REPUBLIC OF KENYA

IN THE HIGH COURT OF KENYA AT NAIROBI

(MILIMANI COMMERCIAL COURTS)
CIVIL SUIT NO. 646 OF 2008

PAULINE MUTAVE SAMSON MAKAU …............................................................................ PLAINTIFF

-versus-
KENYA COMMERCIAL BANK LIMITED .……...…………….........…………….….......... 1 ST DEFENDANT
JUSTUS MUSYOKI ISAIAH ………….……….…………………………………………............ 2ND DEFENDANT
MARY W. MURIUKI (T/A VERA PROPERTIES) …...…..…….………...……………... 3 RD DEFENDANT
AND
J. K. KIBUI T/A KAHUTHIA KIBUI
& CO. VALUERS ……………………………………...………………………………................. 1 ST THIRD PARTY
VERA PROPERTIES LIMITED ………..……………………....…...……………………..… 2ND THIRD PARTY

SUBMISSIONS BY THE PLAINTIFF

Your Ladyship,

1. The plaintiff filed the suit herein against the 1 st, 2nd and 3rd defendants vide a plaint dated
26th July 2001.

2. Upon being served with summons the defendants entered appearances and filed their
respective defences.

3. Subsequently the 1st defendant took out third party proceedings against the 1 st third
party and the 2nd third party, who is also the 3 rd defendant. The 1st third party filed his
defence on 14th April 2009.

4. Save for the 1st defendant, the other defendants and or third parties after filing their
respective defences have shown little or no interest in taking part in these proceedings.
5. Consequently, the documents filed in preparation of the hearing herein were either filed
separately or jointly by the plaintiff and the 1st defendant as follows:

(i) Agreed bundle of documents as between the plaintiff and the 1 st defendant
dated 14th April 2015 (hereinafter referred to as “the bundle”)

(ii) Statement of Issues dated 10th February 2013 signed for and on behalf of
only the plaintiff and the 1st defendant.

(iii) 1st defendant’s supplementary list of documents filed in Court on 22 nd April

2015.

(iv) Witness statement of the plaintiff.

(v) Amended witness statement of Sisimonda Kinya Nzioka for the 1 st

defendant.

6. The plaintiff’s claim is primarily against the 1 st defendant as is brought out by

paragraphs 5, 6, 7, 8, 8 (b), (c), (e) and (f), 9, 10 and 11 of the plaint.

7. The 1st defendant at paragraph 2 of its statement of defence has admitted paragraphs 5
and 6 of the plaint.

8. Paragraph 7 states as follows:

“The aforesaid citations descriptions references and indications by the

Auctioneer were directly based upon and quoted from a Valuation Report
prepared and made by the third Defendant on 24.4.1993 as a basis for the
creation of the aforesaid Charge which gave rise to the Public Auction
purchase by the Plaintiff. The Plaintiff with leave of this Honourable Court

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 shall refer to the said Valuation Report at the trial of this suit for its tenor
full meaning and implications.”

9. Paragraph 8 of the plaint reads as follows:

“The aforesaid Valuation Report by third defendant was prepared and made
in collusion between the Resident Manager Kenya Commercial Bank Limited
Mwingi Branch acting on behalf of the first defendant, the second and third
defendants to fraudulently secure a loan of Kshs. 175,000/= for the second
defendant and the same was intended to defraud any bona fide purchaser
for value in due course who would purchase the same pursuant to the terms
and conditions made out in the aforesaid charge.”

10. Paragraphs 8 (b) (c) (e) and (f) being particulars of fraud state as follows:

“(b) The Resident Manager of Kenya Commercial Bank Ltd Mwingi Branch
being the agent or servant of the first Defendant together with the second
and third Defendants falsified the said citations descriptions references
and indications of the property MUTONGUNI/KAUWI/2509 knowing very
well and intending that any bona fide purchaser for value in due course of
the said property pursuant to the terms of the charge would be misled and
prejudiced.

(c) The said Resident Manager of Kenya Commercial Bank Ltd Mwingi Branch
being the agent or servant of the first Defendant together with the second
and third Defendants deliberately misquoted the property offered for
security as MUTONGUNI/KAUWI/2509 when in fact the same was
MUTONGUNI/KAUWI/2941 which was also registered in the name of the
second defendant.

