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JudgmentFALCON SIGNS LIMITED VS DAYSTAR AUCTIONEERS AND PETER MWANGI GATHOGO T/A DAYSTAR AUCTIONEER14 min read

FALCON SIGNS LIMITED VS DAYSTAR AUCTIONEERS AND PETER MWANGI GATHOGO T/A DAYSTAR AUCTIONEER

High Court at Milimani High Court · · David Mburu

Introduction

1. This appeal arises from the judgment of the Auctioneers Licensing Board delivered on 20 th November 2023 in Disciplinary Cause No. 76 of 2022.

2. Vide Nairobi CMEL No. 1455 of 2019 Willys Onyango Osike vs Falcon Signs Ltd. , Falcon Signs Ltd. (the appellant) was condemned to pay a total of Kshs. 371,078/- to Willys Onyango Osike. Willys Onyango then instructed Peter Mwangi Gathogo t/a Daystar Auctioneers (the respondent) to proceed with the realization of that judgment; KCL 474g was proclaimed on 8 th August 2022 and later attached on 18 th August 2022. This appears to have prompted the appellant to pay Kshs. 40,000/- to Willys Onyango’s advocates on 26 th August 2022. Those acts of the respondent, namely the proclamation and attachment, form the crux of the present appeal.

Factual History

3. By a letter dated 20 th November 2022 and an affidavit sworn on similar date by Heena Joshi, one of the appellant’s directors, the appellant lodged a complaint against the respondent alleging that contrary to the averments by the respondent and Willys Onyango Osike, KCL 474G was hijacked while in transit and was therefore not proclaimed at its premises as alleged by the respondent. The appellant added that the respondent did not visit its premises on the day he allegedly proclaimed KCL 474G.

4. The appellant also attached a letter dated 14 th November 2022 signed by D/OCPP Nyayo Police Post Senior Sergeant Albert Nguta, stating that on the alleged day of proclamation, KCL 474G was escorted to the Nyayo Police Post for causing obstruction along Mombasa Road. According to Senior Sergeant, the obstruction was as a result of the respondent blocking KCL 474G on the road in an attempt to attach it, after which the appellant and respondent agreed to have KCL 474G driven and stored at Leakey Storage Yard within Industrial Area. Further to this, the appellant attached a local purchase order from Explod Electronics for the sum of Kshs 6,461,200/- and a letter dated 30 th August 2022 from Explod Electronics blaming the appellant for delaying delivery and deducting Kshs. 1,671,000/- from the appellant’s fees. It sought the following prayers:

i. Revocation of the respondent’s license.

ii. Recommendations for a criminal charge of perjury against the respondent.

iii. Payment of damages of Kshs. 1,671,000/- as a result of unprocedural attachment.

5. The record of the proceedings before the Board is, with respect, far from clear. The proceedings and dates recorded therein are in places inconsistent and do not clearly disclose what transpired on some of the dates indicated. I have deliberately set out the chronology as it appears from the record, without attempting to reconcile the apparent inconsistencies by inference. The matter was first mentioned on 16 th January 2023 when the respondent was absent. It was later mentioned on 23 rd March 2023 where the Board directed the parties to file submissions and reserved the ruling for 18 th May 2023. On 31 st May 2023, the Board observed that the affidavit of complaint was missing in the file and directed that the appellant avail it. Despite the matter being fixed for mention on 20 th July 2023 to take a ruling, there are no proceedings for that day. Instead, the record contains proceedings for 24 th August 2023. On this day, the appellant was absent while the respondent was present in person when the respondent was directed to file a response and submissions within 14 days, while the appellant was granted 14 days to file a supplementary affidavit if need be.

6. By a replying affidavit sworn on 11 th September 2023, the respondent deposed that he received and proclaimed KCL 474G on 8 th August 2022. He averred that the proclamation was initially served upon the driver of KCL 474G who declined to sign on his copy. The second proclamation notice was served on the appellant and KCY 017F was also proclaimed.

7. The matter was then slated for mention on 23 rd November 2023. Again, the record skips to proceedings dated 25 th October 2023, though the same were signed off on 20 th November 2023. It was also on this day that the Board rendered its Ruling.

