[2023] KEHC 24193 (KLR)

Nzilu v Ngungua (Civil Appeal 570 of 2019) [2023] KEHC 24193 (KLR) (Civ) (27 October 2023) (Judgment)

Neutral citation: [2023] KEHC 24193 (KLR)

Republic of Kenya

In the High Court at Nairobi (Milimani Law Courts)

Civil

Civil Appeal 570 of 2019

AN Ongeri, J

October 27, 2023

Between

Fredrick Kithongo Nzilu

Appellant

and

Alex Kaluyu Ngungua

Respondent

(Being an appeal from the ruling and order of Hon. D. O. Mbeja (RM) in Milimani CMCC no. 6275 of 2018 delivered on 6/9/2019)

Judgment

1. The appellant in this appeal filed Milimani CMCC No 6275 of 2018 seeking judgment against the respondent in the sum of Kshs 1,120,000 being a refund of the purchase price of motor vehicle registration KCK 939T which he sold to the respondent vide an oral agreement entered into sometimes in June 2017 at Benrose Restaurant along Kangundo road.

2. In the plaint the appellant filed in court on 28/5/2018 the appellant averred that the sale was subject to serving of bank loan by the respondent at monthly instalments of Kshs 167,000/=.

3. The appellant further averred that the respondent failed to disclose that the loan was in arrears and further refused to transfer the vehicle to him as agreed.

4. The defendant filed the defence denying the appellant’s claim.

5. After hearing the case the trial court dismissed the appellants case with costs to the respondent.

6. The appellant has filed this appeal on the following grounds;a.That the Honourable Magistrate erred in law and in fact by dismissing the suit on grounds that the Appellant's case discloses no prima facie case against the Respondent, when there is overwhelming evidence on record that the Respondent is indebted to the Appellant for the sum of Kshs 1,120,000. b.That the Honourable Magistrate erred in law and in fact in failing to appreciate that the Respondent's defence lacked merit and ought to have been struck off.c.That the Honourable Magistrate erred in law and in fact in preferring the testimony and submissions of the Respondent against that of the Appellant and misapprehended the evidence and issues raised.d.That the trial court failed to appreciate the open fact that the respondent received Kshs 1,220,000 and to date the Motor Vehicle registration number KCK 939T that it was delivered to the appellant. There was offer and acceptance hence a legal relation was created.e.That the Honourable Magistrate misdirected himself as to the lack of existence of a dear intention to create legal relations between the Appellant and Respondent whereas the two parties had already agreed as to the existence of an oral agreement and a draft sale agreement. The trial Court had also deliberated on the same therefore ignoring the obvious fact that the appellant paid Kshs 1,120,000 for the purchase of the Motor vehicle KCK 937 would be an outright misdirection before this Honourable Court.f.That the Honourable Magistrate erred in law and fact by failing to appreciate that, in failing to pay the arrears for Motor Vehicle KCK 939T and failing to transfer possession as agreed in the agreement between the Appellant and the Respondent, there was a breach of contract which warrants damages.g.That the Honourable Magistrate erred in fact in finding that the Respondent was not indebted to the Appellant when there is clear evidence of the same.h.That the Honourable Magistrate erred in fact and in law by failing to address the issue of legal and beneficial ownership of the subject matter of the contract prominently featured during the trial.i.That the Honourable Magistrate erred in fact and in law in departing from well-established principles upheld severally by the Court of Appeal which the Subordinate Court was bound by.j.That the judgment of this Honourable Court is against the weight of the evidence.

7. The parties filed written submissions as follows; the appellants submitted that the respondent in his testimony states to have handed over possession and management of the subject motor vehicle to the appellant. Had there been no contract to purchase the respondent would not have made allegations of having handed possession and management of the vehicle.

8. The appellant submitted that the respondent affirms to have entered into an agreement for the sale of motor vehicle registration number KCK 9317T. The respondent testified that he was paid the purchase price and only Kshs 100,000 had not been paid. There existed an agreement for sale of motor vehicle which was not a disputed fact. The appellant argued that the trial court therefore erred when it found that there was no legal relations between the parties yet found that there was privity of contract.

9. The appellant submitted that the trial courts finding was premised on that the contract between the appellant and the respondent did not crystallize and interpreted section 3 (3) of the Law of Contract Act to mean that legal relations created between the parties having not been reduced in writing was void. The appellant argued that section 3 (1) does not make all contracts void and unenforceable if there are not reduced in writing. The parties entered into an agreement where the appellant paid the purchase price and the respondent was required to deliver the property which never happened as it turned out the vehicle was in arrears.

10. The appellants claim for breach is pegged on breach of a contract on misrepresentation and failing to disclose material facts on the part of the respondent. The respondent failed to disclose that there were in loan arrears which is an important material fact. The said arrears resulted in the motor vehicle being repossessed.