(e) The property described in the valuation Report and the subsequent
advertisement in the print media was made deliberately to mislead and

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 defraud and in fact the same misled and defrauded the Plaintiff when she
purchased the said property at a public auction.

(f) The actual property offered to and purchased by the Plaintiff was grossly
undervalued with no improvements thereon as compared to the property
original valued and advertised for sale in the print media.”

11. Finally paragraphs 9, 10 and 11 state as follows:

“9. ALTERNATIVELY the third Defendant being the servant and agent of
the first and second Defendants acted in gross and extreme
negligence in performance of her professional services in conducting
and preparing the said Report and Valuation and has thereby caused
loss and damage to the Plaintiff as a bona fide purchaser for value in
due course arising from the terms of the Charge created and based
upon the Report and Valuation made on 24.4.1993 by her the third
Defendant.

PARTICULARS OF NEGLIGENCE

(a) The third Defendant as a qualified professional, registered

and licensed Land Valuer failed and grossly neglected to
personally visit and inspect the property offered for sale to the
plaintiff and known as MUTONGUNI/KAUWI/2509 prior to
making the said report. She relied upon advice given to her
by her junior and unqualified apprentice in her employment
as well as on incorrect and misleading information supplied
by the second Defendant.

(b) The third defendant as a qualified and registered Land Valuer

knew that the Report would form the basis for the creation
of the Charge which eventually gave rise to the rights of the
plaintiff as a bona fide purchaser for value arising from the

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 said sale pursuant to section 74 of the Registered Land Act
Cap 300 Laws of Kenya and the third Defendant breached her
professional duty and responsibility to the detriment and loss
of plaintiff as a bona fide purchaser for value in due course.

10. The plaintiff holds the first and second Defendants jointly vicariously
liable for the said negligence of the third defendants and for loss and
damages cause thereby.

11. The Plaintiff’s claim against the Defendants jointly and severally is
for a Declaration that the said Public Auction Sale on 5.2.1999 on
L. R. No. MUTONGUNI/KAUWI/2509 was null and void and that
the amount paid by the Plaintiff to the first Defendant being Kshs.
291,000/= be repaid to her the Plaintiff with interest thereon at the
rate of 25% per annum from the date of sale 5.2.1999 until Judgment
is entered and thereafter at Court Rates until payment in full.”

12. The evidence of the plaintiff in support of her claim is contained in her written witness
statement dated 22nd April 2015 and filed in court on 22nd April 2015.

13. The statement of issues as framed took into account the matters as pleaded by all the
parties in these proceedings. However, only the plaintiff and the 1 st defendant signed
the said statement of issues and indeed only the said two parties took part in the hearing
of this suit. In the circumstances the only pertinent issues and which the plaintiff shall
endeavour to answer in these proceedings are issues numbers 2, 3, 4, 5, 6, 7, 17, 18, 19,
20, 21, 30, 31, 32, 33, 34, 35, 36, 37, and 38.

14. It is the plaintiff’s submission that as between the plaintiff and the 1 st defendant the
answers to issues 2, 3, 4 and 5 are in the affirmative.

15. Issue number 7 encompasses issue number 6, consequently the plaintiff will only deal
with issue number 7:

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 Whether the auctioneer got the description and particulars of all that
property known as Mutonguni/Kauwi/2509 as contained in the said
advertisements from the valuation reports prepared by the 3 rd
defendant and Kahuthia Kibui & Co. (the 1st third party).

Clearly the answer to this issue is in the negative. The auctioneer was instructed by
Messrs Oraro & Rachier, advocates for and on behalf of the 1 st defendant. The auctioneer
got the description and particulars of the said property from the said advocates. The
letter of instructions from the said advocates to the auctioneer (which is at pages 38 to
39 of the bundle) reads in part in the first paragraph as follows:

“… We enclose herewith copy/copies of the particulars of the

property/properties.”

And at page 39 in the copy to their clients, the 1 st defendant, the advocates in the last
sentence write.

“N.O.O. Please forward to us the valuation report in respect of the

above property.”

