REPUBLIC OF KENYA
IN THE HIGH COURT AT NAIROBI
MILIMANI LAW COURTS
COMMERCIAL & TAX DIVISION
HCCC NO. 422 OF 2016
PRIEYA GANDHI……………..……………..…1ST PLAINTIFF/APPLICANT
RAJ KUMARI GANDHI……………………..…2ND PLAINTIFF/APPLICANT
MITS ELECTRICAL COMPANY LIMITED…………………………….…. ………………………………………INTERESTED PARTY/APPLICANT
VERSUS
DEVELOPMENT BANK OF KENYA LIMITED……………………………........ 1ST DEFENDANT/ RESPONDENT
INTEGRA AUCTIONEERING (K) COMPANY LIMITED………………………………….2ND DEFENDANT/ RESPONDENT
RULING
1. The 1st and 2nd plaintiffs and the interested party (the applicants) filed the Notice of Motion dated 29th June, 2017, brought under Articles 40 and 159(2) of the Constitution, Order 50 Rule 1 of the Civil Procedure Rules, 2010, Sections 1A and 1B of the Civil Procedure Act, seeking the following orders-
(i) Spent;
(ii) Spent;
(iii) That this Honourable Court be pleased to set aside, rescind and/or expunge from the Court record ex debito justiciae the consent dated 15th June, 2017 and adopted by the Court on 5th June, 2017;
(iv) That this Honourable Court be pleased to order parties to abide by the Court Order of 20th April, 2017 issued prior to the impugned consent;
(v) Spent; and
(vi) Costs of the application e in the course.
2. The application is anchored on the grounds on the face of the Motion, the supporting and supplementary affidavits sworn by Ms Prieya Gandhi, the 1st applicant, on 29th June, 2017 and 20th July, 2017, respectively, a supplementary affidavit sworn by Satya Gandhi on 20th July, 2017, a list of authorities dated 12th July, 2017 and written submissions dated 22nd February, 2022.
3. The applicant’s case is that there is a consent on record dated 15th June, 2017 and recorded on 5th June, 2017 by the applicant’s erstwhile Advocates through collusion with the 1st respondent. That the said consent condemns the applicants to pay Kshs.44,000,000/-, inclusive of contested interest, in three instalments and stipulates that in the event of default, the 1st respondent shall be at liberty to sell the charged properties.
4. According to the applicant, the said consent contradicts the Court order of 20th April, 2017 directing the 1st and 2nd applicants to make proposals for settlement of their admitted liability of Kshs.22,218,715.91 to the 1st respondent and the other outstanding amounts be determined after trial.
5. The applicant faulted their erstwhile Advocates for failure to appreciate all the issues and facts as instructed and that they entered into the consent while proceeding on a frolic of their own. The applicants are apprehensive that the 1st respondent is likely to sell the suit properties unless the consent is set aside and/or discharged. They aver that and that their right to property is in danger of being infringed.
6. The applicants state that they are willing and amenable to abide by the Court Order of 20th April, 2017. They contend that a mistake of their erstwhile Advocates should not be visited upon them, and that unless this Court grants the orders sought, they will suffer irreparable harm and prejudice.
7. The applicants’ Counsel submit that they have met the conditions necessary for the setting aside of the consent in that it was entered into on a misapprehension and/or ignorance of facts by the applicant’s former Advocates and was recorded contrary to express instructions of the applicants; that the terms of the consent are unreasonable and unjust; that the consent exceeded the Court’s Order of 20th April, 2017 and that the Consent Order was entered into, in a manner not consistent with the general practice of entering into consents.
8. Among other authorities, the applicants relied on the decisions in Omulele & Tollo Advocates v Mount Holdings Limited [2016] eKLR on the fiduciary relationship between an Advocate and his client and Mardsen v Mardsen [1972] 2 ALL ER 1162, where the Court set aside a consent on the basis that the undertakings were given without her express instructions.
Respondents’ Response
9. The application was opposed by the respondents through their replying affidavits sworn by Aldrin Ojiambo Advocate on 10th July, 2017 and the applicants’ erstwhile Advocate, Mr. Faraji Chipinde, on 13th July 2017, respectively. The respondents also filed written submissions dated 17th February, 2022.
