[2023] KEHC 25158 (KLR)

Automobile Warehouse (Nakuru) Ltd & another v Mang’era & 4 others (Civil Appeal 48 & 59 of 2019 (Consolidated)) [2023] KEHC 25158 (KLR) (9 November 2023) (Judgment)

Neutral citation: [2023] KEHC 25158 (KLR)

Republic of Kenya

In the High Court at Nakuru

Civil Appeal 48 & 59 of 2019 (Consolidated)

SM Mohochi, J

November 9, 2023

Between

Automobile Warehouse (Nakuru) Ltd

Appellant

and

Timothy Momanyi Mang’era

1st Respondent

Imperial Bank Limited (in Liquidation)

2nd Respondent

As consolidated with

Civil Appeal 59 of 2019

Between

Imperial Bank Limited (in Liquidation)

Appellant

and

Timothy Momanyi Mang'era

1st Respondent

Reuben Mong'are Kaba

2nd Respondent

Automobile Warehouse (Nakuru) Ltd

3rd Respondent

(Being an Appeal and Counterappeal from the judgement of the Chief Magistrate's Court at Nakuru in CMCC no. 1299 of 2012(Timothy Momanyi Mang'era Vs Automobile Warehouse (Nakuru) Ltd and Imperial Bank Ltd) delivered by the Hon. Mr. J.B. kalo on the 5th of March 2019)

Judgment

Background 1. The Appellant herein was the 1st Defendant in Nakuru CMCC NO. 1299 of 2012, in which 1st Respondent instituted a suit against the Appellant and the 2nd Respondent, for illegally holding his motor vehicle without regards to law and sought mandatory injunction to compel the Appellant and the 2nd Respondent to forthwith release his motor vehicle, an injunction restraining them from selling or howsoever interfering with the 1st Respondent's motor vehicle and damages for detinue as their acts were criminal in nature and against the constitutional principal (sic) of the rule of law. The 1st Respondent additionally prayed that the Appellant at the 2nd Respondent be made to account for the total sums already paid to them.

2. The 1st Respondent pleaded that by a tripartite hire purchase agreement dated 16th June, 2011 the 1st Respondent bought a motor vehicle registration number KBP 181Q Mitsubishi Fuso Lorry from the Appellant. The arrangement was that the said transaction was to be to registered in three names of the 1st Respondent that is the hirer financed by the 2nd Respondent and guaranteed by the Appellant. the said vehicle was, the 2nd Respondent, the financier and the Appellant who were the guarantors.

3. The 1st Respondent averred that the total purchase price was a sum of Kshs. 6,851,380. 00 wherein the 1st Respondent was to pay a deposit of Kshs. 2,701,380. 00 to the Appellant and the balance of Kshs. 4,150,000. 00 in 36 equal instalments of Kshs. 146,403. 00 directly to the Appellant who were then to remit the deposit and monthly instalments to the 2nd Respondent.

4. The 1st Respondent averred that it duly paid the deposit of Kshs. 2,900,000. 00 to the Appellant and 2nd Respondent after which the said vehicle was duly registered in the joint names of the three parties and released to the 1st Respondent. The 1st Respondent continued paying the monthly instalments as per the agreement until the 27 August, 2012 when the Appellant and 2nd Respondent unlawfully repossessed the above vehicle.

5. The 1st Respondent further averred that on 14th September 2012, he paid an additional sum of Kshs. 500,000/= to the Appellant and 2nd Respondent and on 10th October, 2021 the 1st Respondent was advised by the 2nd Respondent that the amount outstanding and which was a condition for the release of the said vehicle was a sum of Kshs. 411,388. 00, which sum the 1st Respondent duly paid to the 2nd Respondent.

6. The 1st Respondent contended that despite having paid the above sum and despite the 2nd Respondent having indicated that the 1st Respondent is not in any arrears the Appellant and the 2nd Respondent had refused to release the aforesaid vehicle to the 1st Respondent, contending that the 1st Respondent had not regularized his account with them.

7. The 1st Respondent averred that Appellant and 2nd Respondent, were illegally holding his motor vehicle without regard to law, their acts were criminal in nature amounting to robbing the 1st Respondent of his motor vehicle and the same called for legal sanctions. The 1st Respondent further averred that the Appellant and the 2nd Respondent's conduct of attaching his motor vehicle without regard to law, had made the 1st Respondent to suffer loss and continues to suffer loss and damage over the said wrongful attachment and accordingly seeks damages against the Appellant and 2nd Respondent.

8. In its response, the Appellant filed its Statement of Defence on 30th January, 2013 in which it averred that the 1st Respondent approached it with the intention of purchasing a motor vehicle but he did not have the cash and could not secure a loan owing to the state of his finances. The Appellant averred that, it made a standing order in favour of the 2nd Respondent through which the monthly instalments would be paid directly out of the Appellant's account and the 1st Respondent gave the Appellant post-dated cheques to cover the monthly payment and bank commissions and charges.

9. The Appellant averred that, by the 3rd month of instalments, the 1st Respondent's cheques started bouncing and yet the 2nd Respondent was recovering the monthly payments from the Appellant through the standing order. The Appellant averred that, the 1st Respondent's failure to make good the payments was a blatant breach of the agreement. The Appellant further averred that, the 1st Respondent at some point also failed to pay for a comprehensive insurance cover by issuing bounced cheques and as a consequence, the insurance company cancelled the cover exposing the security, being the motor vehicle itself to unconscionable risk of loss or damage.

10. The Appellant further averred that, since it could not continue to service the loan on behalf of the 1st Respondent, when the 1st Respondent's own cheques kept bouncing, the Appellant wrote to the 2nd Respondent withdrawing the buy back guarantee. The Appellant further averred that the subject motor vehicle was repossessed by the 2nd Respondent as a consequence of the 1st Respondent's aforementioned breach and the Appellant was storing the motor vehicle to the order of the 2nd Respondent. The Appellant averred that, the 1st Respondent's claim that the Appellant unlawfully repossessed the subject motor vehicle was baseless, wrong and Scandalous.

11. The Appellant further averred that it had wrongly been sued as the 1st Respondent had no claim whatsoever in law or in fact against the Appellant. The 2nd Respondent on its part filed its Statement of Defence on 29th January, 2013 and on 29th November, 2016 it filed its Amended Statement of Defence and Counterclaim/Cross-action where it contended that by a letter dated 16th June, 2011 the 2nd Respondent offered and the 1st Respondent accepted the offer to finance by way of hire purchase motor vehicle registration number KBP 1810 Mitsubisthi Fuso Lorry in the terms enumerated in paragraphs 3(a) -3(f) inclusive of its Amended Statement of Defence and Counterclaim Cross-action.

12. The 2nd Respondent averred that the 1st Respondent and the 2rd Respondent subsequently executed a Hire Purchase Agreement dated 16th June, 2011 capturing the above terms in addition to the terms set out in paragraphs 4(a) - 4(e) inclusive of its Amended Statements of Defence and Counterclaim Cross-action. The 2nd Respondent averred that in view of the buy-back guarantee issued by the Appellant to the 2nd Respondent, the monthly hire instalments were paid directly to the Appellant for onward transmission to the 2nd Respondent.

13. The 2nd Respondent further averred that, they issued repossession orders over the hire vehicle for reasons that (1) cheques issued to the Appellant on account of hire payments were returned unpaid and (2) the 1st Respondent failed to keep the motor vehicle insured as per the express terms of the hire purchase agreement. The 2nd Respondent reiterated that the repossession was conducted lawfully and under the terms of the hire purchase agreement executed between parties. The 2nd Respondent contended that the issuance of a mandatory injunction would interfere with the express contractual obligations of the parties herein freely entered into and in particular the 2nd Respondent's right of repossession under clause 4 of the Hire Purchase Agreement as owners of the hire vehicle.

14. The matter came up for hearing on various diverse dates and consequently a judgment was delivered on 5th March, 2019 in which a declaration was issued against the Appellant that the 1st Respondent had fully paid and/or satisfied payment as per the terms of the hire purchase agreement. A permanent injunction was issued restraining the Appellant and the 2nd Respondent from selling or howsoever interfering with the 1st Respondent's motor vehicle registration number KBP 181Q Mitsubishi Fuso Lorry. The Appellant was ordered to account to the 1st Respondent the sums of Kshs. 10,800/= for the instalments received from him on account of the 2nd Respondent. The 1st Respondent was awarded Kshs. 4, 875,000/= against the Appellant and the 2nd Respondent jointly and severally for loss of user. Lastly, the Appellant and the 2nd Respondent were condemned to bear costs of the suit equally between them and the 1st Respondent was awarded interest on the damages for loss if user and costs to be calculated from the date of the judgment until payment in full.

Submissions By The Appellant And 3Rd Respondent In HCC No 48 of 2019 15. The Appellant herein was the 1st Defendant in Nakuru CMCC No. 1299 of 2012 in which the 1st Respondent instituted a suit against the Appellant and the 2nd Respondent, for illegally holding his motor vehicle without regards to law and sought mandatory injunction to compel the Appellant and the 2nd Respondent to forthwith release his motor vehicle, an injunction restraining them from selling or howsoever interfering with the 1st Respondent's motor vehicle and damages for detinue as their acts were criminal in nature and against the constitutional principal (sic) of the rule of law. The 1st Respondent additionally prayed that the Appellant and the 2nd Respondent be made to account for the total sums already paid to them.

16. The 1st Respondent pleaded that by a tripartite hire purchase agreement dated 16th June, 2011 the 1st Respondent bought a motor vehicle registration number KBP 181Q Misubishi Fuso Lorry from the Appellant. The arrangement was that the said transaction was to be to be registered in three names of the 1st Respondent that is the hirer financed by the 2nd Respondent and guaranteed by the Appellant, the said vehicle was, the 2nd Respondent, the financier and the Appellant who were the guarantors.

17. The 1st Respondent averred that the total purchase price was a sum of Kshs. 6,851,380. 00 wherein the 1st Respondent was to pay a deposit of Kshs. 2,701,380. 00 to the Appellant and the balance of Kshs. 4,150,000. 00 in 36 equal instalments of Kshs. 146,403. 00 directly to the Appellant who were then to remit the deposit and monthly instalments to the 2nd Respondent.

18. The 1st Respondent averred that it duly paid the deposit of Kshs. 2,900,000. 00 to the Appellant and 2nd Respondent after which the sid vehicle was duly registered in the joint names of the three parties and released to the 1st Respondent. The 1st Respondent continued paying the monthly instalments as per the agreement until the 27th August, 2012, when the Appellant and 2nd Respondent unlawfully repossessed the above vehicle.

19. The 1st Respondent further averred that on 14th September, 2012 he paid an additional Kshs. 500,000/= to the Appellant and 2nd Respondent and on 10th October, 2021 the 1st Respondent was advised by the 2nd Respondent that the amount outstanding and which was a condition for the release of the said vehicle was a sum of Kshs. 411,388. 00, which sum the 1st Respondent duly paid to the 2nd Respondent. The 1st Respondent contended that despite having paid the above sum and despite the 2nd Respondent having indicated that the 1st Respondent is not in any arrears the Appellant and the 2nd Respondent had refused to release the aforesaid vehicle to the 1st Respondent, contending that the 1st Respondent had not regularized his account with them.

20. The 1st Respondent averred that Appellant and 2nd Respondent were illegally holding his motor vehicle without regard to law, their acts were criminal in nature amounting to robbing the 1st Respondent of his motor vehicle and the same called for legal sanctions. The 1st Respondent further averred that the Appellant and the 2nd Respondent's conduct of attaching his motor vehicle without regard to law, had made the 1st Respondent to suffer loss and continues to suffer loss and damage over the said wrongful attachment and accordingly seeks damages against the Appellant and 2nd Respondent.

