Chrispo Okinda Mien v Kenya Commercial Bank,Keysian Auctioneers & Antony Odhiambo Owaga [2015] KEHC 5413 (KLR)

REPUBLIC OF KENYA.

IN THE HIGH COURT OF KENYA AT BUSIA

CIVIL APPEAL NO. 02 OF 2014.

CHRISPO OKINDA MIEN…………………..................................…………..APPLICANT.

VERSUS

KENYA COMMERCIAL BANK………………..............................….1ST RESPONDENT.

KEYSIAN AUCTIONEERS……………………...........................….2ND RESPONDENT

ANTONY ODHIAMBO OWAGA………...............................………..3RD RESPONDENT

J U D G M E N T.

BACKGROUND;

CHRISPO OKINDA MIEN, hereinafter referred to as the Appellant, being  dissatisfied  with the judgment  of Hon. Mildred Munyekenye, Senior Resident Magistrate in Busia CMCC. NO. 206 of 2011 of 14th February, 2014  preferred  this appeal setting out seven grounds as shown herein below;

"1.    The learned Trial Magistrate  erred in law and in fact in making a finding that a statutory notice and or a proper statutory notice had been issued to the Appellants by the 1st Respondent, through 2nd Respondent, without  any evidence of such notice and or service of  such notice upon the Appellant.’’

2.     The Learned Trial Magistrate erred in law and in fact in finding that a public auction  took place  on 27/5/2011 outside Busia  Post Office whereby Land Parcel  No. South  Teso/Angoromo/1373 was sold in pursuant to a purported exercise  of statutory power of sale by 1st Respondent whereas there was no evidence to that effect.

3.     The Learned Trial Magistrate erred in law and in fact by finding that the land subject matter of litigation South Teso/Angoromo/1373 was not in existence and thereby failed to issue an order of injunction against disposal, whereas there existed evidence that the suit property was existing during commencement of suit and the purported disposal was by fraud to defeat justice.

4.      The Learned Trial  Magistrate  erred in law and in fact in making a inding that the Appellant  was Not entitled to cost upon dismissal of the counter claim by the 3rd Respondent, and thereby failed to appreciate that a counter claim is a suit independent  of the parent suit and upon its dismissal cost follow events.

5.      The Learned Trial Magistrate erred in law and in fact in failing to include and allude to crucial evidence of fraud on part of the 2nd and 3rd  Respondent  as regards the purported sale of land No. South Teso/Angoromo/1373 and evidenced by testimony of PW 1 and PW 2 and on the exhibits  produced by both the Appellant  and the Respondents and thereby arrived  at an erroneous finding in favour of Respondents.

6.     The learned Trial Magistrate erred in law  and in fact  in failing to find that the Appellant  was entitled  to prayers sought having proved his case on the standard required  by law since both the plaint and counter claim  confirmed the existence of the suit property trial.

7.     The Learned Trial Magistrate erred in law and in fact   to draw real issues that were indeed between the parties , listing  each, and making decision on them and thus considered  irrelevant issues to the detriment of the Appellant.’’

2.         The Appellant named Kenya Commercial Bank, Keysian Auctioneers and Antony   Owaga Odhiambo as the 1st to 3rd Respondents respectively and they will be referred as such hereinafter.  The Appellant filed a notice of motion dated 19th February, 2014 under certificate of urgency dated 21st February, 2014 in the Lower court file and interim orders of stay were issued on 24th  February, 2014.  The interim orders were subsequently extended severally by this court  and eventually  allowed by consent of  parties counsel on 10th November, 2014.  The counsel also consented to have the appeal dealt with through  written submissions  and timelines  were given and extended  with a final  period of 14 days from 16th February,  2015 for the Respondents. When  the matter came up  on 5th March, 2015 to confirm the filing of submissions and fixing a date for judgment, the  counsel for  the 1st and 2nd  Respondents  was absent and had not filed submission within the time. The counsel holding his brief notified  the court that  the submissions had just been filed on that   date. The court fixed  23rd  April, 2015  as the date for judgment.  Thereafter  the counsel for the 1st  and 2nd Respondent  filed  a notice  of motion  under certificate of urgency dated 12th March, 2015  seeking  to have the submissions filed on 5th March, 2015 to be  deemed as properly filed.  The  application was certified urgent  on 17th March, 2015 to be heard on priority basis. The counsel for the 3rd  Respondent  has already field grounds of opposition dated  18th March, 2015.  The record shows that  the application was fixed for hearing on 25th March, 2015 but there is no indication of what happened on that date. So as to avoid any further  delay in this matter, the court has on its own motion taken the submissions filed by counsel  for the 1st and  2nd  Respondents on 5th  March, 2015 to be properly before the court in spite  of being filed outside the time set. This will enable the court to proceed to prepare its judgment without any further delay.