10. In relying on the Court of Appeal decision in Flora M. Wasike v Destimo Wamboko [1988] eKLR, the respondents submitted that the applicants have not met the conditions required for setting aside the consent of 5th June, 2017. They contended that the applicants have not proved that their former Advocate colluded with the 1st respondent to arrive at the terms of the Consent Order. They also submitted that in capping their debt at Kshs.44,000,000/-, the terms of the consent were favourable to the applicants because as at the year 2016, the outstanding debt and accumulated interest owed by them was Kshs. 60,864,002.43. They contended that there was nothing to be gained by the applicants’ former Advocates and the respondents’ Advocates by colluding.
11. The respondents asserted that apart from the parties’ respective Advocates, the consent was recorded in the presence of Ms Satya Gandhi, the interested party’s Managing Director and she did not protest the terms or demand that their Advocate should not sign it. The respondents submitted that in the Flora M. Wasike v Destimo Wamboko case (supra), the Court did not set aside the consent on the basis that the original record showed that both parties were represented by Advocates and that the consent judgment was recorded in their presence.
12. The respondents relied on the case of Lenina Kemigisha Mbabazi Star Fish Ltd v Jin Jeng International Trading Ltd [HCT-00-MA-344-2012] cited in SMN v ZMS & 3 others [2017] eKLR to argue that a Court cannot set aside a consent where there is nothing to show that the applicants’ Counsel entered into it without instructions, and where an Advocate has no specific instructions but has general instructions to defend a suit and his instructions have not been terminated. The respondents also relied on the decision in Waugh v H B Clifford & Sons [1982] Ch 374 to the effect that Counsel would ordinarily have ostensible authority to compromise suits so far as the opponent is concerned.
ANALYSIS AND DETERMINATION
13. I have considered the application, the grounds in support thereof, the rival affidavits, submissions and authorities. The issue arising for determination is whether the applicant has met the threshold for the setting aside of the Consent Order of 5th June, 2017.
14. The guiding principles for setting aside a consent is that a Consent Order entered into by Counsel is binding on all parties and cannot be set aside or varied unless it is proved that it was entered in through fraud, collusion, an agreement contrary to the policy of the Court, without sufficient material facts, misapprehension or ignorance of such facts and in general for a reason which would enable the Court set aside an agreement.
15. These principles were laid out by the Court of Appeal in the case of Flora M. Wasike v Destimo Wamboko case (supra), where it was held as follows-
“It is well-settled law that a consent judgement or order has contractual effect and can only be set aside on grounds which would justify setting aside, or if certain conditions remain unfulfilled, which are not carried out. If a consent is to be set aside, it can only really be set aside on grounds which would justify the setting aside of a contract entered into with knowledge of material matters by legally competent persons…Prima facie a consent order made in the presence and with the consent of counsel is binding on all parties to the proceedings or action, and on those claiming under them and cannot be varied or discharged unless obtained by fraud or collusion, or by an agreement contrary to the policy of the court, or if the consent was given without sufficient material facts, or in misapprehension or in ignorance of material facts, or in general for a reason which would enable the court to set aside an agreement...A court cannot interfere with a consent judgement except in such circumstances as would afford good ground for varying or rescinding a contract between the parties…In the instant case, while the Judge did not in terms record the parties’ ‘or their advocates’ consent to the consent judgement he entered, nevertheless the original record shows that both parties were represented by advocates and that the consent judgement was recorded in their presence. The universal practice is to record that a judgement or order is by consent, if that be the case, and it is difficult to believe unless demonstrably shown otherwise that the court would so head the judgement if it were not the case, at least so far as the Judge was aware. Furthermore, a solicitor or counsel would ordinarily have ostensible authority to compromise suit so far as the opponent is concerned…But it would be no mean task for a party to a decree by consent to prove that the decree is invalid on the grounds referred. It is abundantly clear that the appellant was a ready and willing party to the material judgement by consent and that the terms and consequences of the judgement were explained to her.”
16. In addition to the foregoing, in Republic v District Land Registrar Nandi and another Exparte Tegenei [2005] eKLR, Hon. Musinga J. (as he then was), stated thus-
“It is not in dispute that an advocate has general authority to compromise a matter on behalf of his client but he has to act bona fides and in the best interests of his client.
“SETON ON JUDGMENTS AND ORDERS”, 7th edition, volume 1 page 124 states as follows:-
“Prima facie, any order made in the presence and with the consent of counsel is binding on all parties to the proceedings or action, and on those claiming under them…….and cannot be varied or discharged unless obtained by fraud or collusion, or by an agreement contrary to the policy of the court………or if consent was given without sufficient material facts, or in misapprehension or in ignorance of material facts, or in general for a reason which would enable the court to set aside an agreement.”
