Maina & Maina Advocates v Kapkatet Tea Factory Co. Ltd [2017] KEELC 3397 (KLR)

REPUBLIC OF KENYA

IN THE ENVIRONMENT AND LAND COURT AT NAIROBI

ELC. MISC. APPLICATION NO. 40 OF 2016

MAINA & MAINA ADVOCATES……………………………APPLICANT

VERSUS

KAPKATET TEA FACTORY CO. LTD……………….......RESPONDENT

RULING

The Applicant filed its bill of costs against the Respondent on 7th March, 2016 arising out of a conveyancing transaction.  The Deputy Registrar referred the matter to this court for determination of the question of retainer and whether the Respondent instructed the Applicant.

Parties relied on the Affidavits filed in court together with submissions which the Court has carefully considered.

The Applicant annexed copies of correspondence together with a factory board resolution in support of its claim for instruction fees. It also annexed copies of deeds of assignment that it drew in respect of the five parcels of land known as Kericho/Londiani –Block 1(Hawi)/2, Kericho/Londiani – Block 1(Hawi)/4, Kericho/Londiani-Block 1(Hawi)/25, Kericho/Londiani – Block 1(Hawi)/13-94/212, and Kericho/Londiani – Block 1(Hawi)/3-98/212.

The Applicant contends that the Respondent held a board meeting on 17th December, 2012 and resolved that instructions be given to the Applicant in respect of these parcels of land and that pursuant to those instructions, the Applicant prepared five deeds of assignment in respect of the five parcels of land.  The Applicant prepared Deeds of Assignment between Zenith Realtors Limited and the Respondent which were executed and it then forwarded its fee note to the Respondent on 9th April, 2014 which was not paid.

On its part, the Respondent argues that no instructions were issued to the Applicant and that the board resolution which is purported to issue the instructions was addressed to Kenya Tea Development Agent Limited (KTDA) in its capacity as the managing agent for the Respondent so that KTDA could instruct the Applicant and make arrangements for the payment of the initial deposit for the conveyances. The Respondent therefore maintains that it did not enter into any agreement with the Applicant or give the firm instructions. The Respondent argues that the conveyances for Kericho/Londiani – Block 1(Hawi)/3, Kericho/Londiani-Block 1(Hawi)/4 and Kericho/Londiani – Block 1(Hawi)/25 were concluded by in house counsel while the conveyances in respect of Kericho/Londiani- Block 1(Hawi)/13–94/212 and Kericho/Londiani – Block 1(Hawi)/3-98 were never done.

It is necessary to produce parts of the letters referred to.  The factory board resolution dated 17/12/2012 states as follows: -

“We, Factory Board of Directors of Kapkatet Tea Factory Company Limited having received land business case from legal and after a lengthy deliberation and also request letter Ref. MM/K/20/12 attached, the board adopted the same.”

We the Board also request as follows: -

1) Legal to draw up an agreement between Maina and Maina Advocates and Kapkatet Tea Factory.

2)  Request for 20% initial deposit and forward the same to Maina & Maina Advocates, National Bank of Kenya, Kenyatta Avenue A/C No. 0102005156400.

Dated this Monday…….

The Applicant’s letter under ref. MM/K/020/12 dated 17th December, 2012, to the Respondent reads as follows: -

“Under instruction from our principles, the following parcels are offered for sale at Kshs. 290,000 per acre.”

1. Kericho/Londiani – Block 1(Hawi)/4,

2. Kericho/Londiani – Block 1(Hawi)/25,

3. Kericho/Londiani-Block 1(Hawi)/2,

4. Kericho/Londiani – Block 1(Hawi)/ 3-98/212,

5. Kericho/Londiani – Block 1(Hawi)/13-94/212

The last paragraph of this letter reads: -

“We are further instructed we shall be acting for you in this transaction.  In the circumstances, kindly and urgently transfer kshs.13, 630,000 being 20%  deposit to the account whose details appear here below…………”

The Respondent on its part, produced a Factory Board Resolution dated 06/08/2013 resolving that the Respondent was to procure Kericho/Londiani-Block 1(Hawi)/4 and Kericho/Londiani – Block 1(Hawi)/25. It further states that these two parcels of lands border Kericho/Londiani- Block 1(Hawi)/13–94/212 which had already been acquired by the Respondent.  Copies of Agreements for sale, transfers and title deeds in respect of Kericho/Londiani–Block 1(Hawi)/3, Kericho/Londiani-Block 1(Hawi)/4 and Kericho/Londiani – Block 1(Hawi)/25 were annexed to the Replying Affidavit of Florence Mitey sworn on 24th June, 2016 confirming that the Respondent was registered as the owner of the three parcels of land in June and September 2013.

The question for determination is whether the Applicant was duly retained by the Respondent to act for it in the conveyances.

The court having considered the matter is of the view that the Applicant’s letter of 17th December, 2012 does not confirm that the Respondent gave instructions to the Applicant to undertake the conveyances.  The letter does not state who the principals are, it only states that the Applicant is under instructions from its principles (sic). It is also not clear who had instructed the Applicant when it writes in the same letter that “we are further instructed we shall be acting for you in this transaction.”The resolution of 17th December, 2012 requested the Respondent’s legal department to draw up an agreement between Maina and Maina Advocates and the Respondent.  No evidence was tendered to show that such an agreement was drawn up between the Applicant and Respondent which would confirm that indeed the Respondent instructed the Applicant to undertake the conveyance of the parcels of land.

The Factory Board Resolution dated 06/08/2013 produced by the Respondent mentions that the two parcels of lands the Respondent proposes to buy  border Kericho/Londiani- Block 1(Hawi)/13–94/212 which had already been acquired by the Respondent. If the Respondent had already acquired the latter parcel of land, it could not have asked the Applicant to prepare a Deed of Assignment over it as the Applicant claims it was instructed to do.

Rule 20 of the Advocates Remuneration Order sets out what scale charges include and what they exclude.  Under Rule 20(1), scale charges include all work ordinarily incidental to a transaction and in the case of a conveyance or transfer, includes taking of instructions to prepare the necessary deed or document. Rule 20(2) provides that scale charges shall exclude prior negotiations leading up to or necessary in the completion of a bargain.  What the Applicant did, in the court’s view, appears to be at the point of prior negotiations even though item 1 on its bill of costs reads “to receiving instructions to investigate title, prepare documents and complete conveyance for five parcels of land. The Applicant prepared Deeds of Assignment but did not complete conveyances for the five parcels of land. The Respondent’s in house counsel prepared sale agreements and completed transfers over three of the five parcels of land. The court notes that Zenith Realtors Limited which is indicated as the assignor in the five deeds of Assignment prepared by the Applicant is neither a party in the sale agreements nor did it execute the transfer of land exhibited to the Respondent’s Replying Affidavit. The Respondent entered into the sale agreements and concluded transfers over the three parcels of land with different people.

The court therefore agrees with the Respondent that there were no instructions given to the Applicant.

Dated and delivered at Nairobi this 16th day of March, 2017.

K. BOR

JUDGE

In the presence of: -

Miss Maitai for the Applicant

Miss Kimaru for the Respondent

Mr. V. Owuor- Court Assistant