This being  a first appeal, this court is under duty to examine  and evaluate  the evidence  on record  and arrive at its own conclusion bearing  in mind that it did not have the advantage  of observing the demeanor of the witnesses during  trial (see Seller –vs- Associated Motor  Boat Company  Limited (1968)E.A. 123)

3.      ANALYSIS OF THE EVIDENCE

(a)       The Appellant  had filed Busia SPM . CC. No. 206 of 2011 against the 1`st and 2nd Respondents  through the plaint dated 19th July, 2011 seeking for  permanent injunction in respect of  South Teso/Angoromo/1373, taking  of accounts in respect of the charge of the said land and costs.  The  3rd Respondent  later filed Busia SPM. CC.NO. 301 of 2011 through  the plaint dated  20th  September, 2011 and later amended on 18th October, 2011 in which  he prayed for eviction  orders against the Appellant  in respect  of the same suit land,  removal  of caution and costs.

The two matters were consolidated  by consent  on 30th March, 2012  with the latter case being treated  as a counterclaim (see page 21 of the record of appeal)

(b)       The Appellant’s  evidence  in the court proceedings is at page 32 of the record of    appeal.  He  conceded to having taken a loan of Kshs.75,000/= from the 1st Respondent  and ‘’put the title deed of (South Teso/Angoromo/1373) as security .’’  In  the year 2010, the Appellant visited the 1st Respondent and learnt that the loan balance stood at Kshs.480,000/= and after paying  Kshs.70,000/= on 29th October, 2010, the  balance stood at Kshs.410,000/=. The Appellant  stated that later he learnt from Church members, specifically Pastor  Maureen, that his land had been advertised for auction in the newspapers.  He said  he had not been served with any communication about the auction and that he did not have postal  address. Julius Wandera Mudibo, a pastor  with Kings Outreach Church Busia,  also testified on their  interest to buy one acre of the suit land from  PW 1  at Kshs.1,600,000/=.He also told how he  accompanied  PW 1 to  the bank where the title to the land was charged and paid Kshs.70,000/= on 29th October, 2010 after which the bank gave them one year to pay the balance.  PW 2  also told  how on learning that the land had been advertised for auction, he accompanied DW 1 to the auction venue on 27th May, 2011 but did not find any such function taking place.

On behalf  of 1st Respondent, Elijah  Simi Ochoma and Ferdinard Kalatwen Mangeni testified  as DW 1  and DW 3  and told of the loan facility of  Kshs.75,000/= the bank  gave PW 1  upon securing a legal charge on his land South Teso/Angoromo/1373. That upon PW 1 defaulting,  the bank  issued legal notices  to recover and instructed the 2nd  Respondent  to auction the property. DW 3  stated he was present during  the auction on 27th  May, 2011 when the property was sold to 3rd Respondent  who testified as the Interested Party. (See record of appeal at page 65) Muganda Wasuilwa who is the 2nd Respondent  testified as  DW 2. The evidence  tendered shows that the Appellant charged the suit land with  the 1st Respondent for a loan of Kshs.75,000/= in February, 1988.  The Appellant had given  the 1st Respondent  his postal address as P.O. Box number 379, Busia  as seen in the charge document produced as defence exhibit 2.  The Appellant  signed the said charge document and has not disputed any of its  contents.  As  there is no other address that the  Appellant had given to the 1st Respondent, the latter was in order to send their  notices to the Applicant through  the address in their possession.

(c)        The Learned trial Magistrate addressed herself to the issue of the statutory notices issued  and  served   on the Appellant before the auction and found as follows; at page 8 line  21 of the record of appeal;

‘’………………I find  that a notice for  sale of land parcel number South Teso/Angoromo/1373  was duly given to the Plaintiff.’’

This court finds that the Learned Trial Magistrate properly analyzed  the oral and documentary evidence  presented before the court and came to the correct finding in respect to the statutory  notices being issued and served for the following  reasons

That the letter dated 10th February, 1998  from 1st Respondent  to Appellant , that preceded the charge document ,  clearly indicated that the loan facility  was to be repaid within 3 years in monthly instalments of Kshs.3,000/= inclusive  of interest. The three years were to run between February, 1988 to February, 1991. The Appellant has not disputed  that by the time of the contested  auction of 27th may, 2011,he  was in arrears to the tune of over Kshs.400,000/=.

That  the 1st Respondent  had done the first demand notice dated 12th May, 1989 followed  by a second one  dated 22nd December, 1989. The notices  were addressed to the only postal address the Appellant had given the 1st Respondent  being Box number 379, Busia. This was  in accordance with paragraph 6 (i) of the charge document which reads as follows:-

‘’ that any notice  required or authorized  by law or by this charge to  be served by the Bank  on the chargor shall be sufficiently served if it be sent by Post in a stamped envelope addressed to the chargor at his last known postal address in Kenya or if it be delivered to the place of business of the chargor to the charged property AND THAT Proof  of posting shall be proof of service.’’