21. In its response, the Appellant filed its Statement of Defence on 30th January, 2013 in which it averred that the 1st Respondent approached it with the intention of purchasing a motor vehicle but he did not have the cash and could not secure a loan owing to the state of his finances. The Appellant averred that it made a standing order in favour of the 2nd Respondent through which the monthly instalments. would be paid directly out of the Appellant's account and the 1st Respondent gave the Appellant post-dated cheques to cover the monthly payment and bank commissions and charges.

22. The Appellant averred that by the 3rd month of instalment, the 1st Respondent's cheques started bouncing and yet the 2nd Respondent was recovering the monthly payments from the Appellant through the standing order. The Appellant averred that the 1st Respondent's failure to make good the payments was a blatant breach of the agreement. The Appellant further averred that the 1st Respondent at some point also failed to pay for a comprehensive insurance cover by issuing bounced cheques and as a consequence, the insurance company cancelled the cover exposing the security, being the motor vehicle itself to unconscionable risk of loss or damage.

23. The Appellant further averred that, since it could not continue to service the loan on behalf of the 1st Respondent, when the 1st Respondent's own cheques kept bouncing, the Appellant wrote to the 2nd Respondent withdrawing the buy back guarantee. The Appellant further averred that, the subject motor vehicle was repossessed by the 2nd Respondent as a consequence of the 1st Respondent's aforementioned breach and the Appellant was storing the motor vehicle to the order of the 2nd Respondent. The Appellant averred that the 1st Respondent's claim that the Appellant unlawfully repossessed the subject motor vehicle was baseless, wrong and scandalous.

24. The Appellant further averred that, it had wrongly been sued as the 1st Respondent had no claim whatsoever in law or in fact against the Appellant. The 2nd Respondent on its part filed its Statement of Defence on 29th January, 2013 and on 29th November, 2016 it filed its Amended Statement of Defence and Counterclaim/Cross-action where it contended that by a letter dated 16th June, 2011 the 2nd Respondent offered and the 1st Respondent accepted the offer to finance, by way of hire purchase motor vehicle registration number KBP 181Q Mitsubishi Fuso Lorry in the terms enumerated in paragraphs 3(a)- 3() inclusive of its Amended Statement of Defence and Counterclaim/Cross-action,

25. The 2nd Respondent averred that the 1st Respondent and the 2nd Respondent subsequently executed a Hire Purchase Agreement dated 16th June, 2011 capturing the above terms in addition to the terms set out in paragraphs 4(a) -4(e) inclusive of its Amended Statement of Defence and Counterclaim/Cross-action. The 2nd Respondent averred that in view of the buy back guarantee issued by the Appellant to the 2nd Respondent, the monthly hire instalments were paid directly to the Appellant for onward transmission to the 2nd Respondent.

26. The 2nd Respondent further averred that they issued repossession orders over the hire vehicle for reasons that (1) cheques issued to the Appellant on account of hire payments were returned unpaid and (2) the 1st Respondent failed to keep the motor vehicle insured as per the express terms of the hire purchase agreement. The 2nd Respondent reiterated that the repossession was conducted lawfully and under the terms of the hire purchase agreement executed between parties. The 2nd Respondent contended that the issuance of a mandatory injunction would interfere with the express contractual obligations of the parties herein freely entered into and in particular the 2nd Respondent's right of repossession under clause 4 of the Hire Purchase Agreement as owners of the hire vehicle.

27. The matter came up for hearing on various diverse dates and consequently a judgment was delivered on 5th March, 2019 in which a declaration was issued against the Appellant that the 1st Respondent had fully paid and/or satisfied payment as per the terms of the hire purchase agreement. A permanent injunction was issued restraining the Appellant and the 2nd Respondent from selling or howsoever interfering with the 1st Respondent's motor vehicle registration number KBP 181Q Mitsubishi Fuso Lorry. The Appellant was ordered to account to the 1st Respondent the sums of Kshs. 10,800/= for the instalments received from him on account of the 2nd Respondent. The 1st Respondent was awarded Kshs. 4, 875,000/= against the Appellant and the 2nd Respondent jointly and severally for loss of user. Lastly, the Appellant and the 2nd Respondent were condemned to bear costs of the suit equally between them and the 1st Respondent was awarded interest on the damages for loss if user and costs to be calculated from the date of the judgment until payment in full.

28. The Appellant being aggrieved by the said judgment preferred the instant appeal against the whole of the said judgment by filing a Memorandum of Appeal before this Honourable Court articulating various grounds which can be condensed into four (4) grounds as follows: -i.Whether the learned trial Magistrate erred in law and in fact, in visiting the Appellant with the incidence of liability against the evidence on record?ii.Whether the learned trial Magistrate erred in law and in fact, by finding for the Plaintiff when there was overwhelming evidence that the Plaintiff was in breach of the Hire Purchase terms?iii.Whether the learned trial Magistrate misdirected himself on matters of law and fact in awarding loss of user yet the Plaintiff did not provide evidence of Kshs. 25,000/= per day and audited accounts for his income?iv.Whether the learned trial Magistrate erred in law and fact in failing to address the issue of the 2nd Defendant/Respondent counterclaim against the Plaintiff or even its fate in his judgment?

As To Whether The Learned Trial Magistrate Erred In Law And In Fact, In Visiting The Appellant With The Incidence Of Liability Against The Evidence On Record? 29. Timothy Momanyi Mang'era - PW1 testified in examination in chief that on 28th August 2012 the Appellant instructed an auctioneer to repossess the motor vehicle allegedly on the instructions of the 2nd Respondent. PW1 stated that he approached the Appellant who advised him to get another guarantor or pay a lump sum of Kshs. 500,000/= on 14th September 2012.

30. PW1 paid a lump sum of Kshs. 500,000/= and was issued with a receipt which he produced as P. Exh9. PW1 further testified that he went to the 2nd Respondent's headquarter on 10th October, 2012 where he was advised by the Credit Manager to pay Kshs. 411,388/= as a condition to have the motor vehicle released. In cross-examination by Counsel for the Appellant, PW1 confirmed that the Appellant was not sued as a guarantor and that he sued them because the 2nd Respondent "said" they had repossessed the motor vehicle. PW1 further confirmed that he saw the letter dated 31st July, 2012 from the 2nd Respondent addressed to Direct "O" Services instructing them to repossess the motor vehicle. PW1's testimony is found in pages 268-283 of the Appellant's Record of Appeal.

31. Prakash Shah - DW1, testified in examination in chief, that they notified the 2nd Respondent that they were not getting money from the 1st Respondent; the 2nd Respondent issued a re- possession order for the motor vehicle. The re-possession order was dated 31st July, 2012 and was addressed to Direct "O" Services. The Appellant did not instruct any auctioneer to repossess the vehicle. The re-possession order dated 31st July, 2012 and addressed to Direct "O" Services was produced as D.Exh 3. Invoice dated 4th August, 2012 from Direct “O" Services and addressed to the 2nd Respondent was produced as D.Exh 4. According to DW1 as far as re-possession was concerned the Appellant was not properly sued in the suit. After repossession the vehicle was stored with the Appellant on instructions of the 2nd Respondent.

32. In cross-examination by Counsel for the 1st Respondent, DW1's testimony was consistent that on 31st July, 2012 the 2nd Respondent issued a re-possession order to Direct "O" Services to repossess the vehicle which they did and brought it to the Appellant for storage. DW1 indicated that they normally offer storage for all banks as well as auctioneers and that they were storing the vehicle on behalf of the 2nd Respondent. In cross-examination by Counsel for the 2nd Respondent, DW1 stated that the Appellant was aware of the re-possession order issued by the 2nd Respondent as it was copied to the Appellant. The vehicle was re-possessed because its insurance cover had been cancelled. In re-examination by its Counsel, DW1 told the court that the Appellant did not order the re-possession and that the Appellant complied when the court issued an order. DW1's testimony is found in pages 284 -296 of the Appellant's Record of Appeal. DW1's testimony was corroborated by that of DW2 who testified that it was the 2nd Respondent who directed the repossession of the motor vehicle.

33. Among the issues that were identified for determination by the trial court was whether the repossession order issued by the 2nd Defendant (2nd Respondent herein) for the vehicle was lawful. The Appellant refers the Court to page 335 of the Appellant's Record of Appeal where the trial court made the following finding,“The repossession order was issued following a fundamental breach of the terms of the Hire Purchase Agreement but (sic) the plaintiff and the same was therefore lawful. However as found above, the 2nd defendant waived its rights by requiring the plaintiff to make payments and have the motor vehicle released to him".

34. That it is clear beyond peradventure from the evidence on record that the repossession of the suit motor vehicle was instigated by the 2nd Respondent vide a letter dated 31st July, 2012 addressed to Direct "O" Services instructing them to repossess the suit motor vehicle which they did and took it to the Appellant for storage purposes. The Appellant never initiated the repossession and the trial court having not found the Appellant liable for the repossession of the suit motor vehicle ought to have dismissed the 1st Respondent's case against the Appellant. In holding this view, The Appellant urges the court to be guided by the case of Mburu Gathee T/A Gathee Enterprises Vs National Industrial Credit Bank Ltd, in which the Court of Appeal in pertinent part held as follows,“Having failed to establish liability on the part of the appellant, the suit as against the appellant was liable for dismissal". (Emphasis ours).

As To Whether The Learned Trial Magistrate Erred In Law And In Fact, By Finding For The Plaintiff When There Was Overwhelming Evidence That The Plaintiff Was In Breach Of The Hire Purchase Terms 35. Prakash Shah-DW1 testified that he is the Appellant's managing director and the 1st Respondent came to purchase a motor vehicle through one of their sales people in the year 2011. It was DW1's testimony that in February 2011, the 1st Respondent gave a deposit of Kshs. 500,000/= for purchase of Mitsubishi Fuzo Truck. It was a new track then unregistered, it was registered as KBP 181Q and was sold at a total price of Kshs. 6,851,380/=. There were other items including advanced tax of Kshs. 11,745/=, Anti-theft kit of Kshs. 8,500/= and a tracking device of Kshs. 49,000/= making a grand total of Kshs. 7,051, 525/=. The total deposit payable was Kshs. 2,900,000/= out of which the 1st Respondent paid Kshs. 2,900,000/= Payments were made as follows: -a.On 15/02/2011 - Kshs. 500,000/=b.On 04/03/2011 - cheque number 25, for Kshs. 500,000/= which was unpaid.c.On 12/03/2011 - Kshs. 200,000/=d.On 21/04/2011 -Kshs. 2,000,000/=e.On 10/06/2011 - cheque number 51, for Kshs. 203,000/= which was unpaid.f.On 17/07/2011 - Kshs. 200,000/=

36. DW1 further testified that the bounced cheques were replaced with a lump sum of Kshs. 2,000,000/= and the 1st Respondent was supposed to arrange his finance for the balance of the vehicle, he tried getting finance from several banks unsuccessfully. The Appellant informed the 1st Respondent that they had a buy-back system with the 2nd Respondent. The buy-back system included a condition that the 1st Respondent was to make payments through the Appellant as the dealer since the Appellant were the ones who knew the 2nd Respondent.

37. There was a three-party agreement between the 1st Respondent, the 2nd Respondent and the Appellant, that they were to charge the 1st Respondent an administrative fee based on the agreement. The Appellant proceeded to register the vehicle and forwarded the necessary documents to the 2nd Respondent which was duly signed by the 1st Respondent. The 1st Respondent gave the Appellant post - dated cheques for monthly instalment and he had organized his own insurance with Jubilee Insurance. The Appellant released the vehicle to the 1st Respondent; the post-dated cheques were in the Appellant's favour because the 2nd Respondent was to collect the money from the Appellant's account held with them. That was the arrangement of the buy-back guarantee; the 2nd Respondent debited the Appellant's account for the 1st instalment and the Appellant notified the 2nd Respondent that they would be issuing them with cheques for further instalments.

