NCBA BANK (K) PLC VS GEOFFREY KANG' ETHE T/A KANG' ETHE ENTERPRISES AUCTIONEERS NCBA BANK (K) PLC VS GEOFFREY KANG' ETHE T/A KANG' ETHE ENTERPRISES AUCTIONEERS

INTRODUCTION.

The appellant being dissatisfied with the ruling of the learned Honorable Magistrate dismissing the appellant’s application dated 5^th March 2021 seeking an order directed to the respondents to release forthwith motor vehicle registration numbers KBX 718P and KBW 077D to the appellant.
The appellant has appealed to this court on the following grounds:-
THAT the learned magistrate erred in law and in fact in dismissing the Appellant's Notice of Motion Application dated 5th March 2021;
THAT the learned magistrate erred both in fact and in law in failing to hold and consider the Appellant's submissions that the public auction conducted by the 1st Respondent with instructions from the 2nd Respondent was contrary to Rule 18 of the Auctioneers Act 1997;
THAT the learned magistrate erred both in fact and in law in failing to consider the Appellant's legal and equitable interest in the attached Motor Vehicles, and that the Applicant has a privileged position over the 2nd Respondent in the attached Motor Vehicles;
THAT the learned magistrate erred in both law and fact in holding that the Appellant passed the chance to rebut the depositions on the conduct of the public auction in a Supplementary Affidavit failing to exercise the principle under Article 159 2(d) of the Constitution of Kenya;

APPELLANT'S CASE
The Appellant by way of written submissions has submitted that;-

By a Notice of Disposal of uncollected goods dated 5th January, 2021, the 2nd Respondent caused the Appellant's property being Motor Vehicles Registration Numbers KBX 718P and KBW 077D to be put up for sale by auction, by the 1st Respondent in satisfaction of outstanding storage charges and miscellaneous costs allegedly owed to the 2nd Respondent by the 3rd and 4th Respondents, to which the Appellant was not a party to.
The said Notice made by the 1st Respondent on behalf of the 2nd Respondent on 5th January, 2021 was intended to attach the said motor vehicles listed hereinabove which are registered jointly with the Appellant.
The intended illegal sale by auction of the suit Motor Vehicles Registration Numbers KBW 077D and KBX took place on 8th March, 2021 as indicated in a letter by the 1st Defendant dated 3rd March, 2021-addressed to the Appellant.
The Appellant has a legal and equitable interest in the attached Motor Vehicle Registration Number KBW 077D pursuant to a Chattels Mortgage Agreement dated 2nd July, 2013 between the Applicant and the 3rd Respondent (produced at page 100-112 of the Record of Appeal) and a Hire Purchase Agreement dated 15th October, 2013 between the Applicant and the 4th-Respondent (produced at page 139-148 of the Record of Appeal), for attached Motor Vehicle Registration Number KBX 718P
Consequent to the two aforesaid loan agreements, the said Motor Vehicles were jointly registered in the name of the 3rd Respondent and the Appellant on one part; and the 4th Respondent and the Appellant on the other part and having demonstrated ownership and evidence of its legal and equitable interest in the attached Motor Vehicles, the Appellant has a privileged position against the 2nd Respondent over the attached Motor Vehicles
The appellant further argued that on account of the two registered loan agreements, at the date of the attachment there was a legal and equitable interest in the Motor Vehicles attached in favor of the Appellant.
