Wakilii

Visare Uganda Limited v Muwema and Company Advocates and Solicitors. (Miscellaneous Application 826 of 2022; Miscellaneous Application 827 of 2023)

High Court · [2023] UGCOMMC 32 · 2023 Application Dismissed AI-generated summary ↓ Download Pin to watchlist Add to matter
Jurisdiction
Uganda
Case Type
Consolidated applications: (1) to void a remuneration agreement and vacate a garnishee order nisi; (2) for unconditional leave to appear and defend a summary suit for recovery of legal fees
Decision
Applications dismissed; judgment entered for respondent for US $100,000 with interest at 6% per annum and costs

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Holding

The court consolidated the two applications and dismissed them with costs. The remuneration agreement was found to be properly notarised, fair in its negotiation process, and reasonable in quantum. The agreed fee of US $100,000 represented approximately 2% of the subject matter value and was negotiated with a sophisticated client after completion of services. The applicant failed to disclose a bona fide defence raising triable issues. Judgment was entered for the respondent in the sum of US $100,000 with interest at 6% per annum.

Outcome

Applications dismissed; judgment entered for respondent for US $100,000 with interest at 6% per annum and costs

Facts

The applicant obtained a loan from KCB Bank secured by a mortgage over condominium property comprising 44 residential units. Upon default, the applicant sold 12 units to Grant Thornton Management Limited for US $2,400,000 to partially satisfy the debt. When the applicant failed to redeem the remaining balance by the agreed deadline, Grant Thornton initiated execution proceedings against the entire property. The applicant instructed the respondent law firm to file applications for stay of execution, interim injunction, and to challenge taxation of costs. On 27 October 2022, the parties executed a remuneration agreement whereby the applicant agreed to pay the respondent US $100,000 as legal fees for handling multiple applications arising from the underlying dispute. When the applicant failed to pay by the agreed deadline of January 2023, the respondent filed a summary suit to recover the fee. The applicant then applied to void the remuneration agreement and for leave to defend the summary suit.

Issues

  1. Whether the remuneration agreement dated 27 October 2022 should be voided as unconscionable or non-compliant with statutory requirements.
  2. Whether the applicant should be granted unconditional leave to appear and defend the summary suit for recovery of legal fees.
  3. Whether the remuneration agreement was properly notarised in accordance with section 51 of the Advocates Act.
  4. Whether the fee of US $100,000 stipulated in the remuneration agreement is fair and reasonable or excessive and unconscionable.
  5. Whether the two applications should be consolidated.

Orders

  • Miscellaneous Application No. 0826 of 2023 consolidated with Miscellaneous Application No. 0827 of 2023.
  • The consolidated application dismissed with costs to the respondent.
  • Judgment entered for the respondent against the applicant in the sum of US $100,000.
  • The decretal amount to bear interest at the rate of 6% per annum from the date of judgment until payment in full.
  • The respondent awarded the costs of the suit.

Rules and key headnotes

Advocates' Fee Agreements — Statutory Requirements for Validity
A fee agreement between an advocate and client must comply with section 51(1) of the Advocates Act by being in writing, signed by the person bound, and containing a certificate signed by a notary public (other than a party to the agreement) confirming that the nature of the agreement was explained to the client and the client appeared to understand it. Non-compliant agreements are unenforceable under section 51(2).
Advocates' Fee Agreements — Notarisation Requirements
Notarisation of a fee agreement requires the physical presence of the client before the notary public. The notary must verify the client's identity, witness the signing, and satisfy himself that the client understands the agreement and is entering into it of his own free will. The notary's affidavit evidence detailing compliance with these requirements, if unchallenged, establishes proper notarisation.
Advocates' Fee Agreements — Fairness of Negotiation Process
The burden is on the advocate to prove that a fee agreement was fair and that no undue advantage was taken of the client. Fairness is assessed as of the time the agreement was made and requires that the client gave informed consent after being fully apprised of relevant facts. A fee agreement negotiated with a sophisticated client who has experience in business and litigation, after completion of services and without evidence of overreaching, satisfies the fairness requirement.
Advocates' Fee Agreements — Reasonableness of Quantum
A fee is unconscionable only if it is so exorbitant and wholly disproportionate to the services performed as to shock the conscience of lawyers of ordinary prudence. Reasonableness is assessed by considering factors including the value of the subject matter, the time and labour required, the complexity and novelty of the issues, the advocate's skill and reputation, the results obtained, and the timing and circumstances of the fee negotiation. A fee representing approximately 2% of the subject matter value is not per se unreasonable.
Summary Suits — Leave to Defend — Test for Triable Issues
Unconditional leave to appear and defend a summary suit will be granted only where the applicant discloses a bona fide defence that is good in law and raises triable issues of fact or law. The applicant must set out with sufficient particularity the material facts upon which the defence is based. Mere assertion or bald denial without supporting evidence does not constitute a triable issue. Where the proposed defence lacks an arguable basis in law or fact, leave must be refused and judgment entered for the plaintiff.
Consolidation of Proceedings — Discretionary Factors
Where two or more suits are pending in the same court involving the same parties, common facts, and similar questions of law or fact, the court may consolidate them in exercise of its discretion. Consolidation is appropriate where it will promote expeditious and inexpensive determination, avoid multiplicity of proceedings and inconsistent findings, and result in cost savings without causing undue procedural complexity or prejudice. The court considers factors including the extent to which issues are interwoven, overlap of evidence and witnesses, litigation status, and balance of convenience.
Advocates' Fee Agreements — Enforcement and Recovery
Once an enforceable fee agreement exists that fully complies with statutory requirements, an advocate cannot present an advocate-client bill of costs for taxation except in accordance with sections 52 and 53 of the Advocates Act. The advocate may instead bring a suit to recover unpaid fees under the contract. Where the agreement is found to be fair, reasonable, and enforceable, the court must enforce it and enter judgment for the agreed sum.

