Law firm -
Termination of services
- Legal fees – Scale of
Fees -
Oral
fee agreement - Capacity
- Solicitor’s Licence -
Whether or not the
judgment is against the weight
of evidence - whether or not the
respondent’s board of directors
held a meeting with the
plaintiff -Whether or not the
respondent’s board of directors
held a meeting – Whether or not
non-compliance with section 201
of Act 179 renders the minutes
null and void.
Section 8(1) - Legal Profession
Act 1960 Act 32 - Section 12(2)
- Section 14 - Evidence Act
1975 NRCD 323 - Rule 5(2) -
Legal Profession (Professional
Conduct and Etiquette) Rules,
1969 (LI 613)
HEADNOTES
The appellant is a law firm
registered under the laws of
Ghana while the respondent is a
limited liability company
engaged in the manufacture of
alcoholic and non-alcoholic
beverages. The facts gleaned
from the record reveals that the
respondent engaged the services
of the appellant to handle a
suit brought against it by
another limited liability
company, Integrated Investments
Limited in the High Court, and a
subsequent appeal in the Court
of Appeal. The relationship
between the parties ended
abruptly when the respondent, by
a letter
terminated the services of
the appellant. The appellant
thereafter served a one-month
formal demand notice on the
respondent claiming legal fees
for outstanding services
rendered to the respondent till
the date of termination. The
respondent failed to comply with
the notice served by the
appellant on it, prompting the
appellant to issue a writ at the
High Court, the respondent
resisted the claim of the
appellant. The respondent
asserts that the bills specified
in the appellant’s claim as
outstanding are not the fees
agreed with the appellant for
handling its cases, The
respondent denied being indebted
to the appellant and maintained
that the parties did not agree
on fees at the onset and that
the appellant only demanded
deposits which the respondent
always paid the trial court
delivered judgment against the
appellant after finding on a
preponderance of probabilities
that there was indeed an
agreement reached between the
parties, Dissatisfied with the
judgment of the trial court, the
appellant filed an appeal in the
Court of Appeal, the Court of
Appeal dismissed the appellant’s
appeal .
HELD
No evidence was elicited or
adduced in proof or otherwise of
the alleged lack of capacity and
as a result this court cannot
decidedly resolve the issue of
appellant’s capacity based on
the evidence on the Record as it
stands.
The stage at which
the capacity issue was raised
rendered the trial court and
indeed this Court incapable of
determining it. Accordingly, the
issue of capacity fails.
Accordingly, in the absence of
an express statement from the
legislature nullifying minutes
that do not comply with section
201(1), we see section 201(4) as
one of the administrative
sanctions meant by the lawmakers
to act as a check on
administrative defaults and
nothing else. We therefore
endorse the view of the Court of
Appeal that minutes made in
breach of section 201(1) are
still valid and can constitute
prima facie evidence as provided
in section 201(3) of Act 179.
The evidence therefore tilted in
favour of the assertion by
appellant that no such fee was
negotiated. From the totality of
the evidence on the record, it
is our opinion that though a
proposal was made to appellant
at the board meeting on 27th
October 2005 to accept a fixed
fee for all the cases handled
for respondent, no agreement was
reached by the parties on the
request.
Law firms and lawyers practising
in Ghana are required in the
services they render to their
clients to strictly adhere to
approved scale of fees or
established tariffs. The scale
of fees requires lawyers to
negotiate and agree with the
client the fees to be charged
based on the range provided for
each service and the terms of
payment before the commencement
of the provision of legal
services. In breach of the Scale
of Fees, appellant chose to
render the service before
sending invoices for his
services for the payment by the
client
When instructed by the client, a
lawyer or law firm is required
to discuss, negotiate and agree
with the client the fees payable
within the range provided in the
Scale of Fees and then execute a
written retainer agreement,
engagement letter or fee paying
agreement detailing the scope of
legal services to be performed,
the fees and expenses to be
charged and the possibility of a
refresher fees if the assignment
goes beyond the anticipated time
frame for such cases. The
agreement with the client shall
also provide the terms of
payment of the fees, the
percentage payable as deposit,
the type of fee structure i.e.
fixed fee, fixed fee plus
success fee, hourly fees, hourly
fees plus success fee and fixed
fee for part of the work and
hourly fees for the other part.
If the service is to be rendered
pro bono, the agreement must
specifically state so.
Concluding, appellant law firm
in this case failed to
negotiate, discuss and agree on
its legal fees with respondent
before the commencement of the
service. In addition, appellant
also failed to enter into a
written retainer, fee paying or
engagement agreement with
respondent detailing the scope
of work and the legal fees
payable by the client for the
service. Such conduct was in
breach of the Scale of Fees of
the Ghana Bar Association and
accordingly in breach of
section 28 of the Legal
Profession Act 1960 (Act 32) and
rule 9(9) of the Legal
Profession (Professional Conduct
and Etiquette) Rules, 1969 (LI
613).
The trial court and the Court of
Appeal were justified in
dismissing the claim of
appellant. We for different
reasons as illustrated above
affirm the decision of the
courts below that the
appellant’s action must fail.
For these reasons the appeal is
dismissed.
STATUTES REFERRED TO IN JUDGMENT
Legal Profession Act 1960 Act 32
Evidence Act 1975 NRCD 323
Companies Act 1963 (Act 179).
CASES REFERRED TO IN JUDGMENT
AKUFFO-ADDO V CATHELINE [1992] 1
GLR 337;
TUAKWA V BOSOM [2001-2002] SCGLR
61;
ACKAH V PERGAH TRANSPORT [2000]
SCGLR 728;
ARYEH V AYAA [2010] SCGLR 891
KOGLEX LTD (No2) v FIELD [2000]
SCGLR 175;
NTIRI v ESSIEN [2001-2002]
SCGLR;
GREGORY v TANDOH IV & HANSON
[2010] SCGLR 971;
FYNN v FYNN & OSEI [2013-2014] 1
SCGLR page 729.
FATAL V WOLLEY [2013-2014] 2
SCGLR 1070
Wood v. Tamakloe
[2007-2008] SCGLR 852,
Klein Calderoni & Santucci LLP v
Bazerjian 800 N.Y.S. 2d 348,
2005 WL 51721 (Sup. Ct. Bronx
County 2005)
Edward Nassar v McVroom
[1996-97] SCGLR 468
Achoro v Akanfela [1996-97]
SCGLR 209
Obrasiwa II v Otu [1996-97]
SCGLR 618;
Obeng v Assemblies of God
Church, Ghana [2010] SCGLR 971
Mensah v Mensah [2012] 1 SCGLR
391
Asamoah v Servordzie [1987-1988]
1 GLR 67
Hearts of Oak Assurance Co. Ltd
v James Flowers & Sons [1936]
Ch. 76
Feeder, Goldstein, Tanenbaun &
D’Errico v Ronan, 195 Misc.2d
704, NYS2d 463 (Nassau Gy Dist
Ct 2003)
BOOKS REFERRED TO IN JUDGMENT
DELIVERING THE LEADING JUDGMENT
AMEGATCHER, JSC:-
COUNSEL
CHARLES HAYIBOR FOR THE
PLAINTIFF/APPELLANT/APPELLANT.
TWUMASI ANKRAH FOR THE
DEFENDANT/RESPONDENT/RESPONDENT
_________________________________________________________________________
AMEGATCHER, JSC:-
This appeal arose from a
legal fee
dispute between the
appellant
law firm and the respondent
company.
