[2023] KEHC 23916 (KLR)

PM Gachie t/a Regent Auctioneers v Itoga Investment Holding Limited & 2 others (Miscellaneous Application E392 of 2021 & E083 of 2022 (Consolidated)) [2023] KEHC 23916 (KLR) (Commercial and Tax) (19 October 2023) (Ruling)

Neutral citation: [2023] KEHC 23916 (KLR)

Republic of Kenya

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

Commercial and Tax

Miscellaneous Application E392 of 2021 & E083 of 2022 (Consolidated)

JWW Mong'are, J

October 19, 2023

Between

PM Gachie t/a Regent Auctioneers

Auctioneer

and

Itoga Investment Holding Limited

1st Respondent

The Company for Habitat and Housing for Africa (Shelter Afrique)

2nd Respondent

As consolidated with

Miscellaneous Application E083 of 2022

Between

PM Gachie t/a Regent Auctioneers

Auctioneer

and

Itoga Investment Holding Limited

1st Respondent

The Company for Habitat and Housing for Africa (Shelter Afrique)

2nd Respondent

Ruling

1. When this matter came up for hearing, the Court noted that there were two distinct and separate court files dealing with essentially issues arising from the same set of facts. The File Misc. Civil Application E083 of 2022 was consolidated with Misc. Civil Application E392 of 2021 and the same were heard together. There are therefore two sets of applications. One filed by the Auctioneer on 29th January 2022 and the second one filed by the 1st Respondent on 10th March 2023. Submissions to this application were canvassed together and the ruling herein will address the issues raised in both applications. The 2nd Respondent, although represented by Counsel, did not participate in the two applications and did not file any pleadings thereto.

2. On 22nd January 2022, P.M Gachie t/a Regent Auctioneers, the Auctioneer /Applicant filed a Notice of Motion application under Rule 7 of the Auctioneers Rules, 1997, & Section 22 of the Auctioneers Act, Section 3A of the Civil Procedure Act, Section 55 of the Auctioneers Act seeking the following orders:-1. That judgment be and is hereby entered against the 1st Respondent for Kshs.10,042,097/- with interest rate at 14% per annum from 20th January 2022 till payment in full.2. The costs of this application be borne by the Respondent.

3. The application is supported by the grounds set on its face and the affidavit of P.M. Gachie sworn on 29th January 2022. The 1st Respondent filed a replying affidavit and a further affidavit in opposition thereto sworn by its director, Jesse Gacharira Ngari on 28th April 2022 and 14th September 2022 respectively.

4. Before the application filed by the Auctioneer could be dispensed with on 10th March 2023, the 1st Respondent brought a Notice of Motion Application under a Certificate of Urgency and filed under Order 42 of the Civil Procedure Rules, Section 1A,1B and 3A of the Civil Procedure Act, seeking the following orders:-1. Spent2. Spent3. That there be a stay of execution of the Ruling on taxation by the Deputy Registrar delivered on 12th January 2022 and consequential orders pending the hearing and determination of the 1st Respondents intended Appeal to the Court of Appeal.4. Spent5. That there be a stay of proceedings HCC Misc. Application E083 of 2022(Regent Auctioneers -vs- Itoga Investments Holdings Limited and Another) pending the hearing and determination of the 1st Respondents/Appellant intended appeal to the court of appeal.6. That leave be granted to the 1st Respondent/Appellant to appeal against the ruling of this Honourable Court (Lady Justice Dorah Chepkwony) delivered on 17th February 2023. 7.That costs of this application be provided for.

5. The application was supported by the grounds set on its face and the supporting affidavit of Jesse Gacharira Ngari, a director of the 1st Respondent. The application is opposed and the Auctioneer filed his response thereto. Both parties have filed substantive submissions to both applications which I have considered.

Analysis and Determination 6. There are two applications before this court. For good order I will determine the 1st Respondents application dated 10th March 2023 since the outcome of this application shall ostensibly and invariably settle the Application by the Auctioneer dated 29th January 2022. Having said so, I have carefully considered the pleadings and the submissions filed in the two applications and two issues emerge for determination; to wit,1. Whether the 1st Respondent/Applicant has demonstrated that the orders of stay of execution and leave to appeal are merited.2. Whether the certificate of costs issued on 20th January 2022 should be adopted as judgment and decree of this court.

