Development Bank of Kenya Limited v Nicholas Kiplimo Lagat & 1 other

or that sale proceeds were insufficient. It was further averred that the sale had been stopped by the Appellant bank, a fact known to the auctioneer, and therefore no fees were due. 4. The Appellant maintained that the bill of costs as drawn was exaggerated, unsupported by evidence, and contrary to the Fourth Schedule of the Auctioneers Rules. It faulted the trial court for exercising its discretion improperly in taxing the bill at Kshs. 114,400/=. 5. The 2nd Respondent, through a replying affidavit sworn on 13th September 2024, opposed the application. He admitted the background facts but maintained that the appeal was frivolous, vexatious, and intended to delay settlement of his properly taxed costs. 6. He contended that the learned magistrate committed no error of law or fact in holding both the Appellant and the 1st Respondent jointly and severally liable for his fees, and that the Appellant’s interpretation of Rule 7 of the Auctioneers Rules was flawed. According to him, the rule operates only after assessment of costs, and both the debtor and the instructing creditor must be parties to the taxation since the creditor becomes liable if the debtor cannot be found or is insolvent. 7. The 2nd Respondent relied on Kipkorir, Tito & Kiara Advocates v Deposit Protection Fund Board [2005] eKLR and Co-operative Bank of Kenya Ltd v Jeofrick N. Muinde t/a Kimu Auctioneers [2019] eKLR, among other authorities. He further stated that the 1st Respondent never participated in the taxation, which increased the likelihood that the Appellant would bear liability, and maintained that the bill was properly drawn and taxed in accordance with the Fourth Schedule. 8. He therefore urged the court to dismiss the appeal with costs, terming it an abuse of process and an unwarranted attempt to deny him the fruits of his taxed costs Analysis and Determination 9. The Appellant filed written submissions dated 29th August 2025, while the 2nd Respondent filed submissions dated 12th September 2025. I have considered the pleadings, affidavits, and submissions of the parties. 10. The background of this dispute is that the 2nd Respondent filed a bill of costs dated 9th September 2022 in Milimani CM Misc. Application No. E1260 of 2022: Joseph Gikonyo t/a Garam Investments v Nicholas Kiplimo Lagat & Development Bank of Kenya Limited, arising from instructions by the Appellant to sell the 1st Respondent’s property. Vide a ruling delivered on 20th March 2024, Hon. Lucy Ambasi (CM) taxed the bill at Kshs. 114,400/=. 11. The core issue for determination is whether the learned magistrate erred in law or fact in taxing the auctioneer’s bill of costs as she did and in holding the Appellant liable to pay the same jointly and severally with the 1st Respondent. 12. The Appellant’s case rests on Rule 7 of the Auctioneers Rules, 1997, which provides that: “ A debtor shall pay the charges of the auctioneer unless— a. that debtor cannot be found; or b. he has no goods upon which execution can be levied; or c. the sale proceeds are insufficient to cover the charges, in which cases the creditor shall pay the charges or the deficiency thereof.” https://new.kenyalaw.org/akn/ke/judgment/kehc/2025/16521/eng@2025-10-09 2

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13. The effect of this rule is to make the debtor primarily liable for the auctioneer’s fees, subject to the stated exceptions. However, courts have consistently interpreted the provision in light of the particular circumstances giving rise to the auctioneer’s instructions. 14. In Youth Enterprise Development Fund board v Macharia t/a Platinum Auctioneers (Miscellaneous Civil Application E118 of 2021) [2022] КЕНС 9913 (KLR) (8 July 2022), the Court held that where an auction is called off at the instance of the instructing party, that party becomes liable to pay the auctioneer’s fees. The Court stated that: “ However, the Appellant was the instructing party in this case. Vide a letter dated 31st January, 2018, the Appellant instructed the Auctioneers to seize/repossess, and sell land title no. Dagoretti/Riruta/1280. It is not in dispute that the auctioneers proceeded to act as instructed..... The sale was called off, meaning that the instructing party was to pay for the instructions given out. Having regard to the above extract of the ruling, this court finds that the party liable to settle the auctioneer's costs is the instructing party in the suit that gave rise to the execution, which was West Mont Power (K) Ltd..." 15. The above position was reiterated in Kenya Oil Company Limited v Jovan H Kariuki t/a Moran Auctioneers [2020] КЕНС 7688 (KLR), the Court stated: “ Be that as it may, this court is still minded, in the interest of justice, to address the pertinent question of who should pay the auctioneers' fees in this case. "From the proceedings, the auctioneer could have recovered his fees from the debtor if the sale went through. He is entitled to fees for work done. The sale was called off, meaning that the instructing party was to pay for the instructions given out. Having regard to the above extract of the ruling, this court finds that the party liable to settle the auctioneers' costs is the instructing party in the suit…” 16. The principle that emerges is that an auctioneer is entitled to fees for work done, and where the instructing party withdraws or cancels the sale, it bears responsibility for the auctioneer’s charges. 17. In the present case, the evidence shows that the Appellant instructed the 2nd Respondent to sell the 1st Respondent’s property to recover an outstanding debt. The 2nd Respondent proceeded to advertise the property for sale. However, the Appellant later instructed him not to proceed with the auction. The record further indicates that the Appellant had acknowledged its obligation to settle the auctioneer’s charges before the bill of costs was filed. 18. In those circumstances, the learned magistrate correctly found that the Appellant, being the instructing party who later withdrew the sale instructions, could not invoke Rule 7 to avoid liability. The magistrate’s reasoning was therefore consistent with the authorities cited above and with the principle that costs follow the event. 19. I find no error of principle or law in the taxation, nor any misdirection in the exercise of the magistrate’s discretion. The amount taxed at Kshs. 114,400/= is within the parameters of the Fourth Schedule of the Auctioneers Rules and supported by the record. 20. Consequently, the appeal is hereby dismissed. The ruling of Hon. Lucy Ambasi (CM) delivered on 20th March 2024 in Milimani CM Misc. Application No. E1260 of 2022 is upheld in its entirety. 21. The Appellant shall bear the costs of this appeal. 22. It is so ordered. https://new.kenyalaw.org/akn/ke/judgment/kehc/2025/16521/eng@2025-10-09 3

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SIGNED, DATED, AND DELIVERED IN VIRTUAL COURT THIS 9TH OCTOBER 2025 ADO MOSES JUDGE In the presence of: C/A – Moses ........................... for the Plaintiffs ........................... for the Defendant https://new.kenyalaw.org/akn/ke/judgment/kehc/2025/16521/eng@2025-10-09 4

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