[2023] KEHC 24821 (KLR)

Nganga v Kabutha (Civil Appeal E012 of 2022) [2023] KEHC 24821 (KLR) (3 November 2023) (Judgment)

Neutral citation: [2023] KEHC 24821 (KLR)

Republic of Kenya

In the High Court at Kerugoya

Civil Appeal E012 of 2022

LM Njuguna, J

November 3, 2023

Between

Victor Gathuni Nganga

Appellant

and

Jacob Mburu Kabutha

Respondent

(Appeal arising from the decision of Hon. P.M. Mugure PM in the Principal Magistrate’s Court at Wang’uru Civil Case No. E007 of 2021 delivered on 07th February 2022)

Judgment

1. The appeal herein has been filed vide memorandum of appeal dated 04th March 2022 wherein the appellant, being dissatisfied with the decision of the court as above mentioned, now seeks orders that:a.The appeal be allowed with costs;b.The interest rate be applicable from the year 2018; andc.Costs of this appeal be provided for.

2. This appeal is premised on the grounds that the trial magistrate erred in law and fact by:a.Allowing the plaintiff’s claim as prayed;b.Failing to specify the rate of interest applicable;c.Allowing the interest rate to apply from the year 2012 instead of 2018 when the parties rewrote the agreement;d.Failing to uphold that the parties are bound by their agreement dated 10th August 2018; ande.Failing to find that the 2012 agreement had been revoked by the 2018 one.

3. The subject matter is sale and purchase of land parcel numbers Kirinyaga/Gathigiri/1958 and Kirinyaga/Gathigiri/1959. Vide plaint dated 21st July 2020, the plaintiff/respondent claimed Kshs. 300,000/= with interest at court rates from 06th January 2012 until payment in full and costs plus interest. The defendant/appellant was not able to complete his obligations under the sale agreement because of family squabbles. That he offered the plaintiff/respondent another piece of land namely Kirinyaga/Gathigiri/1954 in place of one of the initial ones, and the same was fully transferred to the plaintiff/respondent. That the plaintiff/respondent demanded refund of the money he had paid for the other land whose transfer was marred by squabbles. That the parties agreed the refund would be made in three installments of Kshs. 100,000/= each. That the defendant/appellant never returned the money as agreed, thereby necessitating the claim with interest from 2012.

4. The defendant/appellant denied the allegations stating that the plaintiff/respondent accepted and took possession of land title number Kirinyaga/Gathigiri/1954 whose value was more than Kirinyaga/Gathigiri/1958 and Kirinyaga/Gathigiri/1959 combined. That the defendant/applicant was under no obligation to transfer the land to the plaintiff/respondent nor to refund the sum of Kshs. 300,000/=. In his witness statement, he stated that the agreement made in 2012 had been frustrated and was mutually revoked when the plaintiff/respondent accepted land parcel number Kirinyaga/Gathigiri/1954. That he was not under any obligation to refund any money to the plaintiff/respondent.

5. The parties on appeal were directed to file written submissions and both of them complied.

6. The appellant submitted that the only enforceable agreement was the 2018 one as it revoked the one of the 2012 following frustration of the agreement and subject matter therein. That after revocation of the 2012 agreement, the parties were only bound by the agreement entered into in year 2018 which the trial court ought to have relied upon. For this argument, he cited the case of Gabriel Njuguna Njoroge v Longobon Tioko [2017] eKLR.

7. The respondent submitted that in 2017 the defendant/appellant transferred parcel number Kirinyaga/Gathigiri/1954 to the plaintiff/respondent before the 2018 agreement was done. That the court was at liberty to award interest at the court rate of 14% as was stated in the case of Highway Furniture Mart Limited v Permanent Secretary Office of The President & another [2006] eKLR. He argued that the defendant/appellant received the full purchase price in the year 2012 when the initial agreement was entered into. That the trial court was right in subjecting the amount to interest from 2012 and in any event, the defendant/appellant had breached both agreements. That evidence showed that the defendant/respondent had spent the money meant to be purchase price and the trial court had the duty to restitute such sum through an award of interest.

