Mwananchi Credit Ltd & another v Obonyo (Civil Appeal E099 of 2023) [2026] KEHC 7571 (KLR) (29 May 2026) (Judgment)

**REPUBLIC OF KENYA** **IN THE HIGH COURT OF KENYA AT KISUMU** **CIVIL APPEAL NO. E099 OF 2023** **MWANANCHI CREDIT LTD…………..……………..…..……1ST APPELLANT** **NYALUOYO AUCTIONEERS……………………………..……2ND APPELLANT** **VERSUS** **BERNARD NAMUTU OBONYO.…………………………………RESPONDENT** *(Being an appeal from the Ruling and Order in Kisumu CMCC E093 of 2023 by Hon. K. Cheruiyot, SPM)* **JUDGMENT** 1. The Appellants' herein instituted this Appeal from the Ruling and order of Hon. K. Cheruiyot (SPM) delivered on the 8th day of June 2023 in Kisumu CMCC No. E093 of 2023. The ruling had emanated from two applications being; 1. Notice of motion dated 28th March 2023 2. Notice of motion dated 13th April 2023 2. The application dated 28th March, 2023 was filed by the Respondent seeking injunctive orders retraining the Appellants by themselves, their agents or any person acting under their authority from interfering with the Respondent's Motor Vehicle Registration Number **KCK** **070G** by selling, offering for sale, alienating and/or otherwise disposing or dealing with the said motor vehicle pending the hearing and determination of the suit. The Respondent had also sought for orders compelling the 1st Appellant through its agents the 2nd Appellant to cause the Motor vehicle **KCK** **070G** to be released to the Respondent in a running attachment pending the hearing and determination of the suit. 3. The application dated the 13th April, 2023 was equally filed by the Respondent and sought further injunctive orders against the Appellant from disposing the subject motor vehicle through sale and for leave to cite the contemnors, Mr. Denis Mombo and James Onyango Josiah and Laar Auctioneers for contempt of court. 4. The learned trial Magistrate, vide a consolidated Ruling delivered on the 8th June, 2023, allowed the prayers except for the contempt prayer against Laar Auctioneers. The Appellants being dissatisfied with that decision preferred this Appeal and filed a Memorandum of Appeal dated 5th July 2023. 5. The Memorandum of Appeal has 30 grounds of Appeal. I will set out some of the major grounds as below. 1. The learned magistrate erred in law in delivering a consolidated ruling in respect of the respondent's applications dated the 28th day of March 2023 and the 13th day of April 2023 when the said applications were not consolidated. In so doing, the learned magistrate erred in failing to appreciate and consider that the two applications were separate and distinct both in substance and in the prayers sought and as a result arrived at a wrong conclusion. 2. The learned magistrate erred and misdirected himself in fact and in law in the exercise of his discretion in allowing the two applications. 3. The learned magistrate erred in fact and in law in the exercise of his discretion in failing to appreciate, consider and apply the legal principles governing an application for injunction and contempt of court. 4. The learned magistrate erred and misdirected himself in fact and in law in his interpretation and application of the principles governing the applications that were before him and in so doing arrived at a wrong conclusion. 5. The learned magistrate erred and misdirected himself in law in failing to uphold the doctrine of stare decisis in light of clearly established legal principles from superior courts for the grant of orders of injunction and also for contempt of court proceedings. 6. The learned magistrate erred in fact and in law by issuing an order compelling the release of the suit motor vehicle to the respondent as a running attachment pending the hearing and determination of the suit. In so doing, the learned magistrate failed to exercise his discretion in a proper manner given the circumstances of the case thereby resulting in injustice to the 1st appellant who advanced money to the respondent in the year 2021 and which amounts remain due and outstanding. 7. The learned magistrate erred in fact and in law in failing to consider and appreciate and find that the respondent had admitted to having defaulted in the repayment of his loan facility in accordance with the terms of the agreement. In so doing the learned magistrate arrived at a wrong conclusion. 8. The learned magistrate erred in fact and in law in failing to consider and appreciate that the respondent was attempting to re-write, alter and vary the terms of his written agreement with the 1st appellant in contravention of the law. In so doing the learned magistrate arrived at a wrong conclusion. 9. The learned Magistrate erred in finding that the amounts sought was in contravention of the *in duplum* rule. In so doing, the learned magistrate arrived at a wrong decision. 10. The learned magistrate erred in fact and in law in failing to consider and appreciate that the 1st appellant was not subject to thein duplum rule in the exercise of its mandate. The learned magistrate failed to consider and appreciate that the 1st appellant was not subject to the provisions of Section 44 of the Banking Act. In so doing, the learned magistrate arrived at a wrong decision. 11. The learned magistrate erred in fact and in law in failing to consider and appreciate that the amounts sought to be recovered against the respondent were in accordance with the law and the agreement between the 1st appellant and the respondent. 