The appellant lost the suit it
filed in the High Court and a
subsequent appeal to the Court
of Appeal, prompting the instant
appeal to this Court. What the
appellant is urging on us is to
reverse the decision of the
Court of Appeal dated 7th
July 2016 which confirmed the
judgment of the High Court
presided over by Dery J, dated
25th July 2014.
The appellant is a law firm
registered under the laws of
Ghana while the respondent is a
limited liability company
engaged in the manufacture of
alcoholic and non-alcoholic
beverages. The facts gleaned
from the record reveals that the
respondent engaged the services
of the appellant to handle a
suit brought against it by
another limited liability
company, Integrated Investments
Limited in the High Court, Accra
and a subsequent appeal in the
Court of Appeal. The
relationship between the parties
ended abruptly when the
respondent, by a letter dated 12th
July 2010, terminated the
services of the appellant. The
appellant thereafter served a
one-month formal demand notice
on the respondent in July 2011
claiming legal fees for
outstanding services rendered to
the respondent from 2006 till
the date of termination. The
respondent failed to comply with
the notice served by the
appellant on it, prompting the
appellant to issue a writ at the
High Court, Accra on 26th
August 2011
claiming the following:
(a)
GH¢35,000.00 being deposit of
fees charged for legal services
rendered to the defendant in
respect of the suit known as
number AC 155/2005, Integrated
Investment Limited v GIHOC
Distilleries Company Limited in
the High Court.
(b)
GH¢35,000.00 being final deposit
of fees charged for legal
services rendered to the
defendant in respect of the suit
known as number AC 155/2005,
Integrated Investment Limited v
GIHOC Distilleries Company
Limited in the High Court.
(c)
GH¢35,000.00 being fees charged
for legal services rendered to
the defendant for conducting two
(2) appeals at the Court of
Appeal in respect of suit known
as number AC 155/2005,
Integrated Investments Limited v
GIHOC Distilleries Company
Limited.
(d)
GH¢5,800 (GH¢6,670.00) being
fees charged for legal services
rendered to the defendant for
preparing all documents and
providing advice needed for the
Annual General Meeting of the
defendant in 2006.
(e)
Interest on the said sums of
money at the prevailing bank
lending rate from the dates on
which the various bills of fees
were served on the defendant up
to the date of final payment.
The respondent resisted the
claim of the appellant. The
respondent asserts that the
bills specified in the
appellant’s claim as outstanding
are not the fees agreed with the
appellant for handling its cases.
It is the case of the respondent
that following the submission of
a bill of GH¢51,700.00 by the
appellant for a winding-up
proceedings which the appellant
was engaged to represent it, the
appellant met with its board of
directors on 27th
October 2005 and agreed on an
amount of GH¢80,000 as legal
fees for all the cases at the
trial and appellate courts. The
respondent further asserts that
it paid an amount of GH¢30,800
in satisfaction of the AGM fees
of GH¢5,800.00 and the
negotiated deposit of
GH¢25,000.00 which together
constituted the balance of the
total fees of GH¢80,000.00
agreed with the appellant on 27th
October 2005.
The
respondent denied being indebted
to the appellant and maintained
that the parties did not agree
on fees at the onset and that
the appellant only demanded
deposits which the respondent
always paid until they
agreed on the GH¢80,000.00.
It is the further case of the
respondent that notwithstanding
their agreement, the appellant
purported to submit additional
bills and when he was reminded
of the 27th October
2005 agreement, the appellant
denied ever agreeing to take an
all-inclusive fee of
GH¢80,000.00. The respondent
said that thereafter its
managing director engaged with
the appellant’s representative
(Mr. Tamakloe) and through the
intervention of a colleague
lawyer and friend of Mr.
Tamakloe, the managing director
managed to persuade Mr. Tamakloe
to once again accept the
all-inclusive fee agreed upon on
the 27th of October
2005.
On 25th July 2014,
the trial
court delivered judgment against
the appellant after finding on a
preponderance of probabilities
that there was indeed an
agreement reached between the
parties on 27th
October 2005 for total legal
fees of GH¢80,000.00.
Dissatisfied with the judgment
of the trial court, the
appellant filed an appeal in the
Court of Appeal on 13th
July 2017. On 7th
July 2016, the Court of Appeal
dismissed the appellant’s appeal
and affirmed the decision of
the learned trial judge in a
unanimous judgment delivered by
Korbieh JA. Further aggrieved by
the decision of the Court of
Appeal, the appellant filed this
appeal on 15th
September 2016 upon the
following grounds:
A.
The judgment is against the
weight of evidence
PARTICULARS
i.
The appellant having denied that
the meeting of October 27, 2005
ever took place, the respondent
ought to have adduced sufficient
evidence of the said meeting in
addition to exhibit 6 tendered
in support of its case.
ii.
The Court of Appeal erred in
ignoring pieces of evidence on
record which tended to show that
the appellant could not have
agreed to accept the sum of
GH¢80,000 for all the cases even
if they should travel to the
Supreme Court.
B.
The Court of Appeal erred in its
interpretation and application
of the provisions of Section 201
of the Companies Act, 1963 (Act
179) to the minutes of the
alleged meeting of the
Defendant/Respondent’s Board of
Directors which was attached to
its Affidavit in Opposition to
the Plaintiff/Appellant’s Motion
to Strike out
Defendant/Respondent’s Defence
and later tendered at trial and
in the process completely
glossed over the patent
discrepancies in Exhibits GH1
and 6.
C.
The Court of Appeal erred in its
endorsement of the failure of
the trial judge to consider and
appreciate the other issues set
down for trial, thereby failing
to consider the totality of the
case of the appellant to appeal.
D.
The Court of Appeal erred in
relying on Exhibit 6 to resolve
the issue set down for trial and
numbered (C) and also wrongly
relied on the alleged meeting of
October 27, 2005 to resolve the
issue set down and numbered (d).
E.
The Court of Appeal erred in
coming to the conclusion that
the meeting of October 27, 2005
took place.
A careful reading of the
appellant’s grounds of Appeal
reveals that they all seek to
attack the trial court and Court
of Appeal’s reliance on Exhibit
6 to resolve the trial and
appeal in favour of the
respondent. Thus, all the
grounds of appeal fall
substantially under Ground A,
i.e., the
judgment is against the weight
of evidence. This is because
the sum total of the appellant’s
contentions is that both the
trial court and the Court of
Appeal did not adequately
consider the evidence on record
in arriving at their respective
decisions; meaning the judgment
is against the weight of
evidence. The appeal would,
therefore be determined on this
omnibus ground.
The authorities are legion that
it is incumbent on the appellate
court to analyse the entire
Record of Appeal, taking into
consideration the totality of
the evidence on record, both
oral and documentary, so as to
satisfy itself that on the
preponderance of the
probabilities, the conclusions
of the trial court and the 1st
appellate court, were reasonably
and amply supported by the
evidence adduced at the trial.
This is the principle laid down
by this court in a plethora of
cases including:
AKUFFO-ADDO V CATHELINE [1992] 1
GLR 337; TUAKWA V BOSOM
[2001-2002] SCGLR 61; ACKAH V
PERGAH TRANSPORT [2000] SCGLR
728; ARYEH V AYAA [2010] SCGLR
891.
