[2022] KEHC 17055 (KLR)

Muthoka t/a Dume General Agencies v Kimatu (Civil Appeal 93 of 2020) [2022] KEHC 17055 (KLR) (7 October 2022) (Judgment)

Neutral citation: [2022] KEHC 17055 (KLR)

Republic of Kenya

In the High Court at Mombasa

Civil Appeal 93 of 2020

MN Mwangi, J

October 7, 2022

Between

Rebecca Kavindu Muthoka t/a Dume General Agencies

Appellant

and

Jones Alaka Kimatu

Respondent

(An Appeal from the ruling and order of Hon. Lesootia Saitabau, Principal Magistrate, delivered on 15th June, 2020 in Mombasa Chief Magistrate’s Court Civil Case No. 1474 of 2017)

Judgment

1. The suit against the defendant (appellant) in the lower court was that she had secured a tender at Mwahima Secondary School for the construction of seven toilets and drilling of a borehole but had no funds to carry out the project hence she approached the plaintiff (respondent) for financial assistance. The respondent averred that on January 31, 2015, the appellant agreed to subcontract the project herein to him and that she verbally agreed to refund and/or repay him Kshs 850,000/= as the cost of the whole construction. He further averred that in March, 2015, he completed the said project and the appellant visited the site and ascertained completion of the same but she had refused to pay the said monies to him.

2. The appellant filed her statement of defence dated October 9, 2017, where she denied the averments contained in the plaint dated September 6, 2017. The case proceeded to hearing before the Trial Magistrate and on July 10, 2019, the parties herein recorded a consent to the effect that the lower Court matter be marked as settled and for each party to bear its own costs.

3. On September 26, 2019, the respondent filed a notice of motion application of even date seeking orders for the trial court to set aside the orders made on July 10, 2019 marking the suit as settled, for the court to reinstate the respondent’s claim in its entirety and for the court to enter judgment on admission for the respondent as against the appellant. In opposition thereto, the appellant filed grounds of opposition dated November 25, 2019 and a replying affidavit sworn on November 27, 2019.

4. In the lower court, a ruling was delivered on June 15, 2020, where the trial magistrate directed that the orders made on July 10, 2019 marking the suit as settled be set aside and for the suit to be reinstated in its entirety. He granted costs of the application to the respondent.

5. The appellant was dissatisfied by the decision of the trial magistrate and on July 14, 2020, she filed a memorandum of appeal dated July 14, 2019 raising the following grounds of appeal-i.That the honourable learned magistrate erred in law and fact in finding that the consent orders recorded by the parties herein on the July 10, 2019 were so done on the basis of an understanding of payment by the defendant, which finding could only have been supported by what the parties recorded in Court of the July 10, 2019;ii.That the honourable learned magistrate erred in law and fact in failing to find that the consent recorded on the July 10, 2019 by the honourable court was so done in the presence of both the parties herein, who confirmed the terms thereof, and their respective advocates, and thus there was no basis for setting aside the orders therein (sic);iii.That the honourable learned magistrate erred in law and fact in failing to find that a consent order or judgment has a contractual effect and can only be set aside on grounds which would justify the setting aside a contract, which grounds did not exist in this matter;iv.That the Honourable learned Magistrate erred in law and fact in taking into account issues which were irrelevant in determining the application before him;v.That the Honourable learned Magistrate erred in forming an opinion that certain obligations by the parties had not been met, which was never an issue at the time of recording the consent order herein, and using the said opinion as the basis of allowing the respondent’s application herein;vi.That the Honourable learned Magistrate misdirected himself by finding that there were sufficient grounds to set aside the orders of July 10, 2019, when there were no grounds to support the said finding and decision as alleged or at all;vii.That the Honourable learned Magistrate erred in law and fact in allowing the respondent’s application dated the September 26, 2019 and further in awarding the costs of the said application to the respondent; andviii.That the learned Magistrate misdirected himself by failing to take into account the submissions filed by the appellant’s Advocates.

6. The appellant’s prayer is for this court to allow the appeal with costs, set aside the ruling and orders of the said learned Magistrate in Mombasa CMCC No 1474 of 2017, Jones Alaka Kimatu v Rebecca Kavindu Muthoka t/a Dume General Agencies, uphold the consent order by the parties herein, and award costs of the respondent’s application dated September 26, 2019 to the appellant.

7. The appeal was canvassed by way of written submissions. The appellant’s submissions were filed by the law firm of Tindika & Company Advocates on April 19, 2022, whereas the respondent’s submissions were filed on July 5, 2022 by the law firm of Apollo Muinde & Partners Advocates.