The 1st Respondent  therefore  acted in accordance with the provision  of section 74  of the  then  Registered  Land Act Chapter  300 of Laws of Kenya instructing  the 2nd Respondent  to realize the charge as the Appellant  was in arrears.

The 2nd Respondent then wrote  to the Appellant  on 21st March, 2011 giving  him 45 days. The notice was sent by registered  post to the addrees the Appellant  had given 1st Respondent and a  certificate  of posting was produced as exhibit.  The 1st and 2nd Respondents had discharged their duty to show that proper  notices  had been issued and served  on the Appellant(see Kisumu  Court of Appeal C.A. NO. 148 of 1991, Obel Omunan –vs- Kenya Commercial Bank  Ltd. eKLR)

d)         The Learned Trial Magistrate  also considered whether  or not the advertised auction took place on 27th May, 2011 and after analyzing   the competing oral evidence  of both  sides  and the documentary  evidence presented,  found as follows;

‘’From the documentary evidence produced by the defendants, I  find  that indeed an auction took place on 27th May, 2011 for parcel number South Teso/Angoromo/1373 and the successful  purchaser was the Interested Party.’’

The  weight  of the evidence given by PW 1  and PW 2 on one side, against  that given by DW 2, DW 3 and Interested Party  on the other side, sways in favour  of a finding that both the oral and documentary evidence presented by the Respondents before the learned trial Magistrate  shows that South Teso/Angoromo/1373 was indeed auctioned as advertised  and the highest  bidder was the 3rd Respondent. There was no evidence of fraud  presented  before the trial court by any of the parties.  The Appellant  was under duty to give particulars of fraud  in his pleadings and avail evidence to support such particulars in the lower court proceedings but failed to do so.  The Appellant therefore lost  the opportunity  to redeem the property  on the fall of the hammer on the auction day.  See the court of appeal case of Mbuthia –vs- Jumbo Credit Finance  corporation & AnotherC.A. No. 111 of 1986 where  it was held;

‘’…………by virtue of the security being  registered under the RLA, the equity  of redemption was lost at the fall of the hammer at auction sale. This is because at the fall of the hammer, the  highest bidder is declared the purchaser and binding contract of  sale is concluded.’’

(e)       That the Learned Trial Magistrate properly addressed herself on the issue of costs and found as follows at page 11 of the record of appeal;

‘’  Since  both Plaintiff’s suit and the counterclaim  have been dismissed, the Plaintiff  and the Interested Party  will each bear their costs as against each other.’’

The general rule as to costs is provided under section 27 of the Civil   Procedure Rules. This provision has been considered in several judicial  pronouncement by the Superior Courts (See Supermarine Handling Services  ltd –vs- Kenya  Revenue Authority  C.A.C. A No. 85 of 2006 and  R- V-The Medical Practitioners  and Dentist Board and 3 others      Exparte Kenya Hospital  Association [2014] eKLR).

The general thread in the  decisions is that though ordinarily costs follow the events and successful litigants  should  have costs, the  trial court has some discretion. The discretion should  however  not be arbitrary but exercised   judiciously.  In this case, the Appellant  and the  3rd Respondent failed in their respective  cases  which had been consolidated for hearing. The learned trial Magistrate could have ordered the Appellant and 3rd Respondent  to pay the costs to the opposite side  upon their suits being  dismissed but instead ordered each  party to bear their own costs as between    themselves.  This court finds that  the learned trial Magistrate  exercised her discretion  judiciously and the  order serves the   justice  in the case and  cannot  be said to be arbitrary.

4.  FINDING.

For  reasons set out  above, the  court do not find any merit in any of the grounds set out  by the Appellant  and the following orders are issued;

The appeal  is  dismissed  with costs.

The learned trial Magistrate  orders  of 14th February, 2014 are upheld.

The orders granted in respect of  the application  dated 20th  February, 2014  are hereby vacated.

It is so ordered.

S. M. KIBUNJA,

JUDGE.

DATED AND DELIVERED ON 23RD DAY OF APRIL, 2015.

IN THE PRESENCE OF  PRESENT ……………………………APPELLANT

…N/A……………………………………...................……1ST RESPONDENT

…N/A…………………………………….........................2ND RESPONDENT

…PRESENT…………………………….......................…3RD RESPONDENT

MR. MAKOKHA  FOR APPELLANT, MR. JUMBA FOR MUKELE FOR 1ST AND 2ND  RESPONDENT AND MR. ONSONGO FOR ASHIOYA FOR 3RD RESPONDENT.

JUDGE.