38. DW1 further testified that according to the Hire Purchase Agreement, the monthly installments was Kshs. 146, 403/= for 35 months and a final instalment of Kshs. 151,403/=. The cheques the 1st Respondent gave the Appellant were for Kshs. 157,170/=, the variance was the administrative fees for Kshs. 11,000/=. DW1 indicated that the Appellant had a summary of cheques the 1st Respondent deposited with them drawn on Diamond Trust Bank and Credit Bank and that they generated a statement which was produced as D.Exh 1 Cheque No. 54 was presented on 6th September 2011 and it bounced, the 1st Respondent asked the Appellant to re-bank the cheque which the Appellant did on 9th September 2011 and it bounced again.

39. The Appellant re-banked it on 16th September 2011 and it went through. DW1 indicated that the Appellant had the bank advise showing the cheque bounced and produced the same as D.Exh 2 (1). Cheque No. 55 was presented on 6th October 2011 and it was unpaid. The cheque was produced as D.Exh 1(2). Cheque No. 56 was presented on 6thn November 2011 and it bounced the same was produced as D.Exh 2(3). On 7th November 2011 the 1st Respondent banked Kshs. 79,000/= in the Appellant's account and a further Kshs. 40, 000/-= on 8th November 2011 which left a short fall of Kshs. 38,170/=. Cheque No. 106 was presented on 6th March 2012 and it bounced the same was produced as D.Exh 2(4). Cheque No. 107 was presented on 6th April 2012 and was unpaid the same was produced as D.Exh 2(5). Cheque No. 108 dated 6th May 2012 was presented on the same date and it bounced, the same was produced as D.Exh 2(6). Cheque No. 111 was presented on 6th July 2012 and it bounced. The same was produced as D.Exh 2(7). DW1 indicated that they still had the rest of the post-dated cheques which they did not bank as the 1st Respondent's cheques were bouncing and they had already paid the 2nd Respondent up to May 2012. The 1st Respondent made promises which he failed to honour and it got to a point where the Appellant stopped paying the 2nd Respondent. The Appellant notified the 2nd Respondent that they were not getting any money from the 1st Respondent and the 2nd Respondent issued a re-possession order dated 31st July 2012 and the same was produced as D.Exh 3.

40. Other than failure of remitting the monthly instalments by issuing bounced cheques, the 1st Respondent was in breach of the Hire Purchase Agreement by failing to take out insurance for the vehicle as per the terms of the agreement. PW1 in cross-examination by Counsel for the 2nd Respondent was referred to the page 17 of the 2nd Respondent's Bundle of Documents which contained a letter informing the Appellant that the insurance to the motor vehicle had been cancelled. PW1 confirmed that paragraph H of the Hire Purchase Agreement demanded him to ensure the motor vehicle is insured comprehensively by an insurer approved by the owners.

41. PW1 further conceded that the court order stated that he was to secure insurance cover for the motor vehicle before it was released because the insurance cover at that time had expired.

42. DW1 in examination in chief stated that there was a comprehensive cover when the vehicle was released to the 1st Respondent and the Appellant was informed by the 2nd Respondent that the insurance was cancelled by Jubilee Insurance because the 1st Respondent's cheques were bouncing. DW1 indicated that he saw a cancellation letter from Jubilee Insurance dated 30th June 2012 addressed to him confirming cancelation of the cover. It was effective on 1st March 2012: DW1 stated that the Appellant insisted on a comprehensive insurance to secure the 2nd Respondent's interest. The letter dated 30th June 2012 was produced as D.Exh 5. In cross-examination by Counsel for the 2nd Respondent, DW1 testimony was consistent that the vehicle was repossessed because its insurance cover had been cancelled.

43. David Kiptoo - DW2 testified that he was employed by the Central Bank of Kenya and seconded to Kenya Deposit Insurance Corporation, who were the receivers of the 2nd Respondent. In his examination in chief DW2 corroborated the testimony of DW1 that there was a letter from Jubilee Insurance Company which confirmed the insurance cover had been cancelled in violation of part of the terms of the Hire Purchase Agreement. In cross-examination by Counsels' for both Respondents', DW2 maintained that at the time of repossession on the vehicle did not have a comprehensive insurance cover and that the motor vehicle was repossessed because of cancelled insurance cover and bounced cheques. DW2's testimony is found in pages 297-301 of the Appellant's Record of Appeal.

44. Among the issue(s) that were set out for determination by the trial court were inter alia whether the Plaintiff (2nd Respondent herein) was in breach of the terms of the Hire Purchase Agreement. The Appellant refer to the judgment of the trial court at page 334 of the Appellant's Record of Appeal, in which the trial court held that from the testimony on record, the Plaintiff was in breach of the Hire Purchase Agreement by failing to keep the motor vehicle comprehensively insured and the 2nd Defendant's interest protected.

45. It is a result of the foregoing that the Appellant humbly submit that the learned trial Magistrate erred in law and in fact by finding for the Plaintiff despite overwhelming evidence that the Plaintiff was in breach of the Hire Purchase terms.As to whether the learned trial Magistrate misdirected himself on matters of law and fact, in awarding loss of user yet the Plaintiff did not provide evidence of Kshs. 25. 000/- per day and audited accounts for his income?

46. That PW1 in examination in chief testified that he was using the motor vehicle to transport building material in Kisii and Transmara and that he had a record for the period between 1st December, 2011 to 19th January 2012, and that the motor vehicle was making Kshs. 25,000/= per day. In cross-examination by Counsel for the Appellant, PW1 indicated that he had audited accounts but not in court. In cross-examination by Counsel for the 2nd Respondent, PW1 stated that he lost Kshs. 20,000/= per day for nine months. PW1 conceded that he did not produce receipts to show he was earning Kshs. 20,000/= per month. The trial court in its judgment and which the particular part is found at page 337 of the Appellant's Record of Appeal, noted that PW1 did not produce audited accounts for his income and proceeded to hold that figure quoted was not unreasonable for a commercial vehicle and that the court had the discretion to adopt the same.

47. It is the Appellant's submissions that loss of user is special damages and the same not only requires to be specifically pleaded but proved as well and as such, the learned trial Magistrate misdirected himself on both law and fact, in awarding loss of user of Kshs. 25,000/= to the 1st Respondent, without cogent evidence in support of the same.

48. The Appellant refers the court to case of Equity Bank Ltd v Gerald Wang'ombe Thuni, in which the court in pertinent part held as follows,“With the foregoing explicit pronouncements on the law it is unnecessary to belabor the point that a claim for loss of user is a claim in special damages and it can only be awarded where the pleadings in which it is sought met the threshold for such claims".

49. It is the Appellant's humble submissions that having failed to support his claim for loss of user with audited accounts to show that his business was a going concern, the 1st Respondent failed to prove his claim for loss of user. In holding this view we refer the court to the case of Nicholas Angwenyi Siro T/A Riverside Continental Resort Vs Finlay Kirui & another, in which Majanja, J., in pertinent part held as follows,“In my view. the projection relies upon by the plaintiff is not supported by any other business books like audited accounts for the period to show that the business was a going concern, that it had employees and was carrying on business that would produce an income. The law requires that the Special damages must be pleaded and proved according to the nature of the claim and in this case a claim for substantial loss of profit cannot stand based on one report whose basis is doubtful. I therefore reject the claim for loss of business".

As To Whether The Learned Trial Magistrate Erred In Law And Fact, In Failing To Address The Issue Of The 2Nd Defendant/respondent Counterclaim Against The Plaintiff Or Even Its Fate In His Judgment? 50. That, the 2nd Respondent did file an Amended Statement of Defence and Counter-claim/Cross Action on 29th November, 2016. The same is found at pages 215-222 of the Appellant's Record of Appeal. In the trial court judgment which is found at pages 310-338 of the Appellant's Record of Appeal, the trial court proceeds to produce the Plaintiffs claim as pleaded in its plaint, this is found at pages 310-312 of the Appellant's Record of Appeal. The trial court then proceeds to produce the 1st Defendant's Defence as pleaded in its Statement of Defence, and this is found at pages 312-313 of the Appellant's Record of Appeal, the trial court then proceeds to produce the 2nd Defendant's Further Amended Statement of Defence and Amended Counter Claim/Cross Action and this is found at pages 313-318 of the Appellant's Record of Appeal. Lastly the trial court proceeds to produce the 1st Defendant's Defence to Counterclaim/Cross-Action, this is found at pages 318-319 of the Appellant's Record of Appeal.

51. The trial court then proceeds to produce the testimonies of the various witnesses that were called at the trial, this is found from page 319 all the way to page 333 of the Appellant's Record of Appeal. The trial court proceeds to analysis and determination and sets out the issues for determination which are compressed into nine (9) issues and it noteworthy that among the issues set out for determination by the trial court, none addresses the issue of the Counterclaim/Cross-Action. The trial court then proceeds to discuss the issues it has identifiedtor determination, this is found at pages 334-337 in the Appellant's Record of Appeal. Lastly the verdict of the court is found at pages 337-338 of the Appellant's Record of Appeal, and nowhere does the trial court pronounce itself on the issue of the Counterclaim/Cross-Action.

52. It is from the foregoing, that the Appellant's faults the judgment of the trial court for failing to address the issue of the 2nd Defendant/Respondent's counterclaim against the Plaintiff or even its fate in its judgment. In Regina Karimi Mbuchi & 2 others Vs Francis Mbuchi Kithaka, the court held in pertinent part as follows,“other than that, fleeting reference to the Appellants' counter-claim, the trial magistrate did not make any determination on the issue of trust. If he was minded to dismiss the Appellants counter-claim, he ought to have done so and given the reasons why. The judgment only granted the Respondent the remedy that he sought. There was no mention of the Appellants counter-claim on which evidence had been led and submissions made including case law. Those grounds of appeal succeed and in Appellants view, are sufficient to dispose of this appeal." (Emphasis ours),

53. In a recent case of Jeremiah Gakuru Ng'ang'a v Brown Inziani Shagwira & another,the Appellant therein faulted the decision of the lower court on the grounds inter alia, that "Learned Trial Magistrate erred in both law and in fact in Dismissing the Appellant's Counter-claim contrary to the Evidence adduced and applicable law". The court in addressing this issue in appeal held inter alia as follows:“Suffice it to point out, at page 30 of the Record of Appeal is a letter of allotment which was issued to and in favor of one Mr. Wilfred Ng'ang'a Gakuru, on whose behalf the Counter-claim was mounted and who donated a power of attorney in favor of the current Appellant. ""Other than the foregoing, there is a letter which was produced as exhibit D11 at page 36 of the Record, whose contents and import is explicit. However, it does not appear that the learned trail magistrate captured the contents and/or import of these Documents in his reproduction of the evidence or even in his analysis whatsoever,"."I must also point out that despite the contents of the various Documents which were produced by the Appellants and which documents were corroborated by DW3, being the witness called on behalf of the 2nd Respondent. the learned trial (sic) magistrate, did not deem it fit and/or appropriate to evaluate the said evidence and/or consider same, in any manner whatsoever."."In the premises, the Appellant's complaints that the learned trial magistrate failed to consider and/or appreciate sufficiently or at all the evidence adduced and/or tendered before the court is well grounded.""In my humble view. the learned trial magistrate was obliged to evaluate the totality of the evidence that was tendered by the Parties and thereafter to distill issues for determination therefrom in an objective manner that would allow the court render itself on the macro issues ventilated by the parties and not otherwise".

54. From the foregoing, it is the Appellant' submissions that the learned trial Magistrate in failing to address the issue of the 2nd Respondent's Counterclaim against the 1st Respondent. cannot be said to have discharged his duty in evaluating the totality of the evidence that was tendered by parties herein and being guided by the authorities cited above this ground of appeal should succeed.

55. The upshot of the Appellant's submissions is that the appeal filed herein has merit, the same should be allowed and the lower court decision set aside and substituted with a dismissal of the 2nd Respondent's case against the Appellant. The 2nd Respondent should also be condemned to pay the costs of this appeal as well as those in the lower court.

