James Omwoyo Nyangau v The Heritage Insurance Company & 2 others

3. Pursuant thereto, the appellant was duly served with the requisite statutory notices. The appellant, upon receiving the notices, pleaded for more time to redeem the loan, and also to be allowed to continue staying in the suit property, which requests were granted and reduced in writing. Prior to this, the suit property had been valued and the reserve price determined. However, the appellant was still unable to meet his part of the bargain. Accordingly, the suit property wasadvertised for sale and was indeed sold to the 2nd respondent on 23rd June, 2009, who in turn sold and transferred it to a third party by the name of Jane Alice Mutuota, who is not a party to these proceedings. The appellant then filed the suit, the precursor to this appeal, challenging the regularity of the auction. 4. In the third re-amended plaint dated 13th November, 2016, the appellant sought, inter alia: a permanent injunction restraining the 2nd respondent from interfering with the suit property by selling, charging, disposing or in any way whatsoever dealing with the suit property pending hearing and determination of the suit; a permanent injunction restraining the 2nd respondent from evicting or in any way interfering with the appellant’s possession of the suit property; a permanent injunction to restrain the intended 4th respondent from selling, charging, disposing or in any way whatsoever dealing with the suit property pending hearing and determination of the suit; a declaration that the sale and subsequent transfer of the suit property to the 2nd respondent was unlawful, irregular and illegal and the same be cancelled and the suit property revert to the appellant; general damages for illegal sale and transfer of the suit property, costs andinterest; and lastly an order that the 1st respondent do give the 50% rebate and/or discount on the loan facility. 5. In support of these prayers, the appellant alleged that had the 1st respondent accepted his proposal that it utilises the automatic 50 % rebate on the loan that he was entitled to upon his early retirement, as well as his other terminal benefits and his wife’s offer to partly settle the loan account through deductions from her salary with the Teachers Service Commission, the public auction would not have been necessary. Based on the foregoing, it was the appellant’s contention that the sale was, in the circumstances, illegal, unlawful, malicious, fraudulent and without reasonable or just cause. The appellant duly provided respective particulars thereof. Contemporaneously with the suit, the appellant took out an application against the respondents essentially to stop the intended auction and though he initially obtained an ex parte injunction which was thereafter extended from time to time, upon inter partes hearing, the application was dismissed. 6. The 1st and 3rd respondents filed a joint Re-amended Statement of Defence dated 22nd December, 2016, wherein they denied that they illegally, unlawfully, maliciously and fraudulently sold the suit propertyto the 2nd respondent as alleged and the particulars thereof. They contended that they sold the suit property to the 2nd respondent through a public auction in the exercise of the 1st respondent’s statutory power of sale. The two respondents pleaded further that the prayers sought by the appellant were not available as the suit property had already been sold and transferred to the 2nd respondent who deserved vacant possession. As regards the prayer for general damages, they averred that the same could not be awarded as the suit property had been sold through public auction in the 1st respondent’s exercise of its statutory power of sale. In the ultimate, they prayed for the dismissal of the suit with costs. 7. The 2nd respondent in her statement of defence dated 22nd December, 2016, averred that she purchased the suit property at a public auction upon emerging as the highest bidder. She denied the allegations of conspiracy and or fraud in the transaction and the particulars thereof. She averred that she paid in full the purchase price, after which the title to the suit property was processed and transferred to her. In turn, she had sold and transferred it to Jane Alice Mutuota, whom the appellant did not bother to make a party to thesuit. She accordingly prayed that the suit be dismissed with costs to her. https://new.kenyalaw.org/akn/ke/judgment/keca/2025/1453/eng@2025-07-31 2

