Background
1. This is an appeal from the Ruling of the lower court in the Milimani CMCC No. 1037 of 2016 delivered on 20th February 2024, in which the trial court allowed the Respondent’s application dated 18th August 2023, declaring that ‘the consent sum contained in the consent letter dated 2nd February 2023 and adopted as an order of this court on the 13th February 2023 as duly settled by the Defendant’ and that the Appellant estopped from enforcing the amount of Kshs. 1,592,577.14 with interest.
2. The background of the dispute is that by a consent dated 2nd February 2023, the parties herein agreed that the Respondent was to pay the Appellant’s debt of Kshs. 4,000,000/ (discounted from Kshs. 5,592,577/-) in 7 monthly installments of between Kshs. 100,000/- to Kshs. 900,000/- beginning 20th December 2022 and ending 31st July 2023.
3. It was also a condition of the consent that “in default of any single installment and/or the auctioneer's fees, execution to issue forthwith against the defendant for the entire outstanding amount of Kshs. 5,592,577/= per the warrants of attachment and sale herein dated 9th November 2022, subject to the part payments made as at the date of default.”
4. The Respondent had difficulties in paying as per the consent; however, in the process, he engaged the Appellant, who received subsequent payments until the full amount of the consent (Kshs. 4,000,000/-) was cleared by 31st July 2023 as per the Consent.
5. The Respondent subsequently vide an application dated 18th August 2023 applied to the trial court, seeking an order declaring the consent sum fully satisfied, and stopping any further execution against him.
6. The Appellant opposed the application, arguing that the Respondent, having defaulted to pay the specific instalments by the due dates, the Appellant was entitled to recover the whole of the initial sum, being Kshs. 5,592,577/=. According to the Appellant, the Respondent still owed him a sum of Kshs. Kshs. 1,592,577.14/- under the consent order of 2nd February 2023.
7. On 20th February 2024, the trial court delivered its Ruling allowing the application. The court found that the Appellant was estopped from enforcing the amount of Kshs. 1,592,577.14 with interest as the said consent order required execution to occur immediately upon default, not at the plaintiff’s discretion. The trial court was of the view that since the Appellant failed to act in accordance with the consent order, he was estopped from exercising that right.
The Appeal
8. Aggrieved with the trial court’s decision, the Appellant lodged an appeal to the Court against the Ruling, raising the following grounds:
“ i. That the learned trial magistrate acted in error in law and in fact when he failed, as he did, to find that the Respondent had defaulted in payment of the agreed instalments towards settlement amount then agreed to be owing as provided in clause 1 of the letter of consent dated 2nd February 2023 and that consequently the self-executing default clause of the said letter of consent had automatically kicked in.
ii. That the learned trial magistrate acted in error in law and in fact when he did find that the Appellant was estopped from pursuing the recovery of the entire outstanding balance of the decretal sum as indicated in clause 2 of the letter of consent dated 2nd February 2023.
iii. That the learned trial magistrate erred in law and in fact in finding as he did, that the Appellant is not entitled to recover the sum of Kshs. 1,592,577/= from the Respondent and consequently barring the execution proceedings in recovery thereof without any sound legal reasoning and occasioning gross injustice thereby.
iv. That the learned trial magistrate erred in law and in fact in allowing the Respondent’s application dated 18th August 2023 on the basis of reasoning and grounds that are not supported by any known law.”
9. Based on the foregoing grounds, the Appellant prayed for his appeal to be allowed and the ruling of 20/2/2024 to be quashed and substituted with an order of dismissal of the Respondent’s application dated 18/8/2023. Further, the Appellant prayed for costs of this appeal.
Submissions
10. The appeal proceeded by way of written submissions. The Appellant filed his submissions dated 26th September 2024, whilst the Respondent’s submissions are dated 23rd October 2024.
11. In his submissions, the Appellant submitted that the Respondent failed to pay the installments on the strictly agreed dates and this amounted to default and there having been no application for intervention by the lower court to enlarge time or set aside the consent order, the court had no jurisdiction to rewrite the terms of the consent therein.
12. The Appellant further submitted that he is entitled to the entire decretal sum following the events of default in payment of the sums due on the expected date of payment. The Appellant was consistent with its demand for the entire sum.
