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Nyakina v Rose Obaga t/a Obaga & Co. Advocates (Civil Case 7 of 2019) [2022] KEHC 17142 (KLR) (21 December 2022) (Judgment)
Neutral citation:
[2022] KEHC 17142 (KLR)
Republic of Kenya
Civil Case 7 of 2019
REA Ougo, J
December 21, 2022
Between
Pacifica Bonareri Nyakina
Plaintiff
and
Rose Obaga t/a Obaga & Co. Advocates
Defendant
Judgment
1.The suit was commenced by an originating summons dated August 22, 2019 brought under section 55 and 56 of the Advocate (Deposit Interest Rules), Order 22 Rule (1) & (2), Order 27 Rule (1) and Order 52 Rule 4 subrule (1) & (2), Rule 7 subrule (1) (b) and (2) of the Civil Procedure Rules and any other enabling provisions of the law. The applicant seeks the following orders:1.That the plaintiff/applicant be allowed to demand and execute upon Advocate Rose Kerubo Obaga t/a, Obaga & Co. Advocates, Town House, 3Rd Floor Room 8, Kaunda Street Nairobi on the decretal sum arising from the filed Kisii Chief Magistrate’s Court Case Number 752 of 2005 in which the Advocate Acted for the applicant but refuses to account the decretal sum paid into her account.2.That the plaintiff/applicant having an Advocate client relationship vide a filed Civil Suit, Kisii Chief Magistrate’s Court Case Number 752 of 2005 the defendant/respondent Advocate had professional undertaking to the Applicant through her firm of Advocates, Obaga & Co. Advocates and was under obligation to pay in full Decretal sum of Kshs. 1,379,036.00 to the Applicant which plus costs Kshs.208,500.00 total sum Kshs. 1,587,536.00 was paid and since the year 2007 until today is unpaid and the honourable court be pleased to order the payment of the principle with interest Kshs. 3,496,071.14.3.That as per the Decree issued on May 20, 2019 the plaintiff’s Principal Amount Kshs. 1,288,819.00 and interest Kshs. 2,180,252.14 total Kshs. 3,469,071.14 is due and payable to the applicant and the defendant/respondent be ordered to pay the full sum to the plaintiff/applicant or make payment to the court such money pr securities for the applicant being the current decretal sum claimed and payable to the plaintiff/applicant and should the respondent refuse to pay, a notice to show cause why she should not be arrested and jailed be issued.4.That costs of this Application be provided for.
2.The application is supported by the grounds on the face and the supporting affidavit sworn by the applicant. According to the Applicant, the respondent acted for her in Kisii Chief Magistrate’s Court Case Number 752 of 2005. At the time the suit was instituted she was 7 years of age and the suit was instituted though her father and next friend. The suit in question was for damages following a road traffic accident and was concluded in favour of the applicant. However, an appeal was preferred, Kisii High Court Appeal No 65 of 2007. Before the appeal was set down for hearing, the court directed the appellant to pay part of the decretal sum, Kshs. 788,819 together with costs of Kshs. 218,819. The court further directed that Kshs. 750,941 be deposited in a joint interest earning account in the names of the Advocates of the parties. The appellant in the appeal fully complied with the order of the court by issuing two bankers cheque nos. 023024 and 023025. The appeal was dismissed and the respondent received the full sum of the decretal amount and costs.
3.The applicant deposed that despite the appeal having been concluded in 2012, the respondent has refused to release the sums due to the applicant. She contends that the respondent was obligated to open a trust account in favour of the applicant. The respondent has failed to account for the monies received and any efforts by the next friend to account or release the monies failed. The next of friend in a letter dated March 18, 2011 wrote to the respondent concerning her reluctance in bringing the matter to conclusion. He then wrote to the Advocate’s Complaints Commission and his primary concern was that communication with the advocate/respondent was completely strained. The next friend proceeded to file a complaint against the respondent vide the Disciplinary Tribunal Cause Number 56 of 2014 which was dismissed in 2016 for reasons that the next friend had failed to cooperate with the respondent to put the money in a trust account. Despite the efforts made by her father and next friend, she was not paid sums of the decretal amount which has accumulated interest and the total amount is now Kshs. 3,469,071.14.
4.The applicant contends that is now an adult and has discharged her father and next friend and demands payment from the respondent.