The appellant’s right to the equity of redemption cannot be defeated by way of sale in an attempt to satisfy the outstanding storage charges and miscellaneous costs allegedly owed to the 2nd Respondent by the 3rd and 4th Respondents.
The Appellant filed an Application by way of Notice of Motion dated 5th March 2021 in Commercial Suit No. E277 of 2021 NCBA Bank Kenya PLC v Geoffrey Kang'ethe T/A Geoffrey Kang'ethe Auctioneers & 3 others together with a Plaint which Application sought inter alia temporary Injunctive orders restraining the Respondents either by themselves or through their agents, servants or employees from selling, disposing off, transferring, using and/or dealing with Motor Vehicles Registration Numbers KBX 718P, and KBW 077D.
A Ruling was delivered on 31st May 2021 by Hon. E. Kagoni (PM), dismissing the Applicant's application dated 5th March 2021 for being overtaken by events as the subject motor vehicles were sold by way of public auction on 8th March 2021 by the 1st Respondent acting on the instructions of the 2nd Respondent to one Enkay Trading. (Ruling delivered on 31st May 2021 produced at page 83-89 of the Record of Appeal)
Being aggrieved by the Ruling of the learned magistrate the Applicant filed an appeal challenging the said decision since the Applicant was apprehensive that the subject motor vehicles shall be transferred to Enkay Trading as a result of the dismissal of the Application dated 5th March 2021 and subject to the public auction.
The appellant maintained that the subject Motor Vehicles are jointly registered in the name of the 3rd Respondent and the Applicant on one part, and the 4th Respondent and the Applicant on the other part; and having demonstrated ownership and evidence of its legal and equitable interest in the attached Motor Vehicles, the Applicant. has a privileged position against the 2nd Respondent over the attached Motor Vehicles.
The appellant submitted that, the sale by auction of the suit Motor Vehicles Registration Numbers KBW 077D and KBX 718P took place on 8th March, 2021 as indicated in a letter by the 1st Defendant dated 3rd March, 2021-addressed to the Appellant and according to it that sale was irregular owing to the fact that the appellant has a legal and equitable interest in the attached Motor Vehicles pursuant to a Chattels Mortgage Agreement dated 2nd July, 2013 between the Applicant and the 3rd Respondent and a Hire Purchase Agreement dated 15th October, 2013 between the Applicant and the 4th-Respondent for attached Motor Vehicle Registration Number KBX 718P
The appellant further argued that having demonstrated joint ownership with the 3^rd and 4^th respondents, he had a legitimate claim over the motor vehicles.
According to the appellant the equity of redemption could not be defeated by way of a sale to recover outstanding storage charges and miscellaneous costs allegedly owed to the 2nd Respondent by the 3rd and 4th Respondents.
The subject Motor Vehicles are jointly registered in the name of the 3rd Respondent and the Applicant on one part, and the 4th Respondent and the Applicant on the other part; and having demonstrated ownership and evidence of its legal and equitable interest in the attached Motor Vehicles, the Appellant has contended that he stood in a privileged position against the 2nd Respondent over the attached Motor Vehicles.

