosaline Mary Kahumbu v National Bank of Kenya Ltd [2014] eKLR, the Court held: -
“In contrast, at a formal proof hearing, if the party with the onus of adducing evidence fails to satisfy the truth threshold, the matter would stand to be dismissed on the basis that it was unmeritorious and did not raise sufficient proof of any issues of fact or law. It would be heard and determined on its merits."
7. Consequently, in a formal proof hearing, a party with the onus of adducing so much of the evidence that is sufficient to satisfy the trial court as to the truth of the averments in the pleadings.
8. In the instant case, the suit before Court is based on an alleged breach of an agreement between the plaintiff and defendant. The Plaintiff adduced evidence of the existence of the agreement by producing a copy of the same.
9. To prove the existence of the contract between the parties herein and breach thereof, Mr. Joseph Kimani Wachira who testified as PW1 in support of the plaintiff’s case produced in evidence a copy of a Fee Agreement dated 7th September 2021 between the plaintiff and the defendant. The Agreement was duly executed by the parties herein and registered under the Registration of Documents Act.
10. According to the witness, the plaintiff was engaged by the defendant to represent the defendant’s interest in several legal disputes, both civil and criminal. Consequently, the defendant and the plaintiff entered into a Fee Agreement dated 7th September 2021 wherein a sum of Kshs. 40,000,000 (Kenya Shillings forty million only) was agreed between the parties to be the plaintiff’s fees for the legal services rendered.
11. On the question of breach, the Court In Mwangi v Kiiru [1987] eKLR, approved Lord Diplock’s sentiments in Photo Production v Securicor Ltd (1980) AC 827, where Lord Diplock observed that: -
“Characteristically, commercial contracts are a source of primary legal obligation upon each party to it to procure that whatever has been promised will be done…Every failure to perform a primary obligation is a breach of contract.”
12. It was the plaintiff’s testimony that the legal services provided by the Plaintiff to the defendant included representation in the following matters:
i. High Court Commercial Case No. E406 of 2019: Benl Development Limited vs. First Community Bank;
ii. Environment and Land Court Case No. 456 of 2015: Sebastian Paul Muinde Kathilu vs. Benl Development Limited;
iii. High Court Miscellaneous Applications No. 211 of 2021, consolidated with Criminal Miscellaneous Application No. 235 of 2021: Mohamed Yassin Ismail vs. Omar Hassan Mohammed and Others;
iv. Makadara Criminal Case No. 1791 of 2021: Republic vs. Mohamed Yassin Ismail; and
v. Filing a complaint with the Directorate of Criminal Investigations (DCI) regarding the alleged alteration of the Defendant's shareholding structure.
13. Since the plaintiff’s evidence was unchallenged, this Court finds that the plaintiff was able to prove, on a balance of probability the existence of the said contract; its performance, and the breach thereof.
14. The law governing remuneration for advocates is contained in Section 45 of the Advocates Act, which permits an advocate and client to enter into an agreement fixing the advocate's fees. Section 45(1) provides: -
“An advocate and his client may—
a. before, after or in the course of any contentious business, make an agreement fixing the amount of the advocate’s remuneration in respect thereof; and such agreement shall be valid and binding on the parties provided it is in writing and signed by the client or his agent duly authorized in that behalf.”
15. Section 45(6) further provides that:-
“Subject to this section, the costs of an advocate in any case where an agreement has been made under this section shall not be subject to taxation nor to Section 48.”
16. The Plaintiff relies on a written fee agreement dated 7th September 2021, duly signed by the Defendant’s directors and registered under the Registration of Documents Act, Cap 285. The Plaintiff asserts that this agreement fixed Defendant’s liability at Kshs. 40,000,000, thereby exempting the fees from taxation proceedings.
17. In the case of Nzaku & Nzaku Advocates v Tabitha Waithera Mararo as Trustee of Tracy Naserian Kaaka (minor) & others [2020] eKLR the Court of emphasized the enforceability of fee agreements under Section 45, stating:
“An agreement for fees contemplated under section 45, is a contract whose terms and conditions must be clear and unambiguous. There must be consensus or meeting of the mind between the parties and it must also be entered into freely without undue influence or promise.”
18. Similarly, in Omulele & Tollo Advocates v Mount Holdings Limited [2016] eKLR, the Court of Appeal held that taxation is not a mandatory requirement where there is a valid fee agreement. It observed:-
“Under the proviso to Section 45 (5) of the Act, an advocate who is a party to the retainer agreement and who has acted diligently for the client is entitled to sue and recover for the whole retainer fee should his client default in payment thereof. In fact, as long as the advocate has been diligent, his entitlement to the fixed sum is so outright that he need not tax his costs nor give statutory notice to the client prior to his pursuit of the said fee. Consequently, it behooves such advocate to ensure that the retainer agreement once made is reduced into writing”.
19. The purpose of taxation proceedings under the Advocates (Remuneration) Order is to resolve disputes over the amount payable to an advocate where no agreement exists or where a client challenges the fees. However, in this case, the Plaintiff provided evidence of a valid, written, and signed agreement fixing the legal fees. In the absence of any challenge to the agreement by the Defendant, taxation proceedings were unnecessary.