Clearly therefore at the time the said advocates were instructing the auctioneer and
giving the auctioneers the particulars of the property they did not have the valuation
report. The advocates and the auctioneers are agents of the 1 st defendant. In any event
it matters not where the auctioneer got the particulars of the property from; it is the
auctioneer who took out the false advertisement.

The Law and its application to the facts herein

16. Paragraph 11(1) (a) and (b) of the Auctioneers Rules provides in pertinent parts as
follows:

“(1) A court warrant or letter of instruction shall include in case of

(a) Moveable property

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 (i) …

(ii) …

(iii) the exact location of goods

(iv) the person to point out the goods

(v) …

(vi) …

(b) Immovable property

(i) as in (i) to (v) in paragraph (a);

(ii) the land reference number, file number, plot number, or flat
number, as the case may be;

(iii) …

(iv) …

(v) …

(vi) the location, and in case of land situated within a township or

municipality the amount of the most recently available
annual site value tax.

(vii) accurate description of improvements and developments

(viii) …

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17. The letter of instruction in this suit was issued by the firm of Oraro & Rachier, Advocates
for and on behalf of the 1st defendant. The particulars of property referred to in the said
letter was not produced by the 1st defendant but given what was carried out in the
advertisement by the auctioneer, it must be inferred that the said letter was in
contravention of paragraph 11(1) (b) (i), (vi) and (vii) in that the same did not provide
the exact location of all that property known as Mutonguni/Kauwi/2509 nor did it
provide an accurate description of improvements and developments in the property as
is clearly shown below.

18. Paragraph 15 (c) of the Auctioneer Rules provides:

“Immovable property
Upon receipt of a court warrant or letter of instruction the auctioneer shall
in the case of immovable property –
“… (c) locate the property and serve the notification of sale of the property
on the registered owner or an adult member of his family residing or
working with him or where a person refuses to sign such notification, the
auctioneer shall sign a certificate to that effect …”

(The underlining is for emphasis).

Clearly the auctioneer in this suit did not locate the property in breach of the above
mentioned paragraph because if he had located all that property known as
Mutonguni/Kauwi/2509 he would have found out, as is shown below, that what he
advertised was false inaccurate and misleading.

19. Paragraph 16(1) (f) of the Auctioneers rules states that:

“(1) An advertisement by an auctioneer shall, in addition to any other

matter required by the court, contain –

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 “… (f) in case of immovable property all the information required to be
contained in the court warrant or letter of instruction except the amount to
be recovered and the exact amount of any reserve price …”
(The underlining is for emphasis only).

20. Patently the breach of the provisions of paragraphs 11 and 15 cited above would lead to
false information being advertised pursuant to paragraph 16(1) (f) above.

21. In the circumstances it is clear that the contravention of the law by the 1 st defendant led
to the false advertisement, as shown below, and which misrepresentation induced the
plaintiff to participate in the auction and bid, ending up with a property she had not
bidded for.

22. The plaintiff will deal with issues 17, 18 and 21 together.

Whether in fact the plaintiff was misled and defrauded when she
purchased the said property at a public auction.

Whether the property offered to and purchased by the plaintiff was

of gross undervalue with no improvements as compared with the
property originally valued and advertised for sale in the print media.

Whether the plaintiff as a bona fide purchaser for value in due course
arising from the terms of the charge created and based upon the
Report and Valuation made on 24.4.1983 by the 3 rd defendant
suffered loss and damage.

The advertisements of the auction as appears in pages 1, 2 and 3 of the bundle is not
disputed by the plaintiff and the 1 st defendant. Indeed the Daily Nation version of the
advertisement at page 3 of the bundle reads as follows in pertinent parts:

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 “Following instructions received from Oraro & Company Advocates on
behalf of their clients the chargees, we shall sell the below mentioned
property together with improvements erected thereon ON FRIDAY 5TH
FEBRUARY 1999 NEAR KITUI-MWINGI MATATU STAGE IN KITUI TOWN
AT 11.30 A.M.
All that parcel of land known as L. R. No. MUTONGUNI/KAUWI/2509
situate in Kabati Market Kauwi Sub Location, Mutonguni Location of
Kitui District, measuring 3.334 acres or thereabouts and belonging to
Justus Musyoki Isaiah.
The plot lies 150m to the West of Kabati Market and on it stands a one
(1) bedroomed permanent residential house and a 20,000 liter water
tank. The rest of the land is uncultivated and under shrubs and
thickets. A double lockable metal plated gate on concrete pillars opens
into the property. Mains electricity and telephone services are within
connectable distances.
CONDITIONS OF SALE
… Bidders are requested to verify details themselves as these are not
warranted”
(Underlining is only for emphasis).

