Kennedy Shikuku t/a Eshikhoni Auctioneers v Nzoia Sugar Company Limited [2022] KEHC 10361 (KLR)

Kennedy Shikuku t/a Eshikhoni Auctioneers v Nzoia Sugar Company Limited (Miscellaneous Application 2 of 2020) [2022] KEHC 10361 (KLR) (11 May 2022) (Ruling)

Neutral citation: [2022] KEHC 10361 (KLR)

Republic of Kenya

In the High Court at Bungoma

Miscellaneous Application 2 of 2020

SN Riechi, J

May 11, 2022

Between

Kennedy Shikuku t/a Eshikhoni Auctioneers

Applicant

and

Nzoia Sugar Company Limited

Respondent

Ruling

1This ruling is in respect of the applicant’s Chamber Summons application dated 10th January, 2020 which seeks the following orders.1. That the decision of the learned magistrate given on 7/1/2020 in Bungoma CMCC No. 79 of 2019 assessing the appellant/applicant’s bill of costs dated 13/11/2019 be set aside, varied and or quashed.2. The appellant/applicant’s bill of costs dated 13/11/2019 be re-assessed.

2The application is supported by the affidavit of Kennedy Shikuku sworn on 10/1/2020 where he depones that in his bill of costs dated 13/11/2019, he had sought the sum of Kshs 1, 027,110/= whereas the trial magistrate assessed the bill at Kshs 329,150/= which he states was under assessed in that the attached property was Kshs 26,500,000/=. That the learned magistrate failed to assess the bill in accordance with the provisions of the 4th Schedule of the Auctioneers Rules.

3He depones that the learned magistrate incorrectly interpreted the 4th Schedule of part II vis-à-vis paragraph 7 of the Auctioneers Rules regarding the fees on attachment/commission. He further depones that the magistrate erroneously awarded Kshs 2,000/= instead of Kshs 4,000/= as fees before attachment and that the magistrate erred in assessing travel expenses which ought to be allowed at 3 times the Automobile Association of Kenya scale.

4The applicant faults the magistrate for under assessing the awards for taking inventory, process server’s fees and the advocate’s instructions fees.

5The application was disposed of by way of written submissions. Both parties complied and the same have been considered.

6The guiding principles when dealing with a reference from the decision of a Taxing Master are well settled that the court is to exercise caution and only interfere with such an award if; the taxing master exercised discretion improperly or has acted on wrong principles. In Oscar Otieno Odongo t/a Odongo Investment Auctioneers v Sukari Industries Limited [2019] eKLR, it was held;A court dealing with a reference on assessment or taxation of costs must exercise caution since the assessment or taxation is based on exercise of discretion on the part of the assessing or taxing officer. Such assessment or taxation can only be interfered with when it is demonstrable that the decision was based on an error of principle or the fee awarded was manifestly high as to justify an interference.

7It is also settled law that matters of assessment of an Auctioneer’s Bill are a province of the Auctioneers Act 1997 and the Rules made thereunder, the court need not look further. The Rules and the Schedules thereto are self-governing. This is provided for under Rule 55(1) of the Auctioneers Rules which states;1. Except as may be provided by any other written law or by contract the fees set out in the Fourth Schedule payable to the auctioneer for the attachment, repossession and sale of movable and immovable property under court warrants or letters of instructions shall be charged in accordance with these Rules.

8On the ground that the learned magistrate erred in assessing the commission payable, the relevant legal provisions on the auctioneers commission is paragraph 7 of part II of the 4th schedule which provides;Where requisite notices are served and sale is stayed, or postponed, the auctioneer is entitled to ½ of fees to which auctioneer would have been entitled to after sale, plus expenses.

9This provision was interpreted in National Industrial Credit Bank Limited v SK Ndegwa Auctioneer [2005] eKLR, where the court held;We are satisfied that the learned Judge correctly construed the word “proclamation” in the context in which it is used in the Auctioneers Rules and reached the correct decision that the auctioneer was entitled to fees for attachment prescribed in paragraph 4 of Part II of the Fourth Schedule.

10The applicant contends that once a proclamation has been served, the auctioneer is entitled to 100% of the fees as opposed to ½ the fees as awarded by the subordinate court.

11On the respondent’s part, it is submitted that since a consent was recorded staying the execution, the applicant was entitled to ½ the fees he would have been entitled to if the sale had been successful.

12It is common ground the attached goods was worth Kshs 26, 500,000/=. There was a stay of sale. Therefore under Paragraph 7 of the 4th Schedule, 2% of the attached goods gives Kshs 530,000/= and ½ of 530,000/= is 265,000/=. The auctioneer is therefore entitled to Kshs 265,000/=.

13Consequently, the applicant’s contention on this ground is without merit.

14On the fees before attachment and upon perusing the ruling I note that this item was allowed. The applicant’s contention that he was awarded Kshs 2,000 is incorrect.

15On travelling expenses, the applicant sought Kshs 21,960/=. The magistrate awarded Kshs 4,000/=. The applicant contends that he travelled to Nzoia covering a distance of 50 Kilometres. He submits that the 4th schedule provides for 3 times the Automobile Association’s rates.

16The respondent contends that the distance covered is approximately 18. 7. He submits that the amount awarded was reasonable. Paragraph 11 provides;Travelling expenses as published by the automobile association from time shall to time be allowed at three times the scale.

17Having considered the provisions of Paragraph 11 of the 4th Schedule as well as the Automobile Association scale and the fact that the taxation of an Auctioneers Bill is a discretionary exercise by the magistrate, the court is inclined to uphold the magistrates award of Kshs 4,000/= as reasonable amount in the circumstances.

18On the award for taking inventory, the applicant had sought Kshs 20,000/=, the magistrate awarded Kshs 2,000/=. The court considers this amount too low in the circumstances considering the value of the proclaimed goods. Paragraph 10 of the 4th schedule provides;For taking inventory of transporting movable property and for advertising and insuring movable and immovable property the auctioneer shall be paid such amount as the court may consider reasonable.

19Considering all the circumstances of the case, the court is inclined to award the sum of Kshs 10,000/= under this head.

20On the advocate’s fees and the process server’s fees, the applicant was not awarded for the reason that the same is not accounted for. The reason for declining the award are sound and legal. The 4th schedule does not provide for such an award and the learned magistrate’s finding is hereby upheld.

21On VAT, the applicant faults the magistrate for awarding VAT only on the commission. Having perused the Bill as presented, the applicant had sought VAT only on the commission. The trial magistrate cannot therefore be faulted.

22In the circumstances the application partially succeeds in the following terms;Fees upon receipt of warrants Kshs 1,000/=Fees before attachment Kshs 4,000/=Fees for taking inventory Kshs 10,000/=Auctioneers commission; Kshs 265,000/=Travelling expenses Kshs 4,000/=VAT on commission Kshs 42, 400/=TOTAL Kshs 326, 400/=

23A certificate to issue in those terms and each party to bear its own costs.

DATED AT BUNGOMA THIS 11TH DAY OF MAY, 2022S.N. RIECHIJUDGE