12. The learned magistrate erred in law in failing to give effect to the overriding objective in Sections 1A and 1B of the Civil Procedure Act and Article 159 of the Constitution of Kenya in denying the appellants an opportunity to ventilate their case. 13. The learned magistrate erred in fact and in law in failing to consider the contents of the Replying Affidavit sworn by **SYLVIA** **NJOROGE** on the 12th day of April 2023 in relation to the application that was before him and as a result arrived at a wrong decision. 14. The learned magistrate erred in fact and in law in arriving at conclusions that were inconsistent, detached and at complete variance to the evidence that was before him for consideration. In so doing the learned magistrate arrived at a wrong conclusion. 15. The learned magistrate erred in fact and in law in considering matters which he ought not to have considered and failing to consider relevant matters in arriving at his decision. 16. The learned magistrate erred in fact and in law in citing **DENNIS** **MOMBO, JAMES ONYANGO JOSIAH** and **LAAR AUCTIONEERS** for contempt of court. **Appellants Submissions** 1. The Appellants submit that the two applications had not been consolidated and therefore the Learned magistrate was in error to deliver a consolidated Ruling. He states that an application for injunction and one for contempt of court are governed by different principles and therefore delivering a consolidated ruling occasioned prejudice to the Appellant. He submitted that the Ruling was undifferentiated and rendered the decision fundamentally unfair. 2. The Appellant further submitted that the learned magistrate erred in allowing the Applications and stating that the Appellant was governed by Section 44 of the Banking Act which governs financial institutions. According to the Appellant, it is not a financial institution going by the definition given in Section 2 of the Banking Act. The Appellant submits that the rates of interest applicable are those given in the letter of offer and not any other. Counsel for the Appellant submitted that the learned magistrate failed to appreciate that the rates of interest were a matter of agreement and not subject to the *in duplum* Rule. 3. The appellant went ahead and submitted on the principles of grant of injunction as enunciated in the famous case o**f GIELLA VS Cassman Brown (1973) EA 358,** that there must be a prima facie case with a probability of Success, that the Applicant must demonstrate irreparable loss and the balance of convenience must settle with the person seeking the injunctive orders. Counsel for the Appellant submitted that the Respondent herein had defaulted in the facility and the security that had been offered was the subject motor vehicle. It was therefore proper according to Counsel that the vehicle should not have been released. 4. On the Application dated 13th April, the Appellant submits that the learned Magistrate failed to consider that the mode of service was through email. He submitted that the 1st Appellant was not aware of the orders that had been issued and purportedly served through email. The Appellant urged that the Appeal be allowed and the orders of the learned magistrate issued vide the Ruling delivered on the 8th June, 2023 be set aside. **Respondents Submissions** 1. The Respondent submitted that the principles required for the grant of temporary injunctive orders ware well laid out in the case of Giella -Vs-Cassman Brown *(Supra)*. That the Applicant must demonstrate a prima facie case and irreparable injury for an injunction to issue and if not then they need to demonstrate that the balance of convenience is in their favour. 2. The Respondent submitted that vide his Plaint dated 28th March 2023 and the list of documents attached thereto he had established that he is the registered owner of the motor vehicle **KCK** **070G.** A logbook was had been attached. He admitted that the subject motor vehicle was used to secure a loan facility of Kshs. 1, 200,000/= advanced to the Respondent by the 1st Appellant. The Respondent by way of M-pesa-statements annexed in his list of documents submitted before court that at the time of repossessing the motor vehicle he had settled the loan to a tune of Kshs.976,500/=against the principal sum granted. 3. The Respondent submitted that they had done late payments but had also sought to have a waiver of penalties after noting that his loan balance had escalated to Kshs. 1,634, 984 and was committing to pay a monthly sum of Kshs. 204, 373/= until payment in full. However, the Appellant never responded to the proposal. 4. Counsel submitted that the loan was to be repaid in two years and that period had not lapsed by the time the repossession was done. The respondent submitted that they had already paid Kshs.976,500/=and were prepared to continue paying the amounts proposed after waiver of interest but they did not get any response from the Appellants. Their contention is that the repossession was premature and illegal and was infringing on the Respondent's right to property and that is why he sought for relief before the court for temporary injunctive orders. 3 1. TheRespondentreliedon **MRAO LTD VERSUS FIRST AMERICAN BANK OF** **KENYA** **LTD** (2003) **EKLR** in which the Court of Appeal gave a determination on a prima facie case. The court stated that: "... *in civil cases, it is a case in which, on the material presented to the court a tribunal properly directing itself will conclude that there exists a legal right which has apparently been infringed by the opposite party as to call for an explanation or rebuttal from the latter.