8. By a Ruling signed off on 20 th November 2023, the Board held that there was proper service of the proclamation having been attached at the appellant’s gate manned by its personnel. The Board declined to make an award for loss of business, arguing that the appellant, being aware of the proclamation, ought to have honoured the same within the stipulated timelines. Equally, the Board declined to award damages of Kshs. 1,671,000/-, stating that it lacked jurisdiction to do so. In the end, the complaint was dismissed and the appellant was condemned to pay Kshs. 30,000/- as costs within 30 days.

9. Despite indicating that the matter would be mentioned on 18 th January 2024 to confirm compliance, there are no proceedings for the said date. The record however, indicates that the matter was mentioned on 25 th July 2024 when both parties were absent, and the Board directed that a final mention notice be issued.

10. In the meantime, the record reflects that the appellant wrote to the Board vide a letter dated 28 th July 2023 and received on 7 th November 2023 enquiring whether the Ruling was delivered as scheduled for 18 th May 2023. The record bears no response to this letter. Once again, the appellant wrote to the Board on 7 th November 2023 enquiring about the status of the matter. Again, the appellant wrote on 15 th February 2024, complaining that the Board delivered a decision on 18 th July 2024 without informing the appellant. It also applied for typed proceedings and a certified copy of the decision. Subsequently, the appellant wrote on 26 th February 2024 requesting a copy of the respondent’s replying affidavit, which they contended was never served upon them.

11. The Board responded vide a letter dated 15 th August 2024 computing the charges for certified copies of its proceedings and another letter dated 7 th December 2022, which appears from the context of the record to have been intended to bear the year 2024, communicating the Board’s decision and that the matter would be mentioned on 18 th July 2024.

The Appeal

12. Aggrieved by the foregoing, the appellant lodged a memorandum of appeal dated 19 th February 2024 raising various grounds of appeal which can be condensed as follows, that the Board erred in fact and law:

i. By failing to consider the evidence of D/OCPP Nyayo Police Post Sergeant Albert Nguta that the subject motor vehicle KCL 474G was obstructed by the respondent on the road and not at the appellant’s premises.

ii. By failing to consider the appellant’s submissions dated 12 th April 2023 filed in the absence of the respondent’s response, which was filed after the close of pleadings on 12 th September 2023.

iii. By considering the respondent’s affidavit filed on 12 th September 2023 after the close of pleadings and after a Ruling date was set for 18 th May 2023.

iv. By deferring the Ruling to a later date than 18 th May 2023.

v. By failing to consider evidence that the respondent did not physically visit the appellant’s premises as per his affidavit sworn on 2 nd November 2022.

vi. By failing to consider evidence that the respondent did not proclaim motor vehicle KCL 474G as alleged.

vii. By failing to appreciate that Willys Onyango Osike lied on oath as to how the respondent served the proclamation notice upon the appellant and later alleged attached motor vehicle KCL 474G.

viii. By failing to consider that the appellant suffered loss and damage on account of the respondent’s and Willys Onyango Osike’s actions and/or omissions.

ix. By proceeding with the hearing in the absence of the appellant and/or its advocates and sending communication to a different firm other than the appellant’s advocates on record.

13. Consequently, the appellant urged this Court to allow the appeal, set aside the decision of the Board, revoke the respondent’s license pursuant to Section 18 of the Auctioneers Act, recommend a criminal charge of perjury against the respondent, and issue an order compelling the respondent to pay the appellant Kshs. 1,671,000/- on account of its unlawful actions and costs of the appeal.

The Appellant’s Submissions

14. In its submissions dated 11 th November 2024, the appellant raised 3 issues for determination:

i. Whether the Board ignored, disregarded and misdirected itself on the complaint before it;

ii. Whether the Board breached the appellant’s right to a fair trial by sharing documents regarding the complaint with the firm of M/S Katunga Mbuvi and not M/S Mwae & Associates Advocates; and

iii. Whether the actions by the respondent were unprofessional and if so, whether his license should be revoked and damages amounting to Kshs. 1,671,000/- as a result of an illegal auction be awarded.