Again, the circumstances under
which a second appellate court
like this Court may interfere
with the concurrent findings of
fact of two lower courts; (i.e.
the trial court and the first
appellate court), are well
established in a long line of
cases. Some of these cases are
KOGLEX
LTD (No2) v FIELD [2000] SCGLR
175; NTIRI v ESSIEN [2001-2002]
SCGLR; GREGORY v TANDOH IV &
HANSON [2010] SCGLR 971;
FYNN v FYNN & OSEI [2013-2014] 1
SCGLR page 729. The
Court in the Fynn case (supra)
unanimously dismissed the
plaintiff’s appeal from the
judgment of the Court of Appeal
and held as follows:
“(1) the legal principles
governing appeal against
concurrent findings of fact and
conclusions of two lower courts
were that ordinarily, a second
appellate court, such as the
Supreme Court, would not
interfere with the findings of
fact made by the trial court and
confirmed on appeal by a first
appellate court. A second
appellate court, i.e. the
Supreme Court, would overturn
such findings and conclusions
only in exceptional cases.
Thus the Supreme Court, as a
second appellate court, would
not interfere with the
concurrent findings of two lower
courts unless it was established
with absolute clearness that
some blunder or error resulting
in a miscarriage of justice, was
apparent in the way in which the
lower tribunals had dealt with
the facts. It must be
established, e.g., that the
lower courts had clearly erred
in the face of crucial
documentary evidence, or that a
principle of evidence had not
been properly applied; or
that the finding was so based on
erroneous proposition of law
that if that proposition were
corrected, the finding would
disappear.
The Supreme Court would also
interfere where it was satisfied
that there were strong pieces of
evidence on record which were
manifestly clear that the
findings of the trial court and
the first appellate courts were
perverse or inconsistent with
the totality of evidence and the
surrounding circumstances of the
entire evidence on record; or
where the trial court had failed
to properly evaluate the
evidence or make proper use of
seeing or hearing the witnesses
at the trial. In the instant
case, the concurrent findings
were not perverse; they were
amply supported by the record,
and clearly consistent with the
totality of the evidence. No
miscarriage of justice had been
occasioned by those findings and
conclusions and it would be most
unjust on our part, to interfere
with them.
Achoro v
Akanfela [1996-97] SCGLR 209
applied. Obrasiwa II v Otu
[1996-97] SCGLR 618; Obeng v
Assemblies of God Church, Ghana
[2010] SCGLR 971 at 986-987; and
Mensah v Mensah [2012] 1 SCGLR
391 cited.”
CAPACITY
Before examining the merits of
the grounds of appeal, there is
an issue of
capacity raised by Counsel
for the respondent on the last
page of his Statement of Case,
which we must address.
Respondent sought to challenge
the appellant’s capacity to sue
to recover fees as follows:
“My Lords at the High Court,
the Defendant raised the issue
of the Plaintiff’s failure to
show compliance with
Section
8(1) of Act 32 which
prohibited a Lawyer from taking
a Suit to cover fees unless that
person has in respect of that
practice a valid
Solicitor’s Licence. The
defendant’s invitation to the
Court was refused on the ground
that it was late in the day at
addresses stage for the issue to
be raised as it was not pleaded”.
It is trite that the issue of
capacity can be raised at any
stage of the proceedings and
even for the first time in the
second appellate Court. However,
in
FATAL V WOLLEY [2013-2014] 2
SCGLR 1070 this Court
highlighted certain conditions
precedent that will enable this
Court resolve an issue of
capacity that is belatedly
raised. In holding (1) thereof,
it was held as follows:
(1)
The legal question of capacity,
like other legal questions, such
as jurisdiction may be raised
even on appeal. But it is trite
learning that the principle is
clearly circumscribed by law.
The right to raise legal issues
even at such a late stage is
legally permissible only if
the facts, if any, upon which
the legal question is premised,
are either undisputed; or if
disputed, the requisite evidence
had been led in proof or
disproof of those relevant
facts, leading to their
resolution by the trier of
facts; failing which the
facts could, and based purely on
the evidence on the record, and
without any further evidence,
decidedly be resolved by the
appellate court.”
From the above dictum, it is
clear that while the question of
legal capacity can be raised at
any stage, it can only be
properly raised before the
Supreme Court if this Court can
decidedly resolve the issue of
the appellant’s capacity to sue
for recovery of its legal fees
purely on the evidence on
record. Failing that, the court
is required to dismiss any
allegation of lack of capacity
at the last stage.
In the instant case the
respondent neither pleaded facts
about the appellant’s lack of a
valid solicitor’s practicing
licence nor did he cross-examine
the appellant to give him the
opportunity to challenge that
assertion. Consequently,
no
evidence was elicited or adduced
in proof or otherwise of the
alleged lack of capacity and as
a result this court cannot
decidedly resolve the issue of
appellant’s capacity based on
the evidence on the Record as it
stands.
The stage at which the capacity
issue was raised rendered the
trial court and indeed this
Court incapable of determining
it. Accordingly, the issue of
capacity fails.
THE OMNIBUS CROUND OF APPEAL
The judgment is against the
weight of evidence
Section 14
of the Evidence Act 1975 NRCD
323 provides as follows:
“Except as otherwise provided
by law, unless and until it is
shifted a party has the burden
of persuasion as to each fact
the existence or non-existence
of which is essential to the
claim or defence he is asserting”
The standard of proof required
to discharge the burden of
persuasion is one on the
“preponderance of probabilities”
and
Section 12(2) of NRCD
323 defines “preponderance
of probabilities” as:
“That degree of certainty and
belief in the mind of the
tribunal of fact or the court by
which it is convinced that the
existence of a fact is more
probable than its non-existence”
Accordingly, with regard to
whether
or not the respondent’s board of
directors held a meeting on
27th October 2005,
the respondent who asserted that
there was a meeting had the
burden to prove that fact. The
respondent sought to discharge
this burden by tendering into
evidence, minutes of the board
meeting held on 27th
October 2005. The minutes were
admitted and marked as Exhibit
“6” without any objection
whatsoever from the appellant.
Section 5(1)
and (2) of NRCD 323
states that:
1) No finding, verdict, judgment
or decision shall be set aside,
altered or reversed on appeal or
review because of the erroneous
admission of evidence unless the
erroneous admission of evidence
resulted in a substantial
miscarriage of justice.
(2) In determining whether an
erroneous admission of evidence
resulted in a substantial
miscarriage of justice the court
shall consider—
(a) whether the trial court
relied on that inadmissible
evidence; and
(b) whether an objection to or a
motion to exclude, to strike out
the evidence could and should
have been made at an earlier
stage in the action; and
(c) whether the objection or
motion could and should have
been so stated as to make clear
its ground or grounds; and
(d) whether the admitted
evidence should have been
excluded on one of the grounds
stated in connection with the
objection or motion; and
(e) whether the decision would
have been otherwise but for that
erroneous admission of evidence.
In the case
of
Edward Nassar v McVroom
[1996-97] SCGLR 468,
this court interpreting section
5 of Act 323 stated as follows:
If a party failed as required by
Section 6 of NRCD 323 to object
to the admission of evidence
which in his view, ought not to
be led, he would be precluded by
Section 5(1) of the Act to
complain on appeal or review
about the admission of that
evidence unless the admission
had occasioned a substantial
miscarriage of justice. Factors
helping to determine whether or
not a substantial miscarriage of
justice had occurred have been
set out in Section 5(2).
