https://new.kenyalaw.org/akn/ke/judgment/kehc/2026/10457

Platinum Credit Ltd v Amolo (Civil Appeal E234 of 2025) [2026] KEHC 10457 (KLR) (14 July 2026) (Judgment) Neutral citation: [2026] KEHC 10457 (KLR) Republic of Kenya In the High Court at Kisumu Civil Appeal E234 of 2025 AM Hassan, J July 14, 2026 Between Platinum Credit Limited Plaintiff and Elijah Oloo Amolo Defendant Judgment A. Introduction/ Facts Of The Case 1.The Plaintiff (now Respondent), vide an Amended Plaint dated 18th March 2024, instituted a suit against the Defendant (now Appellant) seeking a permanent injunction restraining the Defendant from selling, repossessing, disposing of and advertising for sale or in any way divesting a Motor Vehicle Reg. No. KCY 492M, loss of user, costs of the suit, interest at court rates, a declaration that the Appellant is in breach of the consent dated 27th September 2022, and an order for refund of the excess amount of the sale. 2.This suit arises from the judgment of the subordinate court in a dispute concerning a loan facility advanced by the Appellant to the Respondent and the subsequent repossession and sale of motor vehicle registration Number KCY 492M (Toyota Hiace) which had been offered as security. 3.The Respondent instituted the suit contending that he had entered into an agreement with the Appellant to buy out loan of Kshs. 780,000/= from ENK Enterprises. He contended that the loan was to facilitate the purchase of the motor vehicle and that the Appellant unlawfully sold the vehicle despite existing court orders and an alleged consent dated 27th September 2022 permitting him to settle the outstanding loan amount by instalments. He maintained that the Appellant rejected the cheques he had issued pursuant to the alleged consent, informed him that the vehicle had already been sold, and declined to furnish him with documents relating to the sale. He further claimed that the vehicle was used for commercial transport and that its repossession occasioned him substantial financial loss. 4.The Plaintiff averred that at the time of repossession of the motor vehicle, the approximate value of the said motor vehicle was Kshs. 2,000,000/= 5.The Appellant's case was that it advanced the Respondent a loan facility of Kshs. 847,305/=, comprising Kshs. 800,000/= principal and Kshs. 47,305/= processing fees, and paid Kshs. 780,000/= directly to ENK Enterprises on the Respondent's behalf. The Appellant asserted that the Respondent remained in persistent default from the inception of the loan and failed to regularize the account despite demand notices and an extension granted by both the parties and the court. Consequently, the vehicle was lawfully repossessed through Antique Auctions Agencies. 6.The Appellant further maintained that although the subordinate court ordered the Respondent on 6th September 2022 to pay Kshs. 495,990/= within twenty-one days to regularize the account, the Respondent failed to comply. It denied the existence of any consent dated 27th September 2022 allowing payment by instalments and stated that, after issuing a statutory notice of disposition citing an outstanding debt of Kshs. 1,698,592.60, it lawfully disposed of the vehicle through a private treaty. 7.Upon considering the evidence, the trial court partly allowed the Respondent's suit, holding that loss of user had not been proved but declaring that the Appellant had breached the alleged consent dated 27th September 2022. The court ordered the Appellant to refund the Respondent Kshs. 1,504,010/=, dismissed the Appellant's counterclaim, and awarded costs of the suit to the Respondent. 8.Being dissatisfied with the judgment of the trial court, the Defendant lodged the present appeal vide a Memorandum of Appeal dated 5th November 2025, raising the following grounds: -1.That the learned magistrate erred in finding that the Appellant should refund the Respondent Kshs. 1,504,010/= on the strength that the 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 in fact in finding that the Appellant breached the consent dated 27.9.20224.The learned magistrate erred in dismissing the Appellants counterclaim despite the overwhelming evidence placed before her.5.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.6.The learned trial magistrate erred in law and in fact in failing to consider in whole the evidence adduced in court7.The learned magistrate erred in law and in fact in disregarding the submissions made and filed by the Appellant in arriving at judgment in the case. 9.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 A. Submissions By Parties Appellant’s Submissions 10.The Appellant submitted that the main issue in contention was whether the Respondent was entitled to the orders sought. 11.The Appellant first addressed the issue of whether they had breached the consent dated 27th September 2022, and whether they ought to refund the Respondent Kshs. 1,504,010/=. The Appellant contended that the repossession and subsequent sale of the motor vehicle was lawful and undertaken in accordance with both the loan agreement and the applicable statutory provisions. 