*" 2. On the issue of irreparable damage and injury, the Appellant relied on the case of **PIUS** **KIPCHIRCHIR KOGO VERSUS FRANK KIMELI TENAI (2018) EKLR** inwhichthe court had stated; *Irreparable injury means that the injury must be one that cannot be adequately* *compensated for in damages and that the existence of a prima facie case is not itself* *sufficient. The applicant should further show that irreparable injury will occur to him if* *the injunction is not granted and there is no other remedy open to him by which he will* *protect himself from the consequences of the apprehended injury.* 3. The Respondent submitted that had the orders not been granted, they would have suffered irreparable loss as the vehicle would have deteriorated and potentially wasted away due to exposure to weather elements and lack of proper maintenance thus causing the Respondent monetary loss due the depreciation in value. He further submitted that there was need to preserve the subject matter of the proceedings and stated that the trial court applied the right principle in issuing an order for injunction as the same was meant to preserve the subject matter pursuant to the provisions of Order 40, rules 1 and 2 of the Civil Procedure Rules, which mandates the court to preserve the subject matter of the proceedings. 一 Greate Sign in **Ask Al Assistant** **Share** View Summary 4 9 arch **Analysis of the Trial Court’s evidence** 1. This being a first appeal, this court is duty bound to delve into factual details and revisit 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. This was appreciated in **Abok James Odera t/a A.J. Odera & Associates vs John Patrick Machira** **& Co. Advocates [2013] eKLR** where the duty of a first appellate court was summarized as follows***:- “This being a first appeal, we are reminded of our primary role as a first appellate court namely, to re-evaluate, re-assess and re-analyse 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.”*** 2. **Further, in Kenya Ports Authority vs Kuston (Kenya) Limited [2009] 2 EA 212 the Court of Appeal held inter alia that: -** ***“On a first appeal from the High Court, the Court of Appeal should reconsider the evidence, evaluate it itself and draw its own conclusions though it should always bear in mind that it has neither seen nor heard the witnesses and should make due allowance in that respect. Secondly the responsibility of the court is to rule on the evidence on record and not to introduce extraneous matters not dealt with by the parties in the evidence.”*** 3. In the instant case, at the trial court the two applications were heard by way of submissions and allowed. I have had the occasion to consider the lower court record, the Record of Appeal and the submissions by the opposing counsel herein. My duty would be to determine whether the learned magistrate erred in law and in fact in hearing the two applications together and in issuing the orders of injunction as was sought. **Determination** 1. An appellate court will not ordinarily interfere with a finding of fact made by a trial court unless such finding was based on no evidence, or it is demonstrated that the court below acted on wrong principles in arriving at the finding it did – See **Bashir Ahmed Butt vs Uwais Ahmed Khan [1982 – 1988] I KAR 5.** 2. It is not in disputed that indeed the Respondent herein had received a facility from the Appellant. It is not in dispute that the motor vehicle Registration number KCK 070 G, that is the subject matter herein had been offered as the security. It is also not in dispute that the Respondent had been servicing the facility but had at some point delayed in the payment of the monthly instalments and that is what prompted the repossession that was subject matter of the applications before the lower court. 3. The trial court handled the two applications simultaneously. The applications had both been filed by the Respondent herein. Both sought orders of injunction to preserve the motor vehicle and in the Application dated 13th April 2023, an order for contempt of court was sought. 4. To me these are applications that were related and could be handled together to ensure expeditious disposal of cases and save judicial time in the spirit of Article 159 of the Constitution. In any event, the Appellant has not demonstrated to the court what prejudice or loss they suffered by the two applications being heard together. 5. The submission by the Appellant is that the two are governed by different principles. That is true. And indeed, from the Ruling delivered by the learned Magistrate he first dealt with the question of contempt of court from Paragraph 6 of the ruling to paragraph 16 and then from paragraph 17 dealt with the question of injunction. 6. I find that there is nothing wrong with the manner in which the applications were handled. Indeed, in the Court’s directions issued on 25th May 2023, the trial Magistrate had indicated that he would deliver a ruling on the two applications together. My finding is that the Learned Magistrate did not err in handling the two applications together. 7. On the question as to whether the injunction order ought to have been granted, the principles for grant of orders of injunctions are well laid down in the case **of Giella vs Cassman Brown & Co. Ltd(1973) EA at 358.** These are:- 8. The applicant must establish that he has a prima facie case with a probability of success. 