23. It was the plaintiff’s evidence that as per the advertised conditions of sale term that
bidders verify details for themselves, the plaintiff found time and went to Kauwi and
viewed the property and found that it matched the description in the advertisements;
the plaintiff found that indeed the property was approximately 150m West of Kabati
Market, had a one bedroomed permanent residential house, a 20,000 litre water tank
and a double lockable metal plated gate on concrete pillars. Further the plaintiff found
out, as advertised, that the property was owned by the 2nd defendant, who was in fact the
plaintiff’s relative through marriage.

24. It was the plaintiff’s further evidence that her brother, Boniface Makau, who was then
working for the 1st defendant at its Kitui Branch also confirmed to the plaintiff that
indeed the property described in the advertisements was the property on auction and
that he had also visited the property.

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25. It was the plaintiff’s evidence that induced by the advertisements and what she had
viewed upon visiting the advertised property, she went to the public auction held on 5 th
February 1999 in Kitui Town and bided for the purchase of the property that had been
advertised and the one she had viewed and her brother had confirmed to her was the
property under auction; the property that was 150m West of Kabati Market, had on it
one bed-roomed permanent residential house, had a 20,000 litre water tank and a
double lockable metal plated gate on concrete pillars.

26. It is not in dispute that the public auction did indeed take place in Kitui Town and the
plaintiff emerged as the highest bidder with a bid of Kshs. 291,000/=. It is further not in
dispute that the plaintiff paid the said bid price in full to the 1st defendant.

27. Subsequently the 1st defendant caused all that property known as
Mutonguni/Kauwi/2509 to be transferred and registered in the name of the plaintiff.
The title to the said property in the name of the plaintiff is at pages 8 to 11 of the
bundle.

28. It was the plaintiff’s evidence that after she purchased the property she thought she had
viewed and which was advertised, her then advocates wrote to the 2 nd defendant on 23rd
September 1999 requiring the 2nd defendant to vacate the property. The letter is pages
12 to 13 of the bundle.

29. When the 1st defendant failed to vacate the property the plaintiff thought she had
purchased despite the urging and demands from the plaintiff, the plaintiff got her father
to try and find out the truth of the property she had purchased. It was the plaintiff’s
evidence that upon inquiry her father found out that even though the advertisements
stated that the property being sold was Mutonguni/Kauwi/2509, the description and
particulars given in the advertisements were those of all that property known as
Mutonguni/Kauwi/2941 and which property also belonged to the 2nd defendant.

30. It was the plaintiff’s testimony that her father further discovered that the property
advertised for sale Mutonguni/Kauwi/2509 was situate 10km West of Kabati Market

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 (and NOT 150 meters West of Kabati Market as advertised) and that the said property
had no development or improvements at all (and NOT having on it one bed roomed
permanent residential house, a 20,000 litre tank and a double lockable metal plated gate
on concrete pillars as advertised). It was a complete empty parcel of land.

31. It is the plaintiff’s submission that the answer to issue number 17 is in the affirmative.
Given the above submissions the plaintiff was definitely misled by the false
advertisements appearing in the newspapers as to what was in or contained in all that
property known as Mutonguni/Kauwi/2509. The misleading crystallised even more in
that when the plaintiff went to view the property advertised as directed in
advertisement, she found what was contained in the advertisement in the property she
viewed. The only difference as it later turned out was that the property that was
advertised and the one she viewed had different title numbers. The title number of the
property she had viewed and thought she was bidding for was Mutonguni/Kauwi/2941,
also owned by the 2nd defendant. Further the plaintiff was defrauded because she was
injured (the property that was transferred to her was of much lesser value than the one
she believed she was bidding for) by the false representation through the
advertisements which she relied upon to attend and bid at the auction.