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8. During the plenary hearing of the suit, the appellant testified on his own behalf whereas one, Jackson Mbuthia Kiboi, the 1st respondent’s Legal Risk and Compliance Manager testified on its behalf. Their evidence was a mere rehash of what we have already set out elsewhere in this judgment. 9. In its judgment delivered on 27th September 2018, the ELC found that the appellant had not proved his case and was therefore undeserving of the prayers sought in the plaint. The suit was accordingly dismissed with costs to the respondents. 10. Aggrieved by the judgment and decree, the appellant filed this appeal on the grounds that the ELC erred in law in failing to: consider his evidence but relied solely on the evidence of the respondents; to determine that the charge document was registered after the disbursement of the loan had been made and substantial recoveries made from the payroll; consider the submissions of the appellant and instead wholly relied on those of the respondents; determine the exact outstanding loan amount; to appreciate that rebate was granted by the 1st respondent to all members of staff who retired before as part of theretirement package; in relying on the 1st respondent's assertion that if the respondent could have applied all the appellant's terminal benefits towards the repayment of the loan it could have made him a pauper. 11. The appeal was canvassed by way of written submissions, with limited oral highlights. When it came up for plenary hearing, Mr. Mutua teaming up with Mr. Kiboi, learned counsel, appeared for the appellant whereas Mr. Kirui, learned counsel, appeared for the respondents. Counsel for the appellant submitted that by the 1st respondent’s own admission through its witness in the course of cross examination, it’s Human Resource Manual made a provision for a rebate of 50% on the mortgage accounts held by retiring employees. Counsel submitted that the appellant had provided evidence in the ELC of some of the 1st respondent’s retirees who had enjoyed the 50% rebate on their mortgage facilities upon retirement and which was not extended to him. 12. He relied on the cases of Justice Kalpana H Rawal Vs Judicial Service Commission and 3 others [2016] eKLR and Communication Commission of Kenya & 5 others Vs Royal Media Services & 5 others, SC petition Nos. 14, 14A.14B & 14C of 2014 to submit that the decision by the appellant to acquiesce to his forced retirement was informed by the understanding that he would enjoy 50% rebate on his loan facility as did those who retired before him. To the appellant, this was a legitimate expectation that was violated by the 1st respondent, which resulted in his default in loan repayment. It was his further submission that this Court should remedy the breach of the appellant's legitimate expectation by directing the 1st respondent to recalibrate the appellant's loan as at the date of his retirement with the 50% rebate on the loan repayment. Additionally, that any amounts outstanding be paid at an interest rate directed by the Court. It is the appellant’s submission that his claim was anchored on the hallowed right to property which the respondents conspired to arbitrarily deny him. 13. It was submitted that the 1st respondent’s contention that applying the appellant's terminal dues towards offsetting the mortgage amount would render him a pauper was without any legal foundation. That the appellant was well within his rights to determine how his terminal benefits were to be appropriated. The failure by 1st respondent to apply the same towards offsetting his loan amounted to violation of the appellant’s rights under Article 41 of the Constitution. Further, that the ELC was properly vested with jurisdiction to determine the issue of the appellant’s terminal benefits by dint of section 13 of the Environment and Land Court Act. That by failing to address its mind on the issue of the appropriation of the appellant’s terminal benefits towards offsetting the loan facility, the ELC was in error. https://new.kenyalaw.org/akn/ke/judgment/keca/2025/1453/eng@2025-07-31 3

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14. With regard to the public auction, it was the appellant’s submission that the question was which was the operative law at the time of the impugned sale by public auction. That as the charge document was registered under the Registered Land Act, it then followed that that was the applicable statute in settling any dispute around the auction, more specifically section 74 thereof. The ELC therefore erroneously applied section 99 of the Land Act, bringing into question the retrospective and prospective application of statutes. While relying on the cases of Samuel Kamau Macharia & Another Vs Kenya Commercial Bank Limited' & 2 others [2012] eKLR and Esta Kuto Vs Oriental Bank Ltd & 2 others [2016] eKLR, counsel submitted that the appeal raises serious question, not only on the unjust application of the appellant’s retirement benefits, but also the illegal public auction of the appellant’s suit property. Counsel therefore urged us to allow the appeal with costs. 