Cooperative Bank of Kenya Ltd v Gituma (Environment and Land Appeal E021 of 2024) [2024] KEELC 4917 (KLR)
The bottom line
#A Kenyan court ruled that a signed settlement agreement binds parties even without court approval, and illegal execution of a decree can be reversed with money and title returned.
What this practically means
#Executive summary
#Key legal issues
#Validity of the unadopted consent dated 27.3.2024
The consent was valid, self-executing and binding though never adopted by the court
The court found the consent signed and stamped by both law firms on record, with no claim of forgery reported to the DCI and no application to set it aside for fraud, mistake, illegality or coercion. The parties opened and funded the joint account with Kshs.8,500,000 by 5.4.2024 within the 14-day compliance window, so the consent was acted upon and actualised, giving it contractual effect regardless of adoption.
Legality of the execution of 8.4.2024
The execution was illegal, irregular, null and void
The consent had varied and vacated the orders of 25.3.2024, the 14-day compliance period had not lapsed, and the applicant had already complied by depositing the funds four days before 8.4.2024. The ex parte orders in the miscellaneous application were also obtained without notice to the applicant, contrary to Order 50 Rule 3, and no properly extracted decree was evidenced.
Preliminary objection - functus officio and satisfaction of decree
The preliminary objection fails; satisfaction of the decree does not bar stay or restitution orders
The court held that where a consent to settle a suit is made on conditions and breached, the court retains the right to hear the parties. Mere fulfilment of a decree does not stop a court from issuing restitutionary orders under Order 42 Rule 7(1) where sufficient cause is shown, and the decree-holder's unlawful execution required security for restitution.
Advocate's professional conduct
Respondent's counsel, an officer of the court, acted in bad faith by instructing auctioneers despite the consent
Counsel did not deny signing the consent, did not swear his signature was forged, and did not report forgery to the DCI. Being aware of the consent and the stayed proclamation, he nonetheless instructed auctioneers to execute. Bad faith includes dishonesty, unfairness and unreasonable conduct amounting to deliberate breach of due process.
Legal principles established
#- A signed consent agreement between parties, even if not adopted by the court, binds the parties once acted upon and can only be set aside for fraud, misrepresentation, collusion or ignorance of suit facts
- Consent orders are binding and cannot be set aside unless obtained by fraud, misrepresentation, collusion or ignorance of material facts
- Courts do not rewrite contracts for parties; they hold parties to their bargain
- An order improperly made without serving a person affected who has a statutory right to be served is a nullity
- It is the decree, not the judgment, which is executable
Court orders
#- 1.Stay of execution of the decree pending appeal granted, the court having found the purported execution illegal
- 2.The purported lifting of the charge against the title by the Land Registrar is vacated and replaced with a restriction against the title register until the hearing of the appeal
- 3.If the respondent has collected the original title deed, he shall surrender it to the Deputy Registrar of the court within 3 days
- 4.The respondent shall surrender the decretal amount to the custody of the court within 3 days
- 5.A notice to show cause to issue to M/s Lifeline Auctioneers why disciplinary action should not be taken for proceeding with an irregular execution, to appear before the court on 24.6.2024
- 6.The lower court file to be availed for mention on 24.6.2024
- On appeal from
- Chief Magistrates Court, Meru
- Meru CMCC ELC No. 31 of 2022
- Jurisdiction invoked
- Order 42 Rules 6(1)&(2) and 7(1) Civil Procedure Rules; Sections 1A, 3A and 34(1) Civil Procedure Act - stay of execution pending appeal and restitution
Key timeline
#Practical implications
#Frequently asked questions
#Cite this brief
#Cite this brief
Caselaw, "Cooperative Bank of Kenya Ltd v Gituma (Environment and Land Appeal E021 of 2024) [2024] KEELC 4917 (KLR)", Case Analysis (2024). Not stated in the judgment (application dated 2.5.2024; arises from Meru ELC E031 of 2022). Source: https://new.kenyalaw.org/akn/ke/judgment/keelc/2024/4917/eng@2024-06-19
Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.