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30 March 2010
The Court of Appeal has upheld a High Court decision declaring as invalid a charge instrument and deed of guarantee which had been drawn up by an advocate who had failed to renew her practising certificate. As a result, the moneys advanced to the borrower by the National Bank of Kenya, which the documents sought to secure, were found to be irrecoverable.
On July 23 1990 and October 17 1990 a borrower, Wilson Ndolo Ayah, executed a charge and a deed of guarantee in favour of the bank to secure the repayment of the sum of KSh10 million which had been loaned to him by the bank.
However, on July 17 1997 the borrower filed suit in the High Court seeking, among other reliefs, a declaration that the charge and the guarantee were null and void ab initio (from the beginning). He further sought a declaration that the sum of money advanced to him – which had grown from the initial figure of KSh10 million to over KSh57 million – was irrecoverable.
At trial in the High Court, the court found that on the respective dates that the charge and guarantee were drawn up, the advocate in question, Mrs V A Nyamondi, had not renewed her practising certificate. Therefore, she was unqualified to draw up the documents in view of the provisions of Section 34 of the Advocates Act. Section 34 provides that no unqualified person may take instructions or draw up or prepare any document or instrument for which a fee is prescribed by an order made by the chief justice under Section 44 of the act.
The court concluded that the charge and guarantee were null and void, with the result that the moneys that the documents sought to secure were irrecoverable. The bank appealed to the Court of Appeal.
The Court of Appeal drew a distinction between qualifying as an advocate – which Nyamondi had achieved by successfully going through law school – and qualifying to practice as an advocate, which requires the renewal of the advocate's annual practising certificate.
The court was faced with the question of whether Section 34 of the act is intended to protect the unsuspecting public from unqualified persons, or whether it is meant to punish a person who uses the services of an unqualified person. The court considered, among other authorities, the UK case Spirling v Breneton, in which Sir W Pagewood stated:
"It would be most mischievous indeed, if persons without any power of informing themselves on the subject, should be held liable for the consequence of any irregularity in the qualification of their solicitor. As against third parties the acts of such a person acting as a solicitor are valid and binding upon the client on whose behalf they are done. A client who might ascertain by inquiry that his solicitor was on the roll would have no means of finding out if his certificate was taken out and stamped at the proper time."
However, the Court of Appeal declined to follow the UK court's decision, holding that a statute prohibiting certain acts intended to protect the public interest was more relevant in a country such as Kenya, which has a predominantly illiterate or semi-literate population. Allowing an illegal act to stand according to the highest court in Kenya would amount to a perpetuation of the illegality. The court further found that since the Law Society of Kenya published a list of advocates that had renewed their practising certificates for the year, the public was deemed to have been notified of which advocates were qualified to offer legal services.
Ultimately, the court held that the advocate's lack of a valid practising certificate at the time of drawing up the charge and the guarantee invalidated those documents. The appeal was dismissed.
The Court of Appeal's decision is laudable from a disciplinarian point of view. There is a pressing need to discourage unqualified persons from practising as advocates, since the number of cases wherein unqualified persons have attempted to pass themselves off as advocates has been increasing. Banks and other clients should be careful when engaging advocates, ensuring that they have a valid practising certificate before they draw up instruments or pleadings.
However, the decision appears to be out of touch with practice, since although many advocates apply for the renewal of their certificates at the beginning of each year, there is usually a lengthy delay in their delivery from the Law Society of Kenya. Some certificates are issued as late as April. Therefore, it is arguable whether an applicant is qualified to act as an advocate between the date of application for the renewal of his or her practising certificate and the date on which it is actually renewed.
For further information on this topic please contact John Mbaluto at Njoroge Regeru & Company by telephone (+254 20 271 8482), fax (+254 20 271 8485) or email (firstname.lastname@example.org).
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