That position was restated by the Court of Appeal in FLORA WASIKE VS DESTIMO WAMBOKO [1988] 1 KAR 625 and recently by the same court in KENYA COMMERCIAL BANK LTD VS BENJOH AMALGAMATED LTD & MUIRU COFFEE ESTATE LTD Civil Appeal No. 276 of 1997.”
I have carefully considered the consent orders issued on 15th March, 2004. The applicant was not aware of the application dated 10th March, 2004 which gave rise to the said orders. His instructions were not sought in the matter at all. The applicants erstwhile advocates did not file any grounds of opposition and neither did they get the applicant to swear a replying affidavit. How then could they challenge the said application? The orders sought in the said application had far reaching effects and so it was incumbent upon Mr. Mbeche Advocate to seek express instructions from the applicant.
Although an advocate has ostensible authority to compromise his client’s case, employment of such authority cannot be upheld where counsel consents to orders which are diametrically opposed to the express instructions which he has been given by a client in a matter. It is not easy to prove that there was fraud or collusion in recording of any consent orders between advocates in the absence of their instructing clients but where such orders completely negate the interests of an instructing client and it is shown to the satisfaction of the court that the client was not even aware of the application that gave rise to those consent orders leave alone having consented to the recording of the orders, in the absence of any satisfactory explanation by the counsel who is accused of entering into the consent orders in question, a court of law would be entitled to conclude that there was fraud or collusion involved and will not uphold the consent orders issued.
17. Coming back to the instant application, the record shows that on 20th April, 2017, the Court issued an order directing the applicants to make proposals to pay the admitted sum of Kshs.22,218,751.91. Thereafter, the applicants made a proposal through a letter to their former Advocates Maura, Muthoni, Mikhala, Faraji & Associates dated 11th May, 2017. That proposal was rejected prompting the applicants to give a second proposal vide a letter dated 26th May, 2017 addressed to the said law firm. Through email correspondence of 30th and 31st May, 2017, a meeting between the parties’ Advocates was scheduled for 31st May 2017 at 2.00 p.m., to discuss the second proposal. Ms Satya Gandhi averred that she arrived at the offices of the 1st respondent’s Advocates for the meeting, but despite confirming his attendance, Mr. Faraji did not make it for the meeting, and only called at the last minute to say that they had been called to the High Court for some hearing late in the evening and would not make it (for the meeting).
18. Ms Satya Gandhi deposed that negotiations did not take place due to the 1st respondent’s Advocate’s insistence that the applicants’ Advocates had to be present as per their earlier letter dated 19th April, 2017. That notwithstanding, she stated that the applicants through a letter dated 1st June, 2017, instructed their erstwhile Advocates that a consent on settlement of their admitted liability limited to Kshs.22,218,715.91 to the 1st respondent would only be recorded in Court, and that they gave the terms of the consent in the said letter.
19. The 1st respondent filed a Notice of Motion dated 31st May, 2017 seeking to review the orders of 20th April, 2017. The applicants however claim that they were not aware of the said application. Although they concede that the application was served on their erstwhile Advocates on 2nd June, 2018, they claim that it was neither brought to their attention nor their instructions sought. Ms Satya Gandhi averred that she only learnt of the application on 5th June, 2017, after the consent was recorded and adopted.
20. In his replying affidavit, the applicant’s former Advocate, Mr. Faraji deposed that that he was not able to attend the meeting scheduled on 31st May, 2017, and averred that he was engaged in a hearing and that he communicated the same to both the 1st respondent’s Advocates and to Ms Satya Gandhi in reasonable time. Mr. Faraji also deposed that on 2nd June, 2017, he wrote to the 1st respondent’s Advocates presenting fresh proposals for their consideration and that unknown to them, the respondents had already taken out the Motion of 31st May, 2017 seeking immediate payment of Kshs.22,218,715.01 together with proportionate interest. That faced with the threat of discharge of the interim injunction, he advised Ms Satya Gandhi to accede to the immediate payment of the admitted sum and the proportionate interest. From my review of the record, there were no grounds of opposition or a replying affidavit filed by the applicants in response to the 1st respondent’s application of 31st May, 2017 seeking to review the orders of 20th April, 2017.
