National Association of Kenya Auctioneers (suing through its Secretary General) Darius Kimwele v Kenya Bankers Association of Kenya, Co-operative Bank of Kenya, Family Bank, NCBA Bank, Kenya Commercial Bank, SBM Bank, Kenya National Chamber of Commerce & Industry, Kenya Landlord & Tenant Association, Tarus & Onyango, Oduk Advocates, Millers Motors Ltd, Momentum Credit Ltd, Platinum Credit Ltd & Association of Kenya Insurance [2020] KEHC 10363 (KLR)

REPUBLIC OF KENYA

IN THE HIGH COURT OF KENYA AT NAIROBI

MILIMANI LAW COURTS

COMMERCIAL AND TAX DIVISION

CORAM: D. S. MAJANJA J.

CIVIL CASE NO. E237 OF 2020

BETWEEN

NATIONAL ASSOCIATION OF KENYA AUCTIONEERS

(Suing Through its Secretary General)

DARIUS KIMWELE ...........................................................................PLAINTIFF

AND

KENYA BANKERS ASSOCIATION OF KENYA..................1ST DEFENDANT

CO-OPERATIVE BANK OF KENYA.....................................2ND DEFENDANT

FAMILY BANK..........................................................................3RD DEFENDANT

NCBA BANK..............................................................................4TH DEFENDANT

KENYA COMMERCIAL BANK.............................................5TH DEFENDANT

SBM BANK.................................................................................6TH DEFENDANT

KENYA NATIONAL CHAMBER OF

COMMERCE & INDUSTRY.....................................................7TH DEFENDANT

KENYA LANDLORD & TENANT ASSOCIATION...............8TH DEFENDANT

TARUS & ONYANGO.................................................................9TH DEFENDANT

ODUK ADVOCATES.................................................................10TH DEFENDANT

MILLERS MOTORS LTD.........................................................11TH DEFENDANT

MOMENTUM CREDIT LTD....................................................12TH DEFENDANT

PLATINUM CREDIT LTD........................................................13TH DEFENDANT

ASSOCIATION OF KENYA INSURANCE.............................14TH DEFENDANT

RULING

1. The Plaintiff is an association representing the interests of auctioneers. All the Defendants have interests in the finance and banking sector and in the course of their business, engage the services of auctioneers.

2. The Plaintiff’s cause of action is summarized in one paragraph of the Plaint dated 22nd June 2020 as follows:

[9] That at all material times relevant to this suit, the 1st defendant/respondents members have illegally issued instructions, repossessed, advertised and sold loan securities without the involvement of the plaintiff’s members, prescribed an illegal fees schedule and encouraged undercutting.  The cause of action applies to the 7th, 8th, 9th, 11th, 12th and 13th respondents/defendants who on diverse dates have advertised, attached and sold distressed, attached, repossessed and charges goods without the involvement of auctioneers and have encouraged illegal fees payment to our plaintiff’s members and or encouraged undercutting and malpractice by the auctioneers.

3. The Plaintiff therefore seeks the following reliefs set out in the Plaint:

1. All the instructions issued by the respondents/defendants, their members, agents or person(s) acting on their behalf must comply with the statutory sale form 1 of the Auctioneers Act and Rules.

2. A declaration that the defendants, their members, agents, officers or persons working under their control should not be allowed to issue illegal instructions, repossess attach and offer for sale chattels, goods, property for sale by any mode of competition otherwise reserved for licensed auctioneers unless allowed by any other written law or court order.

3. The defendants their members, agents, officers or person(s) working under them do stick to the fees schedule as provided for under the Auctioneers Act and that under paying is illegal under the Auctioneers Practice 2009.

4. The defendants have been illegally been underpaying, advertising for sale, repossessing, storing and dealing with the charges and mortgaged facilities.

5. The landlords, estate agents and persons working under them have no legal basis to distress, store and sell distressed chattels.

6. The cost of this suit be provided for by the defendants.

4. By an application made, inter alia, under Order 39 of the Civil Procedure Rules, the Plaintiff sought the following reliefs:

[1] Spent

[2] Spent

[3] Spent

[4] Spent

[5] That this honourable court do suspend all instructions letters form the respondents/defendants, their members or persons acting on their behalf directed to all auctioneers that do not meet the statutory sale form 1 in the Auctioneers Act and rules pending the hearing and determination of this application. That in the interim this honourable court do issue a declaration of the following to be against the law.

a. That issuing instructions in rem and or instructions that do not comply with the Auctioneers Act statutory forms.

b. That a declaration that no institution, persons, advocates’ firms and or any other party is allowed to repossess, advertise and sell property, item goods, chattels and or any other materials by competitions or public auctions that are a preserve of licensed auctioneers unless it is expressly expected by the written law until this application is heard interparties and determined.

[6] That this honourable court do issue orders declaring that the respondents/defendants and its members and any other persons dealing with the licensed auctioneers, not to pay any invoice that does not comply with the auctioneers rules otherwise known as undercutting pending the hearing and determination of this application interparties.

[7] That there be a declaration that the selling or repossessing of the customers/debtor’s property or goods without the involvement of the licensed auctioneers offends their constitutional and statutory rights and the law of natural justice.

[8] That this honourable court be pleased to issue all the above prayers permanently pending the hearing and determination of this suit.

[9] That the cost of this application be provided for.

5. The Defendants opposed the application through replying affidavits. The parties also filed written submissions. I do not propose to deal with all the issues raised because I would be forced to determine the entire petition at this interlocutory stage. The Plaintiff’s claim is based on mainly application of the Auctioneers Act and the role of auctioneers and their relationship with the Defendants. Apart from responding to the substantive issues, the Defendants have raised several issues regarding the competence of the suit.

6. Prayers 2, 3 and 4 of the application seek injunctions pending the hearing and determination of the application. Since I did not grant those orders prior to the hearing of this application, it is not necessary to consider the injunction since they would ordinarily lapse at the delivery of this ruling. The remaining prayers, which I have set out, are for declarations. A Declaration is issued by the court after consideration of all the facts and law presented by the parties. At this stage, the parties have not even filed their statements of defence. The court cannot issue declarations at an interlocutory stage in these circumstances. I would only cite East African Portland Cement Company Limited v Attorney General and Another NRB IC No. 9 of 2012 [2013]eKLR where the Court observed as follows:

Interim orders are granted where the Court, in exercising its discretion is satisfied that they are necessary due to the urgency and nature of the circumstances.  They are mostly injunctive in nature, putting on hold an action, maintaining the status quo, until the substantive dispute can be investigated and resolved.  The applicant must establish genuine urgency.  Interim orders are not suitable if by their grant, they finally determine the substantive dispute. The Courts must be wary of prejudgment of the substantive merits.”  (Emphasis added.)

7. All this goes to show that the Notice of Motion dated 22nd June 2020 is a candidate for dismissal. It is dismissed with costs to the Defendants.

DATED and DELIVERED at NAIROBI this 4th day of DECEMBER 2020.

D. S. MAJANJA

JUDGE