[2023] KEHC 23212 (KLR)

Sila t/a Legacy Auctioneering Services v Kenya Agricultural Research Institute (Miscellaneous Application 1 of 2023) [2023] KEHC 23212 (KLR) (4 October 2023) (Ruling)

Neutral citation: [2023] KEHC 23212 (KLR)

Republic of Kenya

In the High Court at Nakuru

Miscellaneous Application 1 of 2023

HM Nyaga, J

October 4, 2023

Between

Benjamin K Sila T/A Legacy Auctioneering Services

Applicant

and

Kenya Agricultural Research Institute

Respondent

Ruling

1. The Respondent/Applicant vide an Application dated May 5, 2023 brought pursuant to Sections 1A, 1B, 3A,63 (e) and 89 of the Civil Procedure Act, Order 51 Rule 1 of the Civil Procedure Rules and Rule 55 of the Auctioneers Rules 1997 seeks for Orders: -a.Spentb.That this Honourable Court be pleased to stay all proceedings herein pending the hearing and determination of this Application.c.That this Honourable Court be pleased to stay all proceedings herein pending the hearing and determination of the Respondent’s/Applicant’s Application dated May 5, 2023, filed in Nakuru E.L.R.C Pet No. 2 of 2013 seeking to set aside the warrants of attachment and sale dated July 26, 2022. d.That upon determination of the Respondent’s/Applicant’s application in Nakuru E.L.R.C No.2 of 2013, this Honourable Court be pleased to order the Auctioneer/Respondent to release the Respondent/Applicant’s Motor Vehicles Registration Numbers KAN 414 U and KBQ 444 D forthwith.e.That this Honourable Court be pleased to order the Auctioneer/Respondent to refund Ksh. 283,243/= to the Respondent/Applicant paid in respect of the warrants of attachment and sale dated July 26, 2022. f.That this Honourable Court be pleased to issue such orders as it deems fit and just in the interests of Justice.g.That costs of this application be borne by the Auctioneer/Respondent.

2. The Application is predicated on the grounds on its face and supported by an affidavit of DR. Eliud Kireger, the Respondent/Applicant’s Director sworn on the even date.

3. He deponed that Auctioneers’ Bill of Costs arose from warrants of attachment and sale issued in Nakuru Civil Appeal No.315 of 2015 and Nakuru E.L.R.C No.2 of 2013 where the Applicant was a party.

4. That the Respondent proclaimed and attached Motor Vehicle Registration Nos. KAN 414 U and KBQ 444 D in execution of the warrants aforesaid and that out of all the warrants of attachment and sale filed herein, only warrants dated October 24, 2019 can sustain a claim for Auctioneer’s fees and assessment.

5. With respect to warrants of attachment and sale dated October 24, 2019, he deposed that item no. 4 being the commission based on the decretal sum is unlawful since only the Motor Vehicle Registration No. KAN 414 U was attached.

6. He averred that since the Auctioneer’s costs were not agreed upon, the same had to be assessed by the court and therefore the auctioneers had no rights to seize motor vehicle registration no. KAN 414 U.

7. He averred that Respondent’s decision to contemporaneously detain Motor Vehicle Registration Number KAN 414 U despite demands for its release and its failure to file a bill of costs to have the issues resolved by the court was for purposes of escalating costs.

8. He averred that the intended execution was stopped by the consent dated January 24, 2024 which the respondent was aware of as shown by the letter dated October 11, 2022.

9. He deposed that the Auctioneer/Respondent having failed to file a Bill of costs in respect of warrants aforesaid for over a period of 3 years cannot make a valid claim for storage charges.

10. He deposed that the Auctioneers/Respondent and Legacy Connection limited share the same postal address and mobile number and it is thus clear that they had a business relationship or they are one and the same hence the reason why the Respondent was comfortable by unlawfully holding the Motor Vehicle for over 3 years and he intended to unjustly claim through his Siamese twin legacy connections limited Ksh.300/= per day which has led to a purported claim for Ksh.327, 200/=.

11. He stated that items no 3 and 7 of the warrants of attachment are baseless as they are not provided for under the Auctioneers Rules.