21. Mr. Faraji averred that the consent was recorded in open Court and that Ms Satya Gandhi was present and fully participated in the negotiations and understood the terms of the said consent. Mr. Faraji did not however avail any express instructions from Ms Satya Gandhi to confirm her approval of the terms of the consent before it was recorded in Court. Having gone through the aforementioned correspondence exhibited by Ms Satya Gandhi, it is my finding that the applicants’ erstwhile Advocates represented by Mr. Faraji entered into a consent on 5th June, 2017, in terms which were diametrically opposed to the express instructions that he had been given by his clients on 1st June, 2017.
22. I am not persuaded that the applicants’ former Advocates, and more particularly, Mr. Faraji, had express instructions from the applicants to enter into a consent in the terms recorded on 5th June, 2017. I am also not persuaded that the applicants got wind of the 1st respondent’s Notice of Motion dated 31st May, 2017 to set aside the orders of 20th April, 2017, prior to 5th June, 2017. As such, I find that there are sufficient reasons to warrant the setting aside of the orders of 5th June, 2017.
23. This Court however notes that the applicants ought to have made payments of the admitted sum of Kshs.22,218,715.91 as per their proposals of 1st June, 2017, as a sign of good faith.
24. In the result, the application dated 29th June, 2017 is allowed in the following terms-
(i) The consent recorded and adopted by the Court on 5th June, 2017 is hereby set aside;
(ii) The applicants shall pay the admitted sum of Kshs.22,218,751.91 within 120 days from the date of this ruling. In default thereof, the 1st respondent shall be at liberty to exercise its statutory power of sale in order to recover the admitted amount; and
(iii) Although the applicants have succeeded in this application, they shall bear the costs of the said application for failing to honour payment of the admitted sum.
It is so ordered.
DELIVERED, DATED and SIGNED at NAIROBI on this 19th day of April, 2024. Ruling delivered through Microsoft Teams Online platform
NJOKI MWANGI
JUDGE
In the presence of:
Mr. Omino for the plaintiffs/applicants
Mr. Onyango for the 1st defendant/respondent appearing with Mr.
Nyobama h/b for Mr. Odhiambo
Ms B. Wokabi – Court Assistant.
IN THE HIGH COURT AT NAIROBI
MILIMANI LAW COURTS
COMMERCIAL & TAX DIVISION
HCCC NO. 422 OF 2016
PRIEYA GANDHI……………..……………..…1ST PLAINTIFF/APPLICANT
RAJ KUMARI GANDHI……………………..…2ND PLAINTIFF/APPLICANT
MITS ELECTRICAL COMPANY LIMITED…………………………….…. ………………………………………INTERESTED PARTY/APPLICANT
VERSUS
DEVELOPMENT BANK OF KENYA LIMITED……………………………........ 1ST DEFENDANT/ RESPONDENT
INTEGRA AUCTIONEERING (K) COMPANY LIMITED………………………………….2ND DEFENDANT/ RESPONDENT
RULING
1. The 1st and 2nd plaintiffs and the interested party (the applicants) filed the Notice of Motion dated 29th June, 2017, brought under Articles 40 and 159(2) of the Constitution, Order 50 Rule 1 of the Civil Procedure Rules, 2010, Sections 1A and 1B of the Civil Procedure Act, seeking the following orders-
(i) Spent;
(ii) Spent;
(iii) That this Honourable Court be pleased to set aside, rescind and/or expunge from the Court record ex debito justiciae the consent dated 15th June, 2017 and adopted by the Court on 5th June, 2017;
(iv) That this Honourable Court be pleased to order parties to abide by the Court Order of 20th April, 2017 issued prior to the impugned consent;
(v) Spent; and
(vi) Costs of the application e in the course.
2. The application is anchored on the grounds on the face of the Motion, the supporting and supplementary affidavits sworn by Ms Prieya Gandhi, the 1st applicant, on 29th June, 2017 and 20th July, 2017, respectively, a supplementary affidavit sworn by Satya Gandhi on 20th July, 2017, a list of authorities dated 12th July, 2017 and written submissions dated 22nd February, 2022.
3. The applicant’s case is that there is a consent on record dated 15th June, 2017 and recorded on 5th June, 2017 by the applicant’s erstwhile Advocates through collusion with the 1st respondent. That the said consent condemns the applicants to pay Kshs.44,000,000/-, inclusive of contested interest, in three instalments and stipulates that in the event of default, the 1st respondent shall be at liberty to sell the charged properties.
