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Mbotaz v NIC Bank Ltd (Civil Appeal E018 of 2020) [2026] KECA 1291 (KLR) (10 July 2026) (Judgment) Neutral citation: [2026] KECA 1291 (KLR) Republic of Kenya In the Court of Appeal at Nairobi Civil Appeal E018 of 2020 K M'Inoti, EC Mwita & B Ongaya, JJA July 10, 2026 Between Balume Laurent Mbotaz Appellant and NIC Bank Limited Respondent (Being an appeal against the judgment and decree of the High Court of Kenya at Nairobi (Kasango, J.) dated and delivered on 1st day of July 2020 in HCCA No. E012 of 2019 Civil Appeal E012 of 2019 ) Judgment 1.This is an appeal from the judgment and decree of the High Court of Kenya at Nairobi (Kasango, J) (the first appellate court) dated and delivered on 1st July 2020. NIC Bank Limited (the Bank) had appealed against that judgment of the trial magistrate delivered on 18th April 2019. 2.Balume Laurent Mbotaz, (the appellant) and the bank entered into two agreements: hire purchase agreement dated 7th November 2014 for the purchase on hire of vehicle motor vehicle registration No. KCA 854Z, Mercedes Benz Actross and Trailer, registration ZE8341 (the vehicle and trailer respectively) to be financed by the bank as the hirer and a chattels mortgage over the trailer dated 19th November 2014. The appellant was to pay for the vehicle in 47 monthly instalments of Kshs. 157,180 and a final instalment Kshs. 162,000. Under the chattels mortgage agreement, the appellant was to repay the loan in 47 monthly instalments of Kshs. 56,100 and a final payment of Kshs. 61,159, with effect from 14th December 2014. The agreement had a clause that in the event of default of payment of instalments, the bank had the right to repossess both the vehicle and the trailer. 3.The appellant defaulted in repayments leading to the bank repossessing the vehicle. The appellant filed a suit before the Magistrate’s Court seeking a declaration that repossession was illegal, and damages. The bank filed a defence denying the appellant’s claim and raised a counterclaim for Kshs. 4,752,683.89 being the outstanding loan. The trial Magistrate found in favour of the appellant, declared repossession of the vehicle illegal; ordered the bank to release the vehicle and awarded the appellant damages of Kshs. 10, 800,000 for loss of user of the vehicle. The bank’s counter claim of Kshs. 4,752,683.89 being the loan balance as at 28th March 2017 was to be offset from the damages awarded. 4.The bank was aggrieved and appealed to the first appellate court, which reversed the magistrate’s decision, dismissed the appellant’s claim and allowed the bank’s counterclaim. 5.The appellant was dissatisfied and filed this second appeal through a memorandum of appeal dated 31st August 2020, raising 12 grounds of appeal which can be summarized as follows; that the learned judge erred in: setting aside the magistrate’s finding and declaration that repossession of the vehicle was illegal and the award of damages; failing to find that the bank breached the hire purchase and chattels mortgage agreements; finding that the appellant was in arrears; failing to find that the terms of the agreements and the letter of commitment dated 29th March 2017 were misrepresented to the appellant and not explained to him in violation of section 13(2)(a) of the Consumer Protection Act or find that the appellant was protected by section 20(1) of the same Act; failing to find that there was misrepresentation to the appellant that the contractual relationship between the appellant and the bank was under the Hire Purchase Act; ignoring the appellant’s legitimate expectation on ownership of the vehicle and constitutional right to property; considering irrelevant matters and making determination based on emails that had been overtaken by events considering the conduct of the parties restructuring the loan facility; and turning the appellant away from the seat of justice despite injustice committed against him. 6.The appellant urged this court to set aside the judgment of the High Court and reinstate the judgment of the magistrate. In the alternative, the appellant urged this court to find in his favour; make a finding regarding the legality of the repossession of the vehicle and make an appropriate award on special and general damages. 7.When this appeal came up for plenary hearing through the court’s virtual Platform, Mr. Tole learned counsel appeared for the appellant while Mr. Njenga, learned counsel, was present for the bank. Both counsel relied on their written submissions with brief highlights. 8.Mr. Tole urged this appeal on two main grounds. First, that the first appellate court erred in failing to give effect to the intention of the parties in the transaction and construe the agreement in favour of the appellant given that the Hire Purchase Act did not apply despite the appellant having paid more than 2/3 of the purchase price, but was not protected by section 5 of the Hire Purchase Act. Counsel submitted that the first appellate court erred in taking into account only section 3 of the Hire Purchase Act which limits the contract to Kshs. 4 million and failed to appreciate section 20 of the Consumer Protection Act which is derived from article 46 of the Constitution and not only offers protection but also ensures consumers get fair price for the goods. 