15. It was submitted that the Board ignored that KCL 474G was proclaimed while in transit. In their view, they proved their case on a balance of probabilities that service was not effected and the respondent violated the provisions of the Auctioneer’s Act and Auctioneers Rules. The appellant also urged that the Board violated his right to a fair trial by proceeding with the case without communicating to their advocates and instead communicating with the firm of M/S Katunga Mbuvi & Co. Advocates. In its view, it was denied a chance to effectively prosecute its complaint. Finally, the appellant relied on Section 26 of the Auctioneers Act in imploring this Court to award damages of Kshs. 1,671,000/-, arguing that it was on account of the illegal proclamation of KCL 474G while in transit that the appellant was unable to supply goods to Explod Electronics.

The Respondent’s Submissions

16. In opposition to the appeal, the respondent filed his submissions dated 1 st December 2024 contending that the appeal was incompetent as the appellant did not attach a copy of the impugned decree or order and that it was filed outside the statutory timelines set out in Section 25 of the Auctioneers Act and without leave of court. What is more, he pointed out that the appellant did not attach a certificate of delay having filed the appeal outside the thirty days’ statutory timeline.

17. With respect to the merit of the appeal, it was his argument that despite the appellant’s security guard denying him entry to the premises, he was able to successfully and procedurally attach and proclaim KLC 474G. In addition, it was his case that the Board correctly held that it lacked jurisdiction to award damages. In his view, the damages envisioned under Section 26 of the Auctioneer’s Act refers to recovery of damages for improper exercise of powers and not a complaint against an auctioneer’s conduct. What is more, the compensation is capped at Kshs. 100,000/- under Sections 25(4)(f), well above the appellant’s claim. In any event, he urged, the appellant did not prove how the claim of Kshs. 1,671,000/- arose from the attachment of KCL 474G, adding that the appellant could have as well secured an alternative vehicle to transport the goods. Besides, he urged, KCL 474G was released back to the appellant upon clearing the decretal sum.

Appellant’s Supplementary Submissions

18. In response to the allegation that the appeal is incompetent, the appellant filed submissions dated 30 th January 2025. It is contended that the delay in obtaining the impugned Ruling and certified proceedings was attributable to the Board and that the appellant lodged the appeal immediately upon becoming aware of the impugned decision. Further, it urged that the delay was not sufficient to warrant obtaining a certificate of delay as held in Thuita Mwangi vs Kenya Airways Ltd . [2003] eKLR. In its view, a certificate of delay is only required where an appellant seeks to rely on exclusion of time, unlike the present case.

19. The appellant further posited that failure to obtain a certificate of delay, does not, by itself, render an appeal incompetent where the delay was not due to the appellant’s fault. He urged the Court to find the appeal competent in furtherance of Article 48 and Article 50 of the Constitution.

ANALYSIS AND DETERMINATION

20. As a first appellate court, this Court is required to reconsider and re-evaluate the evidence before the Board and arrive at its own conclusion, while bearing in mind that it did not hear or see the witnesses. See Selle v. Associated Motor Boat Co. [1968] EA 123 .

21. I have carefully considered the appeal, rival submissions, statutory and jurisprudential framework. The following issues arise for determination:

i. Whether the appeal is competent.

ii. Whether the Board’s finding was justified.

iii. What reliefs should issue?

22. On the first issue, the respondent contended that the appellant failed to obtain a certificate of delay and failed to attach a copy of the impugned decree, thereby rendering the appeal incompetent. The appellant, on the other hand, submitted that a certificate of delay was unnecessary as the delay was caused by the Board’s failure to communicate to its advocates on record.

23. The wording of Section 25 of the Auctioneers Act is instructive. It provides thus:

(1) A person aggrieved by a decision of the Board under this Act may, within thirty days after receipt by him of written notice of such decision , appeal against the decision to the High Court by giving notice of appeal to the Registrar thereof setting out the grounds of appeal within thirty days after the giving by him of the notice.

(2) The decision of the High Court on an appeal under this section shall be final. [Emphasis mine]

24. Time, therefore, starts running upon receipt of a written notice of the Board’s decision, and not when the decision was actually delivered. In this case, it is not entirely clear when the appellant was notified of the impugned decision. However, by its letter dated 15 th February 2024, it indicated having become aware of the decision. The appeal was filed on or around 19 th February 2024, merely 4 days after becoming aware of the decision. Accordingly, I find and hold that the appeal was filed on time.

