Susan Jane Shah & another v Co-operative Merchant Bank Ltd & another [2015 [2015] KECA 583 (KLR)
The bottom line
#The Court of Appeal ruled that once you settle a case through a consent order, you cannot sue again over the same issues.
What this practically means
#Executive summary
#Key legal issues
#Res judicata on the basis of a consent order in a prior suit
The consent order in HCCC No. 1743 of 2001 compromised all prayers in that suit, so the appellants could not re-litigate the validity of the charge or claims of fraud in a fresh suit.
The court compared the prayers in the two plaints and found them substantially the same; issues of fraud and the invalidity of the charge had been pleaded in the first plaint. Once the consent was entered, litigation on all issues in that plaint came to a close. The appellants were given 90 days to redeem, failing which the bank could realise the security. The consent order remained valid as no application to set it aside had been made before the lapse of the 90 days.
Matters that ought to have been raised in a former suit
All issues sought to be litigated in the latter suit were either pleaded in the former suit or ought to have been raised there, attracting Explanation No. 4 to section 7 of the Civil Procedure Act.
The court set out Explanation No. 4, which deems any matter which might or ought to have been made a ground of defence or attack in the former suit to have been directly and substantially in issue. Having considered both plaints, the court found that the validity of the charge, the personal guarantees and allegations of fraud were raised in the first plaint, and anything not raised ought to have been raised there.
Access to justice as a ground of appeal
The right of access to justice is not open-ended; a party who voluntarily compromises a suit cannot later complain of denial of access to justice.
The court held that access to justice must be enjoyed within the confines of the law and prescribed rules of procedure. By voluntarily opting to limit or stifle that right through compromising the suit, the appellants had to live with the consequences of that compromise and could not be heard to complain later.
Res judicata as a proper preliminary objection
Res judicata is a point of law capable of disposing of a suit at a preliminary stage and was properly raised by preliminary objection.
The court found that the preliminary objection was premised on a pure point of law, namely section 7 of the Civil Procedure Act read with the consent order, and the facts were undisputed. It was therefore capable of disposing of the matter at the preliminary stage, and the learned judge was in order to dismiss the appellants' suit for being res judicata.
Legal principles established
#- A consent order compromising a suit closes litigation on all issues raised or which could have been raised in that suit; those issues cannot be re-litigated in a subsequent suit.
- Explanation No. 4 to section 7 of the Civil Procedure Act bars re-litigation of matters which might or ought to have been raised in a former suit.
- A party who voluntarily compromises a suit cannot later claim that the compromise denied them access to justice.
Court orders
#- 1.Appeal dismissed
- 2.Costs of the appeal awarded to the respondents
- On appeal from
- High Court of Kenya at Nairobi
- H.C.C.C. No. 1111 of 2002 (originally HCC No. 1548 of 2002)
- Jurisdiction invoked
- First appeal to the Court of Appeal against a ruling and decree of the High Court (ruling dated 20th November 2002; appeal filed as Civil Appeal No. 87 of 2008)
Key timeline
#Practical implications
#Frequently asked questions
#Cite this brief
#Cite this brief
Caselaw, "Susan Jane Shah & another v Co-operative Merchant Bank Ltd & another [2015 [2015] KECA 583 (KLR)", Case Analysis (2015). Civil Appeal No. 87 of 2008. Source: https://new.kenyalaw.org/akn/ke/judgment/keca/2015/583/eng@2015-07-03
Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.