https://new.kenyalaw.org/akn/ke/judgment/kehc/2026/10973

**REPUBLIC OF KENYA** **IN THE HIGH COURT OF KENYA AT KISUMU** **CIVIL APPEAL NO. E018 OF 2025** **PLATINUM CREDIT LIMITED….…………..………..…...APPELLANT** **-VERSUS-** **ROSEMARY ANYANGO OWINO…………….……..1ST RESPONDENT** **ROBERT W. MAINA T/A** **ANTIQUE AUCTIONS AGENCIES…………………2ND RESPONDENT** *(Being an Appeal against part of the Judgement and Decree of Hon. D.K Mtai delivered on 20th December 2024 in Winam PMCC Civil Suit No.115 of 2022)* ***JUDGMENT*** **Introduction** 1. The background of this dispute is that the Appellant advanced two loan facilities to the 1st Respondent, on 16th December 2020 and 30th December 2020 in the sum of Kshs.1,600,000/- and Kshs.400,000/- respectively. 2. The loan had an agreed interest rate of 4% per month and a roll over daily interest of 0.33% in the event of any default. The facilities were secured by the 1st Respondent’s vehicles registration number KCQ 364M in respect of the first loan and motor vehicle registration number KCH 291A in respect of the second loan. 3. The Appellant stated that the 1st Respondent defaulted in loan repayments which prompted it to repossess and proclaim the two vehicles which were later sold in an auction to recover the outstanding loan amount. 4. The 1st Respondent instituted the primary suit against the Appellant and the 2nd Respondent in ***PMCC Civil Suit No.115 of 2022*** seeking, *inter alia*, a declaration that the sale and repossession of her vehicles by the Appellant was irregular and illegal. The 1st Respondent sought further orders to compel the Appellant to render account on the sale and allocation of the proceeds of the sale of her motor vehicles and an order to cancel the sale of her the vehicles as well as restoration of the said vehicles to herself. 5. The trial court found that the Appellant had failed to account for a sum of Kshs.1,283,424/- that had been paid by the 1st Respondent towards loan repayment and therefore it was not possible to determine the extent of the 1st Respondent’s indebtedness before the proclamation and sale of the vehicles took place. As such, the trial court was of the view that the right to repossession had not crystalized and therefore the proclamation, repossession and sale of the 1st Respondents vehicles was illegal. 6. The Appellant being dissatisfied with the entire judgement filed the instant appeal on the following grounds:- *1. The Learned Principal Magistrate erred in law and fact in failing to properly frame, consider and determine all the issues that were raised before him.* *2. The Learned Principal Magistrate erred in law and fact in misapprehending the claim and the evidence before him.* *3. The Learned Principal Magistrate erred in law and fact in making findings and orders that were incapable of execution and compliance.* *4. The Learned Principal Magistrate erred in law and fact in issuing orders that were overtaken by events.* *5. The Learned Principal Magistrate erred in law and fact in purporting to re-write the contract between the Appellant and the Respondent.* *6. That the Learned Principal Magistrate erred in law and in fact in awarding general damages to the 1st Respondent amounting to Kshs. 4,000,000/=.* *7. That the quantum of general damages is excessive and an erroneous estimate of the damages that may be awarded to the 1st Respondent having due regard to the circumstances of the case before the subordinate court and the weight of precedents in similar circumstances.* *8. That the Learned Principal Magistrate wrongly applied the applicable principles of law in arriving at the judgment of the suit before the court.”* 1. Based on the foregoing grounds, the Appellant prayed to have the appeal allowed and to have the impugned judgement set aside entirely and, in its place, the 1st Respondent’s suit be dismissed with costs to the Appellant. 1. The Appeal was heard by way of written submissions. **Trial Courts Evidence** 1. The testimony of the Respondent is that she was advanced two loan facilities by the Appellant on 16th December 2020 and 30th December 2020 in the sum of Kshs.1,600,000/- and Kshs.400,000/- respectively. The facilities were secured by her motor vehicles registration number KCQ 364M in respect of the first loan and motor vehicle registration number KCH 291A in respect of the second loan. 2. That the Appellant claimed that she had defaulted in the facilities and the Appellant repossessed the securities and sold them. The Respondent’s case was that the Appellant did not comply with MPSRA while repossessing and selling the securities. 3. The Appellant on the other hand testified that it had complied with the law and denied having applied illegal interest to the facilities. **Appellant’s Submissions.** 1. The Appellant filed written submissions dated 30th March 2026 in support of the appeal. In its submissions, the Appellant addressed five issues framed for determination: - * 1. *Whether the 1st Respondent had defaulted in the loan repayment; -* 2. *Whether MPSRA notifications were properly served on the 1st Respondent;* 3. *Whether proceeds of sale were properly accounted for;* 4. *Whether interest was lawfully charged; and* 5. *Whether the general damages awarded were supported by evidence and/or were excessive in the circumstances.