https://new.kenyalaw.org/akn/ke/judgment/kehc/2026/10496

 REPUBLIC OF KENYA IN THE HIGH COURT OF KENYA AT KISUMU COUNTY COURT NAME: KISUMU HIGH COURT CASE NUMBER: HCCA/E233/2025 PLATINUMCREDIT AND PLATINUM CREDIT LIMITED VS ELIJAH OLOO AMOLO JUDGMENT # INTRODUCTION/ FACTS OF THE CASE * 1. The Plaintiff (now Respondent), vide an Amended Plaint dated 18th March 2024, instituted a suit against the Defendants (now Appellants) seeking a declaration that the actions of the Defendants in repossessing and selling motor vehicle registration number KCY 818L were illegal and unlawful, general damages arising from the said declaration, loss of user, costs of the suit, interest from the date of filing suit until payment in full, a declaration that the Defendants were in breach of the consent dated 27th September 2022, and an order directing the refund of the excess amount realized from the sale of the motor vehicle. 2. The suit arose from a loan transaction between the Respondent and the 1st Appellant, under which the Respondent obtained a financial facility secured by motor vehicle registration number KCY 818L. Following the Respondent's default in repayment, the motor vehicle was repossessed by the 2nd Appellant on the instructions of the 1st Appellant, giving rise to a dispute as to the legality of the repossession and subsequent sale of the motor vehicle, compliance with court orders and a consent recorded between the parties, and the parties' respective financial obligations arising therefrom. 3. The Appellants entered appearance and filed an Amended Statement of Defence and Counterclaim dated 24th April 2024, denying the Respondent's claim and maintaining that the repossession and sale of the motor vehicle were lawful and undertaken pursuant to the terms of the loan agreement following the Respondent's default. The Appellants further sought recovery of an alleged outstanding balance remaining after the sale of the motor vehicle. 4. Upon hearing the parties and considering the evidence on record, the learned trial magistrate entered judgment partly in favour of the Respondent and made the following orders: 1. ***“A declaration be and is hereby issued that the repossession by the Defendants is illegal and unlawful.*** 2. ***General damages are not payable.*** 3. ***Loss of user has not been proved and therefore is not payable.*** 4. ***A declaration be and is hereby issued that the 1st Defendant breached the consent dated the 27/9/2022*** 5. ***The 1st Defendant shall refund to the Plaintiff a sum of Kshs. 1,563,638/=*** 6. ***The 1st Defendant’s Counterclaim is dismissed*** 7. ***The Plaintiff will have costs of the suit and Counterclaim.*** 8. ***Stay granted for 30 days.”*** 5. Being dissatisfied with the judgment of the trial court, the Defendants lodged the present appeal vide a Memorandum of Appeal dated 5th November 2025, raising the following grounds: - 1. *That the learned magistrate erred in law and fact in finding that the 1st Appellant should refund the Respondent Kshs. 1,563,638/= on the strength that the 1st Appellant did not disclose how much the vehicle was sold at yet the Appellants produced documents detailing the sale.* 2. *The learned magistrate erred in law and fact in misapprehending the claim and the evidence before her.* 3. *The learned magistrate erred in law and fact in finding that the repossession by the Appellants was unlawful without analyzing the overwhelming evidence placed before her.* 4. *The learned magistrate erred in law and in fact in finding that the 1st Appellant breached the consent dated 27.9.2022* 5. *The learned magistrate erred in dismissing the Appellants Counterclaim despite the overwhelming evidence placed before her.* 6. *The learned magistrate failed to properly evaluate evidence on record thus reaching an erroneous decision. The judgment appealed from was against the weight of the evidence.* 7. *The learned trial magistrate erred in law and in fact in failing to consider in whole the evidence adduced in court.* 8. *The learned magistrate erred in law and in fact in disregarding the submissions made and filed by the Appellants in arriving at judgment in the case.* 1. The Appeal was canvassed by way of written submissions. As this is a first appeal, this court is obligated to reconsider, re-evaluate and re-analyze the evidence adduced before the trial court and draw its own independent conclusions, while bearing in mind that it did not have the benefit of seeing or hearing the witnesses testify. This duty was succinctly set out in ***Selle & Another v Associated Motor Boat Co. Ltd & Others [1968] EA 123*** # SUBMISSIONS BY PARTIES ## Appellant’s Submissions 1. The Appellants submitted that the main issue in contention was whether the Respondent was entitled to the orders sought. 2. The Appellants first addressed the issue of whether the trial court was justified in granting a declaration that the repossession by the 1st and 2nd Appellants was illegal and unlawful. They contended that the trial court erred in declaring the repossession and sale of motor vehicle registration number KCY 818L illegal and unlawful. It was their submission that the Respondent had entered into a loan agreement for Kshs. 743,305/= repayable in 18 monthly instalments of Kshs. 72,726/=, and had expressly acknowledged that the 1st Appellant was entitled to repossess and sell the motor vehicle upon default. They further submitted that the loan facility attracted interest at 4% and a roll-over interest rate of 0.33% per day on unpaid instalments until full payment. 