13. On the other hand, the Respondent in his submissions opposed the appeal and stated that the appeal should be dismissed in its entirety with costs. It was submitted that the first two grounds of appeal were not relevant to the ruling being challenged, as they were not addressed in the lower court’s ruling of 20/2/2024. The notice of motion dated 18/8/2023, which led to the ruling, sought various reliefs, including a stay of execution and a declaration that the consent amount had been settled. However, the Appellant’s first two grounds of appeal did not align with the issues considered in that ruling.
14. The Respondent emphasized that the learned magistrate only framed two issues for determination: whether the plaintiff had abandoned the right to claim Kshs. 1,592,577.14 with interest, and who should bear the costs of the application. It was contended that the Appellant should have confined the grounds of appeal to these issues. Since the lower court's ruling was based on the doctrine of estoppel, the appeal should have focused on whether the magistrate erred in applying this doctrine.
15. The Respondent submitted that the magistrate rightly found that the plaintiff was estopped from enforcing the amount claimed because, despite an alleged default, the plaintiff continued to receive payments from the defendant. The magistrate noted that the plaintiff failed to execute the consent order immediately upon default, as stipulated in the agreement. Instead, the plaintiff accepted subsequent payments and only sought execution after the final installment had been received. This conduct, the Respondent argued, demonstrated acquiescence and a waiver of the right to immediate execution.
16. The Respondent further relied on the case of John Mburu v. Consolidated Bank of Kenya (2018) eKLR to support the argument that by accepting payments after default, the Appellant had effectively remedied the breach and could not later claim the right to execute.
Analysis and determination:
17. Having analysed the grounds of appeal, this Court finds that the only issue for determination in this appeal is the question of whether the learned trial magistrate erred when he found that the Appellant was estopped from pursuing the recovery of the entire outstanding balance of the decretal sum.
18. At the heart of the dispute between the parties is a consent entered into on 2/2/2023. Clause 3 of thereto states:
“That in default of any single installment and/or the auctioneer’s fees, execution to issue forthwith against the Defendant for the entire outstanding amount of Kshs.5,592,577/- per the warrants of attachment and sale herein dated 9th November 2022, subject to the part payments made at the date of the default.”
19. The Court of Appeal case of East African Portland Cement Company Limited v Superior Homes Limited [2017] eKLR, quoted with approval the case of Flora Wasike vs Destimo Wamboka (1988) 1 KAR 625, where the court held that:
"It is now settled law that a consent judgment 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.... In Purcell vs F C Trigell Ltd [1970] 2 All ER 671, Winn LJ said at 676; “It seems to me that, if a consent order is to be set aside, it can really only be set aside on grounds which would justify the setting aside of a contract entered into with knowledge of the material matters by legally competent persons, and I see no suggestion here that any matter that occurred would justify the setting aside or rectification of this order looked at as a contract.”
20. My understanding of that clause (Clause 3 of the consent dated 2/2/2023) is that upon default of payment of any instalment, execution would ensue immediately. In this case, the Respondent defaulted in the repayment of instalments, the first time was on 28/2/2023. The Appellant applied to execute for the entire sum under the agreement on 8/5/2023 after the lapse of about 2 months.
21. The learned magistrate noted in the ruling that despite the default, the Appellant did not exercise his right to execute forthwith as agreed in the consent, but instead he continued to receive subsequent payments until the final payment was made. I agree with the lower court’s findings that the Respondent did indeed default in payment of instalments as stipulated in the consent; however, after realising the default, the Appellant continued to receive the payments late and only sprang into action two months later with the intent to execute.
22. I the circumstances of this case and based on the evidence on record, I find, as the trial magistrate did, that there was clear acquiescence on the part of the Appellant when he continued to receive subsequent payments until the last instalment. He is therefore estopped from enforcing the amount of Kshs.1,592,577.14 with interest.
23. Accordingly, the appeal herein is dismissed with costs, which is hereby assessed at Kshs. 50,000/-, to be paid within 30 days.
24. This file is closed.
25. It is so ordered.
SIGNED, DATED, and DELIVERED IN VIRTUAL COURT
THIS 24TH DAY OF APRIL 2025
ADO MOSES
JUDGE