5.The respondent in response to the application filed a replying affidavit date May 30, 2022. It was averred that the originating summons filed before the court were incompetent frivolous and abuse of court process on grounds that there was absence of client advocate relationship as the instructions were made by the next friend. Once the applicant reached the age of majority she instructed the firm of Obaga & Co. Advocate to act for her. She also faulted the applicant for failing to comply with the mandatory rules and procedure set our under Order 52 and 37 of the Civil Procedure Rules 2010. The next friend neglected to sign the requisite affidavits for investment on monies received on behalf of the minor and the money in the advocate client’s current account. She had no capacity to invest the money without the instructions of the next friend and court order pursuant to Order 32 of the Civil Procedure Rules. She was always been ready to release the funds subject to payment of her costs. She also contends that the matter before the court is res judicata as the issues were raised before the Advocates Disciplinary Tribunal. The applicant or next friend did not pursue an appeal or review of the decision of the tribunal. She contends that she acted on 3 matters as instructed by the next friend on behalf of the minor; Kisii CMCC No 752 of 2005; CMCC No 347 of 2007; and HCCA No 65 of 2007. The advocates bill of costs vide Kisii Misc Cause Nos 141 and 153 of 2019 were taxed on July 15, 2021. She advanced that she was also awarded costs in the tribunal. She therefore seeks costs and out of pocket expenses be paid out of the amounts awarded
Submissions
6.The applicant in her submissions dated July 7, 2022 argued that it has been over 18 years since the respondent received the applicant’s money in her account but has neglected to remit to the applicant the money. She relied on Order 52 Rule 4(1) of the Civil Procedure Rules which provides as follows:
7.In the case of Henry Kipkorir Kimutai v Weda Ambrose Otieno & another [2018] eKLR the court relied on the decision of the Court of Appeal in Harit Sheth t/a K.H. Harit Sheth Advocates, Court of Appeal Application No. 276 of 2001 where the court held that:
8.The respondent filed submissions before the court on July 29, 2022. The submitted that the mount paid to the advocate on behalf of the applicant is Kshs 1,539,760/-, however her costs should be paid out of the sums received. It was argued that monies received on behalf of the minor can only be handled by the next friend with the approval of the court. The advocate was not the next friend but was acting under the instruction of the next friend who refused to sign requisite affidavits for investments but instead lodged complaints against her.
9.The appellant failed to give instructions relating to the monies received by the advocate. She cited the case of Gunjan S. Patel v Simon Kamere & Co. Advocates [2011] eKLR where the court held that:(2)Except as provided by these Rules an Advocate is not liable by virtue of the relation between the Advocate and the client to account to any client for interest received by the Advocate on moneys deposited in a client account being moneys received or held for or on account of his clients generally.(3)When an Advocate receives for or on account of a client money on which, having regard to all the circumstances (including the account and the length of time for which the money is likely to be held), interest ought in fairness to the client to be earned for him, the Advocate shall take instructions from the client concerning the investment of that money.(4)An Advocate is liable to account to a client for interest received on moneys deposited in a client account where the moneys are deposited in a separate designated account.(5)In these Rules, "separate designated account" means a deposit account in the name of the Advocate or his firm in the title of which the word "Client" appears and which is designated by reference to the identity of the client or matter concerned."………The reason for this rule is, I think clear enough. An Advocates Client account or sometimes referred to as "trust account" is a general non-interest earning account on which an amalgam of all client moneys are deposited and applied or cheques drawn on it, as per the various client's instructions or transactions. According to the custom of banks, interest is paid on term deposits or minimum balances. It is not practicable in a fast moving account with daily transactions to keep term deposits or minimum balances as the sums in the client account will keep fluctuating on a daily basis. That, I think, is the basis of non-liability under rule 2 of those rules.Rule 3, caters for situations, usually, where large sums of moneys are involved and the transaction is likely to take some time…..In situations where the client instructs the Advocate to deposit the moneys in an interest earning account, the duty of the Advocate is to deposit the moneys into a "separate designated account", in the Advocate or his firm's name clearly titled "client" and designated by reference to the client or matter in question (rules 4 & 5).”
10.The court in Gichuki Kingara & Co. Advocates v Charles Mungai Ngure & 6 Oters [2010] eKLR stated:
Analysis and Determination
11.The application before the court was canvassed through written submissions and I have considered the written submissions of both the applicant’s and the respondent’s counsel. The respondent has raised a defence of res judicata. The principle of res judicata is found in section 7 of the Civil Procedure Act Cap 21, Laws of Kenya which provides that:
12.The Court of Appeal in John Florence Maritime Services Limited & another v Cabinet Secretary for Transport and Infrastructure & 3 others [2015] eKLR quoted with approval the case of Henderson v Henderson [1843] 67 ER 313 as follows:-
13.In The Independent Electoral and Boundaries Commission v Maina Kiai & 5 others, Nairobi CA Civil Appeal No. 105 of 2017 ([2017] eKLR), the Court of Appeal held that:
14.In the instant case, the question is whether the applicant has satisfied the conditions for the application of the principle of res judicata given the facts of this case. According to the notice from the Disciplinary Committee the substance before them was that the respondent had failed to properly update the client and give proper account. The face of the judgment by the Disciplinary Committee was attached in the respondent’s affidavit as RO4. The issues that have been raised by the applicant herein concern the payment of monies received by the respondent on her behalf together with interest thereon. In the premise, I find and hold that the plea of res judicata is not available to the respondent herein.
