Background and introduction
1. For determination is the auctioneer’s Chamber Summons application dated 13th December 2023. The application arises from a Ruling delivered on 7th December 2023, by Hon. Deputy Registrar C. L. Adisa, in response to a Preliminary Objection (P.O) dated 20th February 2023 filed by the 2nd Respondent (the Bank).
2. The Bank’s PO was raised under Rule 7 of the Auctioneers Rules, 1997. It challenged its joinder in the taxation proceedings, arguing that, as a creditor, it was not a necessary party since the primary obligation to settle the auctioneer’s fees lies with the debtor, the 1st Respondent. The Deputy Registrar upheld the Bank’s objection and struck out its name from the taxation proceedings.
3. Aggrieved by the decision, the auctioneer filed this appeal under Rule 55 (4) of the Auctioneers Rules (1997). The auctioneer seeks to have the ruling of 7th December 2023 varied or set aside. It argues that the Bank is a necessary party under Rule 55(2) of the Auctioneers Rules, 1997 and that its exclusion contravenes principles of judicial efficiency and fairness.
4. The application is opposed by the Bank, through a replying affidavit sworn on 26th March 2024. The Bank reiterates that the auctioneer’s recourse for its fees should be against the debtor and not against the Bank, since the exceptions under Rule 7 have not been shown to exist.
5. The impugned Ruling affects several other related suits, being Misc. E649/2022; Misc. E651/2022; Misc. E652/2022; Misc. E654/2022 and Misc. E655/2022. By consent of the parties, this file serves as the test case for the others.
Analysis and Determination
6. The appeal was canvassed by way of written submissions which I have carefully considered alongside the other filings by the parties. The singular issue for determination is whether the Bank is a proper party in taxation proceedings alongside the 1st Respondent.
7. As earlier stated, these taxation proceedings were filed under the provisions of Rule 55 of the Auctioneer’s Rules, to determine the fees payable to the auctioneer. Rule 55(2) addresses how a fee dispute is handled procedurally. The liability for such fees is guided by Rule 7 , which provides:
“A debtor shall pay the charges of the auctioneer unless—
(a) that debtor cannot be found; or
(b) he has no goods upon which execution can be levied; or
(c) the sale proceeds are insufficient to cover the charges, in which cases the creditor shall pay the charges or the deficiency thereof.”
8. The wording of Rule 7 is explicit and unambiguous. It establishes that the primary obligation to settle an auctioneer’s fees rests with the judgment debtor. The creditor is only liable in limited circumstances, specifically where the debtor cannot be located, lacks attachable assets, or the sale proceeds are insufficient to cover the auctioneer’s charges.
9. There is no indication under Rule 7 that an auctioneer may pursue both parties for payment in the alternative at the first instance unless he places himself under the exceptions. This rule is couched in mandatory terms, making the judgment debtor the necessary party in an auctioneer’s fee assessment by default.
10. Judicial pronouncements (See for instance Nashon Kerati Muriri V Chacha Mwita Muchuni, (2014) eKLR, Co-operative Bank of Kenya Limited V Joefrick N. Muinde T/A Kimu Auctioneers, [2019] KEHC 5694 (KLR) and Letshego Kenya Limited V Moiruri T/A Moco Auctioneers, [2023] KEHC 18069 (KLR)) have consistently affirmed this position.
11. It follows from these decisions that an auctioneer who intends to rely on an exception must clearly plead and prove the relevant condition during the taxation process, ideally at the time of filing the bill of costs. This is contrary to the submissions by the auctioneer, that the exceptions may crystalize after the taxation proceedings.
12. In other words, the exceptions under Rule 7 should be treated as conditions precedent to creditor liability. This means that the burden is on the auctioneer to demonstrate, at the time of taxation, that one of those conditions exists. It is not enough for an auctioneer to simply hope that the debtor won’t pay and later try to rope in the creditor.
13. Therefore, if the auctioneer’s bill does not indicate that the debtor was untraceable, had no goods, or that the sale proceeds were deficient, the taxing officer is entitled to proceed on the default premise that the debtor is liable.