15. On the part of the respondents, it was submitted by their counsel, Mr. Kirui, that the appellant secured a charge over the suit property in favour of the 1st respondent for a sum of Kshs.2,000,000. The said charge was the contract governing the loan agreement between the appellant and the 1st respondent. The suit property was sold on 23rd June 2009 to the 2nd respondent by way of public auction in the exercise of the 1st respondent’s statutory power of sale. That on 4th September 2009, the appellant filed an application seeking to challenge the auction but the said application was dismissed. The ruling in essence did not impugn the auction. It is noteworthy that the said ruling and order was never challenged on appeal or reviewed. Further, that the appellant's demand that the 1st respondent be compelled to give 50% rebate and/or discount is unavailable to the appellant. 16. That the issue of the appellant's terminal benefits was properly addressed by the ELC when it rightly acknowledged that it was divested of jurisdiction to entertain it. That the ELC had limited jurisdiction to hear and determine only matters relating to the regularity of the sale and transfer of the suit property. That the ELC's jurisdiction is limited to hearing and determining disputes relating to the environment, the use and occupation of, and title to land. 17. The ELC was therefore divested of jurisdiction to hear the issue of terminal benefits due to the appellant pursuant to section 13 of the ELC Act. That only the Retirement Benefits Authority (the RBA) and the Retirement Benefits Appeals Tribunal (the Tribunal) were clothed with such jurisdiction. Indeed, the record shows that the appellant, dissatisfied with the terminal dues offered to him by the 1st respondent, lodged a formal complaint against it with the RBA, which complaint was heard and a decision rendered thereon. The 1st respondent duly complied with the decision and paid out the determined terminal benefits. 18. Given the foregoing it could not have been expected that the ELC would again interrogate the issue counsel submitted on. Counsel went on to submit that the charge document was the only instrument guiding the loan arrangement between the appellant and the 1st respondent. Nothing in the instrument obligated the 1st respondent to apply any retirement benefits of the appellant towards settling the loan account. 19. On whether the appellant was entitled to 50% rebate on the loan facility, counsel submitted that the ELC was divested of jurisdiction to hear and determine the issue. That the ELC rightly acknowledged the fact and properly declined to deal with it as it had nothing to do with the regularity of the sale and transfer of the said suit property. For this proposition the respondents relied on the case of Mursal & Another V Manese (Suing as The Legal Administrator of Dalphine Kanini Manesa) (Civil Appeal E20 of 2021) [2021] KEHC 282 (KLR) (6 April 2022). 20. On legitimate expectation, counsel submitted that the burden of proof was on the appellant to demonstrate some rational and objective reason for his claim of legitimate expectation. Counsel relied https://new.kenyalaw.org/akn/ke/judgment/keca/2025/1453/eng@2025-07-31 4

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on the cases of Republic v Commissioner of Domestic Taxes & Another, exparte Kenton College Trust (2013) eKLR and Teresa Carlo Omondi vs Transparency International-Kenya [2017] eKLR, to submit that no claim for legitimate expectation had been established by the appellant. That there was no express, clear unequivocal representation to the appellant that upon termination or otherwise of his employment he was as of right entitled to 50% rebate. That during trial, the 1st respondent. through its witness, confirmed that the Human Resource Manual of the 1st respondent gave it the discretion of granting a rebate of 50% on loan accounts held by its retiring employees. Counsel clarified that the grant of rebate was conditional that the person eligible for rebate would be one who consistently serviced the loan and was not in arrears at the time of retirement, which was not the case with the appellant. That in any event, the benefit had since been withdrawn. That the auction happened 2 years later, after the appellant had left employment and long after the benefit had been withdrawn. Finally, counsel submitted that the appellant had failed to produce any document to confirm that he was entitled to or qualified for the rebate. 21. Contrary to the appellant’s assertion that the court was vested with jurisdiction by dint of section 13 of the ELC Act to address the issue of the application of his terminal benefits and rebate, the respondents’ position was that the right invoked relates to the right to fair labour practices which fall within the jurisdiction of the Employment and Labour Relations Court (“the ELRC”) and not the ELC. That the guiding instrument was the charge which included a term that the sum secured would be paid by way of monthly instalments until payment in full. It was a further term that in the event of a default by the appellant, the 1st respondent would exercise its statutory power of sale upon issuing the requisite notice and clearly therefore, the charge document had no provision for rebate. 