[2022] KEHC 10903 (KLR)

Murithi v Kenya Women Finance Trust (Civil Appeal 6 of 2020) [2022] KEHC 10903 (KLR) (10 May 2022) (Judgment)

Neutral citation: [2022] KEHC 10903 (KLR)

Republic of Kenya

In the High Court at Meru

Civil Appeal 6 of 2020

EM Muriithi, J

May 10, 2022

Between

Evanson Murithi

Appellant

and

Kenya Women Finance Trust

Respondent

(Being an appeal from the Judgment and decree of the Hon. T.M Mwangi (SPM) delivered on 23/12/2019 in Meru CMCC No. 23 of 2016)

Judgment

Introduction 1. By an amended plaint dated 10/9/2019, the appellant sued the respondent and Anthony Nthiga Ngando seeking:a.Permanent injunction against the defendants jointly and severally whether by themselves, their servants, agents, employees or any one claiming through them restraining them from repossessing/impounding and/or selling/disposing of motor Registration Number KBQ 147 N Toyota Station Wagon or in any other way interfering with the plaintiff’s quiet use and enjoyment of motor Registration Number KBQ 147 N Toyota station wagon.b.General damages for constructive conversion and harassment.c.Costs of the suit and interest at court rates.d.Payment of the value of Motor Registration Number KBQ 147 N Toyota station wagon as at 30th of December 2015 or payment of the purchase price of motor Registration Number KBQ 147 N Toyota station wagon as per the agreement dated 4th November 2014. e.Any other better relief that the honourable court deems fit to grant.

2. In the trial court, the appellant pleaded that he was the beneficial owner of motor vehicle Registration Number KBQ 147 N Toyota station wagon(hereinafter referred to as the subject vehicle), having bought it from Anthony Nthiga Ngando on 4/11/2014 through a written agreement. He was in possession of the subject vehicle from 4/11/2014 until 30/12/2015 when he was stopped on the road by officials of the respondent and informed that the subject vehicle jointly belonged to Anthony Nthiga Ngando and the respondent. He learnt that the respondent had financed Anthony Nthiga Ngando to purchase the subject vehicle but the latter had defaulted in his repayments. Although he delivered the subject vehicle to Meru police station for safe custody, the OCS felt that it was a civil case and refused to book the matter in the OB. The respondent proceeded to sell the subject vehicle to 3rd parties and he was claiming payment of the value of the subject vehicle as at 30/12/2015 or payment of the purchase price thereof as per the agreement of 4/11/2014. Before the appellant bought the subject vehicle, he carried out a search and the name of the respondent was not in the log book, and therefore the respondent had no claim whatsoever against him.

3. During the hearing of the case on 12/11/2019, the appellant orally withdrew the case against Anthony Nthiga Ngando, who had disappeared, and proceeded with the case against the respondent. He testified as PW1 and adopted his witness statements dated 26/1/2016 and 26/9/2019 as his evidence in chief. He further produced the sale agreement and copy of records as exhibits 1 and 2 respectively. He stated that when he bought the subject vehicle, there was nothing to let him know that the respondent had interest in the subject vehicle before they took it away. He bought the subject vehicle in 2015 and used it for 3 to 4 years, and during that time, the respondent did not come to him to make any demand. He accused the respondent of disobeying court order by selling the motor vehicle and prayed for the buying price of the subject vehicle being Ksh.350,000 and the prayers in the plaint.

4. The respondent denied the claim through its statement of defence dated 15/4/2016. Its case was however closed by the trial court as it was absent, with notice on the date of hearing.

5. After the conclusion of the trial, the trial court found that the appellant had not proved his case on a balance of probabilities and dismissed it with no orders as to costs. The trial court assessed Ksh. 300,000 as the damages it would have awarded had the appellant succeeded in his case.

6. Aggrieved by the said dismissal, the appellant filed its Memorandum of Appeal on 20/1/2020 setting out 5 grounds of appeal as follows:a.“The trial court erred in law and fact in holding the appellant did not prove his case on a balance of probabilities as is required by law.b.The trial court erred in law and fact in not analyzing the evidence on record exhaustively to reach a just conclusion.c.The trial court erred in law and fact in considering irrelevant issues in arriving at its judgement.d.The trial court erred in law and fact in disregarding the evidence of the appellant which was very clear and uncontroverted.e.The trial court erred in law and fact in failing to hold that since the respondent did not call any evidence, the appellant’s evidence was unchallenged and consequently the plaintiff had proved his case on a balance of probabilities.”

