This archive report was first published on 2 December 2019.
On December 2, 2019, Magereza Sacco emerged victorious in a dispute over Sh139 million in legal fees related to a failed land purchase deal.
The Court of Appeal in Nairobi ruled in favor of the sacco, citing that the law firm, Ratemo Oira & Co. Advocates, only prepared the contract but did not complete the sale transaction.
According to the court, the law firm's remuneration was only due once the property had passed to the purchaser upon execution of a valid contract of sale and completion of the agreed conveyancing formalities.
The law firm had claimed that it conducted due diligence for the Kenya Prisons Service's Sacco on the land it wanted to buy and drew a sale agreement.
However, the sacco failed to raise the Sh300 million deposit required to secure the property, and the deal collapsed.
The lawyers then slapped the sacco with a demand for fees, despite the deal falling apart.
Magereza Sacco went to court to contest the claim, and Judge S. Mwayuli dismissed the bill on grounds that there was no sale agreement or executed transfer document to show that the transaction took place.
The lawyers appealed, arguing that the Sh100,000 as instruction fees was an error in principle by the judge and the taxing officer.
However, the Court of Appeal threw out the case, stating that the scope and nature of work was minimal and in the early stages of the transaction.
