[2022] KEHC 15773 (KLR)

Judith A. Guserwa t/a J. A. Guserwa & Co Advocates v Kinuthia (Miscellaneous Application E214 of 2022) [2022] KEHC 15773 (KLR) (Civ) (1 December 2022) (Ruling)

Neutral citation: [2022] KEHC 15773 (KLR)

Republic of Kenya

In the High Court at Nairobi (Milimani Law Courts)

Civil

Miscellaneous Application E214 of 2022

JN Mulwa, J

December 1, 2022

Between

Judith A. Guserwa t/a J. A. Guserwa & Co Advocates

Applicant

and

Henry Kinuthia

Respondent

Ruling

1. By an application dated February 24, 2022 , the applicant Judith A Guserwa T/A J A Guserwa & Co Advocates approached this court for orders: -1. That the honourable court be pleased to adopt, endorse and enforce the agreement on fees as per the agreement entered into by the parties hereto on the November 11, 2019. 2.That the honourable court be pleased to grant leave to the applicant to execute the agreement as a decree of this court.3. That the respondent be condemned to pay the costs of this application and incidentals to the enforcement and execution of the decree issued herein.4. That the honourable court do issue any other or further orders it may deem expedient in the interest of justice.

2. The applicant swore the supporting affidavit and stated the two cases that the respondent instructed the said firm to act for him, being; Misc Civil Application No E 349 of 2019 and No E 359 of 2019, on the November 5, 2019. It is averred that at the commencement thereto, the respondent executed an undertaking to pay a sum of Kshs 24,000,000/= as fees upon successful conclusion of the two matters upon terms stated thereto. The undertaking is dated November 11, 2019 and is duly witnessed by an undisclosed witness under the undertaking the said sum was to be paid in two instalments on or before November 18, 2019 and on or before January 31, 2022 with a default clause that if not paid, the applicant would be at liberty to execute against the respondent’s company Terracraft Limited wherein the respondent Henry Kinuthia is a director.

3. The application is premised on provisions of a nonexistent order 36 rule 1 of the Civil Procedure Rules, and other enabling provisions of law.

4. In opposing the application, the respondent Henry Kinuthia swore and filed a replying affidavit on the May 30, 2022 denying instructing the applicant in the two cases stated in the application and particularly Misc Application No 34 of 2019 or Misc No E359 of 2019. He however, admits being aware of Misc Appl No E349 of 2019 but further states that he is not a party thereto, stating that the parties are Kenya Pipeline Company Limited v Terracraft (K) Limited; and admitting that he is a director of Terracraft Limited. He further denies that the applicant ever represented the said company in any court in the two cited applications.

5. The respondent further denies that the undertaking was in respect of legal fees, but was made to facilitate the speedy disposal of Misc Appl No E 349 of 2019, a matter wherein the applicant was not acting for any of the parties; but the firm of M/s Lubullelah & Associates Advocates; a fact that has not been controverted by the applicant.

6. The respondent further deposes that the original undertaking has been altered to read “Deposit on fees “whereas the original is alleged to have stated “Total fees “(annexture No “HKN1”); without his involvement as evidenced by his failure to countersign on the alteration. The respondent ultimately avers that he does not owe the applicant any monies or any legal fees, as the said undertaking was not anchored on a company resolution; and that the same being illegal is not enforceable.

7. Both parties filed further affidavits to buttress their arguments on the application on the July 5, 2022 and June 29, 2022 respectively; as well as written submissions that the court has carefully considered.

Preliminaries 8. In the first instance, the sum of Kshs 3,700,000/= allegedly paid to the applicant seems to have been in respect of a case being Nairobi HCC No 485 of 2008 – Henry Ndungu Kinuthia v Barclays Bank of Kenya & Terracraft (K) Limited – as stated in the respondent’s replying affidavit and further affidavit sworn by one Kendi Florence Maragu on the June 29, 2022 .Though the applicant denies having received the payment in respect of the HCCC No 485/2008; have seen a letter dated August 10, 2021 August 10, 2021 addressed to the respondent by the applicant acknowledging though not so expressly, that the said case had been settled; and calling for payment of the applicant’s fees.

