[2022] KEHC 3372 (KLR)

Omar & another v Ahmednasir Abdullahi t/a Ahmednasir, Abdikadir & Company Advocates & another (Civil Case E055 of 2020) [2022] KEHC 3372 (KLR) (Commercial and Tax) (19 May 2022) (Ruling)

Neutral citation: [2022] KEHC 3372 (KLR)

Republic of Kenya

In the High Court at Nairobi (Milimani Commercial Courts Commercial and Tax Division)

Commercial and Tax

Civil Case E055 of 2020

A Mabeya, J

May 19, 2022

Between

Nab Abdi Omar

1st Plaintiff

Ahmed Abdirahman Elyass

2nd Plaintiff

and

Ahmednasir Abdullahi t/a Ahmednasir, Abdikadir & Company Advocates

1st Defendant

Adan Alio Abdi & 29 others

2nd Defendant

Ruling

1. Before Court is an application dated 15/4/2021. It was brought under order 1 rule 10, rule 11, 40 rule 1 and 2, 51 rule 1 of the Civil Procedure Rules, sections 1A, 1B, 3A, and 63 (e) of the Civil Procedure Act.

2. The application sought a cocktail of prayers; to wit, that the applicants be joined as defendants in the suit, that order nos. 2, 3, 5, 7 and 8 of the consent order issued on 28/1/2021 be set aside or vacated; that order 1 of that consent be varied by replacing 160 with 115 and order 6 be varied by replacing “respondent” with “the firm of Wesonga, Mutembei & Kigen Advocates”.

3. Other prayers were; to restrain the 1st and 2nd respondent from transferring or dealing with L.R. No. 5908/695; the 1st and 2nd plaintiff to unconditionally transfer various plots sub-divided from L.R No. 5908/695 to the applicants; a refund of an alleged unaccounted sum of Kshs.52,589,999/- from the 1st and 2nd plaintiff; an audit within 14 days of the ruling to allegedly ascertain the monies paid by the applicants to acquire plot on L.R. No. 5908/695 (“the suit property”).

4. The application was supported by the affidavits of Adan Alio Abdi, Abdullahi Adan Jimale, Abdullahi Abdirahman Ibrahim & Hassan Mohamed Ibrahim sworn on 15/4/2021. The applicant’s case was that they were among purchasers of the suit property vide an agreement dated 15/2/2018. The same was registered in the names of the plaintiffs as trustees of the purchasers after the purchase price of Kshs. 150,000,000/= was paid.

5. Out of the said amount, Kshs. 30,000,000/= was paid as deposit to the defendant. Kshs. 52,589,999/= was paid to the plaintiffs as trustees under instructions that the same was only to be utilized under the written instructions of the applicants and to facilitate registration of sub-titles in the name of 115 vendors. That to date, the amount has not been accounted for, and no titles have been acquired nor transfers in favor of the applicants effected. That the applicants were desirous of filing a counter claim for frustration of transfer of the suit property.

6. It was alleged that the applicants took possession of the plots in 2009. That a further Kshs. 23,499,998/= was paid to the plaintiffs by the defendant. That the defendant’s law firm represented the applicants in the transaction. That it was the defendant who advised that the applicants elect two persons as their trustees in the transaction and recommended the plaintiffs.

7. That the pleadings filed by the plaintiffs excluded many applicants and included others who had not contributed to the purchase of the suit property. That the plaintiffs illegally created 10 plots from the suit property to deprive the applicants of their property. That the applicants had not given instructions that the plaintiffs and defendant to enter into a consent. That they had written on12/11/2020, 30/11/2020 and 9/12/2020 asking the plaintiffs and defendants not to discuss the propriety rights of the applicants. That the consent was therefore obtained through collusion between the plaintiffs and defendants and by concealing a material fact that the applicants were opposed to such consent.

8. That many plots have been excluded from the consent including plots 1,2,3,54,55,56,57,111,112,113,114,115,159 and 160, that there was collusion to excuse the plaintiffs from audit and accounting of the funds belonging to the buyers of the suit property. That the applicants registered a welfare association called Utamu Welfare Association to take care of their interest in the suit property and a certificate was issued on 25/10/2019.

9. They contended that defendant was pressured by the applicants to release the original title to them and enter into the subject consent which binds the applicants who were not parties to the suit and nor did they give instructions to the defendant to agree to the terms of the consent. That order 2 was given on a misrepresentation that the plots had been allocated to the applicants which was not true. That some plots were wrongly allocated to parties who did not contribute towards purchase and some bona-fide owners had been excluded therefrom.

10. That despite the defendant acknowledging that Kshs. 52,589,999/= was not accounted for by the plaintiffs, he entered into the consent which excused the plaintiffs from an audit. Further, that the withdrawal of all other complaints against the plaintiffs was agreed on without the applicant’s consent. That the plaintiffs demand that the applicants should pay a further Kshs. 150,000/= each is a collusion tactic to defeat the applicants rights in the suit property.

11. The applicants thus sought this courts intervention to stay, vacate and/or set aside or vary the consent order as they were condemned unheard. That unless the plaintiffs are restrained from further dealings with the land, the applicants would face irreparable harm. That there was a need to join the applicants as defendants as the consent orders issued were in the nature of a final judgment which adversely affected their rights over the subject property.

