ON RECOVERY OF LEGAL FEES: A LEGAL PRACTITIONER WHO HAS RENDERED SERVICES ON CONTINGENCY BASIS IS STILL ENTITLED TO PAYMENT FOR THE VALUE OF SERVICES EVEN IF THE CLIENT TERMINATES

OLANREWAJU OSINAIKE, ESQ. v. CORONATION MERCHANT BANK LIMITED (2021) LPELR-53591(CA)

JUDGMENT DATE: 5TH MARCH, 2021

JUSTICES: CHIDI NWAOMA UWA, JCA

TUNDE OYEBANJI AWOTOYE, JCA

BITRUS GYARAZAMA SANGA, JCA

COURT DIVISION: LAGOS

PRACTICE AREA: Legal Practice – Legal Practitioner – Recovery of Legal Fees – Contract  

FACTS:

The Appellant is a legal practitioner carrying on legal practice under the name and style of Osinaike & Associates. The Respondent is a Limited Liability Company incorporated in Nigeria. It is the parent company of Legacy and Investment Limited (in Liquidation), a company licenced to carry on the business of a Financial Institution in Nigeria. In the course of business, Legacy and Investment Limited granted credit facilities to several companies, including SKIV CONCEPT Limited. SKIV Concepts Ltd. failed to liquidate the credit facilities granted to it by Legacy and Investment Ltd., as and when due and its indebtedness as at was in the sum of N352,979,916.67. The Respondent being the parent company of Legacy and Investment Ltd., sought the legal advice of the Appellant on how to recover its money from SKIV Concepts Ltd. The Appellant submitted to the Respondent what he termed “case management strategy” on how to recover the money. 

​The Respondent wrote a letter to the Appellant agreeing with his proposal, instructed him to recover the money and agreed to pay him 15% of the recovered sum as professional fees. The Appellant swung into action and instituted an action against SKIV Concepts Nigeria Limited before the High Court of Lagos for the recovery of debt on behalf of the Respondent with 2 motions of Mareva Injunction.  SKIV Concepts Ltd instituted an action before the High Court of Justice Lagos State against the Respondent (Legacy Trust and Investment Limited). ​The Respondent again instructed the Appellant to enter an appearance for her and Legacy Trust and Investment Ltd., sued as the 2nd Defendant. 

The Claimant entered appearance and filed a Statement of Defence on behalf of the Respondent. However, on 20/09/2011 the Respondent wrote a letter to the Appellant disengaging him from further representing it in the suits pending in Court. On 22/09/2011 the Appellant wrote to the Respondent alerting it of the negative antecedents of the huge debt owed by SKIV Concepts Ltd., to the Respondent and the fact that the debt is unsecured and the strategy he adopted in obtaining the pre-emptive order of Mareva Injunction in the High Court for the reservation of the sum of N315,135,000.00 which can be attached when judgment is obtained against SKIV Concepts Ltd. He also forwarded his bill of charges for the professional fees and cost in respect of the suit. It is the Appellant’s contention that he put in substantial work towards recovery of the debt owed to the Respondent by obtaining the order for preservation of the sum of N315,135,000.00 via an order of Mareva Injunction and the time, skill and industry on his part as counsel to Respondent/Defendant. That he was reasonably certain that he would have recovered the sum of N352,979,916.67 together with interest on behalf of the Respondent more so, when he had obtained an Order of Mareva Injunction to secure the sum of N315,135,000.00 and he would have been entitled to the full payment of his professional fees in the sum of N52,946,987.51 being 15% of the sum of N352,979.916.67 as contained in the terms of the agreement between him and the Defendant. 

Thus, the Appellant as Claimant instituted this suit against the Respondent as Defendant claiming the following:

1. The sum of N41,427,000.00 being professional fees, cost and expenses due to the Claimant from the Defendant on a quantum meruit basis for the services rendered by the Claimant as Legal Practitioner for the Defendant in respect of Suit No: ID/1116/2010 which was instituted by the Claimant for the recovery of the debt owed by the Defendant by SKIV Concepts Nigeria Ltd.
2. Interest on the sum of N41,427,000.00 at the rate of 10% per annum from the 23rd day of September 2011 until judgment and thereafter a post-judgment interest of 15% per annum until the debt is paid to the Claimant.
3. The sum of N2,491,800.00 being professional fees, cost and expenses due to the claimant from the Defendant on a quantum meruit basis for the services rendered by the Claimant as Legal Practitioner for the Defendant for the defence of the action instituted as Suit No: LD/ 1693/2011.
4. Interest on the sum of N2,491,800.00 at the rate of 10% per annum from the 23rd day of September 2011 until judgment and thereafter a post-judgment interest of 15% per annum until the debt is paid to the claimant.

