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Court of AppealDismissedCivil Application No. NAI 1 of 2015

Samuel Mbugua Ikumbu v Barclays Bank of Kenya Limited [2015] KECA 390 (KLR)

Court of Appeal
25 September 2015
Martha Karambu KoomeM. K. KoomeFAF. AzangalalaSKS. ole Kantai
2,739 words in judgment
View original judgmentRead on Kenya Law Watch case
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·~11 min to read original · ~4 min brief

The bottom line

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The Court of Appeal ruled that a settlement agreement recorded in court is binding like a contract and cannot be undone without proof of fraud, mistake, or lack of authority.

What this practically means

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Executive summary

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This is a Court of Appeal ruling on an application by Samuel Mbugua Ikumbu to review consent orders made by a different bench of the same court on 28th April 2015 in his application for stay of execution pending appeal against Barclays Bank of Kenya Limited. The consent order required the applicant to pay Kshs. 7,500,000 towards reduction of indebtedness within 21 days, failing which the stay motion would stand dismissed. The applicant argued that the advocate who recorded the consent, an employee of the law firm on record, had no instructions to do so, and sought review under Rules 42 and 47 of the Court of Appeal Rules and Order 45 Rule 1(b) of the Civil Procedure Rules. The Court first confirmed that, following the 2010 Constitution, it has residual jurisdiction to review its own post-2010 decisions, exercising that power cautiously and only where it promotes public interest and confidence in the justice system; pre-2010 decisions remain immune from review. On the merits, the Court reaffirmed that consent orders have contractual effect and may only be set aside on grounds that would vitiate a contract, such as fraud, collusion, mistake, illegality or ignorance of material facts. It held that a duly instructed advocate has general authority to compromise and enter consents absent an express negative direction communicated to the other side. Since the instructing counsel admitted sending the advocate and had made no complaint against him, lack of authority was not established. Noting the application was filed outside the agreed 21-day period and that the applicant had not complied with the consent terms, the Court dismissed the application with costs to the respondent.

Questions the Court framed

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The issues the Court set itself to decide, in its own words.

  1. 1.Whether the Court has jurisdiction to review its own orders made after the promulgation of the Constitution of Kenya, 2010
  2. 2.What circumstances would justify varying or setting aside a consent order adopted by the court
  3. 3.Whether the advocate who recorded the consent order of 28th April 2015 lacked authority to do so

Key legal issues

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01

Jurisdiction of the Court of Appeal to review its own decisions

Holding

The Court has residual jurisdiction to review decisions made after the promulgation of the 2010 Constitution, exercised cautiously and only where it serves public interest and enhances public confidence in the rule of law; pre-2010 decisions will not be reviewed.

Reasoning

Before 2010, as apex court, the Court held it was a creature of statute with no power to reopen its decisions. After the Supreme Court was created, the Court in Benjoh Amalgamated recognized residual jurisdiction balancing the finality principle against the justice principle, limited to cases of fraud, bias or other injustice, and only for post-2010 decisions. The present application was therefore properly before the Court.

p. 4
02

Variation and setting aside of consent orders

Holding

A consent order adopted by the court is binding and can only be varied or set aside on grounds that would vitiate a contract: fraud, collusion, illegality, mistake, agreement contrary to public policy of the court, or absence of or ignorance of sufficient material facts.

Reasoning

Relying on Flora Wasike v Destimo Wamboko, Brooke Bond Liebig v Mallya and Hirani v Kassam, the Court reaffirmed that consent orders have contractual effect. Where an advocate has no authority at all, the consent is a nullity, but a duly instructed advocate has general authority to compromise, including entering consents, absent an express negative direction communicated to the other side.

p. 4
03

Whether the advocate recording the consent lacked authority

Holding

It was not demonstrated that Mr. Ilako, an employee of the instructing law firm on record, lacked authority; the firm had full mandate to compromise the application, and no complaint had been lodged against the advocate.

Reasoning

The instructing counsel, Mr. Koceyo, admitted sending Mr. Ilako to attend court and that no complaint had been made against him. General authority to act in a matter carries authority to enter consents. Further, the review application was filed outside the 21-day period agreed by consent and the applicant had not complied with the consented terms, so the application lacked merit.

p. 5

Legal principles established

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  • A consent judgment or order has contractual effect and can only be set aside on grounds which would justify setting a contract aside.
  • An advocate duly instructed to act for a client has general authority to compromise and enter consent orders on the client's behalf, absent an express negative direction brought to the other side's notice.
  • Post-2010, the Court of Appeal has residual jurisdiction to review its own decisions, to be exercised cautiously, only where it promotes public interest and public confidence in the justice system, and only for decisions made after the 2010 Constitution.

Court orders

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  1. 1.Dismissal of the applicant's motion for review of the consent orders made on 28th April 2015
  2. 2.Costs of the application awarded to the respondent

The bench

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One judgment of the whole court — no separate or dissenting opinions.

Martha Karambu Koome
M. K. KoomeJA
Currently serving
majority
FA
majority
SK
majority
On appeal from
Court of Appeal (earlier bench)
Civil Application No. NAI 1 of 2015 (UR.1/2015); HCCC No. 147 of 2002 (Nakuru)
Jurisdiction invoked
Rules 42 and 47 of the Court of Appeal Rules and Order 45 Rule 1(b) of the Civil Procedure Rules; residual jurisdiction to review its own decisions recognized post-2010 Constitution

Relief refused

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Review of the consent order of 28th April 2015

No demonstration that counsel lacked authority; application filed outside the 21-day period agreed by consent and the applicant had not complied with the consent terms

p. 5

Costs

The application was dismissed with costs to the respondent.

Quotable passages

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Verbatim from the judgment, each located to the page it appears on in the official PDF — so these can be cited and checked directly.

It is now settled law that a consent judgement or order has contractual effect and can only be set aside on grounds which would justify setting a contract aside, or if certain conditions remain to be fulfilled, which are not carried out.
p. 4Consent orders have contractual effect
A consent order entered into by counsel is binding on all parties to the proceedings and cannot be set aside or varied unless it is proved that it was obtained by fraud or by an agreement contrary to the Policy of the court or where the consent was given without sufficient material facts or in misapprehension or ignorance of such facts in general for a reason which would enable the court to set aside an agreement.
p. 5Grounds for setting aside consent orders
An advocate has general authority to compromise on behalf of his client as long as he is acting bona fide and not contrary to express negative direction. In the absence of proof of any express negative direction, the order shall be binding
p. 5Scope of advocate's implied authority
The application has no merit and we dismiss it with costs to the respondent.
p. 5Final orders - dismissal and costs

Issues in the judgment

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minor

The judgment inconsistently dates the orders sought to be reviewed, referring to '28th August, 2015' in the applicant's grounds when the orders were in fact made on 28th April 2015 as recorded elsewhere in the judgment.

Key timeline

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Practical implications

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Frequently asked questions

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Later judgments citing this (6)

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Judgments in the corpus that rely on this one. Where the Court said how it treated the authority, that is shown.

Cite this brief

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Cite this brief

Caselaw, "Samuel Mbugua Ikumbu v Barclays Bank of Kenya Limited [2015] KECA 390 (KLR)", Case Analysis (2015). Civil Application No. NAI 1 of 2015. Source: https://new.kenyalaw.org/akn/ke/judgment/keca/2015/390/eng@2015-09-25

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