8. In making his submissions, Mr Tindika, learned Counsel for the appellant relied to the Court of Appeal decision in the case of Board of Trustees National Social Security Fund v Micheal Mwalo [2015] eKLR and stated that a consent can only be set aside where it has been demonstrated that there was collusion, fraud, the consent is based on insufficient material facts, the consent is based on misapprehension or ignorance of material facts and/ or the consent was against public policy and/or policy of the Court. He submitted that the respondent had not provided any evidence to show any means of coercion, misrepresentation and/or fraud to warrant the setting aside of the recorded consent. To this end Mr. Tindika placed reliance on the Supreme Court decision in the case of Geoffrey M Asanyo & 3 others v Attorney General [2018] eKLR.

9. In citing the case of Windsor Commercial Land Company Ltd & others v Century National Merchant Bank Trust Ltd SCCA 114/2005, Mr Tindika submitted that the purported reasons in the application seeking to set aside the consent order do not meet the threshold set for setting aside the said consent. He contended that the Trial Magistrate was grossly in error in allowing the said application, since there were no sufficient grounds to interfere with the agreement which had a contractual effect between the parties herein.

10. Mr Muinde, learned Counsel for the respondent submitted that the subject consent was arrived at through direct negotiations between the parties herein and it was agreed that the matter would be marked as settled and that the appellant would settle the entirety of the respondent’s claim on or before August 31, 2019 without reference to Court proceedings. He further submitted that the appellant paid the respondent Kshs 200,000/= on July 15, 2019 leaving a balance of Kshs 650,000/= which she had refused to settle. Mr Muinde contended that on account of the appellant’s breach of the pre-requisite conditions to the said consent, the respondent filed the application dated September 26, 2019.

11. In relying on the case of Kenya Commercial Bank Limited v Banjoh Amalgamted Limited; Hirani v Kassam [1952] 19 EACA 131 and Kenya Commercial Bank Limited v Specialized Engineering Company Limited [1982] KLR 485, he submitted that a consent order is capable of being varied and/or set aside. He also relied on the case of Mwangi v Wambugu [1984] eKLR, where the court discussed instances when an appellate court can interfere with the findings of fact by the trial court. Mr Muinde submitted that in this instance, the trial court did not deviate from the principles in the said case. He submitted that the decision appealed against and the grounds forming such decision are entirely justified and ought not to be disturbed in any way.

12. In a rejoinder, Mr Tindika submitted that there were no conditions attached to the consent entered into on July 10, 2019. He further submitted that a consent can only be set aside when a condition agreed on is not settled or on the other elements highlighted hereinabove.

Analysis And Determination. 13. This being a first appeal, this court is under a duty to re-evaluate and assess the evidence adduced before the trial court and arrive at its own conclusion. It must however bear in mind that a Trial court, unlike an appellate court, had the advantage of observing the demeanour of the witnesses and hearing their evidence first hand. See the decision in Jabane v Olenja [1986] KLR 661.

14. An appellate court must however be slow to differ with the trial court’s decision and should only do so with caution and in cases where the findings of fact are based on no evidence, or there has been a misapprehension of evidence, or where it is shown that the trial court acted on wrong principles of law in arriving at its findings. These principles were restated in Mkube v Nyamuro [1983] LLR, 403-415 at 403.

15. I have re-examined the Record of Appeal and given due consideration to the submissions by the parties’ respective Counsel. The issue that arises for determination is whether the ruling and orders of the Trial Magistrate in Mombasa CMCC No 1474 of 2017 arising from the respondent’s application dated September 26, 2019, should be set aside and for the consent order to be upheld.

16. The relevant law guiding the compromise of a suit through a consent order is order 25 rule 5(1) of the Civil Procedure Rules, 2010 which provides that-“Where it is proved to the satisfaction of the court, and the court after hearing the parties directs, that a suit has been adjusted wholly or in part by any lawful agreement or compromise, or where the defendant satisfies the plaintiff in respect of the whole or any part of the subject-matter of the suit, the court shall, on the application of any party, order that such agreement, compromise or satisfaction be recorded and enter judgment in accordance therewith.”

17. The parties herein recorded a consent before the trial court on July 10, 2019 for the suit be marked as settled and for each party to bear its own costs. The respondent however filed an application dated September 26, 2019, where he sought an order for the trial court to set aside the said consent order.

18. In response thereto, the appellant filed in the lower court a replying affidavit in which she confirmed that indeed the parties herein engaged in lengthy negotiations and they agreed that the respondent would withdraw the case and in turn she would pay him a sum of Kshs 200,000/= to compensate him for work already done and cater for any profits he may have expected to gain from the transaction. The appellant averred that she honoured her part of the agreement since she deposited Kshs 200,000/= into the respondent’s bank account at Co-operative Bank on July 15, 2019.