22. Consequently, the 1st respondent had no obligation whatsoever to accede to the appellant's request regarding the rebate. Further, that the appellant's employment was terminated when he had not fully repaid the loan together with interest. That upon termination of employment, the appellant made several requests to be granted time to pay the outstanding loan, which was a clear manifestation that he was indebted to the 1st respondent. Notably, the loan balance as at the time of issuing instructions to sell the suit property was Kshs.2,738,613. The ELC rightly considered that the appellant was indebted to the 1st respondent and accordingly proceeded to consider the merits of the sale 23. As to which statute was applicable, counsel submitted that the auction was carried out under the Registered Land Act, (now repealed). That the challenge to the auction has always been under the said Act and not the Land Act as claimed by the appellant. That the ELC only made reference to the Land Act when answering the question of the delay by the 1st respondent’s lawyers in remitting part of the purchase price to it. The question then is whether the auction was conducted in strict compliance with the provisions of the said statute as it was still in force. That the 3rd respondent, upon receipt of instructions from the 1st respondent, proceeded to serve the appellant with a statutory notice dated 9th April 2009 through his wife in the presence of Mr. Nyangito, who was then the appellant’s advocate. Service of the notices has never been disputed. Counsel further submitted that having issued the requisite notice, the 3rd respondent, acting on the 1st respondent's instructions, proceeded to sell the suit property. That the upshot of the foregoing was that the appellant failed to prove that the auction was conducted irregularly or that he is deserving of the damages sought. That in any event, had the appellant proved any irregularity in the auction, the only remedy available to him would have been damages against the 1st and 3rd respondents in terms of section 77(3) of the Registered Land Act that was still in force then. The respondents’ parting shot was for us to dismiss the appeal with costs. 24. We have considered the appeal, submissions by the respective counsel, authorities cited, and the law. This being a first appeal, parties are entitled to and indeed expect re-evaluation and re-consideration of the evidence tendered in the ELC afresh and a determination thereon by this Court, of course bearing https://new.kenyalaw.org/akn/ke/judgment/keca/2025/1453/eng@2025-07-31 5

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in mind that it did not see witnesses testify and therefore give due allowance for that. See the case of Gitobu Imanyara & 2 others v Attorney General [2016] eKLR. 25. With our above mandate in mind, we deem the following to be the issues for our determination: whether the appellant was indebted to the 1st respondent; whether the appellant had legitimate expectation that he would be entitled to a 50% rebate on his loan facility upon retirement; and whether the auction, in the circumstances, was legal and final. 26. From the record, the appellant was an employee of the 1st respondent as the deputy section head, credit control section in the accounts department from 1st February 2002. Whilst in the employment, the appellant was entitled to benefit from a loan scheme for staff established by the 1st respondent, amongst other benefits. The appellant duly applied for the facility for purposes of purchasing the suit property. The application was successful and the amount was disbursed to the appellant, and was to be recovered through monthly payroll deductions by the 1st respondent. 27. A charge was created against the suit property in favour of the 1st respondent and as at October 2007, the total amount that had been advanced to the appellant when the charge was registered was Kshs.2,718,000. According to the appellant, as at that time, he had so far paid through check-off system a sum of Kshs.735.714/ including interest at the rate of 8% per annum, leaving a balance of Kshs.1,983,286, which was rounded off to Kshs.2,000,000/. He was, however, unexpectedly put on forced retirement and his loan account fell into arrears. Threatened with the possible auction of the suit property by the 1st respondent in the exercise of its statutory power of sale, the appellant tried all means to redeem the loan first by requesting for more time to reorganize his affairs and secondly, to be allowed to continue staying in the suit property for sometime, which requests were granted. He further proposed that his personal emoluments and terminal benefits be applied to offset the outstanding loan and any other or further balance thereof be offset by a special arrangement through his wife, an employee of Teachers Service Commission. 