Submissions By The 1St Respondent In Hcc No 48 Of 2019 Hcc No 59 Of 2019 56. The 1st Respondent is relying on the Record of Appeal filed by the 1st Respondent on 23rd June 2021 and which runs to page 347. The reasons for relying on the 1st Respondent's appeal is that the Appellant's record of Appeal filed on 6th May 2021 is incomplete and muddled up. The Appellant's counsel currently on record did not participate in the lower court proceedings and is challenged in compiling a proper Record of Appeal. Court ought to rely on the 1st Respondent's Record of Appeal filed on 23rd June 2021 as it is complete.

57. The appeal herein essentially stems from a claim in Nakuru CMCC No. 1299 of 2012. In paragraph 3 of the further amended Plaint dated 1st July 2015 (Page 65 - 67 of the 1st Respondent's Record of Appeal), it was the 1st Respondent's case that by a tripartite agreement dated 16th June. 2011 he bought a motor vehicle registration number KBP 181 Q Mitsubishi Fuso from the Appellant and partly financed by the 2nd Respondent at a total cost of Kshs. 6. 851, 380. 00. However, despite paying for the total sum and despite the 2nd Respondent indicating that the 1st Respondent is not in any arrears the Appellant declined to release the aforesaid vehicle to the 1st Respondent contending that he has not regularized his account with the 2nd Respondent.

58. The Plaint was vehemently opposed by the Appellant in a statement of defence dated 5th February 2018 (Page 178 - 179 of the 1st Respondent's Record of Appeal.)

59. The Plaint was also vehemently opposed by the 2nd Respondent in a further amended statement of defence dated 18th May 2017 (Page 195 - 201 of the 1st Respondent's Record of Appeal,)

60. That, the Trial Magistrate granted the 1st Respondent's prayers as prayed for in the Plaint. Judgement (Page 313- 341 of the Record of Appeal).

61. The 1st Respondent has framed from the grounds of appeal encapsulated in the memorandum of appeal at page 2- 4, twenty-five (25) issues for determination by this Honorable Court as follows: -i.Whether the learned trial magistrate erred in law and in fact in finding that the 1st Respondent had proved his case as required?ii.Whether the Learned trial magistrate erred in law and in fact in failing to dismiss the Plaintiffs 1st Respondents case?iii.Whether the learned trial magistrate was in error of law and fact in finding the 1st Defendant liable when the evidence on record was that the repossession of the Plaintiffs vehicle was ordered by the 2nd Respondent?iv.Whether the learned magistrate was in error of law and fact in finding the Appellant liable when the evidence on record exculpated them from any form?v.Whether the learned trial magistrate erred in law and in fact in finding the 1st Defendant liable against the weight of the evidence?vi.Whether the learned trial magistrate was in error of law and fact in failing to consider certain factors material to an estimate of evidence?vii.Whether the learned trial magistrate was in error of law and fact in visiting the Appellant with the incidence of liability against the evidence on record?viii.Whether the learned trial magistrate was in error of law and fact in failing to find that the Appellant was entitled to walk out of the buy-back guarantee owing to the 1st Respondent’s persistent breach in issuing numerous bouncing cheques?ix.Whether the learned trial magistrate was in error of law and fact in failing to find that what was before court was purely an issue between the 1st Respondent and his financier, the 2nd Respondent and dismiss or strike out the suit against the Appellant?x.Whether the learned trial magistrate erred in law and fact in failing to find that at the time of repossession of the motor vehicle on instructions of the 2nd Respondent the plaintiff was in material breach of the Hire Purchase terms?xi.Whether the Learned trial magistrate erred in law and fact in failing to consider evidence of bounced cheques issued by the Plaintiff?xii.Whether the learned magistrate was in error of law and fact in awarding the Plaintiff Kshs. 4,875,000/= against the Defendants jointly and severally?xiii.Whether the learned trial magistrate erred in and fact in relying on figures given by the Plaintiff which were neither audited accounts nor supported by any bank statements or other sufficient evidence?xiv.Whether the learned trial magistrate erred in law and fact in relying on figures tendered by the Plaintiff which clearly had evidence of the Plaintiff corrupting the police in the course of his business?xv.Whether the learned trial magistrate misdirected himself on matters of law and fact in awarding loss of user yet the Plaintiff did not provide evidence for Kshs. 25,000/= per day and audited accounts for his income?xvi.Whether the learned trial magistrate erred in law and fact in concluding that the Plaintiff could not be held liable for any outstanding amount on the Hire Purchase agreement?xvii.Whether the learned trial magistrate was in error of law and fact in failing to find that the Plaintiff/1st Respondent conduct did not entitle him to any of the prayers sort?xviii.Whether the learned trial magistrate was in error of law and fact in finding for the Plaintiff when there was overwhelming evidence that the Plaintiff was in breach of the Hire Purchase terms?xix.Whether the learned trial magistrate assessment was excessive and unreasonable in the circumstances?xx.Whether the learned trial magistrate erred in law and fact in disregarding the weight of the 1st Defendants evidence?xxi.Whether the learned trial magistrate was in error of law and fact in failing to address the issue of the 2nd Defendant/Respondents counterclaim against the Plaintiff or even its fate in his judgement?xxii.Whether the learned trial magistrate was in error of law and fact in coming up with a contradictory and vague judgementxxiii.Whether the learned magistrate erred in law and fact in taking into account irrelevant or extraneous issues in his judgement?xxiv.Whether the learned magistrate assessment for loss of user has led to a resultant miscarriage of justice?xxv.Whether the learned magistrate was in error of law and fact in failing to fully comprehend all the issues that were before him?

62. The 1st Respondent has compressed twenty-five (25) issues into the following two (2) issues: -a.Whether the lower court was proper in finding in favour of the Plaintiff/1st Respondent in appeal including making an award in his favour for loss of user?b.Whether the lower court addressed the 2nd Respondent's counterclaim and what's the overall effect of finding in favour of the Plaintiff vis a vis the counterclaim?

As To Whether The Lower Court Was Proper In Finding In Favour Of The 1St Respondent In Appeal Including Making An Award In His Favour For Loss Of User? 63. The 1st Respondent submits that, in the lower court the he filed a further amended plaint including the prayers in pages 65 - 67 Record of Appeal.

64. That, by a tripartite agreement dated 16th June 2011 between himself, the Appellant and the 2nd Respondent in page 13 -16 of the 1st Respondent's Record of Appeal, he bought from the Appellant motor vehicle registration number KBP 181 Q.

65. That, the purchase price was Kshs. 6. 851,380/=. The vehicle was sold by the appellant and being financed by the 2nd Respondent on the following terms of the Agreement;i.Purchase price of Kshs. 6,851,380. 00ii.Direct deposit to the dealer (Appellant) of Kshs. 2,701,380. 00. iii.Balance of Kshs. 4,150,000. 00 to be financed by the 2nd respondent

66. The amount of Kshs. 4,150,000. 00 is repayable in 36 months in monthly rentals of Kshs. 146,403. 00 per month for 35 months making the final payment of Kshs. 151,403 on the 36th month.

67. That the 1st Respondent made the following deposits to the appellant as confirmed in pages page 17-18 of the 1st Respondent's Record of Appeal and were produced as PEXB 1 (1a -1d).a.First deposit of Kshs. 500,000/= made on 15th February 2011. b.Second deposit of Kshs. 200,000/= made on 12th March 2011. c.Third deposit of Kshs. 2,000,000/= made on 21st April 2011. d.Fourth deposit of Kshs. 203. 000/= made on 10th June 2011.

68. Cumulatively the deposit paid to the appellant directly before the date of the tripartite agreement was the sum of Kshs. 2,903,000/=, The deposits slips are in confirmed in pages 17-18 of the 1st Respondent's Record of Appeal and were produced as PEXB 1 (1a -1d).

69. That it should be noted from the onset that the appellant was literally playing games. An agreement talking of a deposit of Kshs. 2,701,380/= and the amount actually received is Kshs. 2,903. 000/=. Appellant was not accounting for Kshs. 201,620/=.

70. The tripartite agreement is in page 13 - 17 of the 1st Respondent's Record of Appeal and was produced as PEXB 2. Upon paying the amount, the 1st Respondent was given a delivery note and the following further documents:PEXB 4 - Delivery note page 19 of the 1st Respondent’s Record of Appeal.PEXB 5 - Sales invoice page 20 of the 1st Respondent's Record of Appeal.PEXB 6- Logbook page 21 of the 1st Respondent’s Record of Appeal.

71. The logbook was registered in the joint names of the 1st Respondent, the Appellant and the financier/ 2nd Respondent. Plaintiff proceeded and made the following further payments to the appellant as per plaintiffs exhibit 3, 6a, 6b, 6c, 6d, 7. 8a, 8b, 8c, 8d and 16.

72. That further payments were made directly to the Appellant to remit money to 2nd Respondent as follows;a.Kshs. 200,000/= in cash on 17th June 2011 confirmed by the documents in page 18 of the 1st Respondents Record of Appeal.b.Kshs. 157,170/= cheque 52 on 8th July 2011 confirmed by bank statement in page 47 of the Record of Appeal.c.Kshs.157, 170/= cheque 53 dated 9th August 2011 confirmed by the bank statement in page 48 of the 1st Respondents Record of Appeal.d.Kshs. 157. 170/= cheque 54 dated 6th September 2011 as confirmed by the bank statement in page 49 of the Record of Appeal.e.Cash deposit of Kshs. 157,170/= on 15th October 2011 as confirmed by the banking slip in page 24 of the 1st Respondent's Record of Appealf.Cash deposit of Kshs. 79,000/= on 7th November 2011 as confirmed by the banking slip in page 22 of the 1st Respondent's Record of Appeal.g.Cash deposit of Kshs. 40,000/= on 8th November 2011 as confirmed by the banking slip in page 23 of the 1st Respondent's Record of Appeal.h.Payment of Kshs. 157,170/= by cheque 56 on 16th November 2011 as confirmed by the bank statement in page 53 of the 1st Respondent's Record of Appeal.i.Payment of Kshs. 157,170/= by cheque 102 on 8th December 201l as confirmed by the bank statement in page 54 of the 1st Respondent's Record of Appeal.j.Payment of Kshs. 157,170/=by cheque 58 on 9th January 2012 as confirmed by the bank statement in page 56 of the 14 Respondent's Record of Appeal.k.Payment of Kshs. 157,170/= through cheque 105 on 7th February 2012 as confirmed by bank statement in page 58 of the 1st Respondent's Record of Appeal.

73. The aforementioned payments were made directly to the dealer. Appellant was clandestinely receiving Kshs. 157,170/= per month from the 1st Respondent whereas the agreement was for monthly rentals of Kshs. 146,403/=. It was the evidence of DW 2 at page 297 and 298 of the 1st Respondent’s Record of Appeal, that the 2nd Respondent on 16th June 2011 paid the Appellant the balance in consideration Kshs 4. 150. 000/= as financiers any other money coming after 16th June 2011 ought to be paid to the bank and not to the dealer. The dealer however was receiving money directly from the 1st Respondent and not remitting it to the bank.

74. That, the 1st Respondent made the following further payments directly to the bank:a.Kshs. 90,000/= on 6th March 2012 confirmed by the banking slip in page 24 of the 1st Respondent's Record of Appealb.Kshs. 56,410/= on 16th March 2012 confirmed by the banking slip in page 27 of the 1st Respondent’s Record of Appealc.Kshs. 110,000/= on 17th April 2012 as confirmed by the banking slip in page 28 of the 1st Respondent's Record of Appeal.d.Kshs. 50,000/= on 19th June 2012 as confirmed by the banking slip in page 29 of the 1st Respondent's Record of Appeal.e.Kshs. 50,000/= on 16th May 2012 as confirmed by the banking slip in page 28 of the 1st Respondent's Record of Appeal.

75. That the vehicle was attached on 1st July 2012 on account of lapse by the 2nd Respondent of an insurance Cover as confirmed by the documents on page 169. The Appellant's allegations in their submissions that the motor vehicle was attached due to non- payment is neither here nor there.