32. Indeed in a letter dated 7th September 2000 addressed to the plaintiff (at page 15 of the
bundle) the 1st defendant admitted that the plaintiff was misled as follows:

“We refer to your letter dated 3.2.00 and regret that you were misled to
buy the above property instead of parcel No. Mutonguni/Kauwi/2941
which was shown to you …”

33. It is the plaintiff’s submission that the court need only look at the two valuation
produced into evidence to confirm that the property that was eventually transferred to
the plaintiff was a gross undervalue in respect of what the plaintiff paid. The valuation
report of the 1st Third Party at pages 27 to 32 of the bundle gave the market value (at
page 31 of the bundle) of the property that the plaintiff viewed and which had
improvement at Kshs. 240,000/=. Out of that Kshs. 210,000/= was attributed to the
permanent improvements and only 30,000/= was for the land and the valuation report

12
 of the 3rd defendant at pages 33 to 37 valued the property (at page 37 of the bundle) at
Kshs. 291,000/= with Kshs. 158,000/= attributable to buildings and Kshs. 133,000/= to
land.

34. In the circumstances if land alone was to be considered and indeed land which is over
10km from the Kabati Market Centre one can clearly surmise that the property the
plaintiff eventually ended with was worth much less than what she paid for it. The
plaintiff therefore submits the issue number 18 must also be answered in the
affirmative.

35. Given the foregoing evidence of the plaintiff, the plaintiff clearly suffered loss and
damage in purchasing all that property known as Mutonguni/Kauwi/2509 and as such
the answer to issue number 21 is in the affirmative.

36. The plaintiff will submit on issues numbers 19, 20 and 33 together:

Whether the 3rd defendant was the servant or agent of the 1 st and 2nd
defendants.

Whether the 3rd defendant acted in gross and extreme negligence in

the performance of her professional services in conducting the
valuation and preparing the report for the same.

Whether the 1st and 2nd defendants are jointly vicariously liable to the
plaintiff for the loss and damage caused by the negligence of the 3 rd
defendant.

37. Blacks’ Law Dictionary defined “agent” and “independent contractor” as follow:

“agent … one who is authorized to act for or in place of another; a

representative …”

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 “independent contractor – one who is entrusted to undertake a specific
project but who is left free to do the assigned work and to choose the
method for accomplishing it …”

38. The plaintiff submits that the property valuers, the 3 rd defendant and the 1st Third Party,
were agents of the 1st defendant, the hiring party or the employer, and therefore the 1 st
defendant was vicariously liable for the negligence of the said valuers.

39. However, even if the honourable court finds that the valuers are independent
contractors, the plaintiff submits that the 1 st defendant, the party that hired the valuers,
is still liable for their negligence. This is because (i) the facts of this case fits within an
exception to the rule that the hiring party or the employer is not responsible for the
negligence of an independent contractor and (ii) the duty is statutorily non-delegable
and or common law non-delegable.

40. The said exception to the rule is: The hiring party is liable when, owing to its failure to
exercise reasonable care to retain a competent and careful contractor, a third party is
injured and suffers loss and damage.

41. In the present proceedings, the 1 st defendant hired the 3 rd defendant and the 1st Third
Party, who the 1st defendant’s witness admitted were in the 1 st defendant’s panel of
valuers. The plaintiff’s evidence clearly showed that non of the improvements and
developments in the advertisements, the Report and Valuations of the 3 rd defendant and
the 1st Third Party were in all that property No. Mutonguni/Kauwi/2509, which
evidence the 1st defendant did not contradict. From the 1 st Third Party’s Report and
Valuation on L. R. No. Mutonguni/Kauwi/2509 (at pages 33 to 37 of the bundle) the
location of the said property and development thereon are not in respect of L. R. No.
Mutonguni/Kauwi/2509. Likewise the 3rd defendants Report and valuation of the said
property (at pages 27 to 32 of the bundle) is not in respect of L. R. No.
Mutonguni/Kauwi/2509; indeed it would appear that save for the valuation of the
property, the 3rd defendant merely copied the Report and Valuation of the 1 st Third
Party.

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42. What can be more improbable than two valuers saying in their reports that they visited
the same property at different times, came up with similar developments being on the
said property and yet it later turns out that the said developments are not in the
property they allegedly visited and valued. They probably sat in their offices or some
restaurant and wrote their respective reports. If that is not the height of incompetence
and sheer lack of care then the plaintiff would be dumbfounded.

