Nyakinyua Mugumo Tree Co. Ltd v Joseph Mwangi Gichuhi & 6 others [2021] KEELC 3531 (KLR)
The bottom line
#The Kitale Environment and Land Court refused to stop a completed land auction but ordered the auctioneers to account for the sale proceeds within 30 days.
What this practically means
#Executive summary
#Key legal issues
#Whether stay of execution could be granted
The prayer for stay was refused: it was res judicata, having been determined in a ruling of 15/10/2020, and in any event the suit property had already been sold by public auction on 05/11/2020 and no objection to the sale was raised; the Applicant also failed to demonstrate merits, irreparable harm and balance of convenience, and there was inordinate delay.
The Court found the identical prayer for stay of the intended auction of LR No. 1803 was previously heard and dismissed in a ruling of 15/10/2020, invoking Section 7 of the Civil Procedure Act and the Uhuru Highway authority on res judicata in applications. Independently, the Court found on the auctioneers' documents that the property was sold on 05/11/2020 to third parties without objection, and that the Applicant failed the merits, substantial loss and balance of convenience tests, with inordinate delay since judgment of 06/09/2016.
Whether a joint account should be opened for deposits towards the decree
The prayer was untenable because the decretal sum appeared realized from the auction; the Court instead directed the auctioneers to account for the proceeds.
The Court found the property sold for Kshs. 35,200,000.00 against a decree of Kshs. 18,355,825.00, making the sale fait accompli. It invoked Rule 18(4) of the Auctioneers Rules 1997 imposing a duty on the auctioneer to remit proceeds less charges to the court or instructing party. Since the Respondents were the instructing client, the Court required the Respondents to demonstrate whether the decretal sum was satisfied and account for the balance, rendering the joint account prayer untenable.
Whether the Applicant should be granted 6 months to settle the decretal sum by instalments
No instalment or extension order was granted; the Applicant failed to evidence possession of Kshs. 5,000,000.00 or bona fide deposits, though the Court gave the benefit of doubt as to intentions.
Applying Order 21 Rule 12 of the Civil Procedure Rules and the Keshvaji Jethabhai and Hildegard Ndalut principles, the debtor must show bona fides by arranging prompt payment of a fair proportion. The Court noted no evidence of deposits or of the Kshs. 5,000,000.00 being within reach, treating the claims with circumspection. While acknowledging COVID-19 hardship, no express instalment order issued; only consequential directions for accounting and a mention were made.
Legal principles established
#- The doctrine of res judicata applies to applications; once a prayer has been heard and determined it cannot be re-litigated in a fresh application.
- Upon entry of judgment the judgment-debtor must settle the decretal sum immediately unless by consent or court order the mode of payment is varied; instalment orders require demonstration of bona fides by prompt payment of a fair proportion.
- An auctioneer has a statutory duty to remit sale proceeds, less charges, to the court or the instructing party with an itemized account.
Court orders
#- 1.Lifewood Traders Auctioneers shall deposit before this Court a statement of accounts together with an account of the proceeds of the sale within 30 days from the date of this order
- 2.Parties herein shall fix a mention date after 30 days of this order for further directions
- Jurisdiction invoked
- Sections 1A, 1B, 3 and 3A of the Civil Procedure Act and Order 51 Rule 1 of the Civil Procedure Rules
Key timeline
#Practical implications
#Frequently asked questions
#Cite this brief
#Cite this brief
Caselaw, "Nyakinyua Mugumo Tree Co. Ltd v Joseph Mwangi Gichuhi & 6 others [2021] KEELC 3531 (KLR)", Case Analysis (2021). Application by Motion on Notice dated 11/02/2021 (pending suit on land parcels LR Nos. 1803 and 7393). Source: https://new.kenyalaw.org/akn/ke/judgment/keelc/2021/3531/eng@2021-05-03
Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.