7. A perusal of the court file reveals that on 19th August 2019 the 2nd Respondent instructed the Auctioneer, P.M. Gachie T/A Regent Auctioneers, to arrange to sell by public auction the property of the 2nd Respondent on Land Reference Number 1/157(original number 1/22/3) Kilimani registered in the 1st Respondent - Itoga Investments Holdings Limited, valued at the time at Kshs.1,118,000,000/- with a forced sale value of Kshs.838,000,000/-. The Auctioneer issued the requisite notices under the law and on 17th October 2019 advertised the said property for sale by public auction, which was to be conducted on 25th October 2019. On 24th October 2019 by a court order, the sale by public auction was stopped. The said court order stopping the sale also directed that the successful Applicant, the 1st Respondent herein, to pay to the Auctioneer’s costs associated with the auction.

8. Subsequent to the court order of 24th October 2019, the Auctioneer filed its bill of costs and the same was taxed at Kshs.10,042,097/- by the court. A reference challenging the ruling of the taxing master was filed in the High Court under the Auctioneers Rules, Rule 55(4) & (5) and this court upheld the same by its orders of 17th February 2023. The application filed by the 1st Respondent dated 10th March 2023 seeks to stay the execution of the above orders. The application also seeks leave to appeal the said ruling.

9. The 1st Respondent/Applicant has moved the court under Order 42 of the Civil Procedure Rules. Under Rule 6 of Order 42, a party wishing to stay execution of an order of this court must satisfy the court he has an arguable appeal with a likelihood of success and the same shall be rendered nugatory if the stay of execution is not granted and that he stands to suffer substantial loss, if leave to appeal is not granted.

10. Under Rule 55(4) & (5) of the Auctioneers Rules, an appeal to a decision of taxing master only lies to the High Court. That right was extinguished once an application challenging the taxed costs was made before the High Court and the decision rendered on 17th February 2023. There is no automatic right of appeal from the High Court to the Court of Appeal. Accordingly, there are no provisions under the Auctioneers Act upon which the 1st Respondent’s Application can be hinged.

11. Be that as it may, even if the court is to consider the application as one where leave of the court is necessary to file an appeal in the Court of Appeal under the Civil Procedure Rules, the court notes that what the 1st Respondent/Applicant has provided as proof of its intended appeal is a Notice of Appeal that was filed under Order 42 Rule 6 of the Civil Procedure Rules. In the absence of a draft Memorandum of Appeal setting out the grounds upon which the intended appeal is to be premised, the court is left with nothing to consider in determining if the Applicant is deserving of the leave sought.

12. I have considered the facts surrounding this case. The genesis of the taxed costs herein emanated from an order of the Court that stayed the sale of the 1st Respondents property LR. No. 1/157 on 24th October 2019 and directing that the 1st Respondent/Applicant who was the successful party to pay costs associated to the auction to the Auctioneer. A careful analysis of the court record reveals that these orders of the court were not vacated or appealed against. What transpired was the subsequent filing and taxation of the Auctioneers Costs by the court and the same was upheld by the ruling of this Honourable Court. As noted earlier, it is not possible for the court to make a finding on whether the applicant or intended appellant has an arguable appeal with chances of success in the absence of a draft memorandum of appeal. It is also not possible for the court to grant leave to appeal without first considering what is being appealed against.

13. The 1st Respondent/Applicant in urging the court to grant the orders sought made reference to the case of RWW -vs- EKN (2019)eKLR where in an application similar to this one the court observed:-“the purpose of an application for stay of execution pending appeal is to preserve the subject matter in dispute so that the rights of the appellant who is exercising the undoubted right of appeal if successful, is not rendered nugatory. However, in doing so, the court should weigh this right against the success of a litigant who should not be deprived of the fruits of her/his judgment. The court is also called upon to ensure that no party suffers prejudice that cannot be compensated.”Although the above finding by Justice Asenath Ongeri is persuasive, I agree with the observations and I am persuaded by the same and agree with the court’s holding.

14. The upshot of the above findings is that the application by the 1st Respondent is without merit and the same is dismissed with costs to the Auctioneer.

15. This therefore leaves the Application for adoption of the certificate of costs as a judgment and decree of this court, filed on 29th January 2022 by the Auctioneer. Having found the application seeking leave to appeal and stay of execution pending the hearing of the intended appeal was not proved to the required standard, the court finds no grounds have been put forward to warrant a denial of the orders sought herein. The application is therefore allowed as prayed with costs.

DATED, SIGNED AND DELIVERED VIRTUALLY AT NAIROBI THIS 19TH DAY OF OCTOBER 2023. .........................................J. W. W. MONG’AREJUDGEIn The Presence of:-Mr. S.M. Mwaura for the Auctioneer.Mr. wanjohi for the 1st Respondent.Mr. Ogole for the 2nd Respondent.Amos - Court Assistant