9.In this respect, Mr. Tole submitted that since the appellant had paid Kshs. 5,545,540 out of Kshs. 7,200,800 which was equivalent to 77% and, therefore, more than 2/3 of the purchase price by the time the vehicle was repossessed on 28/3/2017, the contract fell under section 20 of the Consumer Protection Act. The respondent could only repossess and sell the vehicle after obtaining a court order. 10.Second, Mr. Tole submitted that the first appellate court took into account irrelevant matters; put a lot of reliance on an admission letter written in Kiswahili and dated 29/3/2017 which was done through coercion; misrepresentation that the agreement was pursuant to the Hire Purchase Act as well as the issue surrounding insurance agreement which was not supported by evidence. 11.Counsel argued that in case of ambiguity like in this case where the Hire Purchase Act was found not to apply, the first appellate court should have considered the principle of fundamental mistake in favour of the appellant. The first appellate court therefore erred in setting aside the judgment of the Magistrate’s Court declaring repossession of the vehicle unlawful and awarding damages. 12.Mr. Njenga submitted on behalf of the bank that the appellant did not raise the issues of misrepresentation; coercion; section 20 of the Consumer Protection Act or infringement of rights before the first appellate court; the appellant did not plead or prove misrepresentation or coercion either in the plaint or reply to defence and defence to the counterclaim before the magistrate’s court; those issues having not been raised before the two courts below cannot be raised in a second appeal. 13.Mr. Njenga submitted that the agreements the parties entered into were in English language; the appellant executed the agreements voluntarily and signed a declaration that he had understood the terms of the agreements, including consequences in the event of default. The agreement for purchase of the vehicle was also clear that the agreed amount was Kshs. 7,544.560 which was more than Kshs. 4 million. In that respect, parties were bound by the terms of the agreements they entered into. 14.It was Mr. Njenga’s submission that there was no dispute that the bank financed the purchase of the vehicle; the appellant defaulted in repayment and the bank rightfully repossessed the vehicle; the appellant had not paid more than 2/3 of the price; that the contract amount was Kshs. 5,256,800 plus interest of Kshs. 2, 287,260 making a total of Kshs. 7,544560; that the amount under the chattels mortgage agreement was Kshs. 1,944,00 plus interest of Kshs. 748,829 making a total of Kshs. 2,692,829 and that at the time of repossession, the appellant had only paid Kshs. 5,545,540 about 54% of both agreements which was less than 2/3 of the contract amount. The appellant could not seek protection under the Hire Purchase Act since the Act did not apply. 15.Mr. Njenga argued that the first appellate court was right in finding that repossession of the vehicle was lawful and that the trial magistrate erred in awarding damages which had not been pleaded and proved as special damages. He urged that the appeal be dismissed. 16.This court's mandate in a second appeal is limited to considering questions of law only unless it is shown that the first appellate court considered matters it should not have considered or did not consider matters that it should have considered or that the decision is otherwise perverse. 17.In Charles Kipkoech Leting v Express (K) Ltd & another (2018) eKLR this court stated as follows:“This is a second appeal. Our mandate is as has been enunciated in a long line of cases decided by the Court. See Mina Mugiria (1983) KLR 78, Kenya Breweries Ltd verses Godfrey Odongo, Civil Appeal No. 127 of 2007 and Stanley Muriithi & another versus Bernard Munene Ithiga (2016) eKLR for the holdings inter alia that, on a second appeal, the Court confines itself to matters of law only unless it is shown that the courts below considered matters they should not have considered or failed to consider matters they should have considered or looking at the entire decision, it is perverse.” 18.We have carefully considered submissions by the parties, the authorities cited and the law. We discern the main issue for determination to be whether the first appellate court erred by setting aside the judgment of the magistrate’s court. The first appellate court found as a matter of law that the Hire Purchase Act did not apply to the agreement between the parties since the contract amount was above Kshs. 4 million. This finding of law has not been contested by the appellant. The first appellate court further made a finding of fact that the appellant had defaulted and for that reason set aside the trial Magistrate’s decision which had found repossession of the vehicle to be illegal. The first appellant court also found that the award of damages for loss of user being in the nature of special damages, was not specifically pleaded and strictly proved. 