Radhabai Shivji Bhanderi (Suing as administrator of Shivji Ramji Bhanderi (Deceased) v Jyotibala A. Desai & 2 others [2018] KECA 727 (KLR)
The bottom line
#Kenya's Court of Appeal confirmed that a signed consent order binds everyone, but judges must give reasons when deciding who pays legal costs.
What this practically means
#Executive summary
#Key legal issues
#Effect of a consent order adopted by the court on the scope of issues remaining for determination
The consent order compromised all issues in the suit regarding shareholding, dividends, management, and buyout/winding up of the company; the only issues left for the court were the open market value of the Riara property and whether the sale was fraudulent
The court examined each clause of the consent against the prayers in the amended plaint. Clauses 1 and 3 resolved shareholding and dividends; clause 2 resolved the Bondo Road property; clauses 4 and 5 left only valuation of the Riara property and the buyout/winding up mechanism. The judge therefore did not err in restricting himself to the consent.
Whether the trial court properly determined the market value of the Riara property and the question of fraud
The judge properly considered the valuation reports, preferring the joint valuation of Kshs.100,000,000, and correctly applied clause 4 of the consent upon finding the sale fraudulent
Steven Omengo was jointly appointed by the parties' advocates and thus independent. The respondents' valuer's report was rightly rejected as partisan and based on a valuation two years earlier. Clause 4 of the consent provided for apportionment based on the determined value where fraud was found, not for refund of the excess.
Whether the order that each party bear their own costs was a proper exercise of discretion
The discretion on costs is wide but must be exercised judicially and with reasons; the judge gave none, and the litigation was necessitated by the respondents' lack of transparency, so costs of the suit were awarded to the appellants
Although costs are discretionary under section 27 of the Civil Procedure Act, the absence of reasons and the respondents' conduct of obstructing access to the company's financial affairs justified interference. The appellants succeeded only on costs, and were also awarded 50% of the appeal costs.
Legal principles established
#- A consent order adopted by the court binds the trial judge, who may only do what the parties agreed; where the consent did not provide for a refund of the excess over the sale price, the court cannot order one
- A valuer jointly appointed by both parties is not a witness for one party but gives a report on his findings following joint instructions, and a court may prefer that valuation over one procured on a single party's instructions
- The discretion on costs must be exercised judicially and reasons given; where no reasons are given and litigation was necessitated by a party's lack of transparency, the appellate court may interfere and award costs to the aggrieved party
- Unresolved matters arising under a consent order remain enforceable by application to the High Court
Court orders
#- 1.The appeal and cross appeal dismissed except on the issue of costs
- 2.The appellants awarded costs of the suit in the lower court
- 3.The respondents to bear 50% of the appellant's costs in the appeal
- On appeal from
- High Court of Kenya at Milimani Commercial Court, Nairobi
- Civil Suit No. 35 of 2006
- Jurisdiction invoked
- First appellate jurisdiction over the High Court under the Constitution and the Appellate Jurisdiction Act (appeal from the Judgment and Decree of the High Court)
Key timeline
#Practical implications
#Frequently asked questions
#Cite this brief
#Cite this brief
Caselaw, "Radhabai Shivji Bhanderi (Suing as administrator of Shivji Ramji Bhanderi (Deceased) v Jyotibala A. Desai & 2 others [2018] KECA 727 (KLR)", Case Analysis (2018). Civil Appeal No. 159 of 2016. Source: https://new.kenyalaw.org/akn/ke/judgment/keca/2018/727/eng@2018-02-02
Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.