12.The Appellant submitted that the Respondent had acknowledged entering into a loan agreement for Kshs. 847,305/-, repayable in eighteen (18) monthly installments of Kshs. 82,665/-. They stated that the loan attracted interest at the rate of 4% together with a rollover interest of 0.33% per day on any unpaid installments. According to the Appellant, owing to financial constraints, the Respondent had sought and been granted an extension to clear the arrears by 25th March 2022. They further submitted that the loan application expressly provided that, in the event of default, the Appellant was entitled to immediately call up the loan, repossess, and sell the secured motor vehicle, Registration No. KCY 492M, at their sole discretion for purposes of recovering the outstanding debt. 13.The Appellant further submitted that the loan facility had been governed by the Movable Property Security Rights Act No. 13 of 2017, particularly Sections 65, 66, and 67, which prescribed the procedure for enforcement of security rights. They argued that under the Act, a secured creditor was required to serve a written notification upon the grantor specifying the nature and extent of the default, the amount due and the period within which payment or rectification should be made, the consequences of failing to remedy the default, and the grantor's right to seek relief from the court. In support of their position, the Appellant 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 maintained that where the grantor failed to comply, the creditor was entitled to institute proceedings, appoint a receiver, lease, take possession of, or sell the secured movable asset. 14.The Appellant submitted that they had fully complied with the statutory requirements by issuing written notices dated 6th March 2022 and 20th April 2022, both of which the Respondent had admitted receiving. They further argued that although the Act was silent on the specific procedure for taking possession of secured property, judicial guidance required the issuance of proclamation notices through auctioneers. In compliance with that practice, they stated that they had issued a proclamation notice on 28th March 2022 granting the Respondent seven (7) days within which to rectify the outstanding arrears. 15.The Appellant further submitted that following the court order issued on 6th September 2022, the Respondent had been required to settle arrears amounting to Kshs. 495,990/- within twenty-one (21) days, that is, by 27th September 2022. They pointed out that the Respondent had admitted failing to make the payment within the stipulated period. Consequently, the Appellant submitted that they had issued a statutory notice of disposition on 14th October 2022 pursuant to Section 73 of the Act, notifying the Respondent of their intention to dispose of the motor vehicle. They stated that at that point the outstanding debt stood at Kshs. 1,698,592.60/= comprising the principal amount, accrued interest, and enforcement costs. The Appellant further submitted that the motor vehicle, Registration No. KCY 492M, had thereafter been advertised and sold by private treaty, realizing a variance of Kshs. 796,592.60/=. They therefore maintained that the repossession and sale process had been regular, lawful, and undertaken in the proper exercise of its contractual and statutory rights arising from the Respondent's continued default. 16.With respect to the consent dated 27th September 2022, the Appellant submitted that they had not breached the said consent as alleged by the Respondent. They argued that no breach could be attributed to them because the alleged consent had neither been signed by the Appellant nor by its witness, Richard Simbala, who had expressly denied any knowledge of or participation in its execution. 17.The Appellant further submitted that, even assuming the consent was valid and binding, it was the Respondent who had failed to comply with its terms. They argued that the consent had required the Respondent to pay Kshs. 200,000/= by 5th October 2022 and thereafter continue making the agreed installments, obligations which the Respondent had failed to honour, thereby placing himself in breach of the very consent upon which he relied. 18.In conclusion, the Appellant submitted that they had lawfully exercised their right to repossess and sell the motor vehicle in order to recover the outstanding loan following the Respondent's persistent default under both the loan agreement and the alleged consent. They therefore argued that the trial court had erred in finding that the repossession was unlawful and in condemning the Appellant to refund the Respondent Kshs. 1,504,010/=. 19.Lastly, the Appellant addressed the issue of whether the Respondent was entitled to an order for refund of the excess amount of the sale. The Appellant submitted that the Respondent was not entitled to an order for refund of any excess amount arising from the sale of motor vehicle Registration No. KCY 492M. They argued that the motor vehicle had been sold by private treaty following the Respondent's unmitigated default under the loan agreement and after the Appellant had complied with the requisite contractual and legal procedures governing repossession and realization of the security. 20.The Appellant further submitted that the sale of the motor vehicle did not result in any excess proceeds refundable to the Respondent. Instead, they realized a variance of Kshs. 796,592.60/= which remained outstanding after applying the sale proceeds towards the Respondent's indebtedness. On that basis, they maintained that the Respondent had no legal or factual basis for seeking a refund. 