Specialized Engineering Company Ltd v Kenya Commercial Bank Ltd [1988] KECA 128 (KLR)
The bottom line
#Kenya's Court of Appeal confirmed that a consent order settling a dispute is final and binding, even without a formal decree.
What this practically means
#Executive summary
#Questions the Court framed
#The issues the Court set itself to decide, in its own words.
- 1.Whether the consent order of 9 November 1979, recorded by Harris J and affirmed on appeal, had the effect of finally disposing of the bank's claim in the suit
- 2.Whether a consent order made on an interlocutory application (a motion to discharge an ex parte injunction) can metamorphose into a final decree disposing of the suit
- 3.Whether the appellant's application under order 24 rule 6 of the Civil Procedure Rules and section 3A of the Civil Procedure Act was the proper procedural vehicle
- 4.Whether the learned judge below was right to dismiss that application
Key legal issues
#Effect of a consent order on an interlocutory application
A consent order taken on an interlocutory application such as a motion for injunction can effect a compromise ending the suit, and the bank was estopped from denying the appellant's entitlement to the fixtures, fittings and chattels listed in Exhibit A.
Counsel for both parties jointly sought and obtained the consent order varying the ex parte injunction, releasing the items in Exhibit A. The bank's attempts to set it aside failed in the High Court and on appeal. Once the compromise was affirmed, the substratum of the bank's action disappeared and the order estopped the bank, regardless of whether a formal decree was drawn up or executed.
Procedural vehicle for enforcing a compromise
Order 24 rules 6(1) and (2) of the Civil Procedure Rules govern an application to give effect to a consent judgment or order, empowering the court to record judgment on the compromise and to make any further order necessary for its implementation and execution.
The learned judge had dismissed the motion partly on the basis that Order 24 rule 6 was irrelevant, without identifying any other applicable rule. Apaloo JA held the rule squarely governs such applications: it empowers the court to enter judgment in accordance with a lawful compromise and to make implementation orders, and a party who has not executed the compromise as a decree may still return to court for aid.
Distinction between fixtures and chattels between landlord and tenant
Fixtures affixed to the freehold become part of the land subject to the charge, but tenant's fixtures for trade, ornament or agricultural purposes may be severed and removed; most items in Exhibit A were chattels outside the plaint.
The court applied the general law of fixtures: articles affixed to land presumptively become part of it, rebuttable by degree and purpose of annexation, with tenant's fixtures removable during the term. The plaint concerned only severable fixtures charged to the bank, yet Exhibit A comprised mostly chattels, creating the ambiguity that troubled Harris J and drove the outcome.
Legal principles established
#- A consent order or consent judgment has the same legal effect and, whether taken on the hearing of an action or on an interlocutory application, may end the dispute and operate as an estoppel per rem judicatam without formalisation into a decree.
- A bona fide compromise of all or any questions in dispute may be made without trial and the court will not allow the questions so settled to be litigated again between the parties.
- It is the judgment or order that determines the rights and obligations of parties, not its formalisation into a decree.
Court orders
#- 1.Appeal allowed
- 2.Ruling of Aganyanya J set aside
- 3.Orders sought in paragraphs 1, 3 and 4 of the appellant's Notice of Motion dated 11 May 1983 substituted: the plaint dismissed with costs as effectively extinguished by the consent order, the defendant's counterclaim (on damages) to be listed for hearing, and the plaintiff to return forthwith the fixtures and chattels forming the subject matter of the consent order
- 4.Costs of the appeal and of the superior court to the appellant
The bench
#One judgment of the whole court — no separate or dissenting opinions.
Wrote the judgment
Platt JA agreed with Apaloo JA's draft judgment and added his own comments, tracing the fixtures/landlord-and-tenant law, the ambiguity in the bank's claim, and Harris J's crucial finding that the consent order discharged the injunction over fixtures charged to the bank, leaving nothing of the bank's case.
I have had the advantage of studying the judgment of Apaloo JA in draft and I agree in the result. As we are differing from the opinion of the learned judge, I add a few comments of my own.p. 1
Wrote the judgment
Apaloo JA delivered the leading judgment: the consent order of 9 November 1979 was a valid compromise of the whole bank's claim under Order 24 rule 6, estopped the bank, and the learned judge erred in dismissing the appellant's motion; the appeal should be allowed.
It follows that I would allow the appeal and set aside the ruling appealed from. In lieu of it, I would make the several orders sought in paragraphs 1, 3 and 4 of the appellant's notice of motion with costs here and below.p. 10
- On appeal from
- High Court of Kenya
- Jurisdiction invoked
- Appellate jurisdiction of the Court of Appeal over a ruling of the High Court (order 24 rule 6 of the Civil Procedure Rules and section 3A of the Civil Procedure Act in issue below)
Relief refused
#Formal dismissal in respect of the appellant's claim for damages for detention of chattels
That part of the counterclaim was not compromised by the consent order and remains live for hearing
Costs
Costs of this appeal and of the superior court to go to the appellant
Quotable passages
#Verbatim from the judgment, each located to the page it appears on in the official PDF — so these can be cited and checked directly.
this appeal should be allowed and that the ruling of Aganyanya J should be set aside and be substituted with the orders prayed for in the Notice of Motion dated 11th May 1983. The costs of this appeal and the superior court should go to the appellants.
It seems to me that it is the judgment or order that determined the rights and obligations of parties not their formalization into a decree.
A consent judgment or order may be taken on the hearing of an action commenced by writ or on some interlocutory application therein such as a motion for injunction.
What estops the parties, is not the decree but the actual decision whether or not the decree accurately reflects it.
I am clearly of opinion that order 24 Rules 6(1) and (2) govern this application.
The only issue joined between the parties which was not the subject of the consent order, is the appellant's right to damages against the bank for detention of its chattels.
Issues in the judgment
#The judgment refers to the trial judge whose ruling was appealed in two ways: the draft comment of Masime Ag JA and the disposition name him as 'Aganyanya J', while Apaloo JA's narrative describes the ruling 'persuaded by the bank's contention' without naming the judge, and the motion is recorded as refused by 'the learned Judge'; the identity of the judge below is consistent but the High Court case number is never stated.
Key timeline
#Practical implications
#Frequently asked questions
#Later judgments citing this (1)
#Judgments in the corpus that rely on this one. Where the Court said how it treated the authority, that is shown.
Cite this brief
#Cite this brief
Caselaw, "Specialized Engineering Company Ltd v Kenya Commercial Bank Ltd [1988] KECA 128 (KLR)", Case Analysis (1988). Court of Appeal, Nairobi (civil appeal arising from High Court suit; prior appeal Civil Appeal No. 43 of 1980). Source: https://new.kenyalaw.org/akn/ke/judgment/keca/1988/128/eng@1988-03-11
Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.