Consequently, where evidence in
respect of an unpleaded fact had
been led without objection, the
trial judge was bound to
consider that evidence in the
overall assessment of the merits
of the case, unless that
evidence was inadmissible per
se. An appeal or review against
the judgment might succeed only
where it was established that
the admission had occasioned a
substantial miscarriage of
justice.
Also in the case of
Akufo-Addo v Cathline [1992] 1
GLR 377 this court explained
the section as follows at
holding (5) that:
Where evidence was inadmissible
only because the facts relied on
had not been pleaded, the judge
was under no duty to exclude it
and its admission at the trial
without objection could not be
questioned on appeal. Where,
however, as in the instant case,
the evidence on the alleged
admission of the testator would
be inadmissible to prove even
pleaded facts; there was a duty
on the judge to exclude it even
when no objection was raised.
Accordingly, the Court of Appeal
was justified in excluding the
evidence on the alleged
admission of the testator on
appeal. Furthermore, since it
was hearsay evidence not coming
within the exceptions mentioned
in NRCD 323, it would be
excluded on that ground too.
Further in
Asamoah v Servordzie [1987-1988]
1 GLR 67 the court
stated that:
Evidence was led at the trial to
prove the facts relied on.
Therefore, if at the trial
evidence being given by a party
had no bearing on the facts he
had pleaded it was the duty of
opposing counsel to object to
that evidence and exclude it. If
that was not done, and the
evidence got on the record, then
a court could not shut its eyes
to it in considering the case as
a whole, particularly if it was
against the party who led it.
The effect of these cases is
that where evidence is admitted
without objection, the court
could well proceed to rely on
such evidence as long as it did
not result in a substantial
miscarriage of justice. Further,
where the court finds evidence
not credible, it could also
attach little or no weight to
the evidence even though has
been admitted without objection.
Exhibit 6 was tendered by
respondent’s representative one
James Ossom, the recorder of the
exhibit on 14th
December 2012 and admitted in
evidence without any objection
from the appellant. His evidence
was corroborated by respondent’s
former managing director Josiah
Adusa Hagan. Both Messrs. Ossom
and Hagan maintained under
cross-examination that the
appellant was represented by Mr.
B. W. Tamakloe at the board
meeting of October 27, 2005 and
that he came to an agreement
with the Board on the legal fees
to be paid for his services on
all matters that appellant was
handling on respondent’s behalf.
The relevant part of their
evidence is reproduced from
pages 155, 164 -165 and 181-182
of the Record of Appeal as
follows:
James Ossom’s Examination in
Chief at page 155 of the
Record
“Q:
Now I want you to look at this
document and see whether it is
one of such meetings that you
recorded being a meeting between
the company and the lawyers that
you were the recorder
A:
These are the minutes of an
emergency meeting that was held
between the Board of Directors
of Gihoc and Mr. P. W. Tamakloe
the Company lawyer. I recorded
the minutes and prepared the
minutes for the Board and
signature.
Q:
What date is this?
A:
It was held on 27th
October 2005.
Q: What do you want to do
with this document in your hand?
A: I wish to comment on
it as far as the meeting with
Mr. B. W. Tamakloe is concerned
in this court?
Q: I believe you wish to
tender it in court?
A: Yes my lord.
EMERGENCY MEETING DATED 27TH
OCTOBER 2005 TENDERED AND MARKED
AS EXHIBIT 6”
As mentioned above, the
appellant did not mount any
protest to the tendering of
Exhibit 6, i.e., the signed
minutes of the respondent’s
board meeting held on 27th
October 2005. Appellant rather
sought to discredit Exhibit 6 by
comparing it to Exhibit “GH1”,
an unsigned copy of the same
minutes which had been earlier
exhibited to an Affidavit in
Opposition filed on respondent’s
behalf before trial. Relevant
excerpts of the appellant’s
cross-examination of James Ossom
at pages 164 to 165 of the
Record are reproduced below:
“Q:
Have a look at Exhibit S that G1
that is the Emergency meeting
held on 27th October
2005 not so?
A:
Yes
Q:
Open it again the last page you
will agree with me that at the
last page this minute has not
been signed by the Chairman of
the Board.
A:
My Lord we have the Exhibit of a
meeting held on 27th
October 2005 duly signed by the
Chairman and the Recorder.
Q:
You are not answering the
question I said this one that
you are holding.
A:
He obtained it before the
Chairman signed it I do not know
where he obtained it.
Q:
So you are saying it was this
document the chairman signed
this document later after this
one.
A:
I do not know when he obtained
it the minutes of a meeting goes
through a certain process before
they are finally signed the
various members will have to go
through the next meeting it is
read it is corrected if
everything is okay then the
Chairman signs it somebody
adopts it as the minutes as
representing what happened at
the previous meeting before the
Chairman signs it and I am
saying that I do not know when
you obtained this.
Q:
I am suggesting to you that by
your answer by your explanation
before the 22nd of
November 2011 this minutes has
not been signed by the Chairman.
A:
My lord I cannot say when he
obtained this document and why
he is now using 22nd
November 2011.
Q:
Are you aware that this document
was not obtained by me?
A:
I do not know.
Q:
Are you aware that this document
was exhibited by Gihoc.
A:
I am not aware.
Q:
So I am putting it to you that
by the time they filed this
document the minutes had not
been signed by the Chairman.
A:
I am not aware I do not know.
Q:
I am putting it to you that this
minutes both Exhibits S and 6
are fictitious documents.
A:
My lord I do not agree with Mr.
Tamakloe.”
Apart from the unsuccessful
attempt to get the witness to
agree that Exhibit 6 was
fictitious, the appellant did
not once challenge the witness’
assertion that Mr. B. W.
Tamakloe was present at the
meeting held on 27th
October 2005.
The appellant also raised the
issue of the non-compliance with
section 201 of the
Companies
Act 1963 (Act 179). The
section reads as follows:
“201. Minutes of directors’
meetings
(1) A company shall cause
minutes of the proceedings of
meetings of its directors and a
committee of directors to be
entered in a book or books kept
for the purpose.
(2) A minute kept under
subsection (1) if purporting to
be signed by the chairman of the
meeting at which the proceedings
took place or of the next
succeeding meeting, is prima
facie evidence of the
proceedings.
(3) Where minutes have
been made in accordance with
this section then, until the
contrary is proved, the meeting
shall be deemed to be duly
convened, held and conducted and
the appointments of directors
shall be deemed to be valid.
(4) Where a company fails
to comply with subsection (1)
the company and every officer of
the company who is in default is
liable to a fine not exceeding
[five hundred penalty units].”
It is clear from section 201(3)
that until the contrary is
proved, minutes made in
accordance with the provisions
of section 201, are deemed to be
prima facie evidence that the
meetings they refer to actually
took place. Further, the content
of such minutes would constitute
prima facie evidence of the
events that took place at the
meeting(s). Thus, so long
as Exhibit “6” complied with
section 201, the meeting of 27th
October 2005 would be deemed to
be have been duly held, convened
and conducted as indicated in
the minutes.
The Appellant had contended that
Exhibit “6” did not comply with
section 201(1) because the
minutes had not been entered
into a book and must therefore
be annulled. At pages 461 to 462
of the Record of Appeal, Korbieh
JA speaking on behalf of the
Court of Appeal disagreed with
Appellant’s assertion and said
as follows:
“But which law is counsel
referring to? If it is section
201 of Act 179, nothing in that
provision remotely suggests that
minutes should be annulled for
non-compliance. True enough,
section 201 is couched in
mandatory terms but for breach
of those mandatory terms, the
section prescribes its own
sanction for non-compliance.