76. That on the 18th April 2012, the Appellant purported to withdraw from the tripartite agreement despite the fact that there was no provision for withdrawal in the same agreement, documents suggesting withdrawal is in page 239 of the 1st Respondents Record of Appeal.

77. That, it was the 1st Respondent’s case that on 16th June 2011 it paid to the appellant the entire balance of the purchase consideration in the sum of Kshs. 4,150,000/= and what remained were payments of regular monthly instalments to the bank evidence of 2nd Respondent at page 298 of the 1st Respondents Record of Appeal.

78. That, despite the fact of payment of the balance of the purchase price consideration by the 2nd Respondent to the Appellant on 16th June 2011 and despite the Appellant having purported to withdraw from the tripartite agreement on 18th April 2012. The Appellant happily received a sum of Kshs. 500,000/= from the 1st Respondent on 14th September 2012 and issued a receipt for the same marked as PEXB 9 at page 157 of the 1st Respondent's Record of Appeal.

79. That, the Appellant received the said sum of Kshs. 500. 000/= from the 1st Respondent on 14th September 2012 on the pretext that they will have the vehicle released to the 1st Respondent vehicle being held by the appellant despite payment the vehicle was not released to the 1st Respondent.

80. That, the Appellant had no justification for receiving payment from the 1st Respondent on 14th September 2012 while knowing it had fully been paid by the 16th June 2011 by the 2nd Respondent and we'll knowing that they had purported to pull out from the tripartite agreement of 18th April 2012.

81. That, it was purely a con game where the Appellant purported to have pulled out of the agreement and then continued receiving money from the 1st Respondent.

82. It was also a con game for the appellant to receive money from the 1st Respondent on 14th September 2021 on promise of releasing the vehicle to the 1st Respondent only renege

83. That it was also a Con game for the appellant to receive money from the 1st Respondent 14th September 2012 without remitting the same to the 2nd Respondent having been fully paid by the 1st Respondent on 16th June 2011. Page 297 - 298 of the 1st Respondent's Record of Appeal there is evidence that the said sum of money was paid.

84. On 10th October 2012, the 1st Respondent was advised to pay Kshs. 411,388/= by the 2nd Respondent as a condition for release of the motor vehicle in page 31 an advice by the 2nd Respondent to the 1st Respondent which was produced as PEXHB 10.

85. The 1st Respondent paid a sum of Kshs. 411,388/= to the 2nd Respondent on the same date and the same was produced as PEXB 11 in page 33 paid by banking slip.

86. Despite the 1st Respondent making payment on 10th October 2012 the motor vehicle was not released to the 1st Respondent. The 1st Respondent was forced to move court against the Appellant and the 2nd Respondent vie an application dated 17th December 2012.

87. In a ruling dated 23rd May 2013 Chief Magistrate Hon Mungai ruled that the Appellant and the 2nd Respondent are trying to steal a match on the 2nd Respondent by receiving a sum of Kshs 500,000/= on 14th September 2012 on the promise of releasing from the 1st Respondent and a further sum of Kshs. 411,388/= on 10th October 2012 on the promise of releasing the vehicle only for them not to release it.

88. That, the lower court ruled that it was a clear case where a mandatory injunction ought to be issued as the Appellant and the 2nd Respondent were acting in bad faith in receiving the 1st Respondent's money and not performing part of their bargain as evidenced in page 139 of the 2nd Respondent's Record of Appeal, the court urged to consider the aforementioned court order and ruling.

89. However, court ordered the 1st Respondent to get an insurance cover for the motor vehicle before release and to continue performing their contractual obligations.

90. The 1st Respondent got a cover produced as PEXB 14 in page 141 of the 1st Respondent's Record of Appeal and the motor vehicle was thereafter released on 24th May 2013.

91. That the 1st Respondent's case before the lower court is that, there was no justification for the Appellant and the 2nd Respondent to continue holding the vehicle from 10th October 2012 when they made a representation that he could pay Kshs. 411,388/= and have the motor vehicle released and on 24th May 2013 when the vehicle was released pursuant to the court order.

92. That the Appellants in their submissions however allege that the 1st Respondent was in breach of the hire purchase agreement by failing to remit the monthly instalments by issuing bounced cheques as a result of which they reposed the vehicle and for failing to take an insurance cover as per the terms of the agreement.

93. However, the 1st Respondent submits that, the same is neither here nor there as confirmed by the court in its judgement where it held that, the 1st Respondent was not in breach of the hire purchase agreement and neither was the 1st Respondent in any arrears. The 1st Respondent urges the court, to be guided by the judgement of the lower court and to rule in his favour by dismissing the Appeal.

94. Further, it was the 1st Respondent's claim for loss of user from 10th October 2012 and 24th May 2012 at the rate of Kshs. 25. 000/= per day for the Commercial vehicle. Loss of user was supported by a contract between the 1st Respondent and Rajam Building and Construction Limited where he had leased his motor vehicle and another document for income dated 16th June 2011 contract produced as PEXHB 18 & 19. The documents are on page 146- 155 of the 1st Respondent record of Appeal. Court awarded loss of user for the period attachment to the 1st Respondent having pleaded and sufficiently proven, as such that the Appellants claim in their submissions that the said claim was not proven as pleaded is neither here nor there and urge this court to dismiss their appeal.

95. It is the 1st Respondent’s submission that, the claim for loss of user has to be pleaded and proven as was held in the case of Ryce Motors Limited & Another Vs Elias Muroki [19961 ekLR,“That special damages must be pleaded and proved and that a party cannot merely give evidence to the effect that his vehicle was making certain amount daily. He has to support such a claim through acceptable evidence."

96. Further, in the case of Mumias Sugar Co. Ltd & another Vs Jackson Mwaniki [2009] eklr, the court pronounced itself on the issue of loss of user as hereunder:“In the case before me the Respondent produced invoices showing that he hired out his vehicle for transport business. Although the invoices were of diverse dates, it is common knowledge that transport business vehicles will not get business every other day. Daily income of such business has to be assessed on average based on available records. PWl told the court that the vehicle earned Ksh.12,000/= per day which was supported by PW3 who kept the business records. From the invoices produced in court and the evidence of the witnesses, I find that the magistrate rightly awarded average daily income of Ksh.12,000/= for 30 days the court awards the Respondent Ksh 360,000/= for loss of user."

97. The court is urged to find that, the 1st Respondent adduced the evidence of the contract between himself and Rajam Building and Construction Limited and another document adducing income and which were produced in court and not challenged. As such that the 1st Respondent proved the special damages for loss of user and that this court ought to find that the award was rightly given.

98. After the release the 1st Respondent continued to meet contractual obligations as per 16th June 2011 on release made payments.a)16th November 2012 - Kshs. 73,000/=b)26th November 2013 - Kshs. 100,000/=c)30th December 2013- Kshs. 300,000/=d)17th February 2014- Kshs. 200,000/=e)12th May 2014- Kshs. 300,000/=f)14th June 2014- Kshs. 337,225/=

99. The 1st Respondent produced as evidence the bundle of bank deposit slips in page 142 - 144 of the 1st Respondent's Record of Appeal. The same were produced as PEXB 15.

100. The 1st Respondent has directly paid a sum of Kshs. 2,078,013/= to 2nd Respondent which figure was admitted in court. In page 299 of the 1st Respondent's record of Appeal the 2nd Respondent submitted of recovering that sum. The 1st Respondent had also paid directly to the Appellant a sum of Kshs. 4. 875,350/= confirmed by various documentation. The 1st Respondent produced as PEXH 17 a document showing a summary of money paid to the Appellant and the 2nd Respondent in page145 of the 1st Respondent's Record of Appeal. The 1st Respondent has paid a total of Kshs.6. 953, 363/= to both the appellant and the 2nd Respondent against a contractual sum of Kshs. 6. 851, 380 =.

101. That, the 1st Respondent had actually over paid and hence sought a declaration from the court that he had fully paid as per the terms of the hire purchase agreement. There was is no justification of holding the vehicle between the 10th October 2012 and the 24th May 2013 hence the court issuing a mandatory injunction.

102. That, the Appellant and the 2nd Respondent did not file any appeal against the lower court ruling of 23rd May 2013 which actually amounts to an admission that their acts between 10th October 2012 to the 24th May 2013 were indeed illegal and as such the reason the claim for loss of user

103. That in summary the dirty games played by the Appellant and the 2nd Respondent are highlighted as hereunder:i.Contract of 16th June 2011 acknowledging deposit of Kshs. 2,701,380/= whereas the deposit received was Kshs. 2,903,000/=, Appellant never accounted for the sum of kshs 203,000/= it received from the 1st Respondent on 10th June 2011. ii.Tripartite agreement made a provision for monthly rentals of Kshs. 146,403/= but the Appellant clandestinely continued receiving a sum of Kshs. 157,170/= from the 1st Respondent without accounting for the difference of the sum of Kshs. 10. 800/= every month.iii.The Appellant in evidence at page 291 of the 1st Respondent's Record of Appeal purported that this figure of Kshs. 10,800/= was administrative fees.iv.In page 292 of the 1st Respondent's Record of Appeal the Appellant hire purchase price was Kshs. 7,051,525/= that is not supported by the Hire purchase price agreement. In page 292 of the 1st Respondent's Record of Appeal the Appellant admitted having received a balance in purchase consideration from the 2nd Respondent in the sum of Kshs. 4. 150,000/= as again confirmed by evidence of the 2nd Respondent at page 297 and 298 of the 1st Respondent's record of Appeal notwithstanding confirmed to clandestinely receive money from the 1st Respondent as they did on 14th September 2012 at the sum of Kshs. 500,000/= .v.Receipt of Kshs. 500,000/= from the 1st Respondent on 14th September 2012 on the promise of releasing the motor vehicle then failing to release it.vi.Receipt of Kshs. 411,388. 00 on 10th October 2012 by the 2nd Respondent from the 1st Respondent on the promise of releasing the vehicle yet no vehicle was released.vii.Appellant in their evidence at page 283 - 287, 290-293 falsely claimed that cheques from the 1st Respondent to them for Kshs. 157,170/= were being dishonoured but that they continued having their accounts debited by the 2nd Respondent for the said amount of Kshs. 157. 170/= but when challenged to prove they could not be able to produce the alleged bank statement.viii.They could not produce evidence that they paid the money to the 2nd Respondent without receiving from the 1st Respondent. The fact that they were receiving money after 16th June 2011 is evidence that they were playing dirty games.ix.An established bank and an experienced dealer taking advantage of a normal Kenyan by chewing their money and further taking advantage of his ignorance by clandestinely chewing his money.

As Whether The Lower Court Addressed The 2Nd Respondent's Counterclaim And What's The Overall Effect Of Finding In Favour Of The Plaintiff Vis A Vis The Counterclaim? 104. It is submitted that the 2nd Respondent- bank vide an amended counterclaim dated 18th May 2017 sought the following from the court:a.That the Plaintiff's suit in the main suit be dismissed with costs to the 2nd Defendant thereinb.That judgment be entered in favour of the Bank in the amended action against the 1st Defendant and the 2nd Defendant jointly/severally for the sum of Kshs. 2,275,542/= together with interest thereon at contractual rates from the 14th June 2014 until in full payment:c.Costs of the counterclaim and interest thereon; andd.Such further relief as this honourable court shall deem fit and just to grant.

105. That, under the provisions of Order 7 Rule 3 of the Civil Procedure Rules, a counterclaim moves with the suit and unless a specific order is made that a counterclaim be heard separately from the main suit, a court pronounces itself on both.

106. As such we submit that the court in its judgement addressed itself on the Plaintiff's claim and on the counterclaim by finding in favour of the Plaintiff/ 1st Respondent by issuing a declaration against the 1st Defendant that the Plaintiff has fully paid and/or satisfied payment as per the terms of the hire purchase price, a permanent injunction restraining the Defendants from selling or however interfering with the Plaintiffs motor vehicle, an order for the 1st Defendant to account to the Plaintiff the sums of Kshs. 10,800/=, an award for loss of user for the sum of Kshs. 4. 875. 00O/- and order that costs be shared equally between the Defendants.