12. With regard to warrants of attachment and sale dated January 20, 2020, he stated that it arose after reissuance of the expired warrants dated October 24, 2019 and from analysis of the amounts therein the principal sum of Ksh. 5,950,000/= and the collection fee remained the same while there was a variation in interest, and due to the fact that the time frame between both warrants was less than 2 months is conclusive proof that only one set of instructions was issued.

13. He deposed that items 1, 2,3,4,5 and 6 should be denied since they arose from the instructions in respect to the warrants dated October 24, 2019 since allowing the same will be equivalent to duplication of costs and unjustly enriching the Respondent.

14. With respect to warrants of attachment and sale dated December 8, 2020, he stated that the same were issued contrary to the consent order dated January 24, 2020 and that having been set aside by parties consent in Civil Appeal No. 315 of 2015, the instructions, proclamations notice and any other related act flowing therefrom was rendered null and void.

15. He averred that since motor vehicle registration No. KBQ 444 D was attached pursuant to unlawful warrants, attachment thereof was unlawful, null and void.

16. He stated that upon setting aside of the warrants of attachment and sale dated 8th December,2020, the auctioneer/respondent had no basis for detaining Motor Vehicle Registration No. KAN 414 U.

17. In regards to warrants of attachment and sale dated 26th July, 2022, he submitted that the Applicant paid the auctioneers charges albeit inadvertently.

18. That the firm of Konosi & Co. Advocates in a letter dated August 12, 2022 forwarded the Auctioneer’s invoice No. 2219 dated August 8, 2022 for Ksh. 283,242. 58 and the applicant paid that amount as per the copy of the debit advice dated February 22, 2023.

19. He also stated that the invoice dated August 8, 2023 shows the applicant paid decretal sum of Ksh. 7,133,407. 50

20. He averred that the applicant after perusing its records in totality noted that at the time of issuance of the warrants of attachment and sale dated July 26, 2022, it had deposited Ksh. 6,942,616. 70/= in a joint interest earning account in the names of the advocates representing the parties in Nakuru Court of Appeal, Civil Appeal No. 315 of 2015 and the monies were still available for the purposes of paying the decretal amount.

21. That there was no basis whatsoever for applying for the warrants of attachment and sale dated July 26, 2022 since Ksh. 6,942,616. 70/= together with interest was held in the joint account and the same was enough to pay the entire decretal amount.

22. It was his deposition that in the circumstances, no lawful auctioneer’s charges can be sustained against the Respondent/Applicant arising from the warrants of attachment and sale dated July 26, 2022 as the same was unnecessary and invalid.

23. It was his averment that the respondent holds Ksh. 283,243/= belonging to the applicant which is more than enough to pay any lawful auctioneer’s charges that might be found due and owing to the auctioneer.

24. He averred that the applicant has paid all the lawful Auctioneer’s charges and prayed that its Motor Vehicle Registration nos. KAN 414 U and KBQ 444D be released to it.

25. In response to the Application, the Respondent filed Grounds of Opposition dated May 17, 2023 raising the following grounds: -a.That the Application is incompetent, inept, bad in law and an abuse of the court process the application ought to be filed in the primary file Nakuru E.L.R.C No.2 of 2013 and be served to the relevant parties and or their agent/advocates.b.That the Applicant herein has not been joined as an interested party in Nakuru E.L.R.C No.2 of 2013 and is unable to substantively respond to the pleadings herein.c.That issue in Nakuru H.C Misc. Application No.1 of 2023 herein relate to taxation of the Auctioneers bill of costs by the Deputy Registrar as provided under Rule 55(2) (a) & (b) of the Auctioneers Rules,2009 to that extent this court lacks jurisdiction to entertain the Application herein.

26. The Application was canvassed through written submissions.

Applicant’s Submissions 27. The Applicant submitted that relevant prayers for consideration by this court are prayers (2) and (3). That prayers nos. 4 and 5 will be considered by the Deputy Registrar during the taxation proceedings.

28. In regards to whether the issues which arise will be answered by the court in Nakuru E.L.R.C Petition No.2 of 2013, the Applicant submitted in the affirmative.