9. Demonstrate irreparable injury if a temporary injunction is not granted and 10. Ally any doubts as to (ii) above, by showing that the balance of convenience is in his favour. 11. These are the three pillars that form the foundation of any order of injunction. Further, as was held by the court of appeal in **Lucy Wangui Gachara v Minudi Okemba Lore [2015] eKLR Civil Appeal 4 of 2015,** “all the above three conditions and stages are to be applied as separate, distinct and logical hurdles which the applicant is expected to surmount sequentially. In the Lucy Wangui Gachara case above, the court further referred to the case of **Kenya Commercial Finance Co. Ltd V. Afraha Education Society [2001] Vol. 1 EA 86** where it was held:- ### “If the applicant establishes a prima facie case, that alone is not sufficient basis to grant an interlocutory injunction. The court must further be satisfied that the injury the applicant will suffer, in the event the injunction is not granted, will be irreparable. In other words, if damages recoverable in law are an adequate remedy and the respondent is capable of paying, no interlocutory order of injunction should normally be granted, however strong the applicant’s claim may appear at that stage. If prima facie case is not established, then irreparable injury and balance of convenience need no consideration. The existence of a prima facie case does not permit “leap-frogging” by the applicant to injunction directly without crossing the other hurdles in between.” ### I will now proceed to consider each of the principles and determine whether the applicants have satisfied their requirement in law. ### A Prima Facie Case 1. A prima facie case as defined in **Mrao Ltd vs First American Bank of Kenya Ltd & 2 others (2003)** eKLR is “*one in which on the material presented before the court, a tribunal properly directing its mind, will conclude that there exists a right which has apparently has been infringed by the opposite party as to call for an explanation or rebuttal from the latter.”* 2. In the present case, it is not in dispute that the Respondent herein obtained facility from the Appellant and the facility had been being serviced. The Respondent had not declined to service the outstanding amounts and actually made a commitment to settle the amounts within the facility period which was 2 years. By the time the repossession was done, the two years had not lapsed and the Respondent made an offer to the Appellant. The Appellant did not respond to the offer but instead proceeded and advertised the vehicle for sale on 4th April 2023. 3. Further, this is matter that has not proceeded on the main suit. The Appeal that is before court is on applications. Under Order 40 of the Civil Procedure Rules, it would only be proper and fair to preserve the subject matter of a suit pending hearing and determination of the suit. The motor vehicle herein is the security for the facility that is subject matter of these proceedings and it would only be fair and just to preserve until the full determination of the dispute between the parties. I find that the Respondent had established a prima facie case and was therefore entitled to the orders that were granted. 4. The Appellant has submitted at length on the Application of the in duplum Rule to the interest rates herein and argued that the parties were governed by the agreement between them and therefore Section 44 of the banking Act is not applicable. I have evaluated the entire Ruling delivered by the trial Magistrate on the 8th June, 2023. The issue of the interest rate applicable is not one of the issues canvassed in the said Ruling. 5. However, this being a matter relating to a facility secured by a motor vehicle, I am alive to the fact that the question of interest will arise at the appropriate time. I note that this matter is still pending and what is before me is only an appeal on interlocutory applications. 6. Having found that a Prima facie case has been established, I will not delve into the second and third limb of irreparable loss and balance of convenience. In those circumstances, my finding is that the Respondent has established a prima facie case against the Appellant and even without going further into the merits and principles of grant of the orders of injunction, the trial Magistrate dis not err in granting the same. 7. Then there is the question of contempt of Court. The affidavit evidence on record is that the 1st and 2nd Appellants were indeed served with the orders of the court issued on 29th March, 2023. The service was effected on 31st March, 2023 and there is email correspondence to that effect. The email through which the service was effected, is the email that is indicated on the pleadings filed in court by Counsel for the Appellant. The Appellant cannot therefore deny service. I find that the trial magistrate did not err in finding that indeed the Appellants had been served with the orders of the court but nevertheless went ahead and had the vehicle advertised for sale. 8. In conclusion, it is my finding that there is no merit in the Appeal herein and the same is dismissed with costs to the Respondent. Orders accordingly. **JUDGMENT** delivered virtually, dated and signed at **Nairobi** This **29th** day of **May** 2026. **…………………………..………………** **L.M. WACHIRA** **JUDGE** **In the presence of:** *Kevin* – Court assistants *……………………………………………-* for the Appellant *……………………………………………*- for the Respondent