14. I have perused the application herein and absent an applicable exception, the Bank is not a proper or necessary party to the auctioneer’s bill of costs. The Bank cannot be compelled to participate in a fee assessment when, by Rule 7 ’s clear directive, it has no obligation to pay in the first instance. As such, without a pleaded basis to depart from the normal rule of the debtor-pays, the Hon. Deputy Registrar had every reason to strike out the Bank from the taxation proceedings.
15. The auctioneer raised a further ground that: The Hon. Deputy Registrar erred by failing to acknowledge that the 2nd Respondent (the Bank) had a contractual agreement with the auctioneer and had made part payment to the auctioneer before the filing of the bills of costs and is/was thus rightfully enjoined in the matter.
16. Upon reviewing the documents filed by the auctioneer in support of its appeal, I find no evidence of a contract executed between the parties or any other supporting documentation to establish liability on the part of the Bank. Additionally, there is no proof of partial payment, as alleged, by the Bank to the auctioneer. Notably, the Hon. Deputy Registrar made no reference to such submissions or evidence in the impugned Ruling. Consequently, the auctioneer’s claim falls short of the burden of proof required under Section 107 of the Evidence Act.
17. In the same way as the court found in Letshego Kenya Limited V Moiruri T/A Moco Auctioneers [supra], it is my finding that having failed to prove the existence of the contract and part payment, the auctioneer has not proved that the Bank was liable to pay its fees. For this reason, the Bank should not be dragged into proceedings over auctioneer’s fees.
Disposition
18. Accordingly, the application dated 13th December 2023 is dismissed with costs to the Bank. The Ruling of the Hon. Deputy Registrar dated 7th December 2023 is upheld. For the avoidance of doubt, the Ruling herein shall apply mutatis mutandis to Misc. E649/2022; Misc. E651/2022; Misc. E652/2022; Misc. E654/2022 and Misc. E655/2022.
DATED, SIGNED AND DELIVERED IN NAIROBI
THIS 23RD DAY OF MAY 2025.
F. MUGAMBI
JUDGE
1. For determination is the auctioneer’s Chamber Summons application dated 13th December 2023. The application arises from a Ruling delivered on 7th December 2023, by Hon. Deputy Registrar C. L. Adisa, in response to a Preliminary Objection (P.O) dated 20th February 2023 filed by the 2nd Respondent (the Bank).
2. The Bank’s PO was raised under Rule 7 of the Auctioneers Rules, 1997. It challenged its joinder in the taxation proceedings, arguing that, as a creditor, it was not a necessary party since the primary obligation to settle the auctioneer’s fees lies with the debtor, the 1st Respondent. The Deputy Registrar upheld the Bank’s objection and struck out its name from the taxation proceedings.
3. Aggrieved by the decision, the auctioneer filed this appeal under Rule 55 (4) of the Auctioneers Rules (1997). The auctioneer seeks to have the ruling of 7th December 2023 varied or set aside. It argues that the Bank is a necessary party under Rule 55(2) of the Auctioneers Rules, 1997 and that its exclusion contravenes principles of judicial efficiency and fairness.
4. The application is opposed by the Bank, through a replying affidavit sworn on 26th March 2024. The Bank reiterates that the auctioneer’s recourse for its fees should be against the debtor and not against the Bank, since the exceptions under Rule 7 have not been shown to exist.
5. The impugned Ruling affects several other related suits, being Misc. E649/2022; Misc. E651/2022; Misc. E652/2022; Misc. E654/2022 and Misc. E655/2022. By consent of the parties, this file serves as the test case for the others.
Analysis and Determination
6. The appeal was canvassed by way of written submissions which I have carefully considered alongside the other filings by the parties. The singular issue for determination is whether the Bank is a proper party in taxation proceedings alongside the 1st Respondent.
7. As earlier stated, these taxation proceedings were filed under the provisions of Rule 55 of the Auctioneer’s Rules, to determine the fees payable to the auctioneer. Rule 55(2) addresses how a fee dispute is handled procedurally. The liability for such fees is guided by Rule 7 , which provides:
“A debtor shall pay the charges of the auctioneer unless—
(a) that debtor cannot be found; or
(b) he has no goods upon which execution can be levied; or
(c) the sale proceeds are insufficient to cover the charges, in which cases the creditor shall pay the charges or the deficiency thereof.”