9. Interestingly, the applicant in this matter (Misc App No E214 of 2022), has not stated the genesis of the application, nor the case or cases from whence this miscellous application arose from. Nowhere is it stated that the said contagious legal fees in the sum of Kshs 24 million was in respect of the services rendered in which cases; and for which period. Indeed, no nexus has been established sufficiently for the court to clearly conclude that indeed the applicant’s legal firm acted for the respondent or the respondent’s company. This is plainly clear as the parties in the matter before me are completely separate and different from the parties in the cases upon which the alleged undertaking arose. For avoidance of doubt, at the notice of motion dated February 24, 2022, the instant application, at the grounds upon which the application is premise, all what is stated is as hereunder: -a.That the respondent instructed the applicant to act for him in two matters set out hereunder: -i.Misc No E349 of 2019ii.Misc No E359 of 2019

10. In the supporting affidavit, once again, the parties to the two applications are not stated, save that the applicant avers that at No 2;That on November 5, 2019, the respondent instructed me to act for him in two matters namely Misc E 34 of 2019 and Misc E 359 of 2019; and which I acted accordingly as instructed.

11. In the disputed undertaking executed on the November 11, 2019 only one matter is stated being Misc Civil Application No E349 of 2019. I have taken the liberty to peruse the communication between the applicant and the respondent as seen from the parties annexures to their affidavits in support and opposition to the application.The applicants annexures “JAG 2” speaks of HCCC No 485/2008 where the respondent formally instructed the applicant to act for him against Barclays Bank of Kenya, upon a deposit (total) of legal fees of Kshs 5,500,000/= Nowhere is the claim of Kshs 24 million stated; and therefore no nexus has been established.

12. For the respondent, he not only denied the amount of Kshs 5,500,000/= as a deposit; but states that the said sum was the total sum as per the undertaking subject of these proceeding due to an alteration from “total to deposit.” and not countersigned. The alteration is obvious to all, and is not countersigned, hence the opaqueness of the same.

13. Even if this court were to be sufficiently persuaded to agree with the applicant that the said sum of Kshs 5,500,000/= was a deposit on legal fees in respect of HCCC No 485 of 2008; how then does these proceedings relate to the instant application as posed earlier?I agree with the respondent that the applicant is being very economical with details as to how and on what basis the undertaking for payment of Kshs 24 million can be enforced.

Back to the Undertaking dated 11/11/2019 14. A perusal of the same shows that: -It was given by the respondent, in his capacity as director of Terracraft Limited, for and on behalf of their client for the sum of Kshs 24 million = upon successful conclusion of Misc Civil Application No E349 of 2019 pending for hearing and determination at the commercial and admiralty division at Nairobi on the following terms: -

15. Let me pose there; and interrogate the following questions that arise from the same:a.It was given by the respondent in his capacity as the director of the company –a limited liability company. No demonstration has been shown that the said director (respondent) had been duly authorized by the company to give the undertaking on its behalf.b.For and on behalf of their client:This client has not been disclosed by the applicant, nor the respondent. It is supposedly the client to the company, Terra Craft Limited. This company is not the client. Who then is the client?c.Upon conclusion of Misc (Civil Application No E 349 of 2019What are the particulars of this application?Has it been concluded at the commercial division, and if so, what is the outcome? None has been disclosed. The payment being upon an event taking place, then until that event is shown to have materialized and or crystalised, then it would be premature to order any payments, leave alone the Kshs 24 million.d.In default of the payments the said firm to be at liberty to execute this undertaking against our company, without recourse to civil litigation.This can only be enforced upon No 3 above being proved upon a balance of probabilities.

16. Even assuming that the undertaking was made to secure payment of legal fees in respect of HCCC No 485 of 2008, or the Misc Application No E349/2019, the retainer and or instruction to the applicant is denied.