This is found in subsection (4).
If the lawmaker intended any
other consequence for
non-compliance apart the
criminal sanction, especially
such a serious thing as
annulment of the minutes, he
would have said so in plain
words. Anyhow, in support of his
argument, counsel cited the
English case of
Hearts
of Oak Assurance Co. Ltd v James
Flowers & Sons [1936] Ch. 76
where it was held that loose
leaves fastened together between
two covers but readily
detachable, was not a “book”
within the meaning of section
722(1) of the English Companies
Act, 1985 which required all
minutes of proceedings such as
meetings to be entered in books
kept for that purpose. To begin
with, that case is of persuasive
authority only. Secondly, it did
not hold that the minutes were a
nullity. So no binding
authority has been cited by
counsel to show that
non-compliance with section 201
of Act 179 renders the minutes
null and void. As for the
argument about the decision
being given per incuriam, it may
be so only in the sense that the
trial judge did not make
reference to section 201 but
this Court can make and has made
good that omission.”
There is no doubt that section
201(4) of Act 179 prescribes a
sanction in the form of a fine
for officers of a company that
fails to comply with section
201(1) of Act 179. However, to
conclude that that sanction
makes minutes that have not been
entered in a book as required by
section 201(1) null and void,
one has to look at the whole of
Act 179 and its internal
sanction regime to determine the
lawmaker’s intention. Act 179
has sections that nullify
certain prohibited acts and
others that provide for
imprisonment, fines and
penalties. Some of the
provisions that clearly nullify
acts are sections 56, 199 and
290 on prohibited transactions.
On the other hand, provisions
like sections 10, 23, 26, 29 33,
44, 72, 110, 301, 313 and 322
all provide for fines or
penalties but make no express
provision for nullifying the
non-compliant acts or processes.
Section 201(4) falls within the
latter category.
It is clear from the examination
of the prohibitions and
penalties structured in the
sections above-mentioned that
the legislature intended to have
some distinction and flexibility
in the form of penalties it
imposes such that not all
breaches of Act 179 result in a
nullity or a criminal offence.
The legislature clearly intended
that in certain circumstances
sanctions for breaches should
only serve as a form of
administrative penalties and
restraint but not to declare the
acts and transactions in breach
as void and unenforceable. Thus,
where the legislature wanted a
transaction in breach of any
section of the Act to be of no
legal effect, it provided
clearly as in section 56 on
prohibited transactions in
shares.
On the other hand, where the
legislature wanted a breach to
be visited with a fine it also
provided clearly as in sections
10, 23, 26, 33, 110 among
others.
Accordingly, in the absence of
an express statement from the
legislature nullifying minutes
that do not comply with section
201(1), we see section 201(4) as
one of the administrative
sanctions meant by the lawmakers
to act as a check on
administrative defaults and
nothing else. We therefore
endorse the view of the Court of
Appeal that minutes made in
breach of section 201(1) are
still valid and can constitute
prima facie evidence as provided
in section 201(3) of Act 179.
Both the trial court and
especially the Court of Appeal
thoroughly analysed the minutes
contained in the respondent’s
Exhibit “6” and came to the
conclusion that it complied with
section 201 of Act 179 and
therefore constituted prima
facie evidence that there was
indeed a meeting held on 27th
October 2005 at which the
parties agreed on an
all-inclusive legal fee of
GHC80,000.00.
We have examined the Record. It
seems to us that there is
sufficient evidence on record to
support the findings made by the
trial court and the Court of
Appeal that a board meeting was
held on 27th October,
2005 in which the appellant was
present. In exhibit E which is a
letter written on 3rd
October 2008, three years after
the board meeting from the
respondent to the appellant, the
respondent made reference to the
27th October, 2005
meeting where legal fees were
discussed. The appellant replied
to this letter on October 8,
2008. The appellant’s letter was
tendered in the trial court as
exhibit F. The natural response
from any person to such a claim
of a meeting which never took
place or was not present would
be to deny at the earliest
opportunity. In exhibit F, the
appellant acknowledged receipt
of exhibit E but did not deny
the statement of fact by the
respondent that he honoured its
invitation on 27th
October 2005 to discuss his
legal fees.
In
Wood v. Tamakloe
[2007-2008] SCGLR 852,
this court unanimously
dismissed the appeal by the
defendant therein from the
judgment of the Court of Appeal
and stated in holding (1) as
follows:
“… Per curiam. As clearly
stipulated by section 20 of the
Evidence Act, the effect of a
rebuttable presumption is no
negligible matter and it is
our view that it takes more
than speculation, personal
opinion and conjecture to remove
the assumption of the existence
of the presumed fact; this must
be particularly so where the
presumption arises, as in this
case, from documentary evidence.”
In our opinion, the appellant
woefully failed to adduce the
quality of evidence required to
rebut the evidence adduced by
the respondent about the
existence of the 27th
October, 2005 meeting to enable
this Court make a finding in its
favour. The appellant was unable
to adduce material evidence, be
it his diary or other itinerary,
to show that he could not have
been present at the meeting. The
appellant also failed to produce
any witness to attest to his
presence elsewhere on that day.
The appellant rather submitted
in his Statement of Case that it
was the responsibility of the
respondent to provide
explanation for attaching the
unsigned copy of the minutes to
its affidavit in opposition as
Exhibit GH1. Also, the appellant
attempted to discredit the
evidence of DW1 on the emergency
board meeting leading to Exhibit
6 by submitting that DW1 did not
tender any notice and agenda
inviting board members for the
said meeting, did not tender a
letter inviting the appellant’s
representative to the meeting or
serving him with minutes of the
deliberations of the meeting and
did not lead any evidence to
show which board members were
present at the next board
meeting and adopted the minutes
as a true record of what
transpired at the emergency
board meeting and why the
minutes were not entered in the
minutes book as required by
section 201 of the Companies
Act. The trial court and the
Court of Appeal were not swayed
by such submissions. We are also
not persuaded by these
submissions by the appellant.
They are mere red herring and do
not go to the root of the issue
at hand.
From the record, the emergency
meeting of the respondent’s
board took place on 27th
October 2005 in which appellant
was invited to brief the meeting
and discuss the firm’s legal
fees. Whether the parties
arrived at a consensus of
Ghc80,000.00 is the focus of our
next discussion.
Both the trial court and the
Court of Appeal found as a fact
that at the meeting of October
27, 2005, the appellant agreed
with the respondent to charge a
flat fee of Ghc80,000.00 for all
the firm’s cases up to the
Supreme Court if the suit should
end up there. As stated earlier
on, a finding of fact made by a
trial court and confirmed by the
first appellate court will not
be disturbed by the Supreme
Court unless it was satisfied
that among others, that there
were strong pieces of evidence
on record which were manifestly
clear that the findings of the
trial court and the first
appellate court were perverse or
inconsistent with the totality
of evidence and the surrounding
circumstances of the entire
evidence on record. It would be
helpful to delve into the
evidence and exhibits and see if
the conclusion the two earlier
courts came to is borne out by
the record or there were some
pieces of evidence which were
ignored or overlooked which if
applied could sway the decision
of this Court in appellant’s
favour.
The only recording of agreement
of legal fees in Exhibit 6 could
be found at page three of that
exhibit and is captured as
follows:
"A member suggested that the
lawyer should accept a total
payment of C800 million to cover
all cases.
After some discussion, the
lawyer agreed to accept the
total payment of C800 million
for all the cases.”