3. The Appellants submitted that the Respondent persistently defaulted on the loan despite being granted an extension up to 8th April 2022 to clear the arrears. They further argued that the Respondent also failed to comply with the court order issued on 6th September 2022 requiring payment of Kshs. 436,362/= within 21 days. It was their position that the account statements produced at trial confirmed that no such payment was made. 4. The Appellants further submitted that they complied with the mandatory provisions of Sections 65, 66, 67, and 73 of the Movable Property Security Rights Act, No. 13 of 2017 by issuing reminder letters dated 20th March 2022 and 5th April 2022, a proclamation notice dated 28th March 2022 giving the Respondent 7 days to rectify his arrears, and a statutory notice of disposition dated 21st October 2022 prior to selling the motor vehicle through a private treaty in November 2022. 5. In support of their position, the Appellants relied on ***NCBA Bank PLC v Ndungu Njeri t/a Digital Tours and Logistics (2021) eKLR,*** where the court held that, in addition to the notices required under the Movable Property Security Rights Act, an auctioneer must also issue a proclamation notice under the Auctioneers Act before repossessing secured property. They submitted that this requirement was duly complied with in the present case. 6. The Appellants further contended that they issued the Respondent with a 7-day notice within which he was required to rectify his arrears, which had been properly quantified, and that the Respondent was clearly informed that failure to settle the outstanding amount would result in realization of the security. 7. The Appellants also submitted that the Respondent admitted he was required to pay arrears of Kshs. 436,362/= within 21 days pursuant to the court orders issued on 6th September 2022. They contended that the record confirmed that no payment was made within the stipulated period, a fact which they stated the Respondent himself admitted. 8. The Appellants further submitted that the trial court erred in finding that the motor vehicle was repossessed on 7th April 2025. They contended that the Respondent had been granted up to 8th April 2022 to clear the arrears, as evidenced by his email requesting a 21-day extension dated 19th March 2025 in respect of motor vehicles KCY 492M and KCY 818L. They further argued that the motor vehicle was only sold through private treaty in November 2022 and not on 7th April 2025 as stated by the trial court. 1. The Appellants maintained that the Respondent remained in continuous default and failed to comply with the court order. Consequently, by a letter dated 21st October 2022, the 1st Appellant issued a statutory notice of disposition under Section 73 of the Movable Property Security Rights Act, No. 13 of 2017, notifying the Respondent of its intention to dispose of motor vehicle KCY 818L due to failure to meet his obligations. They submitted that at that time, the outstanding debt stood at Kshs. 1,495,274.53/= comprising principal, interest, and enforcement costs. The motor vehicle was thereafter advertised and sold by private treaty. They acknowledged a variance of Kshs. 345,274.53/=, which they claimed from the Respondent, but noted that the trial court dismissed the counterclaim. 2. The Appellants further submitted that the repossession and sale process was lawful and regular, having afforded the Respondent a fair and legitimate opportunity to redeem the debt. They therefore maintained that the 1st Appellant was entitled to exercise its contractual right of repossession and sale. 3. In conclusion, the Appellants submitted that the Respondent was clearly in default in payment of the instalments and that they acted within their contractual rights in repossessing and selling the motor vehicle in order to recover the outstanding loan amounts. 4. Secondly, the 1st Appellant addressed the issue of whether they were in breach of a consent dated 27th September 2022, and should refund Kshs. 1,563,638/=. They argued that they did not breach the consent dated 27th September 2022 because it was never signed by the 1st Appellant or their witness and was therefore not binding. In the alternative, they contend that if the consent is found to be valid, it was the Respondent who breached its terms by failing to pay Kshs. 200,000 by 5th October 2022 as required. 5. Lastly, the 1st Appellant addressed the issue of whether the Respondent was entitled to a refund of the excess amount from the sale of a motor vehicle. The Appellants submitted that the Respondent is not entitled to a refund of Kshs. 1,563,638/= arising from the sale of motor vehicle KCY 818L. They stated that the vehicle was lawfully repossessed and sold through a private treaty following the Respondent's default and that the sale resulted in a deficit of Kshs. 345,274.53, which forms the basis of their counterclaim. They therefore contended that the trial court ought to have dismissed the Respondent's claim and instead allowed their counterclaim. 