29. The Applicant argued that the genesis of the taxation proceedings is the warrants of attachment and sale issued in Nakuru Court of Appeal No. 315 of 2015 and Nakuru E.L.R.C Pet No.2 of 2013 and that the auctioneer/respondent in grounds (a) in support of the application dated January 10, 2023 stated that he had been instructed in these matters.

30. The Applicant submitted that its response to the said application dated January 10, 2023 has its roots in the principal suit that cannot be determined by this court since it is on challenge on the validity of the warrants of attachment and sale. That once the court handling the application in the principal suit considered and determines the issues raised therein, the decision of the court will assist the taxing officer determine whether or not the Auctioneer/Respondent can rely on the warrants of attachment and sale dated July 26, 2022.

31. On whether the proceedings herein should be stayed pending hearing and determination of the respondent’s application in the principal suit, the Applicant submitted that that the issues raised in the Respondent’s/Applicant’s defence cannot be addressed herein but in the principal suit and in the event the warrants of attachment dated July 26, 2022 are set aside, cancelled and recalled the Auctioneer/respondent will have no basis for claiming auctioneers’ fees from it.

32. It was argued therefore that the Applicant will be prejudiced if it will have paid the auctioneer’s fees arising from warrants of attachment and sale which subsequently will be set aside and therefore the grant of an order of stay is necessary. In support of its submissions, the Applicant relied on the case ofThe Board of Trustees National Hospital Insurance Fund vs Kipkorir, Titoo & Kiara Advocates HCCC No. 154 of 2004 where Justice Azangalala held as follows: -“In my view the interest of Justice leans in favour of granting stay of the taxation. The reason is that taxation determines the quantum payable. It does not address the issue of whether or not any fees have been earned. Taxation can therefore wait.”(16)In the same vein, I would find persuasive the words of Ojwang, J. (as he then was) in Kenya Pipeline Company Limited vs. Nyamongo Advocates [2016] eKLR, that:"...taxation of costs comes at the conclusion of a normal process of hearing, conducted by virtue of the Civil Procedure Act (Cap. 21) and the Civil Procedure Rules. There may, therefore, be taxation-of-costs matters which are so enmeshed in the motions of the trial process itself, that it would not be out of order to raise issues about them within the framework of normal civil procedure; and in any case, any meet directions on the hearing of suits and applications may be made by the Court, by virtue of the broad discretions created by the Constitution of Kenya and the Civil Procedure Act (Cap. 21).”

33. With respect to whether the Application is incompetent, inept, bad in law and an abuse of the court process since it was not filed in the principal suit, the Applicant submitted that it cannot seek stay of proceedings and has no basis to do so in the principal suit since that is the file which it seeks to be heard first considering that it has a bearing on these proceedings.

34. On whether the Respondent should have been enjoined as an interested party in the principal suit to enable him substantively respond to the present application, the applicant submitted that the question of whether the warrants of attachment and sale dated July 26, 2022 should be set aside is to be determined in the principal suit but not before this Honourable Court. It contended that all that the auctioneer is required to do in the application of this nature is to demonstrate why the orders sought should not be granted considering the facts within his knowledge.

35. The Applicant asserted that the auctioneer has not filed a replying affidavit and in the absence of the same the general averment that the auctioneer/respondent is unable to respond to the application herein lack foundation and is unsustainable.

36. On whether the court has jurisdiction to stay proceedings arising from the Auctioneer’s rules, the Applicant submitted that this court is clothed with jurisdiction to determine this Application under Sections 89,1A,3A,1B,63( e) of the Civil Procedure Act and Order 51 Rule 1 of the Civil Procedure Rules.

37. The applicant also relied on the case of Multiline Motors (Kenya) Ltd v Migori County Government [2021] eKLR where Wendoh J stated;“Taxation of costs, in my view, is part of the execution process. Section 89 of the Civil Procedure Act provides for the application of the Civil Procedure Rules in all cases of a civil nature such as the present application arising from taxation of costs...”