It is not clear from Exhibit 6
what was agreed on. Could one
construe what transpired at the
meeting to mean all the cases or
legal matters being handled by
the appellant’s firm from the
High Court level through the
appeal stages all the way to the
Supreme Court? Did the alleged
agreement include non-court
matters such as the annual
general meeting of the company?
The minutes of 27th
October 2005 did not say so.
Further, at the said meeting,
page two of Exhibit 6 recorded
that the representative of the
appellant was asked the
following question:
“The Chairman asked the lawyer
to confirm information received
that he would not charge any
extra fee if the case went to
the Supreme Court.”
There was no recording of the
appellant’s answer to the
question and agreeing to the
request. We, therefore, find it
difficult to agree with the
construction and conclusion
reached by the respondent that
Exhibit 6 captured the agreement
reached with appellant to accept
Ghc80,000.00 for all the cases
right and up to the appellate
stage including the Supreme
Court.
Subsequent events after the
alleged agreement in 2005 will
confirm our difficulty. During
the cross-examination of DW2 on
26th April 2013
captured at pages 193-197 of the
Record, he admitted that
appellant submitted a bill
(Exhibit B) dated 21st
September 2007 for Ghc35,000.00.
He further admitted the
respondent negotiated this bill
to Ghc25,000.00 and wrote to
appellant (Exhibit C) to confirm
acceptance of the negotiated
amount. The cross-examination
further revealed appellant wrote
Exhibit D dated 15th
April 2008 confirming its
acceptance of the negotiated fee
of Ghc25,000.00. In Exhibit E,
which is the respondent’s
response to the appellant’s
letter dated August 29th,
2008, respondent on 3rd
October, 2008 requested
appellant to explain to it the
total amount of which the
negotiated figure forms a
deposit as well as what other
charges if any the company would
be called upon to honour until
the final determination of the
case. In the same
cross-examination, respondent
admitted in Exhibit Dd dated 14th
August, 2008 that it requested
appellant for a negotiation of
the fees submitted for the
Annual General Meeting to a
level acceptable to both
parties.
We find it hard to reconcile on
the one hand respondent’s
insistence that at the 27th
October 2005 meeting, the
parties negotiated a flat fee of
Ghc80,000.00 to cover all legal
fees right up to the Supreme
Court and on the other hand
admit in cross-examination that
between 2007-2008, it was
negotiating various fees
submitted by appellant with it
and incurring other charges the
respondent may be called upon to
honour until the final
determination of the case. We
are sure if an agreement for
fees was reached in 2005,
respondent would have referred
appellant to that agreement and
would have refused to accept the
invoices submitted for fees as
it did in Exhibit 9 dated 6th
October 2010. Even in Exhibit 9
the admission by the respondent
that it had paid the appellant
an amount of Ghc51,750 plus
Ghc30,675.00 making a total of
Ghc82,425.00 could not be
plausible as we found it again
difficult to reconcile
respondent’s overpayment of
appellant at a time they were
cash strapped and had
purportedly negotiated
appellant’s fees downwards.
The evidence therefore tilted in
favour of the assertion by
appellant that no such fee was
negotiated. From the totality of
the evidence on the record, it
is our opinion that though a
proposal was made to appellant
at the board meeting on 27th
October 2005 to accept a fixed
fee for all the cases handled
for respondent, no agreement was
reached by the parties on the
request.
A prudent company would have
followed up this agreement with
a letter to appellant confirming
in writing the consensus
reached. In any case such an
agreement for a fixed fee for
all the cases in the future up
to the appellate courts sins
against the provisions of
Rule 5(2)
of the Legal Profession
(Professional Conduct and
Etiquette) Rules, 1969 (LI 613)
which provides as follows:
“5(2) A lawyer should be
separately instructed and
separately remunerated by fees
for each piece of work done, and
he shall not undertake to
represent any person, authority
or corporation in all their
court work for a fixed annual
salary. But a lawyer may accept
a retainer for advice.”
We believe if the learned trial
judge and justices of the Court
of Appeal had carefully
scrutinised Exhibit 6 and had
adverted their minds to the
various exhibits and pieces of
evidence on record, they would
not have come to the conclusion
that the appellant agreed at the
27th October 2005
board meeting to accept a fixed
fee of Ghc80,000.00 for all the
cases handled for respondent
even into the future if an
appeal should be filed to the
Court of Appeal and then the
Supreme Court. Accordingly, this
Court will set aside that
findings of fact made by the
learned trial judge and
confirmed by the Court of
Appeal.
What then is the implication of
setting aside the findings of
the trial court and the Court of
Appeal on the agreement of the
Ghc80,000.00 legal fees to the
claim filed by the appellant
against the respondent for
outstanding legal fees? Could
that change the fortunes of the
appellant? One critical issue
which was raised by the parties
in the pleadings and evidence
but was ignored by the parties
in their submissions before us
is the legal status of the
relationship between the
parties. The claim before the
court is not one of quantum
meirut after the termination of
the relationship by respondent.
It is a liquidated claim for
specific sums due and owing to
appellant for legal services
rendered the respondent. While
the legal services rendered are
not in dispute, the claim for
unpaid legal fees is fiercely
resisted by respondent. It is a
specific claim of which
appellant as plaintiff bore the
legal burden of proof. Was the
burden discharged at the close
of the evidence? To deal with
this matter conclusively for the
guidance of the legal
profession, we shall pose the
following questions and proffer
answers to them. Did the parties
at the onset negotiate the legal
fees payable? Did they sign any
retainer, fee paying agreement
or engagement letter? Was there
any correspondence from one
party stating the fact of the
agreement which was not disputed
by the other party?
The dispute erupted because the
parties failed to enter into any
fee-paying arrangements as
required in any valid contract.
The appellant jumped at the
excitement of a new client,
failed to negotiate its fees and
opted for an ad hoc way of
billing piecemeal in the course
of the instructions and at the
end of the case. These
unexpected and un-negotiated
bills were fiercely resisted by
respondent, resulting in
complaints of high fees and
negotiations. These resistances
were described by appellant as
haggling over fees. Not
surprising, it was the cause of
the deterioration in
lawyer-client relationship
leading eventually to the
professional divorce. In
paragraph 17 of its defence
respondent pleaded as follows:
“The Defendant says that the
Plaintiff did not agree with the
Defendant at the onset the fees
it would charge for handling its
cases and was fond of demanding
what he called deposits which
the Defendant always paid until
the agreement was reached with
the Plaintiff over fees for
handling the cases.”
Josiah Hagan, DW2 also adduced
evidence to show that prior to
the meeting of 27th
October 2005, there had been no
agreement on fees with the
appellant. At pages 181 to
182 of the Record, Josiah
Hagan testified as follows:
“Q:
Now in respect of this winding
up can you proceed and talk
about the fees arrangement that
you did with Tamakloe &
Partners?
A: My lord we did not
come to any specific fee because
anytime we raise the issue he
said of fee is not important,
the important thing is to win
this case I will not charge you
much you know we are doing it
virtually for free so just give
us some deposits cost and so on
for filing and from time to time
I will submit such request so
that was how Mr Tamakloe
approached it and we asked
several times to come to an
agreement on a fee even at one
time we had to collect the
schedule of fees from the Bar
Association……………………………….”