1^ST AND 2^ND RESPONDENTS CASE

The 1^st and 2nd Respondents have invited the Honourable court to re-evaluate, re- analyse and re- consider the evidence that was produced during the trial court and issue an independent determination. The 1^st and 2^nd respondents sought to rely on Kaio Kivuva v Penina Wanjiru Muchene [2019] eKLR in which Justice E.C. Chacha on appeal held:

“this being a first appeal, parties are entitled to and expect a rehearing, re- evaluation and reconsideration of the evidence afresh and a determination of this court with reasons for such determination. In other words, a first appeal is by way of retrial and this court, as the first appellate court, has a duty to re-evaluate, re-analyse and re-consider the evidence and draw its own conclusions, of course bearing in mind that it did not see witnesses testifying and therefore give due allowance for that."

The 1st and 2nd Respondent's case is that the appellant is guilty of laches and the suit against them is an afterthought and abuse of the process of the court. The motor vehicles which are the subject of this suit le Motor Vehicle Registration Numbers KBX 718P and KBW 077D (hereinafter "suit vehicles") which at the material time were owned by the 3rd and 4th Respondent, were the subject of a Chattels Mortgage agreement with the applicant as security for loans owed to it.
The 2nd Respondent owned a garage undertaking repairs to vehicles at a fee and the suit vehicles were independently delivered to the 2nd Respondent for various repairs, which were effected as per the job cards Nos. 05185 dated 15th August 2015 and No. 05659 dated 22nd March 2016. Subsequently fee notes were raised and sent to the 3rd and 4th Respondents for the work done on the vehicles which invoices were never honoured by the said respondents. Filed on: No Paid- -BY: MWENDARA
The 2 Respondent sent the appellant the said invoices for the repairs after discovering that the appellant had interests in the vehicles (which the appellant received and stamped on 7th July 2020) but the appellant also did not respond or honour the same promoting the 2nd respondent to issue a demand letter for payment dated 4th September 2020.
The appellant responded vide the letter dated 4th September 2020 indicating that they would be responding to the demand letter within 14 days thereof. Vida an email sent on 5th October 2020, the appellant invited the parties to a meeting to amicably resolve the situation.
A meeting was organised with both parties being represented and resolution were agreed upon and sent by the representatives from the appellant to the 2nd respondent vide the email dated 13th October 2020. Key among the resolutions was payment of storage charges at Kshs. 500.00 per day since the vehicles were delivered to the garage. Further, it was resolved that the appellant would send an assessor to ascertain the repairs and costs for the appellant to settle.
In line with the resolutions, the 2nd respondent sent to the appellant the new invoices dated 14th October 2020 for the storage charges for settlement i.e. Invoices Nos. 2020/306 for Motor vehicle registration no. KBX 718P and No. 2020/305 for Motor vehicle registration no. KBW 077D.
On 15th October 2020, the appellant copied the 2nd Respondent's advocate in an internal email communication directing the processing and settlement of the said invoices. The appellant however reneged on the resolutions and failed to honor the payments.
Accordingly, the 1^st and 2^nd Respondents submit that the relation between the parties herein is governed by the provisions of the Disposal of Uncollected Goods Act.
It is common ground that the suit vehicles were delivered to the 2nd respondent's garage for repairs and/or safe custody in exchange for a fee. It is also common ground that following the arrears which accrued, the 1st and 2nd respondents issued the requisites notices under the Act.
That the appellant having failed to honour their word severally, the 2nd respondent rightfully and procedurally instructed the 1" respondent to proceed and recover the amounts claimed by issuing a notice of disposal of uncollected goods pursuant to section 7 of the Act vide the notices dated 17th November 2020 and 19th November 2020. Pursuant to the said notices, the appellant was required to take possession of the suit vehicles after payment of the amounts claimed failure to which the same would be sold to recover the amounts claimed.
Again, the appellant did not honour the notices, prompting the 1st Respondent to issue a thirty (30) day notice to the appellant vide the notices dated 5th January 2021 informing them that the suit vehicles would be sold via public auction to recover the amounts.
Under Sections 5 and 6 of the Act there is a mandatory requirement that both the Notice to Take Delivery and Notice of Intention to Sell must either be delivered by hand to the depositor or by leaving it at their residence or place of business or by sending to the depositor's last known address by registered post and failing any of the above, the custodian is required to place a notice in both the Kenya Gazette and a national daily newspaper.
These notices issued under the Act are crucial as they indicate that there is breach of any covenant under the agreement between the Custodian and the Depositor. There is no prescribed format promulgated as yet and different formats of the notice have thus emerged. However, there is need to ensure that the notice(s) is compliant with provisions of the 2nd and 3rd schedule of the Act which provides for matters to be included in the notice.
It is not disputed that the 1st and 2nd respondents issued the said notices and the same were delivered and received by the appellant, 3rd and 4th respondents. The 1st respondent having complied with the legal requirements and on expiry of the Notice of Intention To Sell, proceeded to announce an auction of the suit vehicles scheduled for 8th March 2021 vide a newspaper advert.
On 8th March 2021, the auction took place at the time and place advertised in the newspaper and a successful bid was made by ENKAY TRADING who was thereafter Issued with a certificate of sale and an official receipt for the value paid at the auction in accordance with Rule 18 of the Auctioneers Act which provides that;

(1) Payment by a purchaser at a sale of seized goods shall be in form of cash, banker's cheque or electronic funds transfer.
(2) Payment by a purchaser in all other cases shall be in such forms as the auctioneer shall think fit.
(3) On receipt of the proceeds of sale the auctioneer shall issue a receipt for it and in the case of immovable property sign a memorandum of sale.
(4) The auctioneer shall remit the proceeds of sale less his charges to the court or the instructing party, as the case may be, accompanied by an itemised account in the case of movable property within fifteen days of the sale and in the case of immovable property as provided under Order 21, rule 74 of Civil Procedure Rules (Cap. 21, Sub. Leg.).

