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ELRCAllowedCause No 1314 of 2011· [2015] KEELRC 1037 (KLR)

Peter Mbugua Kanoi & 5 others v Coffee Board of Kenya & another [2015] KEELRC 1037 (KLR)

Employment and Labour Relations Court (Industrial Court) of Kenya
25 May 2015
1,925 words in judgment
View original judgmentRead on Kenya Law Watch case
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The bottom line

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What this practically means

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Executive summary

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The Interested Party, an auctioneer, moved the court by Notice of Motion dated 27th November 2014 seeking to set aside or vary ex parte orders granted on 17th November 2014, and seeking declarations that the Judgment Debtor must pay agreed auctioneers' fees of Kshs.2,000,000 outstanding from the first phase of attachment and Kshs.1,050,000 for the second phase, without taxation. The applicant asserted that he was instructed to execute a decree of Kshs.17,882,095.70, attached motor vehicles in two phases, and agreed fees of Kshs.3,200,000 for the first phase; the Judgment Debtor paid Kshs.200,000 in cash and Kshs.1,000,000 by RTGS and issued an unsigned cheque for Kshs.3,200,000. The Respondent, through its Legal Officer Marjory Mwangi, denied committing to the charges, contending the cheque was issued only to stop execution and that the bill required taxation. Justice Hellen Wasilwa framed the question as whether there was a commitment to pay the agreed fees and whether it was proved. Applying Section 120 of the Evidence Act and estoppel authorities, she held the unsigned cheque operated as a lien and proof of the debt, inducing the auctioneer to stay execution, and that the parties had agreed the fees. The court allowed the application, set aside the ex parte order of 17th November 2014 to the extent that the fees shall not be taxed but paid as agreed, held the application of 24th October 2014 overridden, directed release of attached property upon payment of the auctioneers' charges, and awarded costs to the applicant against the Respondents.

Key legal issues

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01

Whether an unsigned cheque issued to an auctioneer constitutes a binding commitment to pay the agreed fees

Holding

Yes. The issuance of the unsigned cheque, together with part payment in cash and by RTGS, induced the auctioneer to stay execution and constitutes a commitment; the Judgment Debtor is estopped from denying the agreed figure of Kshs.3,200,000

Reasoning

The court found that the Judgment Debtor issued an unsigned cheque of Kshs.3.2 million which caused the execution process to be stayed, and on the same date paid Kshs.200,000 in cash, followed by Kshs.1 million by RTGS. The Respondents did not deny issuing the cheque, only contending it was issued to stop execution. Invoking Section 120 of the Evidence Act and the estoppel authorities, the court held the auctioneer believed the fees had been agreed and acted on that belief by staying execution, so the commitment is binding.

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02

Whether the auctioneers' fees should be taxed before the Deputy Registrar

Holding

No. The fees were agreed between the parties and are not subject to taxation; the ex parte order directing taxation was set aside to that extent

Reasoning

Applying the estoppel principle, the court found the parties had agreed on the fees for both phases of attachment. Relying on the Court of Appeal decision on agreed fees in an election petition, the court held that a party who has agreed on a fee threshold cannot go back and subject the bill to higher taxation. The ex parte order of 17th November 2014, obtained without the auctioneer having been enjoined, was therefore set aside to the extent that it required taxation.

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Legal principles established

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  • The doctrine of estoppel precludes a person from denying a commitment where his conduct, including issuance of a cheque, induced another to act to his detriment
  • An unsigned cheque issued towards agreed fees operates as a lien and proof of the amount owed and payable later

Court orders

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  1. 1.The ex parte order dated 17th November 2014 is set aside to the extent that the Auctioneers' fees will not be taxed but shall be paid as already agreed upon by the parties, being Kshs.3,200,000 in the 1st phase of attachment less Kshs.1.2 million already paid
  2. 2.Kshs.1,050,000 is payable for the 2nd phase of attachment
  3. 3.The application dated 24/10/2014 is overridden by the ruling herein and the consent of the parties dated 29/1/2015
  4. 4.Any attached property should be released to the Judgment Debtor upon payment of the Auctioneers' charges
  5. 5.The Respondents to pay the costs of the application

Authorities

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Legislation

  • Civil Procedure RulesOrder 51 Rules 1, 3 and 15
  • Civil Procedure ActSection 3A
  • Civil Procedure ActSection 63(e)
  • Evidence Act Cap 80 Laws of KenyaSection 120

Cases cited (2)

  • Brown vs Westminster Bank Limited
    [1964] 2 Lloyd's Rep 187, Legal Decisions Affecting Bankers 2986
  • Civil Appeal No. 17 of 2013 (Nyeri)
Jurisdiction invoked
Order 51 Rules 1, 3 and 15 of the Civil Procedure Rules, Section 3A and Section 63(e) of the Civil Procedure Act

Key timeline

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Practical implications

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Frequently asked questions

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Cite this brief

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Cite this brief

Caselaw, "Peter Mbugua Kanoi & 5 others v Coffee Board of Kenya & another [2015] KEELRC 1037 (KLR)", Case Analysis (2015). Cause No 1314 of 2011. Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2015/1037/eng@2015-05-25

Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.