43. The false reports and valuations of not one but two valuers hired by the 1 st defendant
speak for themselves, and the 1 st defendant is duty bound on the maxim of res ipsa
loquitor to explain that it exercised reasonable care to retain competent and careful
valuers. The 1st defendant failed to meet this burden of explanation. This court in the
circumstances cannot do any better that conclude that the 1 st defendant failed to
exercise reasonable care in retaining the two valuers, who are clearly incompetent, and
therefore the 1st defendant is liable for the negligence of the said valuers as the plaintiff
herein was injured and suffered loss and damage.

44. Further, Section 77(1) of the Registered Land Act (Cap 300) now repealed provides in
pertinent part as follows:

“A chargee exercising his power of sale shall act in good faith and have
regard to the interests of the chargor, and may sell or concur with any
person in selling the charged land, lease or charge or any part thereof,
together or in lots, by public auction through a licensed auctioneer …”

(Underlining is for emphasis only).

45. The 1st defendant pursuant to section 77(1) of the Registered Land Act was constrained
to sell all that property known as Mutonguni/Kauwi/2509 by way of public auction.

46. And in selling by way of public auction, the 1 st defendant and his agents are required to
comply with paragraphs 11(1) (a) and (b), paragraph 15(c) and paragraph 16(1) (f) of
the Auctioneers Rules as cited in paragraphs 16, 18 and 19 of these submissions and
provide and furnish to the intending bidders through advertisement the exact location of

15
 the property being sold by public auction and accurate description of improvements and
developments in the said property (in the present case the property known as
Mutonguni/Kauwi/2509).

47. The said statutory requirement cannot be delegated to a third party, in this case the 3 rd
defendant and the 1st third party, the valuers.

48. It is the statutory duty of the 1 st defendant to cause to be advertised the exact location of
the property to be sold and the accurate description of the improvements and
developments in the said property. The advertisements were false, inaccurate and
misleading. The 1st defendant breached its duty of care and cannot be heard to say as in
its evidence that the 1st defendant is not liable for the negligence of the 3 rd defendant and
the 1st third party, the valuers.

The law
49. As an exception to the general rule that an employer is not liable for the torts of his
independent contractor, The Law of Torts (Butterworths) at page 149 provides:

“… This form of liability should be contrasted with cases where there is fault
on the part of the employer personally, for example where the employer has
authorized the contractor to commit a tort, has carelessly failed to employ a
competent contractor or servant, has condoned negligence on the part of an
independent contractor, or has otherwise behaved unreasonably. However,
an employer will be liable for breach of a non-delegable duty, even though he
behaved reasonably in selecting a competent contractor, if on the relevant
occasion the contractor was at fault.”

(underlining is for emphasis)

50. And in respect of common law non-delegable duties this is what The Law of Torts has to
say at page 151:

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 “… a man who orders a work to be executed, from which, in the natural
course of things, injurious consequences to his neighbor must be expected to
arise, unless means are adopted by which such consequences may be
prevented, is bound to see to the doing of that which is necessary to prevent
the mischief …”

51. Clerk & Lindsell on torts in respect of Statutory non-delegable duties states as follows at
page 387:

“… where a statute requires a person to do a particular act, and an

independent contractor employed by him fails to that act, he cannot escape
liability by pleading that the fault was not his but was that of his
independent contractor …”

52. In the circumstances the answers to the three issues hereinabove are in the affirmative.

53. The plaintiff will now submit on issues numbers 30, 31 and 32 together:

Whether the plaintiff as an intending purchaser had a duty to verify

the particulars of the advertised property and if so what is the extent
of such a duty.

Whether the plaintiff as an intending purchaser from a public auction

had a duty to verify the exact location of the suit premises and all
other details pertaining to the property prior to the sale.

Whether the plaintiff did verify the exact location of the advertised
property under the circumstances.

54. The legal obligation to determine the exact location of the property is placed on the 1 st
defendant and the auctioneer by virtue of paragraphs 11and 15 of the Auctioneer Rules
cited above. Indeed paragraph 11(1) (b)(i) (vi) and (vii) requires the 1 st defendant in its

17
 letter of instruction to include the exact location of the property to be sold and the
accurate description of improvements and developments in the property.

