[2007] KEHC 1639 (KLR)
The court found that the plaintiff had fully paid the purchase price for the motor vehicle and was given possession, but the vehicle was repossessed due to the first defendant's default on a loan. The defendants failed to refund the purchase price or provide another vehicle. The court held that the sale agreement,...
Source-derived case information.
- Citation
- [2007] KEHC 1639 (KLR)
- Parties
- Plaintiff: Francis Mwangi Mwendia; Defendant: Joseph Mbugua t/a Libra Sport Services alias Libra Sport Services Ltd; Defendant: Margaret Mumbi Karanja
- Court
- High Court
- Court Station
- High Court at Nakuru
- Jurisdiction
- Kenya
- Case Number
- Civil Suit 323 of 1997
- Procedural Posture
- Civil Suit / Judgment
- Outcome
- judgment for the plaintiff
- Legal Topics
- Breach of Contract, Sale of Goods, Company Liability, Unstamped Agreements
- Source Language
- en
Source-derived case record
Summary, issues, holding and outcome
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Parties
Francis Mwangi Mwendia
Plaintiff
Joseph Mbugua t/a Libra Sport Services alias Libra Sport Services Ltd
Defendant
Margaret Mumbi Karanja
Defendant
Procedural Posture
Civil Suit / Judgment
Legal Issues
- 1 Whether the plaintiff is entitled to a refund of KShs. 790,000/= paid for the purchase of a motor vehicle from the defendants.
- 2 Whether the sale agreement is enforceable despite lack of stamp duty.
- 3 Whether the defendants are personally liable or liability attaches to the company.
Ratio Decidendi
The court found that the plaintiff had fully paid the purchase price for the motor vehicle and was given possession, but the vehicle was repossessed due to the first defendant's default on a loan. The defendants failed to refund the purchase price or provide another vehicle. The court held that the sale agreement, though unstamped, was supported by sufficient evidence of payment and delivery, and the defendants' liability was established as the transaction predated the company's incorporation. The plaintiff was entitled to a refund of the purchase price and damages for breach of contract, but not to interest, as he had use of the vehicle for six months. The court rejected the defendants'...
Court Disposition
judgment for the plaintiff
Orders
- The plaintiff is awarded KShs. 790,000/= as refund of the purchase price.
- The plaintiff is awarded KShs. 50,000/= as damages for breach of contract.
Full Case Text
Judgment text and source record
19 paragraphs
REPUBLIC OF KENYA
IN THE HIGH COURT OF KENYA
AT NAKURU
Civil Suit 323 of 1997
FRANCIS MWANGI MWENDIA ........................................................PLAINTIFF
VERSUS
MR. JOSEPH MBUGUA t/a LIBRA SPORT SERVICES
alias LIBRA SPORT SERVICES LTD...................................1ST DEFENDANT
MARGARET MUMBI KARANJA............................................2ND DEFENDANT
JUDGMENT
The plaintiff instituted this suit against the defendants Joseph Mbugua and Margaret Mumbi Karanja, first and second defendants respectively, also trading as Libra Sports Services. The plaintiff’s claim against the defendant’s is for the refund of a sum of KShs. 790,000/= being in respect of monies paid to the defendants for the purchase of a motor vehicle, a 14 setter Nissan caravan. The defendants had offered to sell the vehicle to the plaintiff and the plaintiff duly agreed to purchase the vehicle in 1993. Initially the vehicle was to cost KShs. 580,000/=. This is according to the initial invoice which was issued by the defendants to the plaintiff. The plaintiff testified that he paid the deposit of KShs. 200,000/= and he was issued with a receipt which was produced as an exhibit dated 24th May 1993. He paid the said sum by a bankers Cheque which was also exhibited by the plaintiff. Subsequently the parties entered into an agreement. The defendants were supposed to import the motor vehicle from Japan, they indicated that the foreign exchange value for a dollar had increased and so was the excise duty and the value of the vehicle would cost KShs. 800,000/=. The plaintiff paid the purchase price in installments and was issued with receipts for the total sum of KShs. 790,000/=. The plaintiff was given the motor vehicle reg. No. KAE 998E which was in the name of Joseph Mbugua the first defendant with a promise that the vehicle would be transferred to him. The plaintiff proceeded to insure the vehicle and to use it for his matatu business for a period of about six months. On 13th March 1996 the vehicle was repossessed by Gachewa Motors ltd. who claimed that the first defendant had secured a loan with the motor vehicle which was not paid. The plaintiff tried to contact the defendants to give him the motor vehicle but the defendants became un co-operative and refused to refund the money paid to them by the plaintiff or to give him another vehicle, thus the plaintiff filed the present suit seeking also for damages for breach of contract costs of the suit and interest.
The defendants filed a defence and counterclaim; however they did not attend court to defend the counter claim which was dismissed. Counsel for the defendants who appeared for them during the hearing filed written submissions. It is the opinion of counsel that the suit by the plaintiff against the first and second defendants is bad in law for reasons that Libra Sports Services is a limited liability company. He annexed a copy of the certificate of incorporation which shows the company was registered on the 22nd September 1994.
I wish to state that the practice of counsel giving evidence from the bar through submissions is unacceptable. Counsel had an opportunity to provide evidence through witnesses during the hearing. If the court were to accept this kind of evidence it would be prejudicial to the other party who will not have the opportunity to cross examine on the issues raised in the submissions and the documents that he is producing through this back door method.
The other issue raised by the counsel for the defendant, is that the plaintiff did not annex a stamp duty on the sale agreement which was entered into between him and the defendants. That is a well founded argument as the provisions of Stamp Duty Act cap 480 Section 19B provides that “documents must be stamped”. Even if one was to disregard the sale agreement, there are circumstances that clearly show that the plaintiff and the defendants entered into a sale agreement for the motor vehicle in 1993 before the so called company was incorporated, the plaintiff fully paid KShs. 790,000/= as per the receipts attached which payments were effected by way of bankers cheques in respect of the purchase price. Moreover the evidence by the plaintiff that he was given motor vehicle reg. No. KAE 998E to hold as security and to use while awaiting formal registration and issuance of the log book was not controverted by the defendants, nor was the evidence of the actual payments of the purchase price. The said motor vehicle was repossessed on the grounds that the first defendant had taken a loan using it as a security. The plaintiff was able to use that vehicle for about six months. Accordingly, I will not make an order that the plaintiff be paid interest on the money he paid as purchase price. I will enter judgment for the plaintiff for the sum of KShs. 790,000/=, I will also award the plaintiff KShs. 50,000/= for breach of contract having been guided by the decision in the case of Kenya
ries Ltd. vs. NatexDistributors Ltd. HCCC Milimani Civil Case No. 704 of 2000. The plaintiff shall also have the costs of this suit.
It is so ordered.
Judgment read and signed on 9th day of November, 2007.
M. KOOME
JUDGE