8. That even though the interest rate was not defined, the same was to apply from the 2012 agreement which stated the sum in question. For this argument he relied on the case of Later v Mbiyu[1965] eKLR and Lwanga v Centenary Rural Development bank [1999] 1 EA175. He submitted that the issue of the applicable agreement should have been raised during the hearing but it is only coming up in this appeal for the first time. He termed this as an extraneous ground and urged the court not to entertain it. He relied on the cases of Kenindia Assurance Co. Ltd v Otiende [1989] eKLR and Dubai Bank Kenya limited v Kwanza Estates Limited [2015] eKLR where the court stated that the court sitting on appeal should not entertain a matter that had not been raised at trial. That the trial court had a wide discretion in setting interest rate although the same should be done judiciously. He also relied on the case of New Tyres Enterprises Ltdv Kenya Alliance Insurance Company Ltd [1988] eKLR.

9. In my view, the issue for determination is whether the trial court should have considered the agreement dated 10th August 2018 in awarding interest on the decretal amount.

10. In my determination, I shall endeavor to revisit the evidence and arguments at trial, limiting my analysis to the issues raised in this appeal. I am guided by the case ofSelle & Another v Associated Motor Boat Co. Ltd & Others [1968] EA 123, it was held thus:“...this court is not bound necessarily to accept the findings of fact by the court below. An appeal to this court ... is by way of retrial and the principles upon which this court acts in such an appeal are well settled. Briefly put they are that this court must 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 this respect..."

11. From a perusal of both agreements, I notice that the 2012 agreement is a land sale and purchase agreement with terms therein providing as much. The 2018 agreement does not fully revoke the 2012 agreement but rather serves as an addendum to the agreement. In fact, it is titled as “Revocation Of Part Of Sale Agreement Dated 06Th January 2012/ Undertaking To Refund Ksh. 300,000” thereby serving the purpose of binding the parties to the terms of refund of the purchase price. I do not think that this is a second sale agreement that negates the terms of the 1st agreement. As rightly stated by the plaintiff/respondent, it is based on the 2012 agreement that the purchase price was paid. In my view, even without considering the 2018 agreement, the plaintiff/respondent would still have been able to file a suit in the trial court and succeed. However, this notwithstanding the award of interest on monetary awards is dependent on factors other than the date of the agreement and is largely at the discretion of the court.

12. Section 26 of the Civil Procedure Act provides as follows:“1)Where and in so far as a decree is for the payment of money, the court may, in the decree, order interest at such rate as the court deems reasonable to be paid on the principal sum adjudged from the date of the suit to the date of the decree in addition to any interest adjudged on such principal sum for any period before the institution of the suit, with further interest at such rate as the court deems reasonable on the aggregate sum so adjudged from the date of the decree to the date of payment or to such earlier date as the court thinks fit.2)Where such a decree is silent with respect to the payment of further interest on such aggregate sum as aforesaid from the date of the decree to the date of payment or other earlier date, the court shall be deemed to have ordered interest at 6 per cent per annum.”

13. In the case of Mukisa Biscuits Manufacturing Company Limited v West End Distributors Limited [1970] EA 469 the court stated as follows:“The principle that emerges is that where a person is entitled to a liquidated amount or to specific goods and has been deprived of them through the wrongful act of another person, he should be awarded interests from the date of filing suit. Where, however, damages have to be assessed by the Court, the right to those damages does not arise until they are assessed and therefore interest is only given from the date of the judgment.”

14. In the instant case, the trial court was empowered under section 26(1) of the Civil Procedure Act to award interest as prayed. The prayer in the plaint read: “an order that payment of Kshs. 300,000 plus interest at court rate from 06th January 2012 till all the payment is made in full”. I therefore find no error in law or fact in this award of interest. Section 26(2) of the Civil Procedure Act defines the percentage of the interest for the avoidance of doubt and in fact gives this as guidance for instances were the court remains silent on award of interest rate.

15. In the premises, having considered the trial court’s record, the arguments herein, relevant caselaw, I find no merit in this appeal and the same is hereby dismissed with costs to the respondent. For the avoidance of doubt, the appellant is hereby ordered to pay the amount of Kshs. 300,000/= with interest at court rates from 06th January 2012 until payment in full. The applicable rate is at the date of the judgment of the trial court.

16. It is so ordered.

DELIVERED, DATED AND SIGNED AT KERUGOYA THIS 3RD DAY OF NOVEMBER, 2023. L. NJUGUNAJUDGE...........................for the Appellant...........................for the Respondent