The respondents further submitted that on 9 March 2021, a day after the successful auctioning of the suit vehicles, the appellant then served the 1st and 2nd respondents with the orders of the trial court barring the disposal of the suit vehicles. The said orders were had at the time been overtaken by events with the suit vehicles already having being sold and delivered to the successful bidder who was not a party to in the trial suit.
In light of the above, the 1st and 2 Respondents submitted that from the evidence presented in court it was clearly evident that the sale by public auction was conducted in line with the provisions of the Auctioneers Act and the Disposal of Uncollected Goods Act and the suit motor vehicles were delivered to the successful bidder together with certificates of sale and official receipts issued for payments made at the auction.
The appellant's claim at the trial court was for inter alia injunctive orders to stop the sale of the suit vehicles and for the suit vehicles to be released to the appellant. The appellant also sought orders for a declaration that the storages due and owing to the 2nd respondent should be paid by the 3rd and 4th Respondents.
The 1^st and 2^nd respondents submitted that the trial court carefully considered the appellant's Notice of Motion and the annextures thereto, the pleadings in general, the written submissions, cited authorities and the relevant provisions of the law in making it's finding. The appellant's Application in the trial court was anchored under Order 40 Rules 1 & 2 of the Civil Procedure Rules-which-order provides for situations when temporary injunction may be granted. The said Order 40 Rule 1 provides that:

"Where in any suit it is proved by affidavit or otherwise
(a) that any property in dispute in a suit is in danger of being wasted, damaged, or alienated by any party to the suit, or wrongfully sold in execution of a decree; or
(b) That the Defendant threatens or intends to remove or dispose of his property in circumstances affording reasonable probability that the Plaintiff will or may be obstructed or delayed in the execution of any Decree that may be passed against the Defendant in the suit. the court may by order grant a temporary injunction to restrain such act, or make such other order for the purpose of staying and preventing the wasting, damaging, alienation, sale, removal, or disposition of the property as the court thinks fit until the disposal of the suit or until further orders".

Further, the application was anchored under Sections 1A & 1B of the Civil Procedure Act which deals with the overriding objective of the Act which is to facilitate the just, expeditious, proportionate and affordable resolution of civil disputes.
The said Sections also provide that the Court has a duty to further the overriding objective in a suit and that Section 3A of the Civil Procedure Act donates to court the inherent power to make such orders as may be necessary for the ends of justice or to prevent abuse of the court process.
The respondents submitted that taking into account the totality of the facts and the law, the trial Court was alive to the fact that the injunctive orders sought are equitable reliefs which are granted at the discretion of the Court which discretion they maintained must be exercised judicially. In the celebrated case of Giella..vs..Cassman Brown & Co. Ltd 1973 EA 358, where the Court held that;

"The granting of an interim injunction is an exercise of judicial discretion and an appellate Court will not interfere unless it is shown that the discretion has not been exercised-judicially."

Further, in deciding whether to grant or not to grant the sought orders the Courts will be guided by the well settled principles for grant of injunction orders as stated in the Giella..vs..Cassman Brown-case (supra) where the Court held that.

"The conditions for grant of an interlocutory injunction are well settled in East Africa. First an Applicant must show a prima facie case with probability of success. Secondly, an interlocutory injunction will not normally be granted unless the Applicant might otherwise suffer See East Africa irreparable injury which would not adequately be compensated by an award of damages. Thirdly, if the Court is in doubt, it will decide on a balance of convenience. application on Industries..vs.. Trufood (1972)EA 420."

As the trial Court embarked on the analysis of available evidence in order to determine whether the orders sought were deserving or not and after such consideration the trial Court pronounced itself as follows:

"I have examined annexures 19 and to my mind I have no doubts that the suit properties were sold.....Considering the suit properties have already been sold, it follows that an injunction cannot be granted as you cannot injunct what has already occurred. Such a move is not only absurd but impracticable and consequently incapable of being obeyed or fulfilled. In the end I find the application lacking merit and hereby dismiss it with costs in favour of the 2 respondent."
The appellants case did not therefore satisfy any of the principles to consider before the granting of an injunction.