20. It is worth noting that, in the Court's view, an agreement fixing the advocate’s fees, if validly executed, removes the matter from taxation. Such an agreement must be respected as a contractual obligation unless evidence of coercion, fraud, or illegality is demonstrated. Where an agreement has been made under Section 45 of the Advocates Act, the advocate’s costs are not subject to taxation. The costs can be pursued as a debt owed under the agreement, provided the agreement complies with statutory requirements.
21. In this case, the Defendant has neither contested the validity of the fee agreement nor raised any allegations of fraud, coercion, or undue influence. The agreement is therefore presumed valid, and the Plaintiff was entitled to file this suit to enforce the agreement as a contractual obligation.
22. In the case of National Bank of Kenya Ltd v Pipeplastic Samkolit (K) Ltd & another [2001] eKLR, the Court of Appeal was of the considered position that: -
‘’A Court of law cannot re-write a contract between the parties. The parties are bound by the terms of their contract, unless coercion, fraud or undue influence are pleaded and proved. There was not the remotest suggestion of coercion, fraud or undue influence in regard to the terms of the charge.
As was stated by Shah JA in the case of Fina Bank Limited vs Spares & Industries Limited (Civil Appeal No 51 of 2000) (unreported):
“It is clear beyond peradventure that save for those special cases where equity might be prepared to relieve a party from a bad bargain, it is ordinarily no part of equity’s function to allow a party to escape from a bad bargain”.
23. As indicated above, Section 45(1) of the Advocates Act explicitly allows advocates to enter into agreements with clients fixing their remuneration for legal services. Such agreements are binding provided they are in writing and signed by the client or their authorized agent. Once such an agreement is validly executed, it overrides the provisions of the Advocates (Remuneration) Order regarding minimum fees.
24. In Makhecha & Company Advocates v Central Bank of Kenya [2017] KECA 122, the Court of Appeal emphasized the enforceability of fee agreements under Section 45 of the Advocates Act, stating:-
“This provision recognizes the enforceability of legal agreements on fees made between clients and advocates. Therefore, to determine this matter, we cannot consider the provision of Section 45 of the Advocates Act in isolation. We must take into account the letter in question, its intent and purport, and the conduct of the parties. Was there a legally enforceable contract between the parties herein in respect of the fees? Did the parties intend to be bound by the terms of the agreement which was in the form of the letter in question?”
25. In the present case, the Plaintiff provided evidence of a valid fees agreement signed by the Defendant’s directors. The Defendant did not contest the fees at the time of execution or raise any objections subsequently. This Court is therefore bound to uphold the terms of the agreement in the absence of fraud, coercion, or undue influence.
26. Accordingly, the Court finds that the plaintiff has proved its case. The Plaintiff is therefore awarded the sum of Kshs. 40,000,000 being the agreed legal fees, with interest and costs.
27. The claim Plaintiff’s claim of Kshs. 5,000,000 as general damages is however declined. The law is that general damages are not awardable for breach of contract or breach of contractual obligations. A contract for the performance of specific duties or obligations, if breached, would lead to compensation for the specific loss suffered as a result of the breach, but not general damages.
28. The Court in Gichaba v Lexis Investment Limited (Civil Appeal 131 of 2019) [2024] KEHC 479 (KLR) (29 January 2024) (Judgment) stated as follows on the issue: -
“60. In Kenya Tourist Development Corporation v Sundowner Lodge Limited (supra), the appellant had agreed to give the respondent a loan of Kshs, 15,000,000 for construction of a hotel. However, the appellant unilaterally withdrew that offer. The respondent filed a suit claiming general damages of Kshs. 421,760,000 in the form of opportunity costs and loss of business following breach of contract. The High court awarded general damages of Kshs. 30,000,000 for breach of contract. On appeal, the Court of Appeal held that as a general rule, general damages are not recoverable in cases of alleged breach of contract. Damages for breach of contract are compensation to the aggrieved party and a restitution of what he has lost by the breach.
61. In Dharamshi v Karsan [1974] EA 41, it was held that general damages are not awardable for breach of contract in addition to the quantified damages as it would amount to a duplication. And in Securicor Courier (K) Ltd v Benson David Onyango & another [2008] eKLR, the Court of Appeal reiterated that general damages are not awardable for breach of contract. (See also Provincial Insurance Co. EA Ltd v Mordechai Mwanga Nandwa, (KSM Civil Appeal No 179 of 1995,)”
Disposition
29. In light of the foregoing, this Court accordingly allows the Plaintiff’s claim and enter judgment for the Plaintiff against the Defendant as follows: -
i. Payment of Kshs. 40,000,000 as agreed legal fees;
ii. Interest on (i) at court rates from the date of filing the suit until payment in full;
iii. Costs of the suit to the Plaintiff.
30. It is so ordered.
SIGNED, DATED and DELIVERED IN VIRTUAL COURT
THIS 27TH DAY OF FEBRUARY 2025
ADO MOSES
JUDGE
In the presence of:
Moses – Court Assistant
..………. for the Plaintiff
………...for the Defendant