4. According to the applicant, the said consent contradicts the Court order of 20th April, 2017 directing the 1st and 2nd applicants to make proposals for settlement of their admitted liability of Kshs.22,218,715.91 to the 1st respondent and the other outstanding amounts be determined after trial.
5. The applicant faulted their erstwhile Advocates for failure to appreciate all the issues and facts as instructed and that they entered into the consent while proceeding on a frolic of their own. The applicants are apprehensive that the 1st respondent is likely to sell the suit properties unless the consent is set aside and/or discharged. They aver that and that their right to property is in danger of being infringed.
6. The applicants state that they are willing and amenable to abide by the Court Order of 20th April, 2017. They contend that a mistake of their erstwhile Advocates should not be visited upon them, and that unless this Court grants the orders sought, they will suffer irreparable harm and prejudice.
7. The applicants’ Counsel submit that they have met the conditions necessary for the setting aside of the consent in that it was entered into on a misapprehension and/or ignorance of facts by the applicant’s former Advocates and was recorded contrary to express instructions of the applicants; that the terms of the consent are unreasonable and unjust; that the consent exceeded the Court’s Order of 20th April, 2017 and that the Consent Order was entered into, in a manner not consistent with the general practice of entering into consents.
8. Among other authorities, the applicants relied on the decisions in Omulele & Tollo Advocates v Mount Holdings Limited [2016] eKLR on the fiduciary relationship between an Advocate and his client and Mardsen v Mardsen [1972] 2 ALL ER 1162, where the Court set aside a consent on the basis that the undertakings were given without her express instructions.
Respondents’ Response
9. The application was opposed by the respondents through their replying affidavits sworn by Aldrin Ojiambo Advocate on 10th July, 2017 and the applicants’ erstwhile Advocate, Mr. Faraji Chipinde, on 13th July 2017, respectively. The respondents also filed written submissions dated 17th February, 2022.
10. In relying on the Court of Appeal decision in Flora M. Wasike v Destimo Wamboko [1988] eKLR, the respondents submitted that the applicants have not met the conditions required for setting aside the consent of 5th June, 2017. They contended that the applicants have not proved that their former Advocate colluded with the 1st respondent to arrive at the terms of the Consent Order. They also submitted that in capping their debt at Kshs.44,000,000/-, the terms of the consent were favourable to the applicants because as at the year 2016, the outstanding debt and accumulated interest owed by them was Kshs. 60,864,002.43. They contended that there was nothing to be gained by the applicants’ former Advocates and the respondents’ Advocates by colluding.
11. The respondents asserted that apart from the parties’ respective Advocates, the consent was recorded in the presence of Ms Satya Gandhi, the interested party’s Managing Director and she did not protest the terms or demand that their Advocate should not sign it. The respondents submitted that in the Flora M. Wasike v Destimo Wamboko case (supra), the Court did not set aside the consent on the basis that the original record showed that both parties were represented by Advocates and that the consent judgment was recorded in their presence.
12. The respondents relied on the case of Lenina Kemigisha Mbabazi Star Fish Ltd v Jin Jeng International Trading Ltd [HCT-00-MA-344-2012] cited in SMN v ZMS & 3 others [2017] eKLR to argue that a Court cannot set aside a consent where there is nothing to show that the applicants’ Counsel entered into it without instructions, and where an Advocate has no specific instructions but has general instructions to defend a suit and his instructions have not been terminated. The respondents also relied on the decision in Waugh v H B Clifford & Sons [1982] Ch 374 to the effect that Counsel would ordinarily have ostensible authority to compromise suits so far as the opponent is concerned.
ANALYSIS AND DETERMINATION
13. I have considered the application, the grounds in support thereof, the rival affidavits, submissions and authorities. The issue arising for determination is whether the applicant has met the threshold for the setting aside of the Consent Order of 5th June, 2017.
14. The guiding principles for setting aside a consent is that a Consent Order entered into by Counsel is binding on all parties and cannot be set aside or varied unless it is proved that it was entered in through fraud, collusion, an agreement contrary to the policy of the Court, without sufficient material facts, misapprehension or ignorance of such facts and in general for a reason which would enable the Court set aside an agreement.