Legislation cited (18)

  • Advocates Act s.50
  • Advocates Act s.51
  • Advocates Act s.52
  • Advocates Act s.53
  • Advocates Act s.54
  • Civil Procedure Act s.98
  • Civil Procedure Rules O.6 r.30(1)
  • Civil Procedure Rules O.11 r.1
  • Civil Procedure Rules O.36 r.3(1)
  • Civil Procedure Rules O.36 r.4
  • Civil Procedure Rules O.36 r.5
  • Civil Procedure Rules O.52 r.1
  • Civil Procedure Rules O.52 r.2
  • Civil Procedure Rules O.52 r.3
  • Advocates (Remuneration and Taxation of Costs) Regulations r.57
  • Advocates (Remuneration and Taxation of Costs) Regulations Sixth Schedule item 9(2)
  • Advocates (Professional Conduct) Regulations r.11
  • Advocates (Professional Conduct) Regulations r.28(2)

Cases cited (16)

  • In re Stuart, ex parte Cathcart [1893] 2 QB 201
  • Vilvarajah v West London Law Ltd [2017] EWHC B23
  • Byenkya Kihika & Co. Advocates v Fang Min (Miscellaneous Cause No. 52 of 2022)
  • M.M.K Engineering v Mantrust Uganda Ltd (Miscellaneous Application No. 128 of 2012)
  • Bhaker Kotecha v Adam Muhammed [2002] 1 EA 112
  • Makula Inter global Trade Agency v Bank of Uganda [1985] HCB 65
  • Jamil Senyonjo v Jonathan Bunjo (Civil Suit No. 180 of 2012)
  • Shell (U) Limited and others v Muwema, Mugerwa and Company Advocates and another (Civil Appeal No. 2 of 2013)
  • Goldstone v. State Bar (1931) 214 Cal. 490 at 498; 6 P.2d 513, 80 A.L.R. 701
  • In re Richards, 202 Or. 262, 274 P.2d 797 (Sup. Ct. 1954)
  • Bushman v. State Bar (1974) 11 Cal.3d 558, 563 [113 Cal. Rptr. 904; 522 P.2d 312)
  • In re Backes, 22 N.J. 212, 215 (1956)
  • In re Myrland, 54 Ariz. 284, 95 P.2d 56, 60 (Sup. Ct. 1939)
  • In re Cary, 146 Minn. 80, 177 N.W. 801, 804, 9 A.L.R. 1272 (Sup. Ct. 1920)
  • In Re Swartz (1984) 141 Ariz. 266, 271; 686 P.2d 1236
  • James Mutoigo t/a Juris Law Office v Shell (U) Ltd (Miscellaneous Application No. 68 of 2007)

Full judgment

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Visare Uganda Limited v Muwema and Company Advocates and Solicitors. (Miscellaneous Application 826 of 2022; Miscellaneous Application 827 of 2023) [2023] UGCommC 32 (14 July 2023)
Source: this page presents Wakilii’s issue analysis and metadata for a publicly reported Ugandan judgment. Any AI-generated summary is marked as such. Judgment text is sourced from the Uganda Legal Information Institute (ulii.org). Wakilii is not affiliated with ULII.