6. The 1st Appellant further maintained that the Respondent failed to discharge the burden of proof under Section 107 of the Evidence Act and that the 1st Appellant Bank acted in accordance with the contractual terms and applicable law in repossessing and selling the collateral. 7. Accordingly, the Appellants prayed that the appeal be allowed, the judgment of 8th October 2025 be set aside in its entirety, and in its place the Respondent's suit in the subordinate court be dismissed with costs to the Appellants, the Appellants' counterclaim be allowed with costs, and the Respondent be ordered to pay the costs of this appeal. ## Respondent’s Submissions 1. The Respondent had not filed their submission by the time of writing the judgment herein. 2. In the circumstances, I have considered the pleadings of the parties and submissions by the Appellants and I therefore wish to have the following as issues for determination; # ISSUES FOR DETERMINATION * 1. Whether the trial court erred in law and fact in finding that the repossession and sale of motor vehicle registration number KCY 818L was illegal and unlawful. 2. Whether the trial court erred in law and fact in finding that the 1st Appellant breached the consent dated 27th September 2022 and consequently ordering a refund of Kshs. 1,563,638/= to the Respondent. * 1. Whether the trial court erred in dismissing the Appellants’ counterclaim. 2. Whether the judgment of the trial court is against the weight of the evidence on record. 3. Who should bear the costs of the appeal and the suit in the subordinate court. # ANALYSIS AND DETERMINATION ## Whether the trial court erred in law and fact in finding that the repossession and sale of motor vehicle registration number KCY 818L was illegal and unlawful 1. The Appellants contend that the learned trial magistrate erred in declaring the repossession and subsequent sale of motor vehicle registration number KCY 818L illegal and unlawful. They submit that the Respondent had admittedly defaulted in servicing the loan facility and that, pursuant to the loan agreement and the provisions of the Movable Property Security Rights Act, they were entitled to repossess and realize the security. They further argue that all the requisite statutory notices were duly issued before the vehicle was sold by private treaty. 2. The issue for determination is therefore whether the repossession and sale of the motor vehicle complied with both the contractual terms agreed upon by the parties and the mandatory statutory safeguards governing the realization of movable securities. 3. It is settled law that although a secured creditor is entitled to realize its security upon default, that right is not absolute. The exercise of the right must strictly comply with the terms of the agreement and the procedures prescribed by statute. Any departure from the mandatory legal requirements renders the realization process unlawful regardless of the existence of default. 4. Sections 65, 66, 67 and 73 of the Movable Property Security Rights Act prescribe the procedure to be followed before a secured creditor may enforce its security by taking possession and disposing of the collateral. These provisions are intended to protect both the creditor's right to recover the debt and the debtor's right to redeem the security or obtain the best possible value from its realization. 5. The court in *NCBA Bank PLC v Ndungu Njeri t/a Digital Tours and Logistics (2021) eKLR,* which the Appellants themselves relied upon, emphasized that a secured creditor must demonstrate full compliance with both the Movable Property Security Rights Act and the Auctioneers Act before repossessing and disposing of secured property. The burden of proving such compliance rests upon the party seeking to enforce the security. 6. Having carefully reconsidered the evidence on record, this court notes that while the Respondent did not dispute obtaining the loan facility or falling into arrears, the dispute before the trial court was never merely about default. Rather, it concerned whether the Appellants exercised their remedies in accordance with the law and the subsisting orders of the court. 7. The record demonstrates that there were ongoing court proceedings between the parties and that interim orders as well as a subsequent consent had been recorded with the objective of regulating the parties' rights pending settlement of the outstanding debt. Those court-sanctioned arrangements-imposed obligations upon both parties and could not simply be ignored in favour of unilateral enforcement measures. 8. Although the Appellants maintain that reminder letters, proclamation notices and a statutory notice of disposition were issued, the learned trial magistrate evaluated the totality of the evidence and found that the repossession and eventual sale were undertaken in circumstances that were inconsistent with the parties' subsisting obligations before the court. This court finds no basis for interfering with that factual finding. 