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Court of AppealDismissedCivil Appeal No. 36 of 2017· [2020] KECA 828 (KLR)

National Bank of Kenya Limited v Otieno, Ragot & Company Advocates

Court of Appeal of Kenya
3 April 2020
3,813 words in judgment
View original judgmentRead on Kenya Law Watch case
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The bottom line

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Kenya's Court of Appeal ruled that National Bank of Kenya lost its right to rely on a fees agreement because it stayed silent during taxation and consented to judgment.

What this practically means

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Executive summary

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This second appeal arose from a High Court ruling by E. Maina, J. dismissing the bank's reference against a taxing officer's decision that taxed an advocate/client bill of costs at Kshs. 3,279,534.83. The bank argued that a retainer agreement with the advocates should have governed the fees and could be raised even after judgment. The Court of Appeal, in a judgment authored by Asike-Makhandia, JA with which Kiage, JA concurred (Odek, JA having passed away before delivery, with judgment delivered pursuant to rule 32(3) of the Court of Appeal Rules), framed three issues: whether to interfere with the High Court's discretion, whether the High Court was bound by the D. Njogu decision, and the fate of the consent judgment. The Court held that the bank, having participated in taxation without mentioning the retainer agreement, conceded all but two items, and consented to entry of judgment on the certificate of costs, waived and was estopped from relying on the retainer agreement. Introducing the agreement at the reference stage was fresh evidence on appeal, contrary to public policy. The D. Njogu precedent was properly distinguished because there the retainer issue had been raised as a preliminary point before the taxing officer. On consent judgments, the Court reaffirmed that they have contractual effect and can only be set aside on grounds such as fraud or collusion, none of which were proved. Applying the Mbogo v Shah and United India Insurance principles on non-interference with discretionary decisions, the Court found no basis to disturb the ruling below. The appeal was dismissed with costs to the respondent.

Key legal issues

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01

Whether the retainer agreement was enforceable after taxation and consent judgment

Holding

The appellant, having failed to raise the retainer agreement before the taxing officer and having consented to entry of judgment on the certificate of costs, waived and was estopped from relying on the retainer agreement.

Reasoning

Although a valid retainer agreement under Section 45 of the Advocates Act is binding, the party seeking to enforce it bears the onus of proof. The appellant never raised the agreement before the taxing officer, conceded all but two items of the bill, and consented to judgment being entered on the certificate of costs. Introducing the agreement at the reference stage amounted to inadmissible fresh evidence on appeal. Waiver and estoppel therefore precluded reliance on the agreement.

p. 3
02

Whether the High Court was bound by the D. Njogu decision

Holding

The Judge was correct to find D. Njogu inapplicable because in that case the retainer issue was raised as a preliminary point before the taxing officer, which did not happen here.

Reasoning

The Court acknowledged that under normal circumstances a High Court judge should follow a similar precedent, but the factual matrix differed materially: the appellant here failed to raise the retainer agreement as a preliminary issue, willingly allowed taxation to proceed, and consented to the certificate of costs being adopted as judgment. The judge's reasoning distinguishing the two cases could not be impugned.

p. 3
03

Whether a consent judgment can be set aside on appeal

Holding

A consent judgment binds the parties and can only be set aside on grounds such as fraud, collusion, or considerations that would justify rescinding a contract, none of which were established.

Reasoning

Relying on Hirani v Kassam, Brooke Bond Liebig v Mallya and Flora N. Wasike v Destimo Wamboko, the Court held that an order made with the consent of counsel is binding and cannot be varied or discharged unless obtained by fraud or collusion, or for reasons enabling a court to set aside an agreement. There was no proof of fraud, collusion or misapprehension of facts here, so the consent judgment stood and the appeal, which effectively sought to unsettle it, necessarily failed.

p. 4

Legal principles established

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  • The Court of Appeal will not interfere with a discretionary decision of the judge appealed from unless the judge misdirected himself in law, misapprehended the facts, took into account or failed to take into account relevant considerations, or the decision is plainly wrong.
  • A consent judgment has contractual effect and can only be set aside on grounds that would justify setting aside or rescinding a contract, such as fraud or collusion.
  • A party who participates in taxation without raising a retainer agreement and consents to entry of judgment on the certificate of costs waives and is estopped from later relying on the retainer agreement.
  • New evidence cannot be introduced at the appellate stage without leave, as it is prejudicial to the opposing party and against public policy.

Court orders

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  1. 1.The appeal is dismissed
  2. 2.Costs of the appeal awarded to the respondent
On appeal from
High Court of Kenya at Kisumu
HC Miscellaneous Civil Application No. 18 of 2016
Jurisdiction invoked
First appeal to the Court of Appeal under the Court of Appeal Rules; the judgment was delivered pursuant to rule 32(3) of the Court of Appeal Rules following the death of Odek, JA.

Key timeline

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Practical implications

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Frequently asked questions

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Cite this brief

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Cite this brief

Caselaw, "National Bank of Kenya Limited v Otieno, Ragot & Company Advocates", Case Analysis (2020). Civil Appeal No. 36 of 2017. Source: https://new.kenyalaw.org/akn/ke/judgment/keca/2020/828/eng@2020-04-03

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