The learned trial Judge in his judgment awarded the sum of N750,000.00 in favour of the Claimant as his professional fees with a 15% interest per annum. Dissatisfied with the judgment the Appellant appealed to the Court of Appeal. 

ISSUES FOR DETERMINATION:

Whether the learned trial Judge was right when he held that the Appellant’s quantum meruit claim in the sum of N1,427,000.00 for the recovery services rendered by him to the Respondent in respect of Suit No: ID/1116/2010 cannot be maintained. 

DECISION/HELD:

In conclusion, the Court found the appeal to be meritorious and it was thereby allowed. The judgment delivered by the High Court was set aside. In its place, the Court ordered that all the reliefs sought by the Appellant are granted.

RATIOS:

1. LEGAL PRACTITIONER – RECOVERY OF CHARGES BY LEGAL PRACTITIONERS: What the Court considers in assessing payment due to a legal practitioner for services rendered in a quantum meruit claim

“The question that comes to the fore by this issue is whether the sum of N750,000.00 is adequate considering the level of competence and expertise required, the number of lawyers that participated in the case as indicated in the bill of charges, the Appellant’s age at the bar, the quantum of debt at stake for which SKIV Concepts Ltd., had sued the Respondent, the prevailing rate of fees charged, corporate clients (like the Respondent) in the very demanding litigation process, especially in a commercial city like Lagos? To answer this question, I have considered the submission by learned counsel in their respective briefs of argument but what captured my attention in respect to the instant issue is the holding by Ogundare, JSC, in Oyekanmi v. NEPA (2000) 15 NWLR (Pt. 690) 414 at 429 where the learned Law Lord held thus:

“And no one can deny that in any professional, particularly the legal profession, proficiency in law and advocacy are not attained by a sudden flight, but through years of hard work leading to an accumulation of experience. One can take judicial notice that the Plaintiff was called to the bar in July, 1964, he is, therefore, a senior counsel. That is why a senior counsel or Senior Advocate of Nigeria would command twenty or thirty times what a lawyer of say four years standing given the same brief will earn.” … Per SANGA, J.C.A. 

2. LEGAL PRACTITIONER – RECOVERY OF CHARGES BY LEGAL PRACTITIONERS: Whether a legal practitioner whose service was engaged on a contingency remuneration basis is entitled to recover his professional fees on a quantum meruit basis where the agreement is terminated by the client before completion

“Upon considering the brief facts of this suit and the definition of quantum meruit by the apex Court as a claim for a reasonable price, remuneration or compensation implied in a contract where no remuneration or price is fixed for the work done or for a breach of contract for reasonable remuneration for work done it is my considered opinion that the learned trial judge was not right when he held that the Appellant’s quantum meruit claim in the sum of N41,427,000.00 for the recovery services he rendered to the Respondent in filing suit No: ID/1116/2010 cannot be maintained. The learned trial Judge erred and misconceived the essence of quantum meruit when he based his decision on the fact that since the Appellant did not recover any sum as agreed by the parties, he is not entitled to a quantum meruit claim.

In Oyo v. Mercantile Bank (1989) 3 NWLR (Pt. 108) 213 at 231, this Court, per Uwaifo, JCA, (as he then was) held thus:

“The fact that the Respondent got the Plaintiff to discontinue the actions in Court cannot affect the services rendered up to that stage. The appellant ought not to lose the fruit of his labour. He is entitled to reasonable remuneration not on the basis of the contract because (1) the contract is not enforceable (2) even if it was, it had been brought to an end; and (3) no new contract had been substituted. He cannot claim for breach of contract as he would necessarily have had to rely on the contract…The learned trial Judge would have assessed what was reasonable remuneration.”

In Oyo v. Mercantile Bank (supra), the facts of which are impari materia with the instant suit, the Court held further that a legal practitioner who has rendered services on a contingency basis would still be entitled to payment for the value of services rendered if the client terminated his services. Also, in Savannah Bank Plc v. Opanubi (2004) LPELR-3023 (SC), the apex Court per Uwaifo, JSC, held:

“The law is that if an innocent party has rendered services (or has supplied goods) under a contract which has not been fully performed and which has been determined by him because of the Respondent’s repudiatory breach of contract, he may sue for damages for loss arising from the breach of contract or bring a restitutive claim to recover the value of services rendered or the goods supplied on quantum meruit (or a quantum vale bat…”

This holding by the Supreme Court shows clearly that a legal practitioner is entitled to payment on quantum meruit to recover the value of services rendered since the client terminated the said services and I so hold. Once the claimant is able to establish the parameters for the award of quantum meruit, the Court is bound to award the claim.” Per SANGA, J.C.A.