9. It is a settled principle that an appellate court will not lightly interfere with findings of fact made by a trial court unless it is demonstrated that the court misdirected itself, failed to consider relevant evidence, considered irrelevant matters, or arrived at a conclusion unsupported by the evidence. The Appellants have not demonstrated any such misdirection. 1. Indeed, the existence of a contractual right of repossession does not authorize a lender to disregard pending court processes or agreements entered into before the court. Once parties submit themselves to the jurisdiction of the court and record terms regulating their relationship, any enforcement action must be undertaken consistently with those orders. 2. Upon an independent re-evaluation of the evidence, this court is satisfied that the learned trial magistrate properly appreciated the applicable legal principles and correctly concluded that the repossession and sale of motor vehicle registration number KCY 818L did not comply with the prevailing legal and procedural requirements. Consequently, this court finds no error in the declaration that the repossession and sale were illegal and unlawful. **Whether the trial court erred in law and fact in finding that the 1st Appellant breached the consent dated 27th September 2022 and consequently ordering a refund of Kshs. 1,563, 638/= to the Respondent** 1. The Appellants submit that the learned trial magistrate erred in finding that they breached the consent dated 27th September 2022. They argue that the consent was not binding because it was allegedly unsigned by the 1st Appellant and its witness. Alternatively, they contend that if the consent was valid, it was the Respondent who breached its terms by failing to pay Kshs. 200,000/= as agreed. 2. The law relating to consent judgments is well settled. A consent order recorded before a court has contractual effect and is binding upon the parties unless it is shown that it was entered into through fraud, collusion, misrepresentation, mistake or any other circumstance that would justify setting aside a contract. 3. In *Brooke Bond Liebig (T) Ltd v Mallya [1975] EA 266,* the court held that a consent judgment can only be set aside on grounds that would justify the setting aside of a contract. Similarly, in *Flora N. Wasike v Destimo Wamboko* *[1988] eKLR*, the Court of Appeal reaffirmed that a consent order remains binding unless impeached on recognized legal grounds. 1. From the record before this court, there is no indication that the Appellants applied before the trial court to set aside, vary or invalidate the consent dated 27th September 2022. Neither was evidence produced demonstrating fraud, mistake, misrepresentation or want of authority on the part of counsel who recorded the consent. 2. It is therefore not open to the Appellants, at the appellate stage, to simply assert that the consent was unsigned and therefore unenforceable while having taken no procedural steps to challenge its validity before the trial court. 3. The learned trial magistrate found that the 1st Appellant proceeded to dispose of the motor vehicle notwithstanding the subsisting consent regulating the parties' obligations. That finding was based on the documentary evidence placed before the court and the chronology of events surrounding the repossession and sale. 4. The Appellants further challenge the order directing a refund of Kshs. 1,563,638/= on the ground that they had produced documents showing how the proceeds of sale were applied. However, the burden of accounting for the realization of secured property rests squarely upon the secured creditor. 5. Once a secured asset has been sold exclusively within the knowledge and control of the creditor, the creditor must render a clear and transparent account demonstrating the sale price, deductions made and the balance due, if any. Failure to provide such an account entitles the court to draw an adverse inference against the party withholding that information. 6. The learned trial magistrate found that the Appellants failed to satisfactorily account for the proceeds realized from the sale of the motor vehicle and consequently ordered a refund of Kshs. 1,563,638/=. Having independently reviewed the record, this court finds no sufficient basis upon which to disturb that finding. 7. Accordingly, this court is satisfied that the learned trial magistrate properly found that the 1st Appellant breached the consent dated 27th September 2022 and correctly ordered a refund of Kshs. 1,563,638/= to the Respondent. ## Whether the trial court erred in dismissing the Appellants’ Counterclaim 1. The Appellants submit that the learned trial magistrate erred in dismissing their counterclaim for Kshs. 345,274.53, which they allege remained outstanding after the sale of the motor vehicle. 2. A counterclaim is an independent claim and, like any other civil claim, must be proved on a balance of probabilities in accordance with Sections 107 and 109 of the Evidence Act. The legal burden rests upon the party asserting the existence of the debt. 3. In order to succeed, the Appellants were required to establish not only the existence of the loan facility and the Respondent's default but also the actual amount realized from the sale, the lawful deductions made and the resulting outstanding balance. 