21.The Appellant also submitted that the trial court erred in failing to allow its counterclaim. It contended that the evidence before the court demonstrated that the Respondent remained indebted to it and that the trial court ought to have allowed its counterclaim in the sum of Kshs. 345,274.53/= together with costs. 22.The Appellant further argued that the Respondent failed to discharge the burden of proof as required under Section 107 of the Evidence Act, Chapter 80 of the Laws of Kenya, which places the obligation upon the party asserting a fact to prove it. They maintained that the Respondent had failed to establish, to the requisite legal standard, any entitlement to a refund arising from the sale of the motor vehicle. 23.It was the Appellant's further submission that they had diligently followed the contractual terms of the loan agreement as well as the applicable legal procedures in repossessing and selling the collateral in order to protect its interests. Consequently, they argued that its actions were lawful and that the Respondent was not entitled to any refund of the sale proceeds. 24.On the foregoing grounds, the Appellant urged the court to allow the appeal, set aside in its entirety the decision, judgment, and decree of the trial court delivered on 8th October 2025, dismiss the Respondent's suit in the subordinate court with costs, allow the Appellant's counterclaim with costs, and order that the Respondent bear the costs of the appeal. Respondent’s Submissions 25.The Respondent had not filed their submission by the time of writing the judgment herein. 26.In the circumstances, I have considered the pleadings of the parties and submissions by the Appellant and I therefore wish to have the following as issues for determination; Issues For Determinationi.Whether the trial court erred in law and fact in finding that the Appellant breached the alleged consent dated 27th September 2022 and in its consequent evaluation of the legality of the repossession and sale of Motor Vehicle Registration No. KCY 492M.ii.Whether the Respondent proved his entitlement to a refund of Kshs. 1,504,010/= or any excess proceeds arising from the sale of the motor vehicle, and whether the award made by the trial court was justified in law and on the evidence.iii.Whether the trial court properly evaluated the evidence on record and the applicable law in dismissing the Appellant’s counterclaim and arriving at its final determination.iv.Who bears the costs of the suit and of this appeal. C. Analysis And Determination Whether the trial court erred in law and fact in finding that the Appellant breached the alleged consent dated 27th September 2022 and in its consequent evaluation of the legality of the repossession and sale of Motor vehicle Registration No. KCY 492M 27.The Appellant contend that the learned trial magistrate erred in finding that the repossession and subsequent sale of motor vehicle registration number KCY 492M was unlawful. They submit that the Respondent had admittedly defaulted in servicing the loan facility and that, pursuant to the loan agreement and the Movable Property Security Rights Act, they were entitled to repossess and realize the security. They further argue that statutory notices were duly issued prior to the sale. 28.The issue for determination is whether the repossession and sale complied with both the contractual terms binding the parties and the mandatory statutory framework governing realization of secured movable property, and whether the alleged consent of 27th September 2022 altered those obligations. 29.It is settled law that although a secured creditor has the right to realize security upon default, that right is not absolute. It must be exercised strictly in accordance with the contract and the applicable statutory provisions, including the Movable Property Security Rights Act and the Auctioneers Act. Any deviation renders the process unlawful. 30.Sections 65, 66, 67 and 73 of the Movable Property Security Rights Act set out mandatory procedures governing enforcement of security rights. These provisions are designed to balance the creditor’s right to recover the debt with the debtor’s right to redeem the property and obtain fair value. 31.In NCBA Bank PLC v Ndungu Njeri t/a Digital Tours and Logistics (2021) eKLR, the court reaffirmed that a chargee or secured creditor must demonstrate strict compliance with statutory requirements before repossessing and disposing of secured property, and the burden of proof lies on the enforcing party. 32.In the present case, while default is not in dispute, the central issue is whether the Appellant complied with the subsisting court-sanctioned consent dated 27th September 2022, which regulated the manner of repayment and enforcement of the loan obligations. 33.The record shows that the parties had recorded a consent before court which restructured repayment and suspended or regulated enforcement measures pending compliance. Such a consent, once adopted by the court, has the force of a binding order and could not be unilaterally disregarded by either party. 34.The Appellant maintain that statutory notices and proclamation were issued. However, the learned trial magistrate evaluated the totality of evidence and found that the repossession and sale were undertaken in disregard of the subsisting consent order. This court finds no basis to interfere with that factual finding. 