12. The plaintiffs responded vide the replying affidavit of Anab Abdi Omar sworn on 15/6/2021. They contended that the defendant never represented the applicants in any transaction relating to the suit property. The plaintiffs were strangers to the allegation that Utamu Welfare Association purchased the suit property. They denied being trustees of the applicants.

13. They contended that they had instructed the defendant to represent them in the purchase of the suit property measuring 5. 412 Ha for Kshs. 150,000,000/=. After purchase, they sourced for purchasers, subdivided the suit property into 160 plots and sold the same to third parties. That the advocate-client relationship between them and the defendant broke down before the transferand registration of the subdivided portions, and that the suit was compromised by the subject consent.

14. That the sub-division process had been concluded and deed plans for each of the 160 plots prepared, and that the plaintiffs were in the process of preparing the individual titles for the 160 plots. That the process had been slowed down by the applicants who had forcefully invaded and commenced building on the suit property in contravention of the agreement which provided for possession upon full payment of the purchase price.

15. That the applicants have no right to the suit property and trespassed upon it to the plaintiffs’ detriment. That despite the status quo orders of 20/5/2021, the applicants had continued with apportionment and construction on the suit property. That no grounds for setting aside the consent order were pleaded. That the consent related to the dispute between the plaintiffs and defendant on the basis of the breakdown of the advocate-client relationship and the applicants were not parties.

16. The defendant opposed the application vide grounds of opposition dated 30/6/2021. It was contended that the matter was concluded and the court had no jurisdiction to reopen it. That no evidence had been adduced to warrant the setting aside, variation, review, stay and/or suspension of the terms of the consent order. That the court adopted the consent as an order of the court and the matter was settled hence no joinder could ensue as there was no suit.

17. The applicants filed a further affidavit on 22/7/2021 wherein they contended that the consent was obtained through misrepresentation, collusion and fraud which warranted the variation and setting aside the consent order. That the plaintiffs had written to them on 19/5/2021 requesting them to contribute Kshs. 150,000/= as per the consent. That the defendant had never denied representing them and had acknowledged that fact vide a letter dated 13/7/2020 to the Deputy County Commissioner.

18. I have carefully considered the pleadings, the evidence and submissions on record. There are various issues for determination which can be summarized as follows;

Whether the consent orders of 28/1/2021 should be varied 19. The principles applicable to setting aside of a consent order are well settled. In Brooke Bond Liebig vs Mallya (1975) EA 266, it was held: -“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.”

20. In Flora N. Wasike vs 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.”

21. In the present case, the applicants alleged that the orders were obtained without instructions. That there was collusion between the plaintiffs and defendant and there was concealment of a material fact that the applicants were opposed to such consent. That they had written letters dated 12/11/2020, 30/11/2020 and 9/12/2020 asking the plaintiffs and defendant not to discuss the propriety rights of the applicants.

22. In support of their aforesaid contention, they relied on exhibit produced as AJ7. The Court has looked at the said exhibit. The same did not contain any such letters. That exhibit consisted only copies of cheques. No other attachment contained the letters. There was therefore no evidence that the applicants had denied the defendant instructions to enter the consent.

23. As regards the applicant’s contention that there was collusion between the plaintiffs and defendant to excuse the plaintiffs from audit and accounting, the applicants referred to order number 3 of the subject consent.

24. The Court has looked at the said consent. Order 3 thereof was to the effect that; all the money that had been collected by the plaintiffs from the defendants and from individual purchasers of the subplots was deemed to have been utilized towards the subdivision of the property and the sale to individuals as per the allocation of 160 deed plans delivered to the defendant. That this extinguished any future claims from individual purchasers of the plots against the plaintiffs.

25. This is an indication that accounting was an issue in dispute and the same was resolved by delivery of the 160 deed plans to the defendants. The applicants did not allege that the deed plans were not issued. It is thus not clear how the plaintiffs and defendant colluded whereas there was a reasonable compromise of delivery of the allocations and deed plans. This ground holds no water.

26. The applicant did not seek that the entire consent be set aside. They only sought variation of order 1 of the consent by replacing 160 with 115 and order 6 by replacing ‘respondent’ with ‘the firm of Wesonga, Mutembei & Kigen Advocates’.

27. Order 1 provides that the suit property was paid for by 160 individuals. On their part, the applicants alleged that they were 115 individuals only. However, through-out the pleadings, it is maintained that the suit property was divided into 160 plots. From the applicants own pleadings, they allege that amongst the plots allegedly said to be missing is plot number 160. From the consent itself, it is evident that 160 transfer forms were to be delivered to the defendant together with 160 deed plans. Such a variation would only lead to a chaotic situation as the defendant would thus remain with 45 unclaimed transfers, deed plans, and on the ground, 45 already subdivided plots.

28. As for order 6, the applicants already admitted that the defendants represented them in the transaction. The request to replace their advocate post judgment without consent of the defendant is untenable. The procedure of replacing an advocate post-judgment is well known, not through review.

29. The upshot is that the order for varying the consent is found to be without merit. It then follows that the other prayers have no basis and accordingly denied. The consent issued on 28/1/2021 was adopted as an order of the court and the matter was marked as settled. There is no longer a suit in which the applicants can join as defendants.

30. In the end, the application dated 15/4/2021 is dismissed with costs.It is so ordered.

DATED AND DELIVERED AT NAIROBI THIS 19TH DAY OF MAY, 2022. A. MABEYA, FCIArbJUDGE