* 1. The Appellant contended that the trial court, though purporting to frame these issues, conflated them and failed to engage with the Appellant's evidence on each. On default, the Appellant argued that the restructuring of both facilities at the 1st Respondent's own request constituted an implicit admission of default, corroborated by her own cross-examination testimony and consolidated loan statements showing substantial arrears, which she failed to rebut with independent expert evidence as required to displace the statutory presumption of accuracy attaching to bank records. 2. On service of notifications under the MPSRA, the Appellant contended that repossession was a self-help remedy not requiring prior court sanction, and that the trial court had erroneously conflated the separate question of notice with the accounting dispute, notwithstanding evidence that proclamation notices were served and received, and that the 1st Respondent had not exercised her right of redemption. 1. On accounting for sale proceeds, the Appellant submitted that the finding of unposted payments was unsupported by the evidence, given the shared nature of the M-Pesa collection account, the multiplicity of the 1st Respondent's loan accounts, and DW1's detailed reconciliation tracing disputed payments to accounts other than those in issue, with the burden of proving unposted entries resting on the 1st Respondent, who failed to discharge it. 2. On interest, the Appellant maintained that the rates charged were contractually agreed, disclosed, and signed for by the 1st Respondent, and that the trial court had impermissibly interfered with a freely negotiated commercial contract without making any specific finding of unlawful charging. 3. Finally, on general damages, the Appellant argued that the award of Kshs.4,000,000/-, framed as the value of the vehicles, was excessive, unsupported by contemporaneous valuation, and inconsistent with the compensatory principle, since even on the 1st Respondent's own figures the maximum recoverable surplus would not have exceeded approximately Kshs.650,705/-. 4. The Appellant accordingly urged that the appeal was merited and ought to succeed in the terms sought in the Memorandum of Appeal. **Respondent’s Submissions.** 1. The Respondent relied on the submissions dated 31st March, 2026, having abandoned the one dated 25th March, 2026. The 1st Respondent maintained that the trial court had properly framed and determined all issues, and that the Appellant's contrary suggestion misrepresented the record. 2. On default, the 1st Respondent argued that the central and dispositive fact was the Appellant's failure to credit a Kshs.1,000,000/- payment made by two cheques on 21st January 2021, evidenced by her own bank statement and the Appellant's consolidated pay-off statements, which the Appellant's witness could not explain in cross-examination beyond conceding the sum had been misallocated to a different account. 3. She submitted that restructuring, undertaken in good faith to continue servicing the loans, did not extinguish the Appellant's obligation to credit that payment, and that Section 176 of the Evidence Act cut both ways: since her own bank statements proved payment while the Appellant's statements failed to reflect it, the burden shifted to the Appellant to explain the discrepancy, which it did not discharge. 4. On the statutory notices, the 1st Respondent submitted that the proclamations served were generic, and failed to state the correct amount due (having been calculated without the uncredited Kshs.1,000,000/-), did not particularise the default, and did not advise her of her right to apply to court for relief, contrary to Section 67(2) of the MPSRA. She further submitted that no notice of disposition under Section 73 was proven, that no evidence of a public auction was adduced, and that the vehicles were instead sold by private treaty without valuation or reserve price. She argued that, in any event, since the right to enforce had not crystallized, any notices issued were nullities, and that the interlocutory order requiring payment of Kshs.700,000/- pending suit did not cure an otherwise illegal repossession. 5. On accounting, she submitted that the Appellant had never rendered proceeds accounts despite demand, and that the evidence showed KCQ 364M was sold for Kshs.2,255,000/- against a 2018 purchase price of Kshs.3,100,000/-, indicating undervaluation, and compounded by the uncredited payment. 