107. The 1st Respondent submit that the issues in contention in the counterclaim were addressed concurrently with his claim as evidenced in courts judgement. By finding that the 1st Respondent had fully paid and/or satisfied payment as per the terms of the hire purchase, the effect was that the counterclaim could not be sustained. As such that the Appellant's claim cannot stand. Moreover, no evidence was led in support of the counterclaim.

108. In conclusion the 1st Respondent urges this court, to dismiss the Appellant's appeal and to uphold the lower court's judgement dated 5th March 2019 and to find in favour of 1st Respondent having proven his case as against the Appellant and the 2nd Respondent and to consequently dismiss the appeal with costs.

Submissions By The 2Nd Respondent And Appellant In Hcc No 59 Of 2019 109. The Bank submissions are in support of their Responsein High Court Civil Appeal No 48 of 2019 and for its counterclaim Appeal in High Court Civil Appeal NO. 57 of 2019.

110. The Bank relies on its Memorandum of Appeal dated the 3rd of April 2019 and filed on the same day, Record of Appeal dated the 18th of February 2022 and filed on the 12th of April 2022, Written submissions dated the 14th of April 2023 and the List and Bundle of Authorities dated the 14th of April 2023 all filed in Civil Appeal No. 59 of 2019:

111. That, by a letter of offer dated 16th June 2011, the Bank offered, and the 1st Respondent duly accepted an offer to finance the purchase of Motor vehicle registration number KBP 181Q Mitsubishi Fuso Lorry (hereinafter the 'Hire Vehicle') by way of hire purchase on the following terms inter alia:a.Though the Purchase Price of the Hire Vehicle was Kshs. 6,851,380. 00 the Bank would only finance the principle sum of Kshs. 4,150,000. 00 plus interest at the contractual rate with the balance of Kshs. 2,701,380 accounting for the deposit directly payable by the 1st Respondent to the 2nd Respondent as the dealer of the transaction.b.The maximum period of finance would be for 36 months commencing on 11th July 2011. c.The financed amount would attract interest at the rate of 9% p.a. on a flat basis with a default interest of 40% p.a.d.A Buy-Back Guarantee to be issued by the 3rd Respondent in favour of the Bank.e.Comprehensive insurance cover on the full value of the Hire Vehicle with the Bank noted as the primary beneficiary under the insurance cover; andf.Joint registration of the Hire Vehicle under the names of the Bank, the 1st Respondent, and the 3rd Respondent.

112. The Bank and the 1st Respondent subsequently executed a Hire Purchase Agreement dated 16th July 2011 ("the Hire Purchase Agreement"') capturing the above terms particulars of which are fully within the knowledge of the 1st Respondent. In addition to the above terms set out above, the Hire Purchase Agreement provided that:a.The financed amount being the principle sum plus the hire charges/interest) was a sum of Kshs. 5. 270. 508. 00 ("the Financed Amount)b.The Financed Amount would be liquidated by way of 35 equal monthly Installments of Kshs. 146,403. 00 and a final payment of Kshs. 151,403. 00 On the 36th month commencing 11th July 2011. c.The 1st Respondent had an obligation at all times to insure the Hire Vehicle With a reputable insurance company for the benefit of the Bank: andd.On default of the monthly instalments as and when they fell due, or on breach of any of the terms of the Hire Purchase Agreement, the Bank had a right of repossession of the vehicle.

113. As per the terms of the Hire Purchase Agreement the 1st Respondent was to ensure all monthly installments were to the paid to the Bank as per the Hire Purchase Agreement. The 1st Respondent was the primary and 3rd Respondent as his Secondary on account being the guarantor.

114. The 3rd Respondent wrote directly to the Bank asking to be released from its obligation under the Buy-back Guarantee as the 1st Respondent was no longer meeting its obligations under the Hire Purchase Agreement whilst the 3rd Respondent was making payments to the Bank under a standing order as guarantor under the Hire Purchase Agreement.

115. Subsequent to this the Bank issued a repossession order over the Hire Purchase Vehicle for reasons that; (1) Cheques issued to the 3rd Respondent on account of monthly installments were returned unpaid, and (2) the 1st Respondent had failed to keep the Hire Vehicle insured as per the express terms of the Hire Purchase Agreement leading to the cancellation of the insurance cover and (3) the account was in arrears of the monthly payments due under the agreement.

116. Once the vehicle was repossessed, the 1st Respondent wrote to the 3rd Respondent on 14th September 2012 indicating that he was ready and willing to service the Financed Amount, that he shall take out a comprehensive insurance cover with APA insurance company and proposing the Bank (herein the bank) to accept one Mr. Reuben Kaba (2nd Respondent) as his guarantor.

117. Thereafter the 2nd Respondent executed a guarantee dated 20th September 2012, in favor of the bank and of which the said guarantee provided the following terms, inter alia:a.The 1st Respondent and 2nd Respondent jointly/severally guarantee the punctual payment of all monies payable under the Hire Purchase Agreement duly signed by the 1st Respondent and the due performance of the terms and conditions of the Hire Purchase Agreement entered into by the bank and the 3rd Respondent.b.The 2nd Respondent undertakes to indemnify the Bank against all loss and damages resulting to the bank from any breach by the 1st Respondent of the terms and conditions of the Hire Purchase Agreement.c.The 2nd Respondent shall pay in demand by the Bank any monies which have become due under the Hire purchase agreement but have been paid to the bank by the 1st Respondent.

118. The 1st Respondent undertook to regularized the insurance payment. The 3rd Respondent declined to release the Hire Vehicle on the grounds that they were owed Kshs. 1,047, 003. 00 by the 1st Respondent.

119. This dispute led to the 1st Respondent filing a suit in the lower court and contemporaneously filed a Notice of Motion dated 17th December 2012 seeking inter alia, a mandatory order directed at the Bank and the 3rd Respondent to release the Hire Vehicle in their possession and a temporary injunction restraining the Bank and the 3rd Respondent therein from repossessing the Hire Vehicle pending the hearing and determination of the suit. On 22nd May 2013, Hon S. Mungai (C.M) issued the above-mentioned orders to the detriment of the Bank and directed the 1st Respondent to take out comprehensive insurance cover. Pursuant to this order, the hire vehicle was released to the 1st Respondent by the 3rd Respondent.

120. The Hire Vehicle remained in the possession of the 1st Respondent during the course of trial in the subordinate court and remains in his possession to date.

121. Further to the above it is important to note that.a.As of June 2014, the Bank had received a total of Kshs. 3,694,075. 00 (Kshs. 2,078,023. 00 from the 1st Respondent and Kshs. 1,616,052. 00 from the 3rd Respondent) towards the settlement of the Hire Purchase amount as per the Hire Purchase Agreement.b.Since June 2014, the 1st Respondent has been in arrears of the financed amount advanced to him to the tune of Kshs. 2,275,542. 00 which sum was inclusive of the hire charges/interest (both normal and penal) and this amount continues to accrue interest as per the terms of the Hire Purchase Agreement until payment in full.

122. The Bank submits that this being a first appeal, the appellate court has the jurisdiction to s the first appellate court, has a duty to re-evaluate, re-analyze and Re-consider the evidence and draw its Own conclusions, of course bearing in mind that it did not see witnesses testifying and therefore give due allowance for that. See Gitobu Imanyara & 2 others v Attorney General (2016] eKLR.

Grounds of Appeal 123. In the Memorandum of Appeal dated the 3rd of April 2019, the Bank cites a total of 8 grounds of appeal. For simplicity and ease of argument, the Bank shall argue some of the grounds jointly as set out below.

124. The Bank asserts under the ground of appeal No. 3 that, the trial magistrate erred in fact and in law in failing to consider and give a determination of the Bank's Counterclaim raised as against the 1st Respondent.

125. It is clear from the record that, the Bank filed a Counterclaim in this matter through an amended defence and counter-claim dated the 21st October 2016 (pages 142-149 of the Record of Appeal). This pleading was subsequently amended through a Further Amended Statement of Defence and Amended Counter-claim/Cross action (pages 156-163 of the Record of Appeal). Indeed, in response to this pleading filed by the Bank, the Plaintiff (1st Respondent in the Appeal) filed a Reply to Defence and Defence to Counterclaim (pages 153-155 of the Record of Appeal).

126. In a nutshell, the nature of the counterclaim was that the Bank was still owed money arising out of the Hire Purchase Agreement and sought judgment against the 1st and 2nd Respondents in this appeal (in their capacity as principal borrower and guarantor respectively).

127. The Bank led evidence in support of its counterclaim by filing relevant documents and calling witnesses in support of its case and specifically, the counterclaim. See the following pages of the Record of Appeal: pp. 152 (List of Witnesses: pp. 168-173 (Witness Statement of David Kiptoo; pp 174-197 (List and Bundle of Documents) and pp. 198-209 (Supplementary List and Bundle of Documents). The Bank's witness testified as DW2 on the 29th of October 2018.

128. A look at the judgment of the trial court (at page 298 of the Record of Appeal) shows that the trial magistrate identified as issue number (e) the Bank's counterclaim/cross-action in the following manner:“Whether the 2nd Defendant is entitled to the sum of Kshs. 2,275, 542. 00 from the Plaintiff and the 1st Defendant".

129. Firstly, this issue was captured erroneously as the Bank's Counterclaim was not against the Plaintiff and the 1st Defendant but as against the 1st and 2nd Defendants in the cross-action (see titling of Further Amended Defence and Cross-Action and reliefs set out therein). This error at the onset led the trial magistrate down an erroneous path.

130. Secondly and though listed and framed as an issue for determination, the trial magistrate did not address the issue (as identified) at all, thus falling foul of the law. See the judgment at pages 298-303 of the Record of Appeal. All framed issues for determination must be determined by the court. Order 21 rule 5 of the Civil Procedure Rules provides as follows:“In suits in which issues have been framed. the court shall state its finding or decision. with the reasons therefor, upon each separate issue"

131. By failing to state its finding or decision on this issue, the trial court fell foul of the law, and on this ground alone, the appellate court ought to intervene and reverse the judgment of the trial court.