28. From what we have set out above, the first issue is automatically answered in the affirmative that yes, indeed the appellant was indebted to the 1st respondent. This conclusion is buttressed further by the fact that both parties are in agreement that at the time of retirement, the appellant was indeed indebted to the 1st respondent to the tune of Kshs.2,000,000. which amount continued to accrue interest. The only point of departure was the mode and manner of redemption of the loan; with the appellant putting forth the above proposals which, however the 1st respondent found unacceptable. 29. On the second issue, it is clear that the 1st respondent exercised its discretion to send the appellant into early retirement. The appellant, though, had entered into an agreement with the 1st respondent which created a charge over his property and the conditions and model of payment of the loan were clearly stipulated in the charge document. We are in agreement with the ELC that this was the only document that regulated and governed their relationship and operations with regard to the loan, and nothing more. 30. In the case of Damondar Jihabhai & Co. Ltd v Eustace Sisal Estates Ltd [1967] EA 153, it was held that; “ The function of courts is to enforce and give effect to the intention of the parties as expressed in their agreement. In the English Court of Appeal case above – Globe Motors Inc & others vs TRW Lucas Electric Steering Ltd & Others (supra) – Lord Justice Beatson stated as follows: ‘Absent statutory or common law restrictions, the general principle of the English law of contract is [that parties to a contract are free to determine for themselves https://new.kenyalaw.org/akn/ke/judgment/keca/2025/1453/eng@2025-07-31 6

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what obligations they will accept]. The parties have the freedom to agree whatever terms they choose to undertake, and can do so in a document, by word of mouth, or by conduct.’” 31. In the absence of any other instrument amending or rescinding, the terms and conditions of the charge document, the ELC had no other document to rely on. The appellant’s contention that it was automatically subject to a 50% rebate upon his retirement has no factual or legal basis. We have carefully read through the charge document and have not found any provision or clause providing for automatic rebate of 50% on loans advanced to the 1st respondent’s employees upon early retirement. We are keenly aware that oral evidence cannot be used to vary the terms of a written agreement, especially when the written agreement, as in this case, was intended to be a complete and final expression of the parties’ intentions. This principle is commonly referred to as the parole evidence rule. This is exactly what the appellant was attempting to do with this line of his oral evidence, which is reprehensible. Even the assertion by the appellant that the 1st respondent declined to go along with his proposal on the basis that it would have rendered him destitute is therefore neither here nor there in the circumstances. 32. It may well be true that some employees of the 1st respondent who, just like the appellant, were retired early received a 50% rebate on their outstanding loan. However, tendering their names alone in evidence does not constitute proof or establish a tradition to found a legitimate expectation. We also note that the issue of legitimate expectation was really not specifically pleaded in the ELC, nor was it made a specific ground in this appeal. It only emerged in the written submissions of respective counsel. We would ordinarily have refused to entertain the ground at this stage. However, we are constrained to do so on the basis that despite our misgivings aforesaid, the plea was easily inferable, discernable and or could easily be implied from the pleadings, evidence and respective submissions. 