Submissions 7. The court directed the appeal to be heard by way of written submissions, which were respectively filed by the parties. The appellant faulted the respondent for disobeying a court order issued on 22/3/2016 stopping it from selling the subject vehicle to a 3rd party. He maintained that he proved his case on a balance of probabilities by producing an agreement showing that he bought the subject vehicle at Ksh.350,000. He submitted that the respondent did not have any interest in the subject vehicle as the copy of records did not bear its name either as an owner or financier. He submitted that since the respondent did not adduce any evidence to counter his evidence, his evidence was uncontroverted and the respondent’s defence was mere allegations. He supported that point with the cases of Kenya Power & Lighting Company Limited v Pamela Awino Ogunyo(2015)eKLR and Joseph C Chepkwony v Kiptagich Tea Estate Ltd & Anor(2017)eKLR. He urged the court to allow the appeal by setting aside the trial court’s judgement and relied on Josephat Mulongo Wekesa v Clerk County Council of Lugari(2017)eKLR in support thereof.

8. The respondent submitted that it was neither a party to the sale agreement between the appellant and Anthony Nthiga Ngando nor privy to its contents until the filing of the suit. It relied on the cases of Dunlop Pneumatic Tyre Co Ltd v Selfridge & Co Ltd(1915)AC 847 and Agricultural Finance Corporation v Lengetia Ltd(1985)eKLR where it was reiterated that, “as a general rule, a contract affects only the parties to it, and it cannot be enforced by or against a person who is not a party, even if the contract is made for his benefit and purports to give him the right to sue or to make him liable upon him.” It submitted that it only repossessed and sold the subject vehicle in an effort to recover the defaulted loan that was taken by Anthony Nthiga Ngando, as there was no court order restraining it from so doing. It submitted that it followed all the due process in the making of the loan agreement as it was in possession of the original log book. It submitted that Anthony Nthiga Ngando did not have a good title capable of being passed to the appellant as the contract between it and Anthony Nthiga Ngando was still in force. It faulted Anthony Nthiga Ngando for selling the subject vehicle to the appellant in utter disregard of the terms of the loan agreement, which expressly forbid him from doing so. It urged the appellant to heed the trial court’s advice and file a fresh suit against Anthony Nthiga Ngando. It submitted that since the appellant was a victim of fraud and misrepresentation of a contract, he could only sue Anthony Nthiga Ngando for breach of contract under the Law of Contract Act.

Analysis and Determination 9. The duty of a first appellate court is well settled that the court should by way of a rehearing reconsider the the facts as presented in the trial court, analyse the same and arrive at its own independent conclusions, but always remembering that, the trial court had the advantage of seeing the witnesses testify. And as held by the Court of appeal inKiruga v Kiruga & Another (1988) KLR 348:-“an appeal court cannot properly substitute its own factual finding for that of a trial court unless there is no evidence to support the finding or unless the judge can be said to be plainly wrong. An appellate court has jurisdiction to review the evidence in order to determine whether the conclusion reached upon that evidence should stand but this is a jurisdiction which should be exercised with caution.”

Issue for determination 10. From the grounds as framed, the sole issue for determination is whether the appellant proved his case on a balance of probabilities.

Determination 11. Section 8 of the Traffic Act provides that: “The person in whose name a vehicle registered shall, unless the contrary is proved, be deemed to be the owner of the vehicle.” As such, Section 8 of the Traffic Act contemplates that there may be legal or registered, or beneficial ownership of a motor vehicle which can exist independent of registration. In Securicor Kenya Limited v Kyumba Holdings Limited [2005] 1KLR 748, the Court of Appeal found as follows:“It was apparent, therefore, that though the appellant remained the registered owner of the motor vehicle its actual possession had passed to a third party. In view of this finding, the trial judge cannot be right under section 8 of the Traffic Act when she states that the true owner of the motor vehicle was the appellant.”

12. The registered owner of the subject vehicle as per the copy of records produced by the appellant as at 25/6/2016 was Muthamia Joses. However, the relevant copy of records should relate to a period before the 2nd defendant transferred it to the appellant vide a sale agreement dated 4/11/2014. From the terms of the said agreement, Anthony Nthiga Ngando agreed to sell and the appellant agreed to buy the subject vehicle at a consideration of Kshs. 350,000/=. Kshs. 300,000/= was paid upfront at the time of execution of the agreement while the balance of Kshs. 50,000/= was to be paid, “once the vendor gives to the purchaser the requisite transfer form together with pin number and copy of ID card of the registered owner plus the Original logbook, on or before 4/12/2014. ” The appellant took possession of the subject vehicle immediately upon the execution of the agreement. The appellant continued to use the subject vehicle from that date until December 2015 when he was stopped from using it by the respondent. It is quite clear that as at that time, the transfer had not been effected in the name of the appellant. It is unclear why the appellant did not follow up on getting the transfer form, original log book, PIN number and copy of ID of registered owner from Anthony Nthiga Ngando, yet the sale agreement was categorical that the same were to be obtained on or before 4/12/2014. This makes the case of the defendant as set out in the Defence plausible. The original logbook may have been held by the respondent lender as security for the loan.