6. On general damages, the 1st Respondent argued that the trial court's award of Kshs.4,000,000/- was conservative and justified as compensation for the loss of two vehicles that were her source of livelihood, relying on their purchase/estimated values. She submitted the Appellant's proposed cap of Kshs.650,705/- as gross surplus was fallacious, since it assumed a correctly calculated debt, a premise she argued collapsed once the uncredited payment was factored in. 1. Finally, she submitted that the trial court had correctly applied the MPSRA and the evidentiary burden of proof, that the Appellant's preliminary objections at trial had properly been rejected, and that the appeal was an attempt to evade accountability. She accordingly prayed that the appeal be dismissed with costs, and that the Magistrate's judgment be upheld. **Analysis and Determination.** 1. This being a first appeal, the court is required to reconsider and reevaluate the evidence as adduced before the trial court, this was held in the Court of Appeal case of **Peter M. Kariuki v Attorney General (2014) eKLR** where it was stated:- “***We are duty bound as the first appellate court, to reconsider the evidence adduced before the first trial court and re-evaluate it to draw our own independent conclusions and to satisfy ourselves that the conclusions reached by the trial judge are consistent with the evidence.”*** 1. I have distilled the grounds of appeal to the following issues for determination:- 2. *Whether the trial court properly apprehended the pleadings,* *evidence and issues before it, and correctly applied the applicable principles of law in determining the suit.* *2) Whether the award of Kshs.4,000,000/- as general damages was justified in principle and quantum and whether the orders issued were incapable of execution.* ***Issue 1: Whether the trial court properly apprehended the pleadings, evidence and issues before it, and correctly applied the applicable principles of law in determining the suit.*** 1. The Appellant’s first ground of appeal was that the Honourable Magistrate failed to properly frame, consider and determine all the issues that were raised before him. 2. I have carefully read the impugned judgement of the trial court which is on page 350-364 of the record of appeal dated 4th February 2026. The court analyzed the pleadings and evidence as filed by the parties and on page 10 thereto, it distilled the issues for determination as whether the 1st Respondent was in default in the repayment of the loan facilities, whether the subsequent proclamation, repossession and sale of the motor vehicles was regular and lawful and whether the 1st Respondent was entitled to the reliefs sought in the amended plaint. 1. What followed was an analysis by the court of the issues of the evidence adduced by the parties. Having understood the dispute between the parties as elucidated in the introduction segment of this judgement, I find that the trial court properly framed and addressed the necessary issues for determination. 2. The Appellant challenged the trial court's evaluation of the evidence. In considering the issues for determination as outlined in its judgement, the trial court’s central issue was whether the Appellant had properly accounted for all payments made by the 1st Respondent before exercising its statutory remedies. The record shows that the 1st Respondent produced bank statements evidencing two payments of Kshs.500,000/= each made on 21st January 2021 in favour of the Appellant. She also produced the Appellant's consolidated pay-off statements, which did not reflect the said two payments totaling to Kshs.1,000,000/= in her loan accounts. The aforementioned documents were produced on page 78 and 66-74 respectively in the Record of Appeal. 3. Significantly, during cross-examination, the Appellant's witness acknowledged that the payment had been received into a different account and had not been allocated to the 1st Respondent's loan accounts. No satisfactory explanation was offered as to why the payment was never credited and, in those circumstances, the trial court cannot be faulted for concluding that the Appellant had failed to account for all monies paid by the 1st Respondent. 4. The evidential burden had shifted to the Appellant to explain why the payment was not reflected in the loan accounts. That burden was not discharged. 5. The Appellant further contented that the subsequent restructuring of the facilities extinguished its obligation to account for payments previously made. Although the restructuring may have been undertaken after the parties acknowledged difficulties in servicing the facilities, it did not relieve the Appellant of its obligation to accurately credit all payments received. The restructuring agreements did not operate to waive or negate the Appellant's duty to properly account for the Kshs.1,000,000/= paid by the 1st Respondent. 6. On the issue of whether proper notifications were served, **Sections 67(1) and (2) of the Movable Property Security Rights Act** states:- “*(1)* ***If there is a default with respect to any obligation, the secured creditor shall serve on the grantor a notification, in writing or in other form agreed between the parties, to pay the money owing or perform and observe the agreement as the case may be.*** ***(2) The notification required under subsection (1) shall adequately inform the recipient of the following matters—*** ***(a) the nature and extent of default;*** ***(b) if the default consists of non-payment, the actual amount and the time by the end of which payment must be completed.