17. The parties to HCCC No 485 of 2008 are stated as Henry Ndungu Kinuthia v Barclays Bank of Kenya Limited. No other party is stated to this court. Terracraft Limited is not a party to the suit; the more reason that the respondent needed to obtain authority from the company to commit it to payment of the alleged legal fees of facilitation in respect of Misc /Appl No E349/2019 further, the respondent denies having been a party in Misc App E349 of 2019, the parties being Kenya Pipeline Company Limited v Terra Craft Kenya Limited; and that the firm of Lubullelah & Associates Advocates stated as the firm acting for the said Terracraft Limited wherein the respondent is a director. These issues bring more opaqueness in the whole matter and in the court’s mind.

18. In any event, even if the undertaking was enforceable, as per the wording thereof, it ought to be so enforced against the respondent’s company; M/S Terra Craft Limited not the respondent in his personal capacity. This company is not a party to these enforcement proceedings. It is not disputed that the applicant has not provided any evidence or at all to show and demonstrate that it acted for; or offered legal services to the respondent or his company in the application. It is common knowledge and trite that he who asserts must prove. Mere statements even on oath are subject to prove to the required standard, in this case upon a balance of probabilities- see section 107 -109 of the Evidence Act cap 80, Laws of Kenya.

19. Section 37 of the Advocates Act (2017) provides that:“Any advocate who agrees to share his profits in respect of any professional business whether contentious or non-contentious with any person not being an advocate or other duly qualified legal practitioner (by whatever name called) shall be guilty of an offence”

20. Section 39 thereof is categorical that:“Any advocate who acts as an agent in any suit, or in any matter in bankruptcy, for any unqualified person, or permits his name, or that of any form of which he is a partner, to be made use of in any such suit or matter, upon account or for the profit of any unqualified person or who does any other act enabling an unqualified person to appear, act or practice in any respect as an advocate in such suit of matter, or who in any way assists any unqualified person in any cause or matter in which he knows that such person in contravening or intends to contravene this act, shall be guilty of an offence”

21. By the above legal provisions, it is trite that an advocate is prohibited from being used as a conduit, or an agent of an unqualified party or as an agent for an undisclosed party in respect of legal fees or profits. Any unqualified person cannot be permitted to earn legal fees by using a legal firm as a conduit to the legal fees, the consequences are dire.The phrase in the undertaking,“…Undertake to pay the firm of M/s JA Guserwa & Company Advocates …… for and on behalf of their client the sum of Kshs 24 million …..”Cannot be construed otherwise than as stated therein., in my view, due to the non–disclosure of the client, for whom the applicant was acting for in the cited application. See also section 37 of the Advocates Act, 2017.

22. The court has perused and considered the decisions cited by the applicant. In the matter Ahmednasi, Abdikadir & Company Advocates v National Bank of Kenya Limited, (2006) eKLR, the circumstances thereto are different. There existed an advocate – client bill of costs that was duly taxed. Upon provisions of section 57(2) of the Advocates Act, judgement was duly entered for the taxed costs and the applicant granted leave to execute the decree against the respondent. It is therefore distinguishable.

23. The Sheetal Kapila v Narrim Khan Brutilenor (2021) eKLR is distinguishable also. The advocates and client signed a remuneration agreement in writing to pay some sum of money to the advocate in several matters. The client refused to pay. The court held that the said sum was a retainer in all the suits. Retainer was not denied. In the case Omulele & Tollo Advocates v Mount Holdings cited thereof; a retainer was stated to mean instructions; employment or engagement of an advocate by his client; that it is merely a contract in writing prescribing the terms of engagement of an advocate by his client, including legal fees. In the instant case, the impugned undertaking as drawn was between the (respondent) as a director of a company and the advocate (applicant), for and on behalf of an undisclosed client, for undisclosed services rendered by the advocates to the client.

24. For the foregoing. I find no clarity nor merit in the application dated February 24, 2022 . It is dismissed with costs to the respondent.

Orders accordingly.

DELIVERED, DATED AND SIGNED THIS 1ST DAY OF DECEMBER, 2022J N MULWAJUDGE