19. The Court of Appeal in Intercountries Importers and Exporters Limited v Teleposta Pension Scheme Registered Trustees & 5 others [2019] eKLR when dealing with the question of whether a consent order can be set aside held as follows-“The principles that appertain to setting aside of a consent order are well established in a line of cases including Brooke Bond Liebig v Mallya (1975) EA 266 where Mustafa Ag VP stated thus;“The compromise agreement was made an order of the court and was thus a consent judgment. It is well settled that a consent judgment can be set aside only in certain circumstances, e.g on grounds of fraud or collusion, that there was no consensus between the parties, public policy or for such reasons as would enable a court to set aside or rescind a contract. In this case the parties and their advocates consented to the compromise in very clear terms; they were certainly aware of all the material facts and there could not have been any mistake or misunderstanding. None of the factors which could give rise to the setting aside of a consent agreement existed.”And in the case of Flora N Wasike v Destimo Wamboko [1988] eKLR Hancox JA cited Setton on Judgments and orders (7th edition) vol 1 page 124, and reiterated that;“Any order made in the presence and with the consent of counsel is binding on all parties to the proceedings or action, and 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 general for a reason which would enable a court set aside an agreement.”

20. From the said Court of Appeal decision, a consent order will only be set aside if it can be demonstrated that it was procured through fraud, non-disclosure of material facts or mistake or for a reason which would enable a Court to set it aside. In the appeal before this Court, the respondent submitted that the appellant breached a pre-requisite condition of the said consent thus it should be set aside. The respondent submitted that it was a condition of the consent that the appellant would settle the entirety of the respondent’s claim on or before August 31, 2019. The appellant on the other hand submitted that there were no conditions attached to the consent entered into on July 10, 2019.

21. I have gone through the Record of Appeal and I note from the proceedings taken by the Trial Magistrate that on July 10, 2019, Counsel for the respondent informed the Court that they had received a consent for the matter be marked as settled and for each party to bear its own costs. The proceedings also show that the Counsel for the appellant confirmed the same, and the Court proceeded to mark the suit as settled. The Record of Appeal does not contain a written agreement and/or consent filed before the Trial Court that would have enabled this Court to have the advantage of reading the conditions if any, for withdrawal of the suit, with no orders as to costs.

22. In the said circumstances, I am of the considered view that this is a suitable case to apply the parol evidence rule, since the respondent is attempting to rely on terms and/or contents of his oral negotiations with the appellant, to set aside the consent entered into on July 10, 2019. The parol evidence rule in relation to contracts means that, where a contract has been reduced to writing, neither party can rely on extrinsic evidence of terms alleged to have been agreed.It is a cardinal principle that it is the formal contract that records the bargain and reveals the true intentions of the parties thereto. In Prudential Assurance Company of Kenya Limited v Sukhwender Singh Jutney and another [2007] eKLR, the following excerpt from Odgers’ Construction of Deeds and Statutes (5th edn) at p 106, was cited with approval by the court in connection with construction of contracts -“It is a familiar rule of law that no parol evidence is admissible to contradict, vary or alter the terms of the deed or any written instrument. The rule applies as well to deeds as to contracts in writing. Although the rule is expressed to relate to parol evidence, it does in fact apply to all forms of extrinsic evidence. As it stands this is not a rule of interpretation but of law, and means that the interpretation of the document must be found in the document itself with the addition if necessary of such evidence as we have previously seen is admissible for explaining or translating words and expressions used therein.”

23. In this appeal, the written agreement is the consent order dated July 10, 2019, and from the record, it is evident that it had no conditions attached to it. The Trial Court at page 2 of its ruling correctly found and held that the consent between the parties herein was entered into on the basis of an understanding of payment by the appellant herein. As to whether the agreement was for payment of the entire sum of Kshs 850,000/= as claimed or the sum of Kshs 200,000/= is a matter in contest.

24. The rules of evidence are clear that he who alleges must prove as provided in section 107 of the Evidence Act which states that, whosever desires any court to give judgment as to any legal right or liability dependent on the existence of facts which he asserts must prove that those facts exist. In this appeal, the respondent had the duty to prove that the appellant was to settle the entirety of his claim on or before August 31, 2019, as a condition for marking the suit before the Trial Court as settled.

25. This court’s finding is that the trial magistrate erred in his finding that it appeared to him that certain obligations by the parties had not been met hence there were sufficient grounds to warrant the setting aside of the orders of July 10, 2019. I hold that the respondent did not discharge his burden of proving that the said consent had conditions and/or obligations attached to it. I therefore set aside the decision by the trial magistrate in its entirety.

26. The upshot is that the appeal is merited and the same is allowed with costs to the appellant.It is so ordered.

DELIVERED, DATED AND SIGNED AT MALINDI ON THIS 7TH DAY OF OCTOBER, 2022. JUDGMENT DELIVERED THROUGH MICROSOFT TEAMS ONLINE PLATFORM.NJOKI MWANGIJUDGEIn the presence of-Mr Kiragu h/b for Mr Tindika for the appellantMs Nzisa h/b for Mr Apollo Muinde for the respondentMr Oliver Musundi – Court Assistant.