55. Pursuant to paragraph 16 of the Auctioneer’s Rules, the advertisement shall contain,
inter alia, the information required to be contained in the letter of instructions.

56. If the location of the property to be sold and the description of the improvements
therein in the letter of instructions are false, then the advertisement would likewise be
false and misleading.

57. In the present case the location of the property to be sold and the description of the
improvements therein as advertised were false and misleading in that the same was not
in respect of the property being sold, Mutonguni/Kauwi/2509, but rather the said
description belonged to another property known as Mutonguni/Kauwi/2941.

58. Paragraph 16(1) (c) requires that an advertisement contain the time of viewing the
property to be sold. The law envisions that a prospective bidder may want to view the
property before the auction. Indeed the plaintiff did go to the advertised property and
viewed the same and confirmed that the location and the description of the
improvement were like advertised.

59. There is no other legal requirement that the plaintiff verify the details by appointing her
own valuer; Indeed without the title of the property the plaintiff could not even carry
out a search of the property at the lands office.

60. Given the foregoing the answer to issues numbers 30, 31 and 32 is in the affirmative but
the verification goes only to the extent of viewing the property advertised and
confirming to herself that the description of the property is as advertised; The plaintiff
undertook the said verification.

61. Finally the plaintiff hereinbelow submits on issues numbers 34, 35, 36 and 37.

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 Whether the Public Auction sale on 5.2.1999 of L. R. No.
Mutonguni/Kauwi/2509 was null and void.

Whether the plaintiff is entitled to be repaid the purchase price of

Kshs. 291,000/= together with interest thereon at the rate of 25%
per annum from the date of sale (5. 2. 1999) until payment in full.

Whether the plaintiff is entitled to damages.

Whether demand and notice to sue has been given.

62. Before the plaintiff submits on the issues hereinabove, the plaintiff wishes to address the
evidence as contained in paragraph 15 of the amended witness statement of Sisimonda
Kinya Nzioka for the 1st defendant. The said paragraph provides:

“The sale by auction took place on 5 th February 1999. The suit property
was sold to the plaintiff at the price of Kshs. 291,000/=. Particulars of the
property containing Conditions of Sale and the Memorandum are on the 1 st
defendant’s Supplementary List of Documents.”

63. The reason why the Particulars of the Property and the Memorandum are not part of the
bundle of documents produced by consent is that the plaintiff objects to the said and
required the author of the same, the auctioneer, to be called to produce the same as the
date of execution of the Memorandum which is part of the particulars of property is not
clear.

64. Whereas the beginning of the Memorandum seems to give the impression that the same
was executed on the auction date by stating as follows:

“That at the sale by public auction on this 5 th day of February 1999 Pauline
Mutave Samson Makau of P. O. Box 62938, Nairobi …”

65. The said memorandum continues as follows:

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 “… was declared the Purchaser therefore subject to the foregoing
conditions at the price of sum of Kshs. 291,000.00 and has paid the sum of
Kshs. 72,750,00 by way of deposit to the Auctioneers, Messrs Leggos
Enterprises …”

This part of the memorandum gives the impression that the sum of Kshs. 72,750.00 was
paid on the 5th February 1999. It was not.

66. As the plaintiff testified the Particulars of Property containing the conditions of sale and
memorandum was brought to her later after the auction to execute. Indeed to
corroborate her testimony, the cheque for deposit of Kshs. 72,750.00 is dated 10 th
February 1999 (and is at page 6 of the bundle) and could not have been paid on the 5 th
February 1999.

67. The inescaple conclusion is that the memorandum was executed on or after the 10 th
February 1999 and since it is part and parcel of the Particulars of Property containing
the conditions of sale, one must surmise that the said document was not availed to the
plaintiff and other bidders on the 5 th February 1999 let alone before bidding
commenced. In the circumstances the conditions of sale cannot be binding on the
plaintiff as at time of bidding she was not aware of the same.