33. So, what is the doctrine of legitimate expectation? In The case of Canada (Attorney General) v Mavi, [2011] 2 SCR 504, the Supreme Court of Canada stated the doctrine thus: “ (68) 34. Where a government official makes representations within the scope of his or her authority to an individual about an administrative process that the government will follow, and the representations said to give rise to the legitimate expectations are clear, unambiguous and unqualified, the government may be held to its word, provided the representations are procedural in nature and do not conflict with the decision maker’s statutory duty. Proof of reliance is not a requisite.” In the Kenyan case of Republic v Commissioner of Domestic Taxes & Another (supra) the principle was stated thus: “ The law does not protect every expectation but only those which are 'legitimate'. The requirements for legitimacy of the expectation, include the following: i. The representation underlying the expectation must be 'clear, unambiguous and devoid of relevant qualification; ii. The expectation must be reasonable; iii. The representation must have been induced by the decision-maker; iv. The representation must be one which it was competent and lawful for the decision-maker to make without which the reliance cannot be legitimate.” https://new.kenyalaw.org/akn/ke/judgment/keca/2025/1453/eng@2025-07-31 7

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35. Furthermore, in the case of Teresa Carlo Omondi vs Transparency International-Kenya (supra), the court observed that “...the legitimate expectation is not the same thing as anticipation, desire or hope. It is a principle based on a right, grounded on the larger principles of reasonableness and fair dealing between employers and employees. The employee must demonstrate some rational and objective reason, for the expectation. The representation underlying the expectation must be clear and unambiguous. The expectation must be induced by the decisionmaker….” 36. Finally, the Supreme Court of Kenya in the case of Communications Commission of Kenya & 5 Others v Royal Media Services & 5 others SC Petition Nos 14, 14A, 14B & 14C of 2014, observed that: “ Legitimate expectation would arise when a body, by representation or by past practice, has aroused an expectation that is within its power to fulfil. Therefore, for an expectation to be legitimate, it must be founded upon a promise or practice by public authority that is expected to fulfill the expectation.” 37. Relying on these cases, the 1st respondent submitted and we agree with it entirely that no claim for legitimate expectation was established by the appellant. That there was no express, clear unequivocal representation to the appellant that upon termination or otherwise of his employment, he was as of right entitled to 50% rebate. Indeed, during trial, the 1st respondent confirmed that its Human Resource Manual granted it the discretion of granting a rebate of 50% on the loan to the retirees. That the grant was, however, conditional that the person eligible for such rebate would have consistently serviced the loan and was not in arrears at the time of separation. However, this was not the case with the appellant. Flowing from the foregoing, it is very clear that there was no legitimate expectation in the strict sense of the word to the extent that even if there was, it was discretionary. There cannot be a valid legitimate expectation if it was dependent on the whims of the honchos of the 1st respondent. 38. Lastly, the 1st respondent was a private entity. It would appear from the above authorities that in Kenya, the doctrine of legitimate expectation, is generally applicable to public entities, not private ones. It is primarily concerned with protecting individuals and their interactions with the public, rather than private entities. While private entities are expected to act fairly and predictably in their dealings, the concept of legitimate expectation as a legal principle is not typically extended to them. Either way, and given the circumstances of this case, even if it was applicable to private entities, the threshold could not have been met. The doctrine was not therefore available to the appellant. 39. As to the third issue, we agree with the finding of the ELC and the appellant’s submissions that the question was, what was the operational statute law at the time of the impugned sale? The charge document was registered under the Registered Land Act, t the impugned auction was conducted in the month of June 2009, and the current Land Act came into force on 2nd May 2012. It then follows that the statute that ought to have been applied in settling any dispute around the auction was the Registered Land Act, more specifically section 74 thereof. The ELC did not at all invoke the Land Act in resolving this dispute as incorrectly submitted by counsel for the appellant. The only instance that the ELC made reference to section 99 of the Land Act was with regard to the events post the purchase of the suit property by the 2nd respondent, and by then, the Registered Land Act had been repealed and replaced by the current Land Act. 40. The ELC specifically referred to section 99 of the Land Act while addressing the issue of the 2nd respondent and the fact that part of the purchase price had been withheld by the advocates of the 1st https://new.kenyalaw.org/akn/ke/judgment/keca/2025/1453/eng@2025-07-31 8