15. These principles were laid out by the Court of Appeal in the case of Flora M. Wasike v Destimo Wamboko case (supra), where it was held as follows-
“It is well-settled law that a consent judgement or order has contractual effect and can only be set aside on grounds which would justify setting aside, or if certain conditions remain unfulfilled, which are not carried out. If a consent is to be set aside, it can only really be set aside on grounds which would justify the setting aside of a contract entered into with knowledge of material matters by legally competent persons…Prima facie a consent order made in the presence and with the consent of counsel is binding on all parties to the proceedings or action, and on those claiming under them and cannot be varied or discharged unless obtained by fraud or collusion, or by an agreement contrary to the policy of the court, or if the consent was given without sufficient material facts, or in misapprehension or in ignorance of material facts, or in general for a reason which would enable the court to set aside an agreement...A court cannot interfere with a consent judgement except in such circumstances as would afford good ground for varying or rescinding a contract between the parties…In the instant case, while the Judge did not in terms record the parties’ ‘or their advocates’ consent to the consent judgement he entered, nevertheless the original record shows that both parties were represented by advocates and that the consent judgement was recorded in their presence. The universal practice is to record that a judgement or order is by consent, if that be the case, and it is difficult to believe unless demonstrably shown otherwise that the court would so head the judgement if it were not the case, at least so far as the Judge was aware. Furthermore, a solicitor or counsel would ordinarily have ostensible authority to compromise suit so far as the opponent is concerned…But it would be no mean task for a party to a decree by consent to prove that the decree is invalid on the grounds referred. It is abundantly clear that the appellant was a ready and willing party to the material judgement by consent and that the terms and consequences of the judgement were explained to her.”
16. In addition to the foregoing, in Republic v District Land Registrar Nandi and another Exparte Tegenei [2005] eKLR, Hon. Musinga J. (as he then was), stated thus-
“It is not in dispute that an advocate has general authority to compromise a matter on behalf of his client but he has to act bona fides and in the best interests of his client.
“SETON ON JUDGMENTS AND ORDERS”, 7th edition, volume 1 page 124 states as follows:-
“Prima facie, any order made in the presence and with the consent of counsel is binding on all parties to the proceedings or action, and on those claiming under them…….and cannot be varied or discharged unless obtained by fraud or collusion, or by an agreement contrary to the policy of the court………or if consent was given without sufficient material facts, or in misapprehension or in ignorance of material facts, or in general for a reason which would enable the court to set aside an agreement.”
That position was restated by the Court of Appeal in FLORA WASIKE VS DESTIMO WAMBOKO [1988] 1 KAR 625 and recently by the same court in KENYA COMMERCIAL BANK LTD VS BENJOH AMALGAMATED LTD & MUIRU COFFEE ESTATE LTD Civil Appeal No. 276 of 1997.”
I have carefully considered the consent orders issued on 15th March, 2004. The applicant was not aware of the application dated 10th March, 2004 which gave rise to the said orders. His instructions were not sought in the matter at all. The applicants erstwhile advocates did not file any grounds of opposition and neither did they get the applicant to swear a replying affidavit. How then could they challenge the said application? The orders sought in the said application had far reaching effects and so it was incumbent upon Mr. Mbeche Advocate to seek express instructions from the applicant.
Although an advocate has ostensible authority to compromise his client’s case, employment of such authority cannot be upheld where counsel consents to orders which are diametrically opposed to the express instructions which he has been given by a client in a matter. It is not easy to prove that there was fraud or collusion in recording of any consent orders between advocates in the absence of their instructing clients but where such orders completely negate the interests of an instructing client and it is shown to the satisfaction of the court that the client was not even aware of the application that gave rise to those consent orders leave alone having consented to the recording of the orders, in the absence of any satisfactory explanation by the counsel who is accused of entering into the consent orders in question, a court of law would be entitled to conclude that there was fraud or collusion involved and will not uphold the consent orders issued.
17. Coming back to the instant application, the record shows that on 20th April, 2017, the Court issued an order directing the applicants to make proposals to pay the admitted sum of Kshs.22,218,751.91. Thereafter, the applicants made a proposal through a letter to their former Advocates Maura, Muthoni, Mikhala, Faraji & Associates dated 11th May, 2017. That proposal was rejected prompting the applicants to give a second proposal vide a letter dated 26th May, 2017 addressed to the said law firm. Through email correspondence of 30th and 31st May, 2017, a meeting between the parties’ Advocates was scheduled for 31st May 2017 at 2.00 p.m., to discuss the second proposal. Ms Satya Gandhi averred that she arrived at the offices of the 1st respondent’s Advocates for the meeting, but despite confirming his attendance, Mr. Faraji did not make it for the meeting, and only called at the last minute to say that they had been called to the High Court for some hearing late in the evening and would not make it (for the meeting).
