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Court of AppealPartially AllowedCivil Appeal No. 276 of 1997· [1998] KECA 236 (KLR)

Kenya Commercial Bank Limited v Benjoh Amalgamated Limited & another (Civil Appeal 276 of 1997) [1998] KECA 236 (KLR)

Court of Appeal
10 March 1998
RKR. O. KwachPhilip Kiptoo TunoiP. K. TunoiSBS. E. O. Bosire
2,388 words in judgment
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The bottom line

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Kenya's Court of Appeal ruled that a consent order recorded in court binds parties and cannot be undone years later just because the court file went missing.

What this practically means

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Executive summary

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The respondents, Benjoh Amalgamated Limited and Muiri Estate Limited, sued Kenya Commercial Bank Limited over a loan of Kshs.23,175,000 secured by charges over two parcels of land in Kiambu. On 4th May 1992 a consent judgment was recorded before Githinji J in the presence of counsel for both parties, allowing the bank to realise the securities on default. Almost five years later, and after the court file disappeared, the respondents applied under Order 44 rule 1 of the Civil Procedure Rules and section 3A of the Civil Procedure Act for review or setting aside of the consent order, contending that counsel who recorded the consent, Mr. Meenye, lacked authority. Githinji J allowed the application, relying on his own unreported decision that loss of the original record obliged the court to set aside an order ex debito justitiae. The Court of Appeal allowed the bank's appeal. It disapproved any general principle that loss of the court record entitles a party to set aside an order, holding that such a rule would reward unscrupulous litigants. Restating the principles from Hirani vs Kassam, Brooke Bond Liebig (T) Limited vs Mallya and Flora Wasike vs Destimo Wamboko, the Court held that a consent judgment has contractual effect and can only be set aside on grounds justifying setting aside a contract, such as fraud, collusion or misapprehension of material facts, none of which was shown. Counsel's appearance before and recording of the consent before the judge demonstrated authority, and the respondents' five-year delay and frivolous suits disentitled them to equitable relief. The appeal was allowed, the High Court ruling set aside, and the respondents' application dismissed with costs, the appellant also receiving the costs of the appeal.

Key legal issues

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01

Principles governing setting aside of consent orders

Holding

A consent order recorded in the presence and with the consent of counsel is binding and can only be set aside on grounds that would justify setting aside a contract, such as fraud, collusion, or misapprehension of material facts. None existed here.

Reasoning

The Court adopted the principles in Hirani vs Kassam as approved in Brooke Bond Liebig (T) Limited vs Mallya, and Flora Wasike vs Destimo Wamboko. There was no suggestion of fraud or collusion; all material facts were known and the compromise terms were clear and unequivocal. A court cannot interfere with a consent judgment except on grounds affording good ground for varying or rescinding a contract between the parties.

p. 4
02

Authority of counsel to record a consent

Holding

Counsel appearing before a judge and recording a consent in that judge's presence is presumed to have authority; the judge's acceptance and recording of the consent demonstrates satisfaction that counsel had authority. A solicitor has general authority to compromise bona fide, and undisclosed limitations of authority do not avail the client against the other side.

Reasoning

The consent was recorded by Githinji J himself in the presence of Mr. Meenye; in the ordinary course counsel must have told the judge on whose behalf he appeared. The respondents could easily have sought clarification from Mr. Meenye by affidavit but chose not to, from which the Court inferred his response would have been adverse to their case. Even absent authority, the respondents were not left without a remedy at law against the default of their advocate.

p. 3
03

Effect of loss of the original court record

Holding

The loss of the original record does not automatically entitle a party to have a judgment or order set aside so that a retrial can be held; the Judge's general statement to that effect was disapproved.

Reasoning

Githinji J had relied on his own unreported decision holding that where the original record is lost, an application challenging the order must succeed ex debito justitiae. The Court of Appeal rejected any such general principle, holding it would bring the law into disrepute and reward unscrupulous litigants who arrange for records to disappear to obstruct justice.

p. 3
04

Delay and abuse of process as a bar to equitable relief

Holding

The respondents waited almost five years while filing frivolous suits to ward off the appellant, including one as far afield as Nyeri; such conduct disentitled them to equitable relief and the Judge erred in failing to take it into account.

Reasoning

The respondents applied on 4th April 1997 to review a consent order entered on 4th May 1992. During that period they filed multiple suits, including H.C.C.C. No. 1520 of 1996, H.C.C.C. No. 1611 of 1996 and H.C.C.C. No. 24 of 1997 at Nyeri (struck out as an abuse of process), obviously to exasperate the appellant. The Judge should have taken this track record into account and his failure to do so was clearly wrong.

p. 3

Legal principles established

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  • A consent judgment or order has contractual effect and can only be set aside on grounds which would justify setting a contract aside, or if certain conditions remain to be fulfilled which are not carried out.
  • Prima facie, any order made in the presence and with the consent of counsel is binding on all parties and cannot be varied or discharged unless obtained by fraud, collusion, agreement contrary to the policy of the court, or where consent was given without sufficient material facts or in misapprehension or ignorance of material facts.
  • A solicitor has general authority to compromise on behalf of his client if acting bona fide and not contrary to express negative direction; no limitation of the implied authority avails the client against the other side unless brought to their notice.
  • The loss of the original court record does not, of itself, entitle a party to have a judgment or order set aside ex debito justitiae; such a general principle would reward unscrupulous litigants who arrange for records to disappear.
  • A litigant who delays and files frivolous suits to obstruct the opposing party is not entitled to an equitable remedy.

Court orders

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  1. 1.Appeal allowed
  2. 2.Ruling and order of Githinji J set aside
  3. 3.In lieu thereof, an order substituted dismissing the respondents' application for review of the consent order with costs
  4. 4.Appellant awarded the costs of the appeal
On appeal from
High Court of Kenya at Nairobi
H.C.C.C. No. 1219 of 1992
Jurisdiction invoked
First appellate jurisdiction over the High Court under the Constitution and the Appellate Jurisdiction Act (appeal from the Order and Ruling of the High Court)

Key timeline

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Practical implications

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Frequently asked questions

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Later judgments citing this (8)

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Judgments in the corpus that rely on this one. Where the Court said how it treated the authority, that is shown.

Cite this brief

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Cite this brief

Caselaw, "Kenya Commercial Bank Limited v Benjoh Amalgamated Limited & another (Civil Appeal 276 of 1997) [1998] KECA 236 (KLR)", Case Analysis (1998). Civil Appeal No. 276 of 1997. Source: https://new.kenyalaw.org/akn/ke/judgment/keca/1998/236/eng@1998-03-10

Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.