15.The case before the court raises two issues; whether the applicant has established that there existed a relationship in the nature of advocate client relationship and whether the court can grant the orders under Order 52 Rule 4(1) of the Civil Procedure Rules. The second limb is whether the applicant has established that the respondent should pay interest.
16.In this case, it is not in dispute that the applicant’s next friend gave the respondent instructions to represent the child in Kisii CMCC No 752 of 2005. In my view, there existed a relationship of advocate and client between the parties. It is also not in dispute that the minor upon attaining the age of 18 years discharged the next friend. She therefore has the capacity to represent herself and bring forth the current application.
17.According to the decree annexed to the applicant’s supporting affidavit, the decretal amount payable to the applicant was Kshs 3,469,071.14. However one of the conditions set out by the court in Kisii High Court Appeal No 65 of 2007, before hearing the appeal challenging the lower court’s decision was on deposit of security. According to court order issued on 13th December 2007 relating to Kisii HCCA No 65 of 2007, the court directed the appellant therein to pay the applicant Kshs. 788,819/- together with costs of Kshs. 218,819/- and further directed that Kshs. 750,941/- be deposited in a joint interest earning account in the names of the Advocates of the parties. The amounts received by the advocate on behalf of the applicant was therefore Kshs 1,758,579/-. Moronge & Co. Advocates forwarded to the respondent 2 cheques to cover the amount. The amount received by the respondent was therefore tandem with the judgment of the subordinate court that awarded the applicant damages, costs and interest.
18.I therefore find that the respondent received on behalf of the applicant an award of therefore Kshs 1,758,579/-.
19.The applicant also contends that the advocate should pay the interest on the principle up until May 20, 2019. The respondent on the other hand argued that the money it received was held in an advocate client account and earned no interest. She submitted that she did not receive any instruction to deposit the money in a separate interest earning account.
20.Rule 2 of the Advocates (Deposit Interest) Rules made under section 83 of the Advocates Act cap 16 stipulates that except as provided by the Rules, an Advocate is not liable by virtue of the relation between the Advocate and the client to account to any client for interest received by the Advocate on moneys deposited in a client account being moneys received or held for or on account of his clients generally. The court in Meenye & Kirima Advocates v MM (suing on behalf of MFM, a minor) & another [2020] eKLR stated:
21.According to the order made by the court in Kisii HCCA No 65 of 2007, the court directed that Kshs 750,941/- be deposited in a joint interest earning account and a cheque of a similar amount was forwarded to the respondent. The applicant is therefore entitled to interest earned in regard to Kshs 750,941.
22.The respondent in her submissions alleged that she incurred out of pocket expenses other than her costs. However, she has failed to table any evidence of such expenses. Order 52 Rule 4 (3) of the Civil Procedure Rules empowers the court to protect the advocate’s lien where the advocate claims costs. The respondent averred that they had agreed on the costs pertaining to Kisii CMCC No 752 of 2005. She has also filed Kisii High Court Misc Cause No 141 and 153 of 2019 in respect to Kisii CMCC No 347 of 2007 and HCCA No 65 of 2007. In my view, the respondent is entitled to her costs.
23.In the end, I allow the prayers sought in the originating summons dated August 22, 2019 in the following terms:1.The respondent shall pay the applicant Kshs 1,077,244 that she received vide cheque no. 023024 less her fees as per the Advocates’ Remuneration Order.2.An order that the respondent pays the applicant Kshs. 750,941/- plus interest.3.An order that the respondent do pay to the applicant all money in her custody held on behalf of the applicant failure to which interest to run thereon at court rates from the date of this judgment till full payment.4.The applicant shall have the costs of this application.
DATED, SIGNED, AND DELIVERED VIA MICROSOFT TEAMS AT BUNGOMA THIS 21ST DAY OF DECEMBER, 2022.R.E. OUGOJUDGEIn the presence of:For the AppellantFor the RespondentWilkister/ C/A