8. The wording of Rule 7 is explicit and unambiguous. It establishes that the primary obligation to settle an auctioneer’s fees rests with the judgment debtor. The creditor is only liable in limited circumstances, specifically where the debtor cannot be located, lacks attachable assets, or the sale proceeds are insufficient to cover the auctioneer’s charges.
9. There is no indication under Rule 7 that an auctioneer may pursue both parties for payment in the alternative at the first instance unless he places himself under the exceptions. This rule is couched in mandatory terms, making the judgment debtor the necessary party in an auctioneer’s fee assessment by default.
10. Judicial pronouncements (See for instance Nashon Kerati Muriri V Chacha Mwita Muchuni, (2014) eKLR, Co-operative Bank of Kenya Limited V Joefrick N. Muinde T/A Kimu Auctioneers, [2019] KEHC 5694 (KLR) and Letshego Kenya Limited V Moiruri T/A Moco Auctioneers, [2023] KEHC 18069 (KLR)) have consistently affirmed this position.
11. It follows from these decisions that an auctioneer who intends to rely on an exception must clearly plead and prove the relevant condition during the taxation process, ideally at the time of filing the bill of costs. This is contrary to the submissions by the auctioneer, that the exceptions may crystalize after the taxation proceedings.
12. In other words, the exceptions under Rule 7 should be treated as conditions precedent to creditor liability. This means that the burden is on the auctioneer to demonstrate, at the time of taxation, that one of those conditions exists. It is not enough for an auctioneer to simply hope that the debtor won’t pay and later try to rope in the creditor.
13. Therefore, if the auctioneer’s bill does not indicate that the debtor was untraceable, had no goods, or that the sale proceeds were deficient, the taxing officer is entitled to proceed on the default premise that the debtor is liable.
14. I have perused the application herein and absent an applicable exception, the Bank is not a proper or necessary party to the auctioneer’s bill of costs. The Bank cannot be compelled to participate in a fee assessment when, by Rule 7 ’s clear directive, it has no obligation to pay in the first instance. As such, without a pleaded basis to depart from the normal rule of the debtor-pays, the Hon. Deputy Registrar had every reason to strike out the Bank from the taxation proceedings.
15. The auctioneer raised a further ground that: The Hon. Deputy Registrar erred by failing to acknowledge that the 2nd Respondent (the Bank) had a contractual agreement with the auctioneer and had made part payment to the auctioneer before the filing of the bills of costs and is/was thus rightfully enjoined in the matter.
16. Upon reviewing the documents filed by the auctioneer in support of its appeal, I find no evidence of a contract executed between the parties or any other supporting documentation to establish liability on the part of the Bank. Additionally, there is no proof of partial payment, as alleged, by the Bank to the auctioneer. Notably, the Hon. Deputy Registrar made no reference to such submissions or evidence in the impugned Ruling. Consequently, the auctioneer’s claim falls short of the burden of proof required under Section 107 of the Evidence Act.
17. In the same way as the court found in Letshego Kenya Limited V Moiruri T/A Moco Auctioneers [supra], it is my finding that having failed to prove the existence of the contract and part payment, the auctioneer has not proved that the Bank was liable to pay its fees. For this reason, the Bank should not be dragged into proceedings over auctioneer’s fees.
Disposition
18. Accordingly, the application dated 13th December 2023 is dismissed with costs to the Bank. The Ruling of the Hon. Deputy Registrar dated 7th December 2023 is upheld. For the avoidance of doubt, the Ruling herein shall apply mutatis mutandis to Misc. E649/2022; Misc. E651/2022; Misc. E652/2022; Misc. E654/2022 and Misc. E655/2022.
DATED, SIGNED AND DELIVERED IN NAIROBI
THIS 23RD DAY OF MAY 2025.
F. MUGAMBI
JUDGE