The respondents went on to submit that injunctions are granted to prevent a future event but not an event that has already occurred. The logic herein is that the purpose of injunction is to preserve the status quo and it is issued when there is an immediate danger to property by sale or other disposition.
The court fully agrees with that submission. An in junction cannot issue to stop an event that has already happened. If as is the case here that the sale had already happened, then an order for an injunction would have been ineffectual. In Janmohammed..vs..Kassman Ali Virji Madhani (1953) 20 LRK8 where it was held that:

"The purpose of temporary injunction is to preserve the status quo.

It is not in dispute that at the time of filing and obtaining orders stopping the public auction the suit vehicles had already been sold to a 3rd party.
The Appellant has however, alleged that the said sale was null and void and has gone further to allege the breach of statutory provisions and obligatory requirements but no evidence to support this claim has been advanced. Without tangible evidence, the Court-cannot hold that the said sale was improper, null and void.
In the circumstances of this case it would have been an exercise in futility for the trial court to injunct the 1st and 2nd Respondents-from-selling the suit vehicles. The two could not be ordered to stop a sale they had already completed.
In the case of Mavoloni- Company Ltd..vs..Standard Chartered Estate Management Ltd, Civil Application no.266 of 1997, the Court of Appeal held that:

"An injunction cannot be granted once the event intended to be injuncted has been overtaken by events.

The said vehicles had already been sold to a 3rd party ENKAY TRADING who was not a party to the suit. The suit was therefore overtaken by events since the property had already changed hands.
The respondents further contended that even if the court was to invoke the provisions of Section 1A, 1B and 3a of the Civil Procedure Act and issue any necessary orders such as would prevent further dealing with the suit vehicles, then the said orders would be against ENKAY TRADING who is the Purchaser of the suit vehicles and who was not a party to the suit. Issuing such orders would have amounted to condemning the said Purchaser unheard and that would be against the rules of natural justice.
It follows therefore that if the suit motor vehicles had already been sold and delivered to a 3^rd party not party to the suit, the trial court would be issuing orders in vain.
The respondents further maintained that the claim by the appellant that he had a legal and equitable interest in the suit vehicles and that he enjoyed a privileged position over the 2nd respondent was not supported by any evidence.

ANALYSIS AND DETERMINATION.

