James Francis Kariuki v Mathew Ndau Kanyi
The bottom line
#Kenya's Court of Appeal confirmed that auctioneers jointly hired must split commissions equally when no sharing formula was agreed.
What this practically means
#Executive summary
#Key legal issues
#Privity of contract between jointly instructed auctioneers
The tripartite arrangement between the Receiver and the two auctioneers created contractual obligations as between the auctioneers themselves, including an obligation on one to share the commission with the other.
The Receiver's letter of 23rd June 1995 instructed both firms jointly, provided for a single commission payable as if one auctioneer was retained, and required the two firms jointly to determine its sharing. The defence plea that each auctioneer should look separately to the Receiver was rejected; the effect of the tripartite agreement was that the Receiver owed the joint commission and the auctioneers owed sharing obligations inter se.
Implied term as to sharing of commission
In the absence of an agreed sharing formula or instructions communicated to the Receiver, the law implies an intention that the commission be shared equally.
The letter required the auctioneers jointly to determine the sharing and communicate it to the Receiver. No agreement was reached and no instructions were communicated. The court therefore implied an equal division, consistent with the joint retainer and the single-commission scheme stipulated by the Receiver.
Consequences of wrongful retention of sale proceeds
By retaining Kshs. 687,000 out of the proceeds instead of paying them intact to the Receiver, Ndarugu pre-empted the payment mechanism and became directly liable to Panama for Panama's 50% share of the commission.
The instructions required all cash proceeds to be banked intact and no item released until payment in full was received and banked. Ndarugu's retention of Kshs. 687,000 breached both the contract with KFC and its obligations vis-à-vis Panama, converting Ndarugu's obligation into direct liability for Panama's share.
Legal principles established
#- Where two auctioneers are jointly instructed under a single commission to be shared between them and no sharing formula is agreed or communicated to the instructing party, an equal sharing of the commission is implied.
- An auctioneer instructed that all proceeds be banked intact who wrongfully retains part of the proceeds in breach of the instructions becomes contractually liable to pay the other jointly instructed auctioneer that auctioneer's share of the commission.
Court orders
#- 1.The appeal is dismissed with costs
- 2.The judgment and order of Aganyanya J delivered on 27th February 2002 and 14th March 2002 respectively are upheld
- 3.Ndarugu shall pay interest to Panama at court rates from the date of the judgment until payment in full
- On appeal from
- High Court of Kenya, Nairobi
- H.C.C.A. No. 342 of 1998
- Jurisdiction invoked
- First appeal to the Court of Appeal under the Court of Appeal's appellate jurisdiction (judgment, order and decree of the High Court)
Key timeline
#Practical implications
#Frequently asked questions
#Cite this brief
#Cite this brief
Caselaw, "James Francis Kariuki v Mathew Ndau Kanyi", Case Analysis (2008). Civil Appeal No. 224 of 2002. Source: https://new.kenyalaw.org/akn/ke/judgment/keca/2008/247/eng@2008-02-15
Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.