11. The respondent on the other hand submitted that the appeal herein was filed out of time without seeking leave. That in the circumstances to determine the appeal offends Section 1A and 3A of the Civil Procedure Act. The respondent further submitted that no notice of appeal was filed or served upon the respondent and none is attached on the record of appeal and therefore the appeal should be struck off.

12. The respondent argued that the appeal does not disclose any justifiable cause as the evidence presented by the appellant at the trial court did not prove the existence of contractual breach that would render a relief in damages. There was no indication of the respondent’s breach and the claim only confirmed that the appellant was trying to evade his own obligation of paying the respondent as he was indebted to him. Further the appellant did not show any loss incurred as a result of any dealings with the respondent. Finally, the prayers sought in the appeal should fail automatically as the appeal itself is defective. The appeal should be struck off and expunged from the court record.

13. This being a first appeal, the duty of the first appellate court. In Selle v Associated Motor Boat Co. [1968] EA 123 it was held in the following terms: -“An appeal from the High Court is by way of re-trial and the Court of Appeal is not bound to follow the trial judge’s finding of fact if it appears either that he failed to take account of particular circumstances or probabilities, or if the impression of the demeanour of a witness is inconsistent with the evidence generally.An appeal to this court from a trial by the High 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.In particular, this court is not bound necessarily to follow the trial judge’s findings of fact if it appears either that he has clearly failed on some point to take account of particular circumstances or probabilities materially to estimate the evidence or if the impression based on the demeanor of a witness is inconsistent with the evidence in the case generally.”

14. The issues for determination are as follows;i.Whether this appeal is competent.ii.Whether the appellant proved his case to the required standard.iii.Whether there was a valid contract for sale of motor vehicle registration No KCK 939T.iv.Whether the appellant is entitled to a refund of Kshs 1,120,000. v.Who pays the costs of this appeal?

15. On the issue bas to whether this appeal is competent, I find that the Respondent did not raise any preliminary objection in this appeal for the determination of the court.

16. The Notice of preliminary objection dated 1st August 2023 which was filed after the Appellants had filed their written submissions dated 30th June 2023 is belated and the same amounts to an ambush.

17. The Respondent is estopped from raising the issue of the competence of the appeal at submission stage.

18. On the issue as to whether the appellant proved his case, the appellant’s testimony was that he paid the respondent the sum of Kshs 1,220,000 towards the purchase of motor vehicle registration No KCK 939T and he agreed to service the loan by monthly instalments of Kshs 167,000.

19. The appellant said the respondent was to draft the agreement and deliver possession of the motor vehicle.

20. The appellant said he later learnt that the loan was in arrears and further he said that the respondent did not deliver the vehicle and he demanded a refund of the purchase price paid.

21. The respondent on his part said he agreed to sell the motor vehicle to the appellant and the appellant paid 1. 2 million.

22. The respondent said the appellant asked for a refund of Kshs 100,000 and he returned the money and remained with a balance of Kshs 1,120,000/=. The respondent said the motor vehicle was repossessed.

23. On the issue as to whether there was a valid sale, I find that the respondent did not tell the appellant the truth that the motor vehicle was in arrears. There was misrepresentation which vitiated the contract. I find that there was no valid contract in the light of misrepresentation.

24. Vitiating factors in a contract are those factors the existence of (any of) which will cripple or invalidate the contract. Examples are; mistake, duress, misrepresentation, undue influence, illegality, unconscionable contracts, fraud, insanity, a party being a minor and void agreements.

25. In the case of Mombasa Employment and Labour Relations Court Cause No 78 of 2013, the Court stated as follows: -“…...The threshold of setting aside a contract is the existence of any or all or the vitiating factors including mistake, misrepresentation, coercion and/or undue influence…”

26. I find that the contract between the Appellant and the Respondent was vitiated by the misrepresentation by the Respondent.

27. On the issue as to whether the plaintiff was entitled to a refund of the purchase price, I find that there is evidence that he paid 1,220,000 to the respondent and subsequently the motor vehicle was repossessed.

28. There is no dispute that Kshs, 100,000 was refunded leaving a balance of Kshs,1,120. 000.

29. I find that the appellant is entitled to a refund and the trial court was wrong in dismissing the appellant’s suit.

30. On the issue of costs, I find that the respondent is liable to pay costs of this appeal and of the original suit.

31. I set aside the order dismissing the suit and substitute it with an order entering judgment in favor of the appellant against the respondent in the sum of Kshs 1,120,000 plus costs and interest from the date of filing the original suit until payment in full.

32. The respondent also to pay the costs of this appeal.

DATED, SIGNED AND DELIVERED ONLINE VIA MICROSOFT TEAMS AT NAIROBI THIS 27TH DAY OF OCTOBER, 2023. A. N. ONGERIJUDGEIn the presence of:……………………………. for the Appellant……………………………. for the Respondent