13. According to the respondent, Anthony Nthiga Ngando procured a loan from it and he defaulted in its repayment, which prompted it to exercise its statutory power of sale of the subject vehicle. I have looked at the said loan agreement and noted it was entered into on 17/7/2014 between Gladys Nzambi Kitune and the respondent. The appellant pleaded that he learnt from the respondent that the subject was jointly owned by Anthony Nthiga Ngando and the respondent, and that the respondent was the financier.

14. From the record, the original plaint was lodged on 26/1/2016 while the subject vehicle was auctioned on 23/1/2016. In essence, the subject matter had been disposed of way before the suit was instituted. The appellant obtained court orders to restrain the respondent from disposing of the subject vehicle on 22/3/2016, which was approximately 2 months after the same had been sold.

Privity of contract and Balance of probability 15. In any event, the sale agreement was between the appellant and Anthony Nthiga Ngando. There was evidently no privity of contract between the appellant and the respondent. The Court of Appeal had an opportunity to and deliberated on the doctrine of privity at length in Savings & Loan (K) Limited v Kanyenje Karangaita Gakombe & Another (2015) eKLR where it rendered itself as follows: -“In its classical rendering, the doctrine of privity of contract postulates that a contract cannot confer rights or impose obligations on any person other than the parties to the contract. Accordingly, a contract cannot be enforced either by or against a third party. In Dunlop Pneumatic Tyre Co Ltd V Selfridge & Co Ltd[1915] AC 847, Lord Haldane, LC rendered the principles thus:“My Lords, in the law of England certain principles are fundamental. One is that only a person who is a party to a contract can sue on it.”

16. The appellant’s contention is that since the respondent did not testify or call any witnesses to support its case, his evidence passed the evidentiary burden of proof on a balance of probabilities, and the trial court erred in failing to find so. It must be remembered that the appellant had the onus of proving his case against the respondent, on a balance of probabilities, whether or not the respondent adduced evidence. The Court of Appeal in Mary Wambui Kabugu v Kenya Bus Services Limited (1997) eKLR stated that “The age long principle of law is that he who alleges must prove.”

17. The appellant as plaintiff was required to lead evidence that makes the existence of the fact of non-registration of the interest of the respondent more likely than not. The fact that no evidence was led on behalf of the defendant does not amount to proof on a balance of probabilities. It does not follow that a case is proved if there is no defence or no evidence against it. Proof on a balance of probability was admirably defined in

18. The test of balance of probability was considered by the House of Lords in Re H & R (minors) [1996] AC 563, [1995] UKHL 16, [1996] 2 WLR 8, [1996] 1 All ER 1, where Lord Nicholls of Birkenhead said:“The balance of probability standard means that the court is satisfied an event occurred if the court considers that, on the evidence, the occurrence of the event was more likely than not. When assessing the probabilities the court will have in mind as a factor, to whatever extent is appropriate in the particular case, that the more serious the allegation the less likely it is that the event occurred and, hence, the stronger should be the evidence before the court concludes that the allegation is established on the balance of probability.”

19. It was not shown that the bank respondent was a party or aware of the sale agreement of the motor vehicle between the 1st defendant and the appellant dated 4/11/2014 and that in entering into the agreement the appellant had secured a search certificate on the motor vehicle which indicated the seller 1st defendant as the rightful owner of the vehicle. As regards the repossession and sale of the motor vehicle by the respondent, it was not shown that the bank was aware of the suit and any orders restraining sale when the sale was concluded, the suit having been filed on 26/1/2016.

20. I respectfully agree with the trial court that appellant had failed to prove his case against the respondent on a balance of probabilities.

Orders 21. Accordingly, for the reasons set out above, the court finds that the appeal is without merit and it is dismissed. The respondent shall have the costs of the appeal.Order accordingly.

DATED AND DELIVERED THIS 10THDAY OF MAY 2022. EDWARD M. MURIITHIJUDGEAppearances:M/S G. M. Wanjohi for the Appellant.M/S R.M Mugo & Co. Advocates for the Respondent.