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respondent, awaiting the 2nd respondent to obtain vacant possession of the suit property, and when the same was remitted, it was backdated in the loan account to the date of the auction. This position was in support of the fact that if the auction was to be found invalid or wanting, then there was a remedy for the appellant under the Act, and that position is anchored in section 99(4) of the Land Act. To that extent the ELC did not err in its conclusions. 41. It is clear from the record that the 1st respondent informed the appellant of its intention to exercise its statutory power of sale with regard to the suit property to recover the outstanding amount on the loan. There is no evidence that the appellant made good the outstanding amount, after the said notice. This culminated in the 3rd respondent, pursuant to instructions from the 1st respondent, issuing the appellant appropriate notices, which were served upon him through his wife in the presence of his advocate. The suit property was then advertised for sale by public auction in the Kenya Times Newspaper dated 6th June, 2009. This action precipitated the appellant’s filing of an application seeking injunctive orders against the sale of the suit property, but the application was dismissed, and it is clear that there was no appeal against the said ruling. 42. Taking all the foregoing into account, there is nothing remotely supporting the appellant’s contention that the auction was improper and as such we dismiss that argument, just like the ELC did. We agree with the ELC that the 2nd respondent acquired legal title to the suit property which must be protected as the chargor’s equity of redemption lapsed immediately upon the fall of the hammer. 43. In the case of Captain Patrick Kanyagia & another v Damaris Wangechi & 2 Others [1995] KECA 100 (KLR), this Court held that: “ When does the title pass; putting it another way: when does the right of redemption vested in the mortgagor come to an end?... It is clear therefore that Muchemi’s equity of redemption came to an end when the Kanyagias signed the contract of the sale and not later. However, it is not in dispute that even registration of the title of the Suit Property in favour of the Kanyagia’s has also been effected”. 44. Based on the foregoing, we are satisfied just like the ELC was, that upon the fall of the hammer, a valid contract was concluded as between the 1st and 3rd respondents and the 2nd respondent which can only be rescinded and or set aside upon proof of fraud. Though the appellant specifically pleaded illegalities, malice and fraud in the exercise of the 1st respondent’s statutory power of sale and gave respective particulars thereof, no shred or scintilla of evidence was tendered in support thereof. In the end, the finding of the ELC cannot be impugned. Besides, even if the appellant was able to prove any irregularities in the manner the auction was conducted, which he failed to do, he would only be entitled to an award of damages against the 1st and 3rd respondents and not the nullification of the auction. 45. In any event, it seems quite clear to us that a purchaser of property sold in the exercise of a chargee’s statutory power of sale is protected even in cases where the person had actual notice that the chargee had not properly exercised that statutory power of sale in terms of procedure. 46. Further, even assuming that the auction was not properly conducted as alleged by the appellant, unless it is demonstrated that the 2nd respondent was privy to the fraud or other irregularities in the disputed auction, the sale of the suit property cannot be impugned. This Court in Captain Patrick Kanyagia and Another v Damaris Wangeci and others, (supra) held that there is no duty cast, in law, on an intending purchaser at an auction sale, properly advertised, to inquire into the rights of the mortgagee to sell. This position was also reiterated by this Court more recently in David Katana Ngomba v Shafi Grewal Kaka [2014] eKLR. From the foregoing, it follows that there was no proper legal or factual basis upon which the ELC could have held that the auction was unlawful or irregular, as it was being invited to. https://new.kenyalaw.org/akn/ke/judgment/keca/2025/1453/eng@2025-07-31 9

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47. Ultimately, it is our finding that this appeal is devoid of merit, and it is accordingly dismissed with costs to the respondents. DATED AND DELIVERED AT NAIROBI THIS 31ST DAY OF JULY, 2025. D.K. MUSINGA, PRESIDENT ............................. JUDGE OF APPEAL ASIKE-MAKHANDIA ............................. JUDGE OF APPEAL MUMBI NGUGI ............................. JUDGE OF APPEAL I certify that this is a true copy of the original Signed DEPUTY REGISTRAR https://new.kenyalaw.org/akn/ke/judgment/keca/2025/1453/eng@2025-07-31 10

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