38. The Applicant urged the court to grant prayers nos. two and three of the Application.

Respondent’s submissions 39. In regards to prayer no. 3 of the Application, the Respondent submitted that in view of Section 6 and 34 of the Civil Procedure Act, this court may exercise its discretion and grant the same on condition that the Application dated May 5, 2023 in Nakuru ELC Petition No.2 of 2013 be expedited as the court deems fit so as not to permit the Applicant to delay and frustrate the determination of assessment of Auctioneers bill of costs.

40. With respect to prayer no. 4 of the Application, the respondent submitted that the attachment was as a result of lawful court orders. He contended that in the interest of justice and to avoid further storage charges the motor vehicles in issue can be released on condition that the Applicant do pay Ksh. 383,300/= being the amount claimed in the bill and further storage fee from the date of taxation to date plus further storage fee @ Ksh.300 per day until the date of collection for Motor Vehicle Registration Number KAN 414 U and Ksh. 248,000/= being amount in the bill and further storage charges from January 4, 2023 to July 10, 2023.

41. With regard to prayer no. 5, the respondent submitted that by dint of Section 34 of the Civil Procedure Act, the same is misconceived and incompetent as it relates to execution, discharge or satisfaction of a decree that can only be determined by the court that issued the decree and not by a separate suit.

42. Regarding prayer no. 7, the respondent submitted that the same should be awarded to it for late filing of the instant application by the Applicant.

Issues for determination 43. Upon considering the application, the affidavits in support of the application, the grounds of opposition and the submissions made by the respective parties, I consider that the issues that arise for determination are: -a.Whether the applicant is deserving of the stay order sought.b.Whether the Motor Vehicles Registration Nos. KAN 414 U and KBQ 44D should be released to the Applicant.

Analysis 44. In Hallsburys Laws of England Volume 13, 4th Edition Learned Authors had this to say:“The court has an absolute an unfettered discretion as to the granting or refusing of a stay, and as to the terms upon which it will grant it, and will, as a rule, only grant a stay if there are special circumstances which must be deposed to an affidavit unless the application is made at the hearing.”

45. In Re Global Tours & Travel limited (Nairobi) H.C. Winding up Cause No. 43 of 2000 quoted with approval in Meru Civil Appeal 40 of 2018 Kenya Wildlife service -versus- Mutembei (2019) eKLR that:“The court stated; As I understand the law whether or not I grant a stay of proceedings or further proceedings on a decree or order appealed from is a matter of Judicial Discretion to be exercised in the interest of justice. The sole question is whether it is in the interest to order a stay of proceedings, and if it is on what terms it should be granted.In deciding whether to order a stay, a court should essentially weigh the pros and cons of granting or not granting the order, and in considering those matters it should bear in mind such factors as the need for expeditious disposal of cases, the prima facie merits of the intended appeal in the sense of not whether it will probably succeed or not or whether it is an arguable one. The scarcity and optimum utilization of judicial time and whether the application has been brought expeditiously…. “…Stay of proceeding should not be confused with stay of execution pending appeal. Stay of proceedings is a grave judicial action which seriously interferes with the right of a litigant to conduct his litigation. It impinges on right of access to justice, right to be heard without delay and overall, right to fair trial. Therefore, the test for stay of proceedings is high and stringent…”

46. In Civil Appeal 326 of 2013 Kenya Power & Lighting Company Limited vs Esther Wanjiru Wokabi [2014] eKLR the court distilled three principles in allowing a stay of proceedings as: Whether the Applicant has established that he/she has a prima facie case arguable; whether the application was filed expeditiously and whether the Applicant has established sufficient cause to the satisfaction of the court that it is in the interest of justice to grant the orders sought.

47. The instant matter was instituted by the Applicant/Respondent vide an application dated January 10, 2023 seeking for assessment of fees payable to him as per the bill of costs dated January 10, 2023 and for an award of further storage charges at Ksh.300/= per vehicle from 11th Januray,2023 until date of full payment on grounds that he was instructed in Nakuru H.C.C.C No.315 of 2015 & Nakuru Petition no.2 of 2013 under court warrants to attach the Respondent/Applicant herein and that he successfully carried out the said instructions. It is undisputed and indeed correct as pointed out by the Applicant that the genesis of taxation proceedings is warrants of attachment and sale issued in Nakuru Court of Appeal No. 315 of 2015 and Nakuru E.L.R.C Pet No.2 of 2013. This position is also captured in the supporting affidavit of the Respondent in support of his Application dated January 10, 2023.