4. Having found that the repossession and sale were unlawful and that the Appellants failed to properly account for the proceeds of sale, the learned trial magistrate correctly concluded that the alleged deficit had not been proved. 5. A party who conducts an unlawful realization process cannot rely on the same impugned process as the foundation for recovery of an alleged outstanding balance without first providing a full and satisfactory account of the realization. 6. The documentary evidence relied upon by the Appellants was insufficient to discharge the burden placed upon them. In the absence of a transparent reconciliation demonstrating how the alleged deficit arose, the counterclaim remained unproved. 7. This court therefore finds no error in the learned trial magistrate's decision dismissing the Appellants' Counterclaim. ## Whether the judgment of the trial court is against the weight of the evidence on record 1. The Appellants contend that the learned trial magistrate failed to properly evaluate the evidence, disregarded their submissions and consequently arrived at an erroneous decision. 2. As a first appellate court, this court has undertaken its own independent evaluation of the pleadings, documentary evidence, oral testimony and the impugned judgment in accordance with the principles set out in **Selle &** **Another v Associated Motor Boat Co. Ltd & Others [1968] EA 123.** 1. The record demonstrates that the learned trial magistrate identified the issues in controversy, analyzed the documentary evidence produced by both parties and applied the relevant legal principles before reaching the impugned conclusions. 2. The mere fact that the trial court reached conclusions adverse to the Appellants does not, by itself, establish that the judgment was against the weight of the evidence. An appellate court will only interfere where the findings are plainly wrong or unsupported by the evidence. 3. Upon a fresh and exhaustive evaluation of the record, this court is satisfied that the findings that the repossession and sale were unlawful, that the 1st Appellant breached the consent dated 27th September 2022, that the Respondent was entitled to a refund of Kshs. 1,563,638/=, and that the Appellants' counterclaim was unproved are all supported by the evidence on record. 4. Consequently, this court finds that the judgment of the learned trial magistrate was well founded both in law and in fact and cannot be said to be against the weight of the evidence. ## Who should bear the costs of the appeal and the suit in the subordinate court 1. Costs are governed by Section 27 of the Civil Procedure Act, which provides that costs shall follow the event unless the court, for good reason, orders otherwise. 2. The award of costs is discretionary, but that discretion must be exercised judicially and upon consideration of the circumstances of each case. The general rule is that a successful litigant is entitled to recover the costs incurred in prosecuting or defending the proceedings. 3. In the present appeal, the Appellants have failed to demonstrate any error of law or fact on the part of the learned trial magistrate warranting interference by this court. The appeal therefore lacks merit and the Respondent remains the successful party. 4. The court finds no exceptional circumstances that would justify departing from the general rule that costs follow the event. Accordingly, the Respondent is entitled to the costs of this appeal, while the order of the trial court awarding costs of the suit and counterclaim to the Respondent shall remain undisturbed. # DISPOSITION 1. Having carefully considered the pleadings, the record of appeal, the judgment of the subordinate court, the submissions by the Appellants, together with the applicable law and authorities, this court now proceeds to render its determination on the issues arising for resolution in this appeal as follows: 1. The Appeal is hereby dismissed in its entirety. 2. The Judgment and Decree of the Senior Principal Magistrate delivered on 8th October 2025 in Kisumu CMCC No. E131 of 2022, are hereby upheld. 3. The Declaration that the repossession and sale of motor vehicle registration number KCY 818L by the Appellants was illegal and unlawful is hereby affirmed. 4. The Declaration that the 1st Appellant breached the consent dated 27th September 2022, is hereby affirmed. 5. The Order directing the 1st Appellant to refund the Respondent the sum of Kshs. 1,563,638/= is hereby upheld. 6. The Dismissal of the Appellants' Counterclaim is hereby affirmed. 7. The Respondent shall have the costs of this Appeal, while the orders of the trial court awarding the Respondent the costs of the Suit and the Counterclaim shall remain undisturbed. 8. The sums awarded by the trial court shall attract interest in accordance with the Decree of the subordinate court until payment in full. It is so ordered. SIGNED BY/FOR: **□ TH E JUDICIAR Y O F KENY A ★** **HON. JUSTICE ABDI M. HASSAN** Kisumu High Court High Court Civil Date: 2026-07-14 12:11:18