35.It is a well-established principle that an appellate court will not lightly interfere with findings of fact unless they are shown to be plainly wrong or unsupported by evidence. The Appellant has not demonstrated any such misdirection. 36.The existence of a contractual or statutory right of repossession does not entitle a creditor to ignore a valid court order. Once parties submit to court processes and record a consent, enforcement must be consistent with that consent. 37.Upon independent re-evaluation, this court is satisfied that the learned trial magistrate properly found that the repossession and sale of Motor Vehicle Registration No. KCY 492M were undertaken in breach of the consent dated 27th September 2022 and were therefore unlawful Whether the Respondent proved entitlement to a refund of Kshs 1,504,010/= or any excess proceeds arising from the sale of the motor vehicle and whether the award was justified 38.The Appellant argue that the learned trial magistrate erred in ordering a refund of Kshs. 1,504,010/= contending that the Respondent failed to demonstrate entitlement to the alleged surplus and that the proceeds of sale were properly accounted for. 39.The law on consent judgments is well settled. A consent recorded in court has contractual effect and is binding unless set aside on grounds equivalent to those for setting aside a contract, such as fraud, misrepresentation, mistake, or lack of authority. 40.In Brooke Bond Liebig (T) Ltd v Mallya [1975] EA 266 and Flora N. Wasike v Destimo Wamboko [1988] eKLR, the Court of Appeal reaffirmed that a consent judgment remains binding unless successfully challenged on recognized legal grounds. 41.In this case, no application was made before the trial court to set aside or vary the consent dated 27th September 2022. There was also no evidence of fraud, mistake, or misrepresentation presented to impeach its validity. 42.The Appellant cannot therefore challenge the consent at the appellate stage without having first taken steps to set it aside in the trial court. 43.The record further shows that the motor vehicle was repossessed and sold while the consent was still in force, thereby triggering obligations for proper accounting of the sale proceeds. 44.It is trite that a secured creditor in possession of sale proceeds is under a fiduciary duty to render a full and transparent account of the sale process, including valuation, sale price, and deductions. 45.Where such accounting is not satisfactorily demonstrated, the court is entitled to draw an adverse inference against the party in control of the transaction. 46.The learned trial magistrate found that the Appellant failed to render a credible and complete account of the sale proceeds, resulting in an unexplained surplus. 47.Having independently evaluated the record, this court finds no reason to disturb the finding that the Respondent was entitled to a refund of Kshs. 1,504,010/= being excess proceeds of sale. Whether the trial court properly evaluated the evidence on record and the applicable law in dismissing the Appellant’s Counterclaim and arriving at its final determination 48.The Appellant contend that the learned trial magistrate failed to properly evaluate the evidence placed before the court and consequently erred in dismissing their counterclaim while entering judgment in favour of the Respondent. They submit that the Respondent was admittedly in default of the loan facility and that, after applying the proceeds realized from the sale of Motor Vehicle Registration No. KCY 492M, there remained an outstanding balance for which they were entitled to judgment. 49.A Counterclaim constitutes an independent cause of action 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 to place before the court sufficient evidence establishing both the basis and the quantum of the claim. 50.To succeed in their counterclaim, the Appellants were required to demonstrate not only the existence of the loan agreement and the Respondent’s default but also that the repossession and sale of the motor vehicle were undertaken in accordance with the law, that the proceeds of sale were properly accounted for, and that after applying those proceeds, a definite outstanding balance remained payable by the Respondent. 51.As already determined under the preceding issues, the repossession and subsequent sale of Motor Vehicle Registration No. KCY 492M were undertaken in breach of the subsisting consent dated 27th September 2022, and the Appellant failed to satisfactorily account for the realization of the security and the application of the proceeds thereof. Having failed to demonstrate that the realization process complied with the law and the binding consent of the parties, the Appellant could not rely on the same process as the foundation of their claim for an alleged outstanding balance. 52.The documentary evidence relied upon by the Appellant was insufficient to establish the counterclaim. No transparent reconciliation of the loan account was produced demonstrating the sale price, the deductions made, the amount applied towards the loan, and the basis upon which the alleged balance was computed. In the absence of such evidence, the learned trial magistrate correctly found that the counterclaim had not been proved to the requisite standard. 53.The Appellant further contend that the learned trial magistrate failed to properly evaluate the evidence and arrived at conclusions unsupported by the record. As a first appellate court, this court is under a duty to