The view of this court is that the appellant having been accorded numerous opportunities to settle the matter amicably and failed to honour his promise to pay the storage charges and taking into account that the appellant had been served with the necessary notices, he was precluded from claiming that the sale was wrongful and that the equity of redemption he sought to invoke could not come to his aid.
The Appellant by failing to pay the amount demanded by the 2^nd respondent as a joint owner of the motor vehicles, he was prevented from recovery of the said motor vehicles under equity.
This court having carefully gone through the respective submissions of parties and taking into account the totality of the facts presented by the parties finds and holds that the appeal by the appellant cannot succeed.
The appellant does not dispute the fact that the motor vehicles were held in the custody of the 2^nd respondent and that the same were auctioned by the 1^st respondent under the instructions of the 2^nd respondent.
The appellant further concedes that the sale was made to offset storage and miscellaneous costs owed to the 2^nd respondent by the 3^rd and 4^th respondent who jointly co-owned the motor vehicles with the appellant.
The admission of that set of facts brings to the fore the question of ownership of the motor vehicles as at the time the appellant went to court seeking an injunction against the four respondents. The 1^st and 2^nd respondents maintained that the vehicles had already bee sold by the time the appellant went to court.
This court takes the view that the purchaser of the motor vehicles at the public auction ought to have been enjoined in the matter in order to defend their position regarding the ownership of the motor vehicles and the regularity of the procedure leading to the purchase of the same.
The appellant having failed to enjoin them to the suit sought to have the court issue orders against a third party who had already taken possession of the motor vehicles without giving him an opportunity to be heard.
The learned Honorable magistrate having closely considered the matter correctly found that the order for injunction could not issue in the circumstances against the four respondents.
An injunction by its very nature is meant to preserve the subject matter or property to allow parties an opportunity to ventilate their claim before the court.
In essence it is an order that would seek to freeze the asset so as to give an opportunity to the party claiming ownership of the same to establish ownership.
The principles of injunctions are well settled in the case of Giella Vs Cassman Brown and Co. Ltd 1973 EA 358. An injunction being a relief in equity before its issue the party seeking to benefit from the court’s discretion should be able to demonstrate that he has come to court with clean hands and that he has been vigilant and not guilty of laches.
The appellant in this case does not appear to this court to have come to equity with clean hands. His action of failing to conclude the payment agreement entered into between him and the 2^nd respondent portrays him as being a litigant who was not acting in good faith.
The 1^st and 2^nd respondents have forcefully argued that the appellant was duly informed by the 2nd respondents of the default by the 3^rd and 4^th respondents to pay up for repairs and storage.
The two respondents have gone further to state that indeed they entered into negotiations with the appellant seeking the appellant to pay charges in order for the 2^nd respondent to release the motor vehicle to him and that the appellant had failed to do so.
The appellant has not controverted those facts as stated by the 1^st and 2^nd respondents but has instead chosen to pursue the argument that since the motor vehicles were registered jointly between him and the 3^rd and 4^th respondents under the equity of redemption, the vehicles could not be attached and sold in an attempt to satisfy the outstanding storage charges owed to the 2^nd respondent by the 3^rd and 4^th respondents.
The position taken by the appellant is most surprising in that even though the appellant had the right to exercise the equity of redemption over the said motor vehicles his right could not in any way defeat the 2^nd respondents claim for storage and other costs given that the storage charges were incurred directly in connection with the two motor vehicles co-owned by the appellant, 3^rd and 4^th respondents. The 2^nd respondent was not engaged in charity thus he was entitled to receive payment for the services he rendered in connection with the motor vehicles.
The appellant being a joint registered owner of the motor vehicles together with the 3^rd and 4^th respondents, he was under an obligation to settle the storage charges and other costs owed to the 2^nd respondent in order for him to take possession of the motor vehicles.
To suggest otherwise would mean that the 2^nd respondent would not be able to recover his storage charges and costs. The would result into a travesty of justice against the 2^nd respondent. He who seeks equity must do equity. The 2^nd respondent having repaired the motor vehicle owned by the appellant and others, he was entitled to be paid by the appellant in order for him to release the motor vehicles to him.
Under Section 7 of the Disposal of Uncollected Goods Act the 2^nd respondent was only required to issue a notice of intended disposal of the uncollected motor vehicles.
The material on record indicates that value notices dated 17^th November 2020 and 19^th November were issued to the appellant requiring the appellant to take possessions of the motor vehicle after payments of the amounts owed by the 3^rd and 4^th respondents to the 2^nd respondent.
The key to redeeming the motor vehicles was basically in the pocket of the appellant. This court finds that had the appellant settled the amounts demanded by the 2^nd respondent that action would have put him in the exclusive control of the two motor vehicles and the matter between him and the 1^st and 2^nd would not have arisen at all.
Equity assists the vigilant. The appellant in this case was clearly indolent and he cannot therefore fault the 1^st and 2^nd respondents for basically applying the law by selling of the two motor vehicles by way of public auction to recover that which was lawfully due to them.
The learned Honorable magistrate applying the law and facts arrived at a correct finding in law that the orders of injunction could not be issued in favor of the appellant.
The appellant was not able to demonstrate that the subject motor vehicles were still in the custody of the 1^st and 2^nd respondents as at the time he filed the application. It was his duty to do so under Section 107 of the Evidence Act. Having failed to do so the lower court was entitled to act on the information provided and by the respondents that ownership hand changed and that they no longer had control over the vehicles.
In view of the above and having fully considered the arguments advanced by both parties and taking into account the evidence available, this court finds that there is no reason to interfere with the decision of the learned Honorable magistrate since the appellant had been given adequate notice to redeem the two vehicles and he deliberately chose not to do so.
He who seeks equity must do equity. The appellant by failing to pay the costs owed to the 2^nd respondents did not do equity and must therefore be consigned to the fate he chose.
His remedy lies in a civil suit against the 3^rd and 4^th respondents for the remainder of the purchase price that was due and owing to him as at the time the two motor vehicles were auctioned.
For the above reasons the appeal is therefore dismissed with costs to the 1^st and 2^nd respondents.
It is so ordered.

NCBA BANK (K) PLC VS GEOFFREY KANG' ETHE T/A KANG' ETHE ENTERPRISES AUCTIONEERS

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