Kenya Anti-Corruption Commission v Mbuyu Farms Limited & others (Application by Sammy Michugu Njenga, Interested Party)
The bottom line
#A settlement signed by your lawyer is generally binding, even if you didn't give specific instructions, unless fraud or mistake is proven.
What this practically means
#Executive summary
#Key legal issues
#Whether counsel's entry of the consent without specific instructions binds the client
The consent binds the client because counsel had ostensible authority and no express limitation was communicated to the other side
The Court accepted that Njenga did not specifically instruct his advocates to consent, and counsel admitted he did not seek instructions on the consent. However, following Kenya Commercial Bank v Specialized Engineering, an advocate with general conduct of a matter has implied authority to compromise. Since Njenga never communicated any reservation limiting that authority to the other parties, the consent stands unless grounds for setting aside a contract exist.
Whether the consent order was vitiated by fraud, mistake, misrepresentation or disregard of material facts
No - the material fact that the purchaser would lose the property was central to the consent and known to all who entered it
The application never alleged fraud or misrepresentation; the claim was disregard of material facts, but none were elaborated. The Court reasoned that the very essence of the consent was setting aside the auction, so giving up the property was a defining fact all participants necessarily knew. The compromise of KACC's undervalue application was within counsel's ostensible authority and not contrary to statute or public policy.
Whether parties by consent usurped the Court's role in declaring the auction non-compliant with section 97 of the Land Act
No - the consent was a lawful compromise of KACC's application in which each party assessed its position
The consent compromised KACC's application alleging the sale at Kshs 5,200,000 was at undervalue against forced sale valuations of Kshs 9,000,000 and 6,000,000. In consenting, Sumac assessed that the sale was at undervalue and Njenga gave up his innocent-purchaser defence. Such a compromise could be made within counsel's ostensible authority and was no affront to statute or public policy.
Whether the Julius Kigen Kibiego decision required the consent to be tested on its merits
Distinguished - that consent was set aside because it infringed the rights of a non-party school; here Njenga was represented and a party to the consent
Counsel for the applicant relied on Julius Kigen Kibiego v Angeline Korir to urge the Court to examine the merits of the consent. The Court read that decision and found Munyao J set aside the consent there because it infringed the rights of a school not party to it. In the present case Njenga was represented by counsel and was in that sense a party to the consent, so the precedent did not apply.
Legal principles established
#- A solicitor has an implied general authority to compromise and settle an action on behalf of his client, and a client cannot rely on a private limitation of that authority unless it was brought to the notice of the other side
- A consent order binds all parties and can only be set aside on grounds that would justify setting aside a contract - fraud, collusion, ignorance of material fact, misapprehension, or being against court or public policy
- A duly instructed advocate has ostensible authority to compromise an action unless the authority is expressly circumscribed and that limitation is brought to the notice of the other side
Court orders
#- 1.The Notice of Motion dated 7th October 2019 is dismissed
- 2.Costs of the application to the respondents (dismissed with costs)
- Jurisdiction invoked
- Inherent jurisdiction of the High Court to set aside consent orders; application under the court's case-management powers in the suit (no specific statutory provision invoked for the Motion)
Key timeline
#Practical implications
#Frequently asked questions
#Cite this brief
#Cite this brief
Caselaw, "Kenya Anti-Corruption Commission v Mbuyu Farms Limited & others (Application by Sammy Michugu Njenga, Interested Party)", Case Analysis (2020). Notice of Motion dated 7th October 2019 (in the suit by Kenya Anti-Corruption Commission against Mbuyu Farms Limited). Source:
Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.