19.We have perused the plaint dated 7th April 2017 and amended on 28th August 2017. The appellant sought two main reliefs, namely:“A permanent injunction to restrain the respondent from interfering, selling, transferring and or in any way making adverse dealings of Motor Vehicle Registration Number KCA 854Z/ZE 8341 Mercedes ACTROS” and “Loss of earnings from 29th March to the date of judgment.” 20.The respondent did not plead the amount of loss of user he had suffered or was suffering. The respondent’s witness statement and testimony before the trial magistrate did not also state how much the loss of user was. The law is settled that special damages must not only be specifically pleaded, they must be strictly proved and we need not cite authority as the first appellate court did cite relevant authorities from this court, but if authority is required, it suffices to cite this court’s decision in David Bagine v Martin Bundi [1997] KECA 154 (KLR), where this court stated as follows:“It has been held time and again by this court that special damages must be pleaded and strictly proved. We refer to the remarks by this court in the case of Mariam Maghema Ali v Jackson M. Nyambu t/a sisera store, Civil Appeal No. 5 of 1990 (unreported) and Idi Ayub Sahbani v City Council of Nairobi [1982- 88] IKAR 681 at page 684:[S]pecial damages in addition to being pleaded, must be strictly proved as was stated by Lord Goddard CJ in Bonham Carter vs. Hyde Park Hotel Limited [1948] 64 TLR 177 thus:“Plaintiffs must understand that if they bring actions for damages it is for them to prove damage, it is not enough to write down the particulars and, so to speak, throw them at the head of the court, saying, 'this is what I have lost, I ask you to give me these damages.' They have to prove it.” 21.We are unable to fault the first appellate court for finding that loss of user was not pleaded and proved. We find that it correctly set aside damages awarded in that respect by the magistrate’s court. 22.The appellant also faulted the first appellate court for failing to find that the terms of the agreements and the letter of commitment dated 29th March 2017 were misrepresented and were not explained to him in violation of section 13(2)(a) of the Consumer Protection Act or failed to find that the appellant was protected under section 20(1) of the Consumer Protection Act; erred in failing to find that there was misrepresentation to the appellant that the contractual relationship between the parties was under the Hire Purchase Act; ignored the appellant’s legitimate expectation regarding ownership of the vehicle and the appellant’s constitutional right to property. The appellant further argued that the first appellate court considered irrelevant matters thus, turned the appellant away from the seat of justice despite the injustice committed against him. The respondent took the view that the appellant had raised new issues that were not raised before the first appellate court and cannot therefore, be raised in a second appeal. 23.The law does not allow this court to consider new issues that were not raised before the first appellate court unless they were raised but the first appellate court failed to consider them. In George Owen Nandy v. Ruth Watiri Kibe, [2016] KECA 622 (KLR), this court held as follows:“In general a litigant is precluded from taking a completely new point of law for the first time on appeal. The jurisdiction of this court is not to decide a point which has not been the subject of argument and decision of the lower court unless the proceedings and resultant decision were illegal or made without jurisdiction. (See Nyangau v. Nyakwara [1986] KLR 712.” 24.We have again perused the record of proceedings before the first appellate court and the impugned judgment. We were unable trace any issue to do with section 20 of the Consumer Protection Act; misrepresentation; coercion or violation of rights the appellant has raised in this appeal. Indeed, during the plenary, Mr. Tole, while responding to a quest from the court, conceded that the issues they were raising such as section 20 of the Consumer Protection Act, misrepresentation and coercion were not raised before the first appellate court. This court cannot therefore address new issues that were not the subject of determination by the first appellate court below. 25.In the circumstances, we find that the appeal lacks merit and we hereby dismissed it with costs to the respondent. DATED AND DELIVERED AT NAIROBI THIS 10TH DAY OF JULY, 2026.K. M’INOTI............................................ JUDGE OF APPEALE. C. MWITA............................................ JUDGE OF APPEALB. ONGAYA............................................ JUDGE OF APPEALI certify that this is a true copy of the original.Signed.DEPUTY REGISTRAR