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City lawyer Lydia Kinyanjui cited for professional misconduct, ordered to refund Sh5.8 million in botched deal

Despite the plaintiff remitting the money to the client's account at the law firm, she defaulted to remit the balance of the purchase price to the vendor's advocates despite demands and unsuccessful efforts by the complainant

A Nairobi lawyer has been directed to refund Ksh 5.8 million to a client in a botched house purchase deal after she was found guilty of breaching her fiduciary and professional duty.

Milimani High Court Judge Tabitha Ouya ordered Lydia Wambui Kinyanjui , T/A Mohamed Kinyanjui Advocates, to refund the money to Charles Mwangi Kinoro within 30 days from the day the ruling was delivered.

Kinoro had moved to court after the lawyer  failed to refund the money being the balance of the purchase price for an apartment, number F104, at Green Zone on LR NO 28428/51 in Kiambu.

Kinoro, in his affidavit, said he instructed the lawyer to represent him in the purchase of the property and she accepted the instructions thereby creating an advocate-client relationship and subsequently acted for him during the execution of the sale agreement dated May 5, 2023. Kinoro paid the deposit of the purchase price of Ksh 500,000 as well as the requisite legal fee of Ksh 100,000.

The deposit was remitted by the lawyer to Krishna Estates, the vendors’ account as deposit for the purchase.

According to the agreement, the balance for sale was supposed to be paid directly to the vendor in cleared funds but the lawyer advised her client to pay the balance of the purchase price of Ksh 5.8 million into her law firm’s client account for onward transfer to the vendor and pursuant to the advice, Kinoro complied and deposited the money on May 30, 2023.

The amount being the balance of the purchase price was to be paid to the vendor within 90 days from the date of execution of the agreement for sale, that was on August 3, 2023.

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Despite the plaintiff remitting the money to the client’s account at the law firm, she defaulted to remit the balance of the purchase price to the vendor’s advocates despite demands and unsuccessful efforts by the complainant.

The complainant further engaged the Messrs. J. Salim Advocates in January 2024 to intervene in the issue and to take up conduct of the matter.

“Despite numerous demands by his new lawyers, the defendant failed to release the balance of the purchase to the vendor.”

In filing suit, Kinoro averred that Wambui breached her fiduciary duty and had placed him in a precarious position considering that the vendors has issued him with a 21 days completion notice which was dated February 20, 2024, which had already expired by the time of the filing of the suit.

The plaintiff claims that the vendors were entitled to rescind the agreement for sale leaving him at a risk of forfeiting the deposit of Ksh 500,000 in the event the vendor rescinds the agreement for sale adding that part of the purchase price was financed through a bank loan facility.

Wambui filed a notice of preliminary objection on May 21 2024, challenging the courts jurisdiction and the competency to hear the suit.

She indicated that “the court lacks jurisdiction to hear and determine that issue as the same offended Article 162 (b) of the constitution and the Environment and Labour Court Act No 19 of 2011 ELCA which confers jurisdiction of the Environment and Labour Court.”

Wambui also raised an issue under order 52 rule 4 deposing that the matter touches on relationship between advocates and clients and that order prescribed therein have been fulfilled by deposit of Ksh 4.3 million in the plaintiff’s vendor. She claimed the rule to have been taken by events.

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She terms the suit “as frivolous, scandalous, vexatious and an abuse of the process of the court and that this suit has been overtaken by events.

Kinoro sought the court’s indulgence that Wambui be ordered to refund the legal fees of 100,000 he had paid, compensation of the damages for the financial losses suffered and a declaration be made that his lawyer breached fiduciary duty owed to him.

In determining the matter, Justice Ouya noted that Ksh 100,000 was paid prior to the drafting of the sale agreement and the complainant had accorded that Wambui drafted the agreement for sale upon the payment of the legal fees and the breach happened afterwards.

The judge said that “the claim for refund of the legal fees fails because some legal work was done by the defendant and the work’s worth has not been qualified.”

About jurisdiction, the judge noted that the jurisdiction of the High Court is enriched in Article 165 of the constitution while that of the ELC is at Article 162, hence the court had jurisdiction to hear the matter.

In conclusion, Justice Ouya indicated that “the court has taken notice that the defendant has remitted Ksh 4.3 million to the vendor being part of the summin dispute. This means there is still an outstanding balance being the amount in issue was Ksh 5.8 million and the court therefore seems fit to order that any outstanding balances be remitted to the plaintiff within 30 days from the date thereof.”

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