The fact that there was no fee
agreement between appellant firm
and respondent was confirmed by
appellant himself during his
cross-examination on 25th
April 2012 at pages 125-127 of
the Record. Below is the
dialogue between counsel for
respondent and the witness for
appellant:
“Q……Now when you were engaged
did you discuss from the
beginning your fees that you
charged Gihoc in respect of the
conduct or a case that you are
asking you to handle that is the
integrated against Gihoc.
A. As have already told the
court we were already working
for Gihoc Distilleries
limited. At the time we were
engaged by Gihoc Distilleries
limited Gihoc was in bad
shape……..
Q. So I am suggesting to you
that in integrated investments
and Gihoc Distilleries when you
were engaged in 2005 you did not
have any agreement the amount
that you should be paid for the
services you are rendering in
respect of the case.
A. From the beginning, we did
not agree to the amount that we
should be paid on that basis but
in the end we agreed on the
amount that we should be paid
for those services…….
Q. Are you a member of the Ghana
Bar Association?
A. I am a member of the Ghana
Bar Association.
Q. I believe you are aware of
the regulations regarding
dealing with the clients on fees
when someone engages you on to
do a matter on.
A. I am aware of it.
Q. And by a scale of fees of
lawyers when you are engaged by
your client for a particular
case in respect of that case you
are supposed to at a time
discussed engaged and negotiate
with the client that he will be
called upon at the time of……
A. It is not in all cases
because this are of a nature of
cases are of a nature that you
cannot determine your fees at
the beginning when you are
engaged in that case you can
make your client be aware of
that and he agrees you can
handle his things for him.
Q You are aware that there is
that requirement.
A. Yes.
While conceding that there was
no agreement reached between the
parties on legal fees in the
beginning, appellant contended
that in the end the parties
agreed on the amount to be paid
for appellant’s services.
However, a careful review of the
totality of the evidence on
record including evidence
elicited from appellant on pages
127 to 128 shows that
correspondence forwarded by
appellant to respondent on fees
were one-sided and not
subsequently agreed upon by
respondent. On the contrary,
respondent rather wrote to
appellant on more than one
occasion seeking to understand
the basis of their charges and
reminding appellant of the
latter’s earlier agreement to
accept an all-inclusive fee. At
pages 129 to 130 the
following evidence was elicited
from appellant during
cross-examination:
“Q:
So in respect of this particular
case that you handle that they
were 351,000 dollars from the
defendant Gihoc which you were
defending that matter what as a
member of the Ghana Bar
Association being aware of the
scale if you were plaintiff’s
lawyer what you will get as a
15% or 10% what in the
circumstances will be your
rightful charge.
A: My rightful charge is
I have charged
Q:
And what is the percentage of
that charge
A: I have not computed
the percentage
Page 141
Q:
So I am suggesting to you that
you did not when you took
instructions from the defendant
at the beginning of the case
discuss with them the fees that
you will charge.
A:
As I explained on in the case we
took this matter at the time
when Gihoc was at the point of
bankruptcy they were not having
any money they could not pay
their bills and we discussed
with them and I tendered into
evidence my letter by which we
said that as it carried on with
this case we shall be submitting
bills on deposits from time to
time and that was why we did not
throughout this case and they
accepted those bills and paid
them from time to time.
Q: I am suggesting to you
personally as a member of the
Ghana Bar Association you are
obliged by the Ethics of the
Profession to charge a client at
the beginning of a case.
A: My lord we explained
to our client at the beginning
of this matter that since they
were in that precarious position
we would not like to overcharge
them and that we will rather be
taking deposits from time to
time as the cases went on.”
Clearly, appellant and
respondent did not have a
definitive agreement on the fees
payable for the appellant’s
services and from the
appellant’s own showing,
appellant was not even sure how
to compute the fee payable. In
addition to being in breach of
the ethical duty to negotiate
fees at the start of the
engagement, the above evidence
shows that appellant did not
negotiate the sums endorsed on
its writ with the respondent
before presenting the respective
invoices. The sums being claimed
were belatedly disclosed at the
point of submitting invoices to
respondent contrary to the
express provisions of the
Scale of
Fees that fees must be
negotiated at the commencement
of an engagement.
This court has taken judicial
notice of the fact that it is
the General Council of the Ghana
Bar Association which is charged
with the responsibility of
issuing out to practising
lawyers the Scale of Fees or
established tariffs. The
relevant provision of the
current scale of fees of the
Ghana Bar Association provides
as follows:
“Remuneration for legal services
must measure up to the value of
the time spent or value created
as determined by the economic
environment in which the service
is provided.
The Scale of Fees covers charges
for professional services
rendered by lawyers. Fees are
quoted in both Ghana Cedis and
US Dollars and are to be applied
to services rendered to Ghanaian
clients and international
clients respectively as
prescribed by law.
The essence of these guidelines
shall be negotiation and
agreement between Counsel and
the client within the range
prescribed below before the
commencement of the provision of
legal services. The law entitles
every lawyer to reasonable
compensation for his services.
In negotiating for fees a lawyer
shall adhere to these approved
tariffs and shall avoid charges
which either overestimate or
undervalue the service rendered,
though in legal aid cases, the
poverty of the client may
require a less charge or even
none at all.
The negotiation will take into
consideration the nature
and/amount of work involved and
estimated time to be spent on
it.
The terms of payment may include
a deposit of up to fifty percent
of the agreed fees payable upon
firm instructions being given to
commence work unless the Client
and Counsel agree otherwise.”
The Scale of Fees of the Ghana
Bar Association derives its
legal authority from section 28
of the Legal Profession Act 1960
(Act 32) and rule 9(9) of the
Legal Profession (Professional
Conduct and Etiquette) Rules,
1969 (LI 613)
“Section 28—Costs Recoverable.
A lawyer shall not be entitled
to recover any costs in respect
of any proceedings beyond the
amount applicable to the
proceedings which may be allowed
by the authorised scale of fees
or, in matters not therein
included, which the Court may
allow on taxation, having regard
to the skill, labour, and
responsibility involved.
Rule 9
(9) A
lawyer is entitled to reasonable
compensation for his services,
but he shall avoid charges which
either overestimate or
undervalue the service rendered.
When possible he shall adhere to
established tariffs. The
client’s ability to pay cannot
justify a charge in excess of
the value of the service, though
his poverty may require a less
charge or even none at all.”
As lawyers in Ghana, the lawyers
in appellant’s firm are subject
to Act 32 as well as the Rules
emanating from it and the
authorized Scale of Fees. It is
also noteworthy that during
cross-examination of appellant’s
representative he was directly
questioned in his capacity as a
member of the Ghana Bar
Association (GBA) and he did not
deny that fact. The provisions
of the Scale of Fees therefore
bind appellant.
The importance of providing the
client with a written letter of
engagement at the outset of a
matter was emphasised by Yvonne
Gonzalez J in the Bronx County
Supreme Court case
of
Klein Calderoni & Santucci LLP v
Bazerjian 800 N.Y.S. 2d 348,
2005 WL 51721 (Sup. Ct. Bronx
County 2005). In
that case, the Disciplinary
Rules of the New York Code of
Professional Responsibility
provides that an attorney who
undertakes to represent a client
and enters into an arrangement
for, charges or collects any fee
from a client shall provide to
the client a written letter of
engagement before commencing the
representation, or within a
reasonable time thereafter if
otherwise impracticable.
Plaintiff represented defendant
at an appellate hearing before
the September 11th
Victim Compensation Fund. As a
result of the hearing, the
compensation awarded to
defendant was increased from the
standard, $65,000, to $204,451.