48. The Applicant is challenging the validity of the warrants dated July 26, 2022 in which the respondent is claiming Ksh. 7,133,407. 50 and has filed an application presented herein at page 23- 26 in the E.L.R.C Petition No.2 of 2013 seeking that the said warrants be set aside, cancelled and recalled. The determination of this issue will inform this court whether the Respondent is entitled to the auctioneer’s fees sought in his aforesaid application dated January 10, 2023. It is on this premise that I opine that the Applicants has established a prima facie case.

49. The applicant responded to the Respondent’s application on February 21, 2023 and subsequently filed the instant application on May 8, 2023. I therefore find that the instant application was filed without inordinate delay.

50. The Respondent is amenable to the Applicant being granted the stay order sought and from the foregoing I find the Applicant has presented sufficient cause to warrant grant of the stay order sought.

Issue No.2 51. It is undisputed that pursuant to warrants of attachment issued on October 24, 2019 in Nakuru Civil Appeal No.315 of 2015, the Respondent served the proclamation notice to the Applicant on November 8, 2019 and subsequently attached the Applicant’s Motor Vehicles Registration Nos. KAN 414 U and KBQ 444D on November 19, 2019. To date, the said Motor Vehicles are still in the custody of the Auctioneer.

52. The Respondent is not opposed to the release of the aforesaid Motor Vehicles on condition that the Applicant pays Ksh. 383,300/= being the amount claimed in the bill of Ksh. 327,200/= and further storage charges of Ksh. 56,100/= plus further storage fee @ Ksh.300 per day until date of collection for Motor Vehicle Registration No. KAN 414 U and Ksh. 248,600/= being the amount in the bill of Ksh. 192,500/= and Storage charges of Ksh. 56,100/= for Motor Vehicle Registration No. KAQ 444 D.

53. It was the Applicant’s submissions that no lawful auctioneer’s charges can be sustained against it arising from warrants of attachment and sale dated July 26, 2022 since the same is invalid and that Ksh. 283,243/= was inadvertently paid to the Auctioneers arising from the said warrants dated July 26, 2022 which amount according to it is more than sufficient to pay any lawful auctioneer’s fees that might be found due and owing to the Respondent. This position has not been controverted by the Respondent considering he did not file any replying affidavit. Be that as it may, I believe this is an issue that can be resolved by the E.L.R.C when determining the aforesaid Application by the Applicant. It is my view therefore that the auctioneer’s fees if any can be paid and/or settled after conclusive determination of the said Application before the E.L.R.C.

54. The Applicant contended that the Respondent had no legal basis for detaining the aforementioned Motor Vehicles as the auctioneer’s costs had not been agreed upon and that the Respondent cannot make a valid claim for storage charges for failure to file a bill of costs in respect of warrants aforesaid for over a period of 3 years.

55. It is in no doubt that the said motor vehicles continue to incur storage charges and the Applicant had never taken any steps to seek release of the same prior filing of the instant application.

56. In the interest of justice and balancing the rights of both parties, I will order the Respondent to release the Motor Vehicles in question to the Applicant on condition that the Applicant deposits Ksh. 60,000/= being storage charges for each Motor Vehicle in a joint interest-earning account in the names of the advocates representing the parties within 21 days hereof.

57. Parties to expedite the determination of their matter before the E.L.R.C. and/or the taxation before the Deputy Registrar.

58. Costs shall be in the cause.

Dated, Signed and Delivered at Nakuru this day of 4thDay of October, 2023. HESTON M. NYAGAJUDGEIn the presence of;C/A JenifferMr. Ngethe for KARIMr. Muriithi for Ndolo - AuctioneerNakuru H.C. Misc. Application Number 1 of 2023 Page 4 of 4