*”** 1. The Section prescribes mandatory requirements regarding notifications of default and notices of intention to dispose of a collateral. Of importance is that the notices must accurately state the nature and extent of the default, the amount required to remedy the default, the period within which payment is to be made, and the chargor's right to seek relief from the court. 2. Upon reviewing the record, I find that the evidence suggests that the notices issued were founded on an outstanding balance that failed to take into account the uncredited payment of Kshs.1,000,000/=. Consequently, the amount alleged to have been outstanding was not accurate. More fundamentally, if the Appellant had not properly accounted for payments received, its right to realize the security had not crystallized. It follows that any enforcement notices issued before that right accrued could not be the basis of subsequent repossession. 3. The legality of the enforcement process remained dependent upon compliance with the statutory requirements which were not adhered to. My finding is that the trialcourt properly apprehended the pleadings, evidence and issues before it, and correctly applied the applicable principles of law in making a determination. ***Issue 2: Whether the award of Kshs.4,000,000/- as general damages was justified in principle and quantum and whether the orders issued were incapable of execution.*** 1. The Appellant's sixth and seventh grounds of appeal challenge the trial court's award of Kshs.4,000,000/= as general damages on the basis that it was excessive. It is evident from the judgment that the trial court granted alternative reliefs, namely, the cancellation of the sale and restoration of the motor vehicles, or, in the alternative, an award of general damages. Following the disposal of the motor vehicles, restoration was no longer practicable, leaving an award of damages as the appropriate remedy. 2. In assessing the damages payable, the trial court considered the evidence relating to the value of the motor vehicles. The 1st Respondent produced documentary evidence showing that motor vehicle KCQ 364M had been purchased in 2018 for Kshs.3,100,000/=. She also gave evidence placing the value of motor vehicle KCH 292A at approximately Kshs.1,700,000/=. Although the vehicles would naturally have depreciated over time, the trial court took into account the evidence before it and assessed their combined value at Kshs.4,000,000/=. 3. It is trite law that this court will not interfere with an award on damages unless a certain criterion is met. In the case of ***Elizabeth Mumbi Kinyua vs. Samuel Wanjohi Murage [2024] eKLR*** the court held that for it to interfere with the award it must ascertain that trial court applied irrelevant factors or omitted relevant factors; that the award is so high as to amount to an erroneous assessment of damages and finally that the award is simply not justified from the evidence. 4. In the instant case, the assessment cannot be said to have been arbitrary or unsupported by the evidence. The trial court was entitled to consider not only the value of the motor vehicles but also the circumstances under which they were repossessed and sold. Having found that the Appellant had failed to properly account for payments made by the 1st Respondent and had consequently proceeded with an unlawful repossession and sale, the court was justified in awarding compensation for the loss thereby occasioned. 5. The Appellant's contention that the award ought to have been limited to the alleged surplus of Kshs.650,705/= is equally unpersuasive. That argument proceeds on the assumption that the outstanding indebtedness had been accurately computed. However, as already found, the Appellant failed to credit the sum of Kshs.1,000,000/= paid by the 1st Respondent, thereby undermining the accuracy of the alleged loan balance upon which the computation was based. The proposed surplus cannot therefore constitute a proper basis for assessment of damages. 6. I find that the trial court exercised its discretion judiciously in assessing damages and no basis has been established to warrant appellate interference with the award. The Appellant has not demonstrated that the trial court acted on a wrong principle, took into account irrelevant considerations, failed to consider relevant matters, or arrived at an award that was so inordinately high as to represent an erroneous estimate of the loss suffered. The award of Kshs.4,000,000/= was therefore justified in the circumstances. 1. **In conclusion my finding is that the Appeal herein lacks merit and the same is dismissed with costs to the 1st Respondent.** 2. **Orders Accordingly.** **Judgment** delivered, dated and signed virtually at **Nairobi** this **17th** dayof **July,** 2026. **…………………………..………………** **L. M. WACHIRA** **JUDGE** **In the Presence of:** *Leadys* – Court Assistant *Mr. Omondi* for the Appellant. *Ikhumba for the 1st Respondent.*