Plaintiff billed defendant
$34,862.75 which is 25% of the
award recovered over $65,000.
Defendant disputes that he
agreed to any contingency fee,
whatsoever. Plaintiff, however
contends that the 25% of the
award recovered over $65,000,
was the agreed contingency fee.
The Klein law firm further
argued that the short span of
five days between the client’s
visit to the office and the
hearing had made it
impracticable for the firm to
prepare a letter of engagement.
Judge Gonzales held that there
was sufficient time and
opportunity to negotiate and
provide the letter and that the
firm’s failure to provide it was
deliberate and intentional. The
judge found that the failure to
sign a retainer with the client
is a prerequisite for an
attorney to receive legal fees.
Hence the failure to supply a
letter of engagement or a
retainer agreement, the Klein
law firm would be denied a fee
amounting to $34,862.75.
In
Feeder, Goldstein, Tanenbaun &
D’Errico v Ronan, 195 Misc.2d
704, NYS2d 463 (Nassau Gy Dist
Ct 2003) the law firm
entered into an
oral fee
agreement with the client to
appear in court on the client’s
behalf. In a dispute over the
fees charged for the
representation, the court held
that since the law firm failed
to enter into a written letter
of engagement or retainer with
the client as required by the
Disciplinary Rules of the New
York Code of Professional
Responsibility, the legal firm
was precluded from recovering
legal fees. The court’s
conclusion was based on the fact
that it was the law firm which
failed to provide the client
with a written letter of
engagement or written retainer
agreement for execution by the
parties.
The two cases cited above are of
a persuasive authority to this
court. However, the policy
rationale behind the cases is
significant for lawyer-client
professional relationship and
the practice of law in our
jurisdiction especially when the
equivalent of the provision in
the New York Code of
Professional Responsibility is
the Legal Profession Act and the
Legal Profession (Professional
Conduct and Etiquette) Rules
which gave legal backing to the
Scale of Fees of the Ghana Bar
Association. We, therefore adopt
the reasoning in the cases.
Law firms and lawyers practising
in Ghana are required in the
services they render to their
clients to strictly adhere to
approved scale of fees or
established tariffs. The scale
of fees requires lawyers to
negotiate and agree with the
client the fees to be charged
based on the range provided for
each service and the terms of
payment before the commencement
of the provision of legal
services. In breach of the Scale
of Fees, appellant chose to
render the service before
sending invoices for his
services for the payment by the
client.
From the evidence and exhibits,
the only service that parties
agreed on the legal fees was the
bill dated 21st
September 2007 which was
renegotiated from Ghc35,000.00
to Ghc25,000.00 (see exhibits C,
D and F). Even this bill was not
negotiated at the onset of the
case. In all other invoices and
bills, appellant commenced the
service before submitting his
fees. Not surprisingly, this was
fiercely resisted by respondent
as series of correspondence
between the parties tendered in
the suit revealed. It was this
back and forth regarding the
fees payable that the appellant
called “haggling over fees”
which eventually led to the
filing of this suit. Even the
alleged agreement for the sum of
Ghc80,000.00 at a board meeting
which has been in dispute is the
direct result of failure to
agree on fees and respondent
taken by surprise at the
invoices later submitted by
appellant.
What then is the effect of the
failure on the part of appellant
to negotiate and agree on the
fees with the client before
commencement of the service?
Public policy dictates that the
courts show interest in the fee
arrangement between law firms or
lawyers and their clients. The
policy rationale is that
agreement for fees entered into
with clients ought to be fair,
reasonable and within the
confines of the fee range
prescribed in the Scale of Fees
of the Ghana Bar Association.
This is necessary so that
members of the public who are
served by lawyers are not
short-changed by a few sharp
practitioners. Thus, an
agreement to provide legal
services like any other
agreement must meet the
requirements of a simple
contract such as offer,
acceptance, intention to create
legal relations and
consideration. A law firm or
lawyer who fails to negotiate
and agree on the legal fees with
the client before commencement
of the service or within a
reasonable time after the
commencement (if the instruction
is an emergency one in which
legal fees could not have been
agreed before the commencement)
of the service is not entitled
to recover any fees if the
client disputes the fees
invoiced it subsequently. This
directive is needed today more
than ever to sanitise the
profession and ensure
transparent and fair dealings
with clients. It is also needed
to avert situations where the
clients find themselves at a
disadvantage because of the
power imbalances in the
relationship between lawyers and
their clients and the privileged
position lawyers occupy in
society.
When instructed by the client, a
lawyer or law firm is required
to discuss, negotiate and agree
with the client the fees payable
within the range provided in the
Scale of Fees and then execute a
written retainer agreement,
engagement letter or fee paying
agreement detailing the scope of
legal services to be performed,
the fees and expenses to be
charged and the possibility of a
refresher fees if the assignment
goes beyond the anticipated time
frame for such cases. The
agreement with the client shall
also provide the terms of
payment of the fees, the
percentage payable as deposit,
the type of fee structure i.e.
fixed fee, fixed fee plus
success fee, hourly fees, hourly
fees plus success fee and fixed
fee for part of the work and
hourly fees for the other part.
If the service is to be rendered
pro bono, the agreement must
specifically state so.
Concluding,
appellant law firm in this case
failed to negotiate, discuss and
agree on its legal fees with
respondent before the
commencement of the service. In
addition, appellant also failed
to enter into a written
retainer, fee paying or
engagement agreement with
respondent detailing the scope
of work and the legal fees
payable by the client for the
service. Such conduct was in
breach of the Scale of Fees of
the Ghana Bar Association and
accordingly in breach of
section 28 of the Legal
Profession Act 1960 (Act 32) and
rule 9(9) of the Legal
Profession (Professional Conduct
and Etiquette) Rules, 1969 (LI
613).
The invoices for fees which
appellant later submitted to
respondent were arbitrary and
not negotiated with respondent.
The foundation, therefore, for
the reliefs endorsed on
appellant’s writ as outstanding
fees for legal services rendered
was not there at the inception
of the suit and therefore not
recoverable. As a result, the
appellant’s action fails.
The trial court and the Court of
Appeal were justified in
dismissing the claim of
appellant. We for different
reasons as illustrated above
affirm the decision of the
courts below that the
appellant’s action must fail.
For these reasons the appeal is
dismissed.
N. A. AMEGATCHER
(JUSTICE OF THE SUPREME COURT)
ADINYIRA (MRS), JSC:-
I agree with the conclusion and
reasoning of my brother
Amegatcher, JSC.
S.
O. A. ADINYIRA (MRS)
(JUSTICE OF THE SUPREME COURT)
BAFFOE-BONNIE, JSC:-
I agree with the conclusion and
reasoning of my brother
Amegatcher, JSC.
P.
BAFFOE- BONNIE
(JUSTICE OF THE SUPREME COURT)
MARFUL-SAU, JSC:-
I agree with the conclusion and
reasoning of my brother
Amegatcher, JSC.
S. K. MARFUL-SAU
(JUSTICE OF THE SUPREME COURT)
KOTEY, JSC:-
I agree with the conclusion and
reasoning of my brother
Amegatcher, JSC.
PROF. N. A. KOTEY
(JUSTICE OF THE SUPREME COURT)
COUNSEL
CHARLES HAYIBOR FOR THE
PLAINTIFF/APPELLANT/APPELLANT.
TWUMASI ANKRAH FOR THE
DEFENDANT/RESPONDENT/RESPONDENT |