132. As the Appellate Court has wide ranging powers on a first appeal, the Bank urge the Court to consider the totality of the evidence on the Bank's counterclaim and proceed to enter judgment in favour of the Bank as set out in the Counterclaim dated the 18th May 2017. In doing so, the bank urge the court to consider the following matters:a.No Defence to the counterclaim/cross action was filed by Rueben Mongare Kaba, the 2nd Defendant in the cross-action and 2nd Respondent in the present appeal. As such, the claim against him was uncontroverted. The Bank filed a Request of Judgement on 29th of October 2019 and on the same a judgement should have been entered against the 2nd Respondent.b.Rueben Mongare Kaba had executed a guarantee dated the 20th of September 2012 in favour of the Bank. See page 203 of the Record of Appeal for a copy of the Guarantee.c.The Bank provided a statement of account which indicated the sums then outstanding under the Hire Purchase Agreement. See pages 5-7 of the Bank's Supplementary List of Documents (appearing at pp. 204-206 of the Record of Appeal) a statement as at June 2014d.The Bank tendered evidence that whilst the Financed Amount was Kshs 6, 970. 508. 00 (Kshs. 4,150,000. 00 plus interest) it had only received a total of Kshs 3. 694,075. 00 (a sum of kshs. 2,078,023. 00 from the Plaintiff and Kshs.1,616,052. 00 from the 1st Defendant) leaving a balance of Kshs. 2,275,342. 00 due and payable. See paragraphs 7, 8 and 19 of the witness statement of David Kiptoo. See pages 170 and 172 of the Record of Appeal. See also Statement at pages 207-208 of the Record of Appeal indicating total amounts received from the Plaintiff and the 1st Defendant as at June 2014. e.The evidence on amounts outstanding were not controverted in any way through evidence by way of an independent third party - it was simply an assertion by the Plaintiff that he had fully paid the Hire Purchase amount.f.In its communication with the Bank, the Plaintiff never disputed being in default and indeed, never disputed that there were arears outstanding to the Bank and undertook to issue various post-dated cheques. He would not have done so if the loan was fully repaid. See pages 201-202 of the Record of Appeal.g.The Bank had paid out an amount of Kshs. 4,150,000. 00 being the principal amount and was thus out of pocket for this amount. See pages 181 and 190 of the Record of Appeal.h.The Plaintiff only asserted that he had paid an amount way above the figure he ought to have paid by October 2012 under the Hire Purchase Agreement. See para 11 of the Further Amended Plaint at page 63 of the Record of Appeal.i.The Plaintiff never pleaded the total amount he paid under the Hire Purchase Agreement nor that he had fully settled the payments due under the Hire Purchase Agreement. Indeed, if he had fully paid the loan facility as alleged, he would have exercised his option to purchase under clause 3(b) of the Hire Purchase Agreement. He did not do so.j.Statements of Accounts were submitted by the Bank. These were not controverted in any way. In any event, under section 176 of the Evidence Act, are prima facie evidence of the entries contained therein. The section provides as follows:“Subject to the provisions of this Chapter of this Act, a copy of any entry in a banker's book shall in all legal proceedings be received as prima facie evidence of such entry, and of the matters, transaction and accounts therein recorded"

133. The rate of interest sought for in the Counterclaim is contractual at 9% p.a. provided for in the Offer Letter. See clause 5 of the Letter of Offer appearing at page 181 of the Record of Appeal. Interest should run from 14th of June 2014, which is the date when the last installment payment was made by the Plaintiff through cheque No. 18-page 208 of the Record of Appeal.

134. We therefore urge the court to enter a judgment for the Bank against the 1st and 2nd Respondents for the sum of Kshs. 2,275,542. 00 plus interest thereon at 9% p.a. from 14th June 2014 until payment in full.

135. Under the ground of Appeal No. 4, the Bank asserts that, by granting a permanent injunction to the Plaintiff, the trial court ostensibly removed the Bank's security from its reach and re-wrote the terms of the contract between the parties. This was to the grave detriment and prejudice to the Bank.

136. Through the Judgment and subsequent Decree, the trial court issued a permanent/mandatory injunction in the following terms:“A permanent injunction is hereby issued restraining the defendants from selling or howsoever interfering with the plaintiff's motor vehicle registration number KBQ 181Q Mitubishi Fuso Lorry." (pp.364-365 of the Record of Appeal)

137. It should be noted that:a.The trial court was fully aware that there was a possibility that there was an amount outstanding and due to the Bank under the Hire Purchase Agreement when it observed: -“In the circumstances, the court chooses to believe the plaintiff's version that he has fully paid the sum owing on the hire purchase agreement. If there is any amount outstanding on the hire purchase agreement the same Can only be established upon taking of account between the defendants." See page 301 of the Record of Appeal”.b.The trial court was fully aware that the Hire Purchase Agreement provided the Bank with the right of repossession. See clause 4 of the Hire Purchase Agreement (page 183 of the Record of Appeal).c.Motor vehicle registration number KBQ 181Q Mitsubishi Fuso Lorry (hereinafter "the Hirer Vehicle") was duly registered in the names of both the Plaintiff and the Bank as joint Owners to protect the Bank's interests. See page 191 of the Record of Appeal for a copy of the logbook.

138. In the above circumstances it was an error of law for the trial court to issue a Permanent injunction in the manner that it did because it in effect changed the terms of the Hire Purchase Agreement between the parties and extremely prejudiced the Bank as its only security for the facility was effectively discharged.

139. In addition, the law on granting permanent/mandatory injunctions is well settled. It is the bank's contention that the ingredients for granting a permanent injunction had not been met and the orders issued by the trial court in that respect are and should be set aside ex debitio justitiae.

140. In Malier Unissa Karim -Vs - Edward Oluoch Odumbe (2015) ekLR, the Court of Appeal stated as follows:The test for granting a Mandatory Injunction is different from that enunciated in the Giella -Vs - Cassman Brown case which is the locus classicus case of Prohibitory Injunctions. The threshold in Mandatory is higher than the case of Prohibitory Injunction and the Court of Appeal in the case of "Kenya Breweries Ltd-Vs- Washington Okeyo (2002) EA 109" had the occasion to discuss and consider the principles that govern the grant of a Mandatory Injunction was correctly stated in Vol. 24 Halsbury Laws of England 4th Edition Paragraph 948 which states as follows: -"A Mandatory Injunction can be granted on an interlocutory application as well as at the hearing but in the absence of special circumstances, it will not normally be granted. However, it the case is clear and one which the Court thinks ought to be decided at once or if the act done is simple and summary one which can be easily remedied, or if the Defendant attempts to steal a match on the Plaintiff, a Mandatory Injunction will be granted on an Interlocutory application"

141. There were no special circumstances in the present case. Indeed, none were identified by either the Plaintiff nor the court. It was incumbent upon the Plaintiff to set out the special circumstances that would warrant the granting of mandatory/permanent injunction. He failed to do so. There was therefore no basis in law or in fact to grant the injunction in the manner in which the trial court did.

142. The Bank therefore submit that, the order of permanent injunction issued to be overturned and substituted with an order dismissing the prayer for a permanent injunction.

143. Under the ground of Appeal No. 5, the Bank asserts that the trial court was wrong in awarding the Plaintiff damages on account of loss of user in the sum of Kshs. 4,875,000. 00.

144. That the trial magistrate set out the damages under this head as a claim for loss of user at the rate of Kshs. 25,000. 00 per day for 195 days.

145. The plaintiff framed the claim under this head as follows (see prayer (f) of the Further Amended Plaint at page 64 of the Record of Appeal): "the defendants pay for loss of user of the motor vehicle for the period 10th October 2012 to 24th May 2013 at the rate of Kshs. 25,000. 00 per day".

146. The Bank submit and respectfully urge the Court to wholly overturn this finding and dismiss in its entirety the Plaintiff's claim for loss of Use.a.The Bank concedes that it issued an order for repossession of the Hire Vehicle (see page 200 of the Record of Appeal) for the primary reasons that (1) The Plaintiff had failed to maintain the comprehensive cover on the Hire Vehicle which he was contractually required to do under clause 2(h) of the Hire Purchase Agreement(see page 194 of the Record of Appeal for a letter from the insurer confirming cancellation of the insurance policy) and (2) the Hire Purchase Agreement was in arrears.b.The plaintiff settled the arrears and undertook to take out comprehensive insurance cover with APA Insurance over the Hire Vehicle - see pages 201-202 of the Record of Appeal. The account was therefore current as far as the Bank was concerned and the Bank had no reason to subsequently detain the Hire Vehicle.c.Thereafter, the Hire Vehicle was detained by the 3rd Respondent without authority of the Bank, ostensibly for the reason that the Plaintiff owed the 3rd Respondent some funds. This position was clearly communicated to the Plaintiff. See pages 193, 195, 196 and 197- and it was clear to both the Plaintiff and the 3rd Respondent that (1) the Hire Vehicle was no longer being detained at the request and/or instruction of the Bank and (2) the Hire Vehicle was in the custody of the 3rd Respondent, Automobile Warehouse Nakuru Limited. See also testimony of the Plaintiff (pages 315-316 of the Record of Appeal) where he states: "l produce the banking slip as Pexh 11. After paying the said Kshs. 411,388. 00. the 2nd Defendant referred me to the 1st Defendant to release the motor vehicle to me. Still, the motor vehicle was not released"d.The Bank cannot therefore be penalized for loss of use for the period 10th October 2012 to 24th May 2013 as during this period, the Hire Vehicle was not in the Bank's custody and was not detained at the request or instruction of the Bank.e.In any event, one of the conditions under which the Hire Vehicle was to be released to the Plaintiff was proof that the Plaintiff had taken out a Comprehensive insurance cover over the Hire Vehicle. See letter dated fhe 14th of September 2012 from the Plaintiff to the Bank at page 202 of the Record of Appeal. Through his own testimony, the Plaintiff concedes that he only took out the insurance cover after the court issued a court order compelling him to do so. This was on or about the 23rd of May 2013. See court order at page 116-117 and Third-Party Insurance Policy with Britam at page 118 of the Record of Appeal.f.In view of the above, and without prejudice to what is stated hereinbefore, the Bank asserts that (1) the Plaintiff had failed to fulfil all conditions to secure release of the Hire Vehicle-by obtaining insurance and (2) failed to obtain the proper insurance cover by obtaining only a third-party cover as opposed to a Comprehensive insurance cover. The claim for loss of use cannot therefore succeed.g.Once the Plaintiff cleared all the areas due once the Hire Vehicle was repossessed, he had a contractual obligation to continue making the monthly payments of the facility as and when they fell due. From his own evidence, after he made a payment of Kshs. 411,388. 00 to the bank on 1oth of October 2012. the only other payment he made on the load account prior to 24th of May 2013 was a sum of Kshs. 73,000. 00 made on 16th November 2012. See page 124 and 208 of the Record of Appeal. It therefore follows that during the period in question (10. 10. 12 and 24. 05. 2013) the Plaintiff was as a matter of fact in default and in arrears as to his monthly payment obligations thereby entitling the Bank to repossess the Bank.h.Lastly, there was insufficient evidence to Support the claim of loss of revenue to the tune of Kshs. 25,000. 00 per day, the burden of proof lay on the Plaintiff to demonstrate that this was the revenue he had lost per day for the period in question. The evidence he tendered was that: The Hire Vehicle was Used for transporting building material in Kisii and Trans-mara. No documentary evidence of this was tendered.

He produced a daily income record for a motor vehicle KBP 181Q for the period 01. 12. 2011 to 31. 12. 2011 and 01. 01. 2012 to 31. 01. 2012. See pages 125-126 and 122-123 of the Record of Appeal.

He produced a contract he had with Rachama Building Construction to supply Sand dated the 6th of May 2012. See pages 127-140 of the Record of Appeal.i.It is the Bank submission that, this was insufficient to return a finding that there was loss of revenue for the period in question at 25,000. 00 per day for the following reasons: As a matter of settled law, special damages of the nature of the loss of use claim must be specifically pleaded and proven. See Summer LTD Meru vs Moses Kithinji Nkanata [2006] eKLR High Court Civil Appeal No. 89 of 2004, Lenaola J (as he then was) held that:

“the amount of earnings from a business is not a matter that can be left to judicial discretion or reason since it is a special damage that must be specifically proved. Without such proof, it cannot be awarded..."

In Bungoma HCCA No 20 Of 2001 Kenya Power &Lighting Co Ltd Vs Henry Wafula Masibayi [2013] eKLR the court stated the following in special damages

“special damages must not only be claimed specifically but must also be proved strictly for they are not the direct natural or probable consequences of an act complained of and may not be inferred from the act."

Further the court stated the following in paragraph 17

“(17)The Appellant in the cross-appeal did not address the special damages he claimed to have suffered and particularized in the amended plaint. He did not produce a single receipt to show that he purchased alternative power equipment's and fuel in particular, 3 Optimus lamps, candles and paraffin. He did not also produce any audited accounts, evidence of daily income for the Period of the loss he claimed he suffered. Therefore, although the Appellant may have suffered loss, there was no justification, legally and factually, to make an award of Ksh. 100,000/= as minimal compensation in the absence of specific proof. The trial magistrate erred in law by attempting to make an award which was not based on specific documentary evidence needed to strictly prove special damages. In law, it was not possible in the circumstances of this case for the trial magistrate to have made an award akin to general damages where the claim is one for special damages. The award of Ksh.100,000/= made by the trial magistrate is hereby set aside."

There was no evidence that the Hire Vehicle indeed was used to transport building material. No permits, licenses or evidence of Payment of cess to the County Government were tendered.