25. As for the issue of the decree, the respondent has not demonstrated any statutory requirement under Section 25 of the Auctioneers Act that a decree or order be annexed to the notice of appeal, nor has he demonstrated any prejudice arising from its absence. The appellant has, however, attached the impugned decision and the respondent, despite decrying failure to attach a decree, has not indicated any particular prejudice he suffered. In the circumstances, I find that the appeal is properly before this Court.

26. Moving on to the second issue, the appellant challenged the Board’s decision on various grounds: that it was not notified of the hearing, thereby denying it an opportunity to prosecute its complaint, and that it ignored evidence that KCL 474G was not properly proclaimed or attached. The record of the proceedings before the Board is, with respect, difficult to follow. Despite setting down the matter for mention or ruling on various dates, there is no indication that the Board sat on the said dates or issued alternative dates or even communicated to the parties. What is more, the respondent was granted leave to file his response to the complaint, but there is no indication that the appellant was informed of this or that he was served with the said response. The matter was then set down for mention on 23 rd November 2023, only for the Board to deliver its decision on 20 th November 2023. The Board’s secretary subsequently communicated the decision on 22 nd January 2024, but the correspondence was addressed to Mwaura Kamau & Co. Advocates and Katunga Mbuvi & Co. Advocates, rather than the appellant’s advocates on record.

27. However, I note that the appellant’s main contention was that KCL 474G was not proclaimed in the manner alleged. However, the respondent’s response before the Board and before this Court is fairly consistent: KCL 474G was proclaimed on 8 th August 2022 at the appellant’s premises. The respondent deposed that he was denied access to the premises after disclosing the purpose of his visit. This account explains why the appellant’s visitor log did not have any entry with the respondent’s details. I am not persuaded by the contents of the letter dated 2 nd September 2022 by Bodo Holdings Ltd. that they do not turn away visitors, since the very nature of auctioneers’ work hardly makes them welcome guests.

28. The appellant alleged that the respondent stated that he attached KCL 474G on 18 th August 2022 but that the said motor vehicle had been ‘hijacked’ by the respondent. I have perused the record, and there is no indication that the respondent deposed that he attached in the appellant’s premises. In fact, his account coincides with that captured in Senior Sergeant’s letter dated 14 th November 2022 that indeed KCL 474G was attached and parties agreed to have the said motor vehicle stored at Leakey’s Yard.

29. Sections 107 and 108 of the Evidence Act provide that he who alleges must prove. It behooved the appellant to prove its allegations that KCL 474G was not attached or proclaimed procedurally. In the circumstances, I uphold the Board’s finding that the attachment and proclamation were done procedurally.

30. The question, therefore, is whether the procedural shortcomings occasioned prejudice of such a nature as to affect the substantive determination of the complaint. While the appellant was entitled to proper notice of the proceedings and of the decision, the material before this Court demonstrates that the substantive allegation upon which the complaint was founded was considered and was not proved. Further, the appellant has had the opportunity to challenge the Board’s substantive findings before this Court. I am therefore not satisfied that the procedural shortcomings occasioned prejudice sufficient to warrant setting aside the Board’s substantive determination.

31. As for the claim for damages of Kshs.1,671,000/-, I agree with the Board that it had no jurisdiction to award the same under Section 26 of the Auctioneers Act. Its disciplinary jurisdiction under Section 24(4)(f) permits compensation for misconduct, but that compensation is capped at Kshs.100,000. A claim for special or general damages under section 26 lies by action against the auctioneer. Furthermore, the appellant failed to establish any nexus between the sum claimed and the alleged unlawful actions of the respondent, which this Court has found to have been lawful. There is no evidence as to what KCL 474G was transporting, when it should have been delivered or that the goods could only have been transported using that motor vehicle. Furthermore, the appellant’s very evidence indicates that it acceded to have KCL 474G stored at Leakey’s Yard. This ground of appeal must therefore fail.

32. Accordingly, this appeal fails. The respondent shall have the costs of the appeal.

It is so ordered.

Dated, signed and delivered at Nairobi this 17 th day of September 2026.