The Law
68. In the case of Hedley Byrne & Co. Ltd - versus - Heller & Partners Ltd (1964)
A.C. 465, the House of Lords held:

“that a negligent, though honest, misrepresentation, spoken or written,

may give rise to an action for damages for financial loss caused thereby,
apart from any contract or fiduciary relationship, since the law will imply
a duty of care when a party seeking information from a party possessed of
a special skill trusts him to exercise due care, and that party knew or ought
to have known that reliance was being placed on his skill and judgment …”

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69. In the Supreme Court of Appeal of South Africa, Sim Road Investments CC -versus-
Morgan Air Cargo Pty Limited Case No. 02410
The Court after finding that the advertisement was false in two material respects the
property was not commercial property, it was agricultural and the title deed stated
specifically that it could be used for agricultural, horticultural or for breeding or keeping
domestic animals, poultry or bees, the property was also not earmarked for light
industrial use - proceeded to state as follows at page 10 paragraph 22:

“It has been settled law for many decades that a material representation
renders a contract voidable at the instance of the misrepresentee. Absent
the voetstoots and exclusion clauses cited above, Morgan Air would have
been entitled to ask for rescission and restitution even if the
misrepresentation had been innocent.”

In the present case, as shown above, the exclusion clauses as contained in the Particulars
of Property containing the condition of sale do not apply as the document containing the
same was executed well after the auction. The contract between the plaintiff and the 1 st
defendant is voidable at the instance of the plaintiff, which instance is represented by
this suit.

70. In South Gauteng High Court, Johannesburg, Auction Alliance (Pty) Ltd -v- Netluk
Boerdery CC & Ano. Case No. 2011/10152.

The Court found that the advertisement was materially false and proceeded to quote
another case at page 14 paragraph 34 as follows:

“If a man is induced to enter into a contract by false misrepresentation, it

is not sufficient answer for him to say “if you had used due diligence you
would have found out the statement was untrue.”

This is exactly the defence of the 1 st defendant when it pleads and gives evidence to the
effect that the plaintiff had a duty to verify the exact location of the property and all the

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 other details pertaining to the property when the 1 st defendant by its false
advertisements had caused the plaintiff to enter into a contract.

71. The High Court of Kwazulu-Natal, Durban, South Africa in Ismail Omar & 2 others
-versus- Xanadu Properties 16 CC & 3 Others in case No. 7312/2005 stated as
follows at paragraphs 32, 33, 34, 35 and 36:

“32 Turning now to the substantial issue in the case. The facts loudly
proclaim that the applicant who attended the auction sale as an
innocent and bona fide purchaser found himself the victim of a
fundamental and material misrepresentation in regard to what
was being offered for sale which I shall conveniently call “the
merx”. Mistakenly believing that he was bidding for the immovable
property plus a right as the owner in due course to receive the DTI
grant, the merx that was in fact knocked down at the auction was
merely the immovable property. Having regard to the express
terms of the DTI agreement it would have been impossible to
deliver the right in question.

33 There was clearly no meeting of the minds. The applicant thought

he was buying “A + B”, whereas in truth the respondents were
selling only “A” to him. In my view the applicant’s mistake arose
directly from a material and, in my view, fundamental
misrepresentation. Given the circumstances which have been
outlined above, the mistake made by the applicant was perfectly
reasonable and one which any reasonable man would have made.
Thus the situation that unfolds herein is one in which the law will
recognize that no consensus ad idem between the parties came
about.

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 34 Counsel for the second, third and fourth respondents argued that
the contract concluded at the auction was voidable and not void ab
initio.

35 I disagree with this submission. The decided cases draw a clear

distinction between a material representation inducing a contract
as opposed to on the other hand a representation which is of such a
nature that it entirely vitiates consensus ad idem. In the result
there is no contract at all.”

72. Given the above cited authorities, the sale of all that property known as L. R. No.
Mutonguni/Kauwi/2509 was null and void and consequently the plaintiff is entitled to
damages, which damages is the refund of the purchase price of Kshs. 291,000/= together
with interest thereon at the rate of 25% per annum from the date of the sale (5 th
February 1999) until payment in full as claimed in the plaint.

73. Demand and notice to sue had been given by the plaintiff. Please see letters at pages 14,
17 and 18 of the bundle.

74. The plaintiff in conclusion prays that judgment be entered in her favour as prayed in the
plaint.

That is all.

DATED at NAIROBI this day of 2017.

S. O. OWINO & ASSOCIATES

ADVOCATES FOR THE PLAINTIFF

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