The daily income record was an undated and unsigned document whose author was unknown. It was unsupported by any corroborating documentation. It cannot, in law or in fact, form the basis of returning a finding that the Plaintiff's income per day was a Sum of Kshs. 25,000. 00.

The Plaintiff ought to have provided cheques, purchase orders, receipts, Certified bank statements. audited accounts and Tax returns to demonstrate the average daily income generated by the Hire Vehicle.

There is no rationale/logic for how the court adopted the period of 195 days as the number of days to be used to calculate the loss of Use claim. If appears to be a number simply plucked from nowhere. The trial court was under duty to justify the applicable days for which the claim for loss of use was ultimately awarded. He failed to do so.

147. For the above stated reasons, the Bank submit that the trial courts award of damages for loss of use ought to be wholly overturned and that limb of the claim be dismissed in its entirety.

Grounds of Appeal Nos. 1,2,6,7 and 8 148. The Bank has collapsed and argued these grounds of appeal together. In a nutshell, the Bank's position on these grounds of appeal is that taken in totality, the trial magistrate erred in fact and in law by; misapprehending or misapplying the evidence before him; failed to consider the evidence on record: misdirected himself in exercising his discretion and failed to apply and appreciate the provisions of the Hire Purchase Act.

149. The Bank humbly submit as follows under these grounds of appeal.a.On whether the Hire Purchase amount had been fully settled by the Plaintiff. That there was on record evidence to support the position that the Purchase Price of the Hire Vehicle was an amount of Kshs. 6,851,380. 00 out of which Kshs. 4,150,000. 00 was to be financed by the Bank (this amount is exclusive of interest payable to the Bank with the balance (Kshs 2,701,380. 00) payable to the motor dealer as a deposit on the Purchase Price. See page 190 of the Record.b.There is evidence on record that inclusive of interest, the amount payable to the Bank was a sum of Kshs. 5. 270,580. 00. See Hire Purchase Agreement at pages 182-184 of the Record of Appeal.c.Therefore, at the onset of the contract, the total amount due from the Plaintiff to both the Bank and the motor dealer was an amount of Kshs. 7,971,960. 00 (Kshs.5,270,580. 00+Kshs. 2,701,380. 00).d.There is evidence on record (though disputed by the Defendants) by the Plaintiff himself that he only repaid a total sum of Kshs. 6,953,363. 00. See page 124 of the Record of Appeal. By the Plaintiff's own evidence, there was therefore an outstanding balance of Kshs. 1,018,597. 00 before factoring in bank charges, interest and late payment penalties, repossession charges etc.e.On the basis of the above basic information available to the court, there was therefore no factual basis of returning a finding that the Plaintiff had duly paid or satisfied payments as per the Hire Purchase Agreement. It also follows that there was no basis in granting a permanent injunction restraining the Bank from exercising its contractual rights to repossess and sell the Hire Vehicle in the event there was default.f.The trail magistrate, without interrogating the above primary documents, came to the conclusion that "the court choses to believe the plaintiff's version that he has fully paid the sums owing on the hire purchase agreement". See page 301 of the Record of Appeal. The court had a duty not only to interrogate the evidence on record but also justify the finding that it came to on that issue, using cogent legal arguments and basis. It failed to do so.g.There was in fact no cogent evidence from the plaintiff that he had fully paid the Hire Purchase loan. There were no statements of account submitted or a formal assessment of the repayments made. He simply asserted that he had fully repaid his loan. And the court "chose to believe the plaintiff". The burden of proof lay with the plaintiff, and he failed to discharge this burden. See sections 107(1), 109, 110 of the Evidence Act.h.On the claim for loss of user, the court indicated that it exercised its discretion to use a multiplier of 195 days to compute damages under this head. The issue was captured at page 302 of the Record of Appeal as follows:“The period between 12/10/2012 when the plaintiff made payment and 24/05/20 13 when the vehicle was released to him is 22 days. The vehicle would have worked every single day without provision for service and rest days. The court shall adopt 195 days as the days as the plaintiff suffered loss of user."i.Firstly, the Bank submit that there is no discretion in computing special damages as they must be specifically proven. Secondly. The Court gives no reason or rationale for settling on 195 days as the multiplier. The trial court in the Bank’s submission misdirected itself on the matter.j.On the Insurance cover - the trial court returned the finding that the plaintiff Was in breach of the Hire Purchase Agreement in failing to keep the motor vehicle comprehensively covered. See page 299 of the Record of Appeal. However, the court proceeds to make a curious finding - that by accepting payment of overdue installments of Kshs. 411,388. 00. the bank waived rights accrued as a result of the breach.k.This finding is unsupported by any law and indeed expressly contravene the provisions of the Hire Purchase Agreement - which contractually gives the Bank a right of repossession. Further, the Bank could not contractually waive any of its rights by mere payment of accrued installments by the Plaintiff particularly if other contractual obligation of the Plaintiff remained unsatisfied- in this Case a comprehensive insurance.

150. That it is not the duty of the court to rewrite the terms of contract, but it is the duty of the court to interpret the terms of the contract. See Pius Kimaiyo Langat Vs. Co-operative Bank of Kenya Ltd (2017) eKLR the Court of Appeal stated that: -“We are alive to the hallowed legal maxim that it is not the business of Courts to rewrite contracts between parties, they are bound by the terms of their contracts, unless coercion, fraud or undue influence are pleaded and proved."

151. That, that during trial it emerged that some of the monthly payments were paid directly to the 3rd Respondent by the 1st Respondent for onward transmission to the Bank and the said amounts have been accounted for by the Bank by tabling a schedule detailing the amounts that had been paid.

152. The Bank submit that, the hire purchase agreement and the buy-back guarantee therefore imposed a co-extensive obligation upon both the 1st Respondent (principal debtor) and the 3rd Respondent (as original guarantor) to ensure payment amounts are paid and are up to date. Hence the Respondents understood and knew each other duties and obligation in relation to the fulfilling the terms, conditions, and obligation of the Hire Purchase Agreement.

153. We submit the relationship between the 1st, 2nd and 3rd Respondents was a relationship of guarantee and the same was provided under clause 10 of the Hire Purchase Agreement. Thus, the trial court cannot claim the Bank and the 3rd Respondent entered in to a buy-back guarantee contract in exclusion of the 1st Respondent. It should be noted the Hire Vehicle was indeed registered in the names of the Bank, the 1st Respondent and the 3rd Respondent in recognition of this fact (page 191 of the Record of Appeal).

154. The Bank submit that, the 1st Respondent was fully aware of the same and when he failed to fulfill his obligations it resulted with the 3rd Respondent requesting the Bank to be excused from his guarantee obligation; on the said actions the 1st Respondent went further to nominate the 2nd Respondent [Mr. Rueben Mong'are Kaba] as his guarantor and a guarantee contract dated 20th of September 2012 in favour of the Bank was signed (See page 203 of the Record of Appeal).

155. In Nairobi Civil Appeal No 63 Of 2012 Lalii Karsan Rabadia & 2 Others V Commercial Bank of Africa Limited [2015] eKLR the court cited“the law of guarantees "'by Geraldine Andrews & Richard millet 2nd edition, at page 156 states as follows"a contract of guarantee is an accessory contract, by which surety undertakes to ensure the principle performs the principal obligation. It has been described as a contract to indemnify the creditor upon the happening of a Contingency namely the default of the principle to perform the principal obligation. The surety is therefore under secondary obligation which is dependent upon the default of the principal, and which does not arise until that point."

156. From the above is evident that the 1st Respondent bores the primary obligation as the primary debtor and the secondary obligation Is imposed upon the guarantor. For the trial court to allege the Bank and 3rd Respondent acted in bad faith in where the 1st Respondent interest was of concern, we submit this is a blatant disregard of matter of fact and law.

157. That from the above submissions in the above issue of determination, the Bank submits that, the entire Judgement issued by the trial court should be set aside in its entirety and a new Judgment should be entered in its favor.

158. The Bank submits that, it tendered sufficient proof in relations to the amended counterclaim filed at the trial court and had the court sufficiently interrogated the trial court would have awarded the relief sought. As the 1st Respondent and the 2nd Respondent intentionally and maliciously ignored and failed to submit payment in regards to the Hire Purchase Agreement.

159. As to who should bear costs of the suit the Bank submits that, as the general rule is that costs shall follow the event in accordance with the provisions of Section 27 of the Civil Procedure Act (Cap. 21). A successful party should ordinarily be awarded costs of an action unless the court, for good reason, directs otherwise.

160. Reliance is placed in the case of Jasbir Singh Rai & 3 others Vs Tarlochan Singh Rai & 4 others SC. Petition No. 4 of 2012: (2014] eKLR. The Supreme Court held that costs follow the event and that the Court has the discretion in awarding such costs.

161. The Bank therefore urges the court to order the 1st Respondent to bear the costs of both the subordinate court and this appeal.

Analysis and Determination 162. I have considered in detail, the entire Record of Appeal, the rival Submissions filed both before the Trial Court and in this Appeal and will consider the whole appeal and freshly scrutinize the facts and arrive at my own determination and conclusion.

163. This being a first Appeal, I am guided by the dictum in the case of Selle vs. Associated Motor Boat Co. Ltd. [1965] E.A. 123, where it was held that the first appellate court has to reconsider and evaluate the evidence that was tendered before the trial court, assess it and make its own conclusions in the circumstances.

164. Similarly, in Abok James Odera t/a A.J Odera & Associates v John Patrick Machira t/a Machira & Co. Advocates [2013] eKLR, the court stated with regard to the duty of the first appellate court;“This being a first appeal, we are reminded of our primary role as a first appellate court namely, to re-evaluate, re-assess and reanalyse the extracts on the record and then determine whether the conclusions reached by the learned trial Judge are to stand or not and give reasons either way”

165. That the trial magistrate erred in fact and in law, in failing to consider and give a determination of the Bank's Counterclaim raised as against the 1st Respondent.

166. That the trial magistrate erred in fact and in law, in finding that the 1st Respondent had fully paid for the Hire Purchase loan.

167. That the trial magistrate erred in fact and in law, in granting a permanent injunction thereby disturbing a contract amongst the parties.

168. That the Trial Magistrate did not err in law and in fact, in visiting the Appellant with the incidence of liability.

169. That the Trial Magistrate did not misdirected himself on matters of law and fact in finding for and awarding loss of user of Kshs. 4, 875,000/= against the Appellant and the 2nd Respondent jointly and severally computed at 25,000/- per day.

170. That, the inclusion of the Guarantor to the 1st Respondent by the 2nd Respondent as a party to this proceeding is disallowed, as no material was laid to demonstrate proper service was ever effected, to justify a judgment.

171. Owing to the afore going reasons above, this Court enters Judgment on the following terms;a.That Judgment is entered in favor of 2nd Respondent against the 1st Respondent that, the hirer had not fully paid the Hire Purchase loan.b.That 1st Respondent only repaid a total sum of Kshs. 6,953,363. 00 against the total amount due to both the 2nd Respondent and the Appellant was an amount of Kshs. 7,971,960. 00 (Kshs.5,270,580. 00+Kshs. 2,701,380. 00).c.That the Trial Magistrate did not misdirected himself on matters of law and fact in finding Appellant and the 2nd Respondent jointly and severally Liable for this unlawful.d.Judgment is hereby entered in favor of the 2nd Respondent against the 1st Respondent for the sum of Kshs. 2,275,542. 00 plus interest thereon at 9% p.a. from 14th June 2014 until payment in full.e.The Award of loss of user of Kshs. 4, 875,000/= against the Appellant and the 2nd Respondent jointly and severally is hereby confirmed.f.The Permanent Injunction issued is hereby vacated and set asideI. Parties shall bear their own costs

It is so ordered.

SIGNED, DELIVERED VIRTUALLY ON TEAMS PLATFORM ON THIS 9TH NOVEMBER 2023______________________MOHOCHI S.MJUDGE