18. Ms Satya Gandhi deposed that negotiations did not take place due to the 1st respondent’s Advocate’s insistence that the applicants’ Advocates had to be present as per their earlier letter dated 19th April, 2017. That notwithstanding, she stated that the applicants through a letter dated 1st June, 2017, instructed their erstwhile Advocates that a consent on settlement of their admitted liability limited to Kshs.22,218,715.91 to the 1st respondent would only be recorded in Court, and that they gave the terms of the consent in the said letter.
19. The 1st respondent filed a Notice of Motion dated 31st May, 2017 seeking to review the orders of 20th April, 2017. The applicants however claim that they were not aware of the said application. Although they concede that the application was served on their erstwhile Advocates on 2nd June, 2018, they claim that it was neither brought to their attention nor their instructions sought. Ms Satya Gandhi averred that she only learnt of the application on 5th June, 2017, after the consent was recorded and adopted.
20. In his replying affidavit, the applicant’s former Advocate, Mr. Faraji deposed that that he was not able to attend the meeting scheduled on 31st May, 2017, and averred that he was engaged in a hearing and that he communicated the same to both the 1st respondent’s Advocates and to Ms Satya Gandhi in reasonable time. Mr. Faraji also deposed that on 2nd June, 2017, he wrote to the 1st respondent’s Advocates presenting fresh proposals for their consideration and that unknown to them, the respondents had already taken out the Motion of 31st May, 2017 seeking immediate payment of Kshs.22,218,715.01 together with proportionate interest. That faced with the threat of discharge of the interim injunction, he advised Ms Satya Gandhi to accede to the immediate payment of the admitted sum and the proportionate interest. From my review of the record, there were no grounds of opposition or a replying affidavit filed by the applicants in response to the 1st respondent’s application of 31st May, 2017 seeking to review the orders of 20th April, 2017.
21. Mr. Faraji averred that the consent was recorded in open Court and that Ms Satya Gandhi was present and fully participated in the negotiations and understood the terms of the said consent. Mr. Faraji did not however avail any express instructions from Ms Satya Gandhi to confirm her approval of the terms of the consent before it was recorded in Court. Having gone through the aforementioned correspondence exhibited by Ms Satya Gandhi, it is my finding that the applicants’ erstwhile Advocates represented by Mr. Faraji entered into a consent on 5th June, 2017, in terms which were diametrically opposed to the express instructions that he had been given by his clients on 1st June, 2017.
22. I am not persuaded that the applicants’ former Advocates, and more particularly, Mr. Faraji, had express instructions from the applicants to enter into a consent in the terms recorded on 5th June, 2017. I am also not persuaded that the applicants got wind of the 1st respondent’s Notice of Motion dated 31st May, 2017 to set aside the orders of 20th April, 2017, prior to 5th June, 2017. As such, I find that there are sufficient reasons to warrant the setting aside of the orders of 5th June, 2017.
23. This Court however notes that the applicants ought to have made payments of the admitted sum of Kshs.22,218,715.91 as per their proposals of 1st June, 2017, as a sign of good faith.
24. In the result, the application dated 29th June, 2017 is allowed in the following terms-
(i) The consent recorded and adopted by the Court on 5th June, 2017 is hereby set aside;
(ii) The applicants shall pay the admitted sum of Kshs.22,218,751.91 within 120 days from the date of this ruling. In default thereof, the 1st respondent shall be at liberty to exercise its statutory power of sale in order to recover the admitted amount; and
(iii) Although the applicants have succeeded in this application, they shall bear the costs of the said application for failing to honour payment of the admitted sum.
It is so ordered.
DELIVERED, DATED and SIGNED at NAIROBI on this 19th day of April, 2024. Ruling delivered through Microsoft Teams Online platform
NJOKI MWANGI
JUDGE
In the presence of:
Mr. Omino for the plaintiffs/applicants
Mr. Onyango for the 1st defendant/respondent appearing with Mr.
Nyobama h/b for Mr. Odhiambo
Ms B. Wokabi – Court Assistant.