Please Wait. Searching ...
Oscar Otieno Odongo t/a Odongo Investment Auctioneers v Diamond Trust Bank Kenya Limited (Civil Appeal 127 of 2021) [2022] KEHC 15050 (KLR) (31 October 2022) (Judgment)
Neutral citation:
[2022] KEHC 15050 (KLR)
Republic of Kenya
Civil Appeal 127 of 2021
REA Ougo, J
October 31, 2022
Between
Oscar Otieno Odongo t/a Odongo Investment Auctioneers
Appellant
and
Diamond Trust Bank Kenya Limited
Respondent
(Being an appeal from the ruling and order issued on 15/10/2021 by Hon, Dorcas Mac’Andere (DR) in Kisii High Court Miscellaneous Civil Application No 35 of 2021 Rule 55(5) of the Auctioneers Rules of 1997)
Judgment
1.The appeal before the court was filed by way of Chamber Summons dated 12th October 2021 seeking the following orders:1.The Honourable Judge be pleased to set aside the order of the Deputy Registrar taxing 3 items of the Auctioneers bill dated 24/06/2021 at Kenya Shillings Five Thousand Four Hundred and Eighty Four, Eighty Cents [Kshs. 5,484.80] only.2.The Honourable Judge be pleased to allow item 3 of the Auctioneers bill dated 24/06/2021 as drawn in the bill.3.In the alternative and without prejudice to prayer 2 herein above, the Honourable Judge be pleased to tax/assess the item 3 of the Auctioneers bill dated 24/06/2021 as per the 4th schedule of the Auctioneers Amendment rules of 2009.4.The Hon. Judge be pleased to determine and award costs of taxation and interest on the taxed amount from the date of assessment as prayed for under prayer 3 of the Notice of Motion Application dated 24/06/2021, which prayer was not addressed by the Hon. Deputy Registrar hence technically disallowed/dismissed.5.Such further and/or other orders be made as the court may deem fit and expedient.
2.The appeal is based on grounds that the Deputy Registrar incorrectly interpreted the law by applying the sale commission fees while assessing attachment commission fee. The Deputy Registrar therefore applied a wrong amount in working out the commission.
3.The appellant in his submission filed on the 5th April 2022 submitted that an auctioneer is entitled to two types of commissions if they complete their assignment to the sale stage. Further, that where the auctioneer serves a proclamation, the rules call it an attachment and the auctioneer is entitled to a commission on attachment. The Appellant cited the Court of Appeal decision in National Industrial Credit Bank Limited v S.K Ndegwa Auctioneer, CA NO. 195 OF 2004, where the court observed that the word proclamation as used in the Civil Procedure Act and Rules and the Auctioneers Rules means Attachment. Item 3 in the appellant’s bill dated 24th June 2021 refer to commission for attachment and not the commission for sale. The trial magistrate in her ruling applied paragraph 7 of the Auctioneers Amendment Rules of 2009 which applies to a sale that has been stayed, or postponed. The provision does not apply to attachment.
4.He also faulted the Deputy Registrar for using the amount as per the consent judgment and not the figure in the warrant of attachment which showed the value of the property attached. It was pointed out that the respondent did not dispute the value of the property as indicated in the applicant’s proclamation notice served upon the respondent. The appellant contends that that the total value of the goods proclaimed was Kshs 896,000/- and the commission on attachment attracts 5% of the value of the goods thus they were entitled to Kshs. 44,800/- as their commission on attachment. They also submitted that the trial magistrate failed to address prayer 3 & 4 of his application dated 24th July 2021.
5.The appeal was opposed by the respondent. The Respondent filed written submissions on 14th September 2022. According to the respondent on 14th April 2021, the decree holder in KISII HC MISC APPL. NO. 140 OF 2019 obtained an ex-parte Garnishee Order Absolute of Kshs 219,392/- against the bank. Aggrieved, the respondent filed an application dated 27th April 2021 seeking to set aside the foregoing garnishee absolute to forestall attachment and sale of its immovable assets and by consent recorded on 31st May 2021, parties agreed as follows:a.The Garnishee shall settle the Garnishee Order Absolute of Kshs. 219,392/- within 14 days.b.Parties to agree on the Auctioneers costs failure to which the Auctioneer shall tax his costs.
6.The applicant filed his bill of costs seeking a sum of Kshs 91,300/- and the bill of costs was taxed at Kshs 44,984/-. They relied on the case of Kenya Tea Packers Company Limited v Hezron Getuma t/a Hegeon Auctioneers [2021] eKLR where the court observed:
7.The respondent submitted that the appellant have not adduced any valuation report on the proclaimed goods amounting to Kshs 896,000/-. The value of the goods as proposed by the appellant remains speculative. Under part II of the Fourth Schedule of the Auctioneers Rules, commission charged for attachment and repossession is 5% of the amount actually recovered. The appellant has not annexed a valuation of the goods proclaimed but for proposes of expediency; the same can be calculated using the decretal sum. They support the finding of the trial magistrate. Under paragraph 7 of Part II of the Fourth Schedule of the Auctioneers Rules, if the sale is stayed or postponed, the auctioneer is only entitled to half the commission.
Analysis And Determination
8.I have considered the pleadings on the record, and the arguments made by the respective parties in their submissions and the subject of the appeal concerns the taxation of item no. 3 in the appellant’s bill of costs filed before the Deputy Registrar. The Deputy Registrar in her ruling trial observed as follows: check the Renumeration order on auctioneers bill of costs is there commission on service of proclamation attachment as indicated in the BOC.
9.The trial magistrate failed to consider whether the appellant was entitled to his fees on attachment but instead assessed the bill for sale for immovable property where the sale has been postponed or stayed. The respondent in their submissions explained that it filed an application dated 27th April 2021 seeking to set aside the garnishee absolute to forestall sale of its immovable assets. It is common ground that the appellant did not sell the goods attached. We must however remember that goods can only be sold once they have been attached. The distinction between an attachment and sale was well explained by the Court of Appeal in National Industrial Credit Bank Limited v S. K. Ndegwa Auctioneer [2005] eKLR where the court stated;
10.From the principles established in the above case, it is clear that the Deputy Registrar did not consider item 3 of the appellant’s bill of costs. Indeed, the appellant did attach the goods and it was therefore paramount to consider item no. 3 in the bill of costs. Paragraph 4 of Part II of the Auctioneers Rules provides guidance on the auctioneer’s fees on attachment. The value of the goods according to the proclamation notice is Kshs 896,000/-. The value of the goods are less than a Kshs 1,000,000/- and therefore the fees on attachment will be Kshs 44,800/- (5% x 896,000/-).The Deputy Registrars ruling together with all the attendant consequences are hereby set aside. From the foregoing reasons the bill is hereby taxed as follows;a.Receipt of Instructions 1,000b.Fee before attachment 4,000c.Commission on service on proclamation attachment 44,800d.Hire of pick up and labor for attachment 6,000e.To postage, stationery and telephone 5,000f.Storage for 47 days at 500/- per day 23,500 see the submissions before the DRTOTAL 84,300
11.The appellant is thus entitled to Kshs 84,300/- with interest from the date of the ruling of the deputy registrar on the appellant’s bill of costs. The appellant having been successful in the appeal shall have the costs of the appeal.
DATED, SIGNED, AND DELIVERED ONLINE VIA MICROSOFT TEAMS AT BUNGOMA THIS 31ST DAY OF OCTOBER, 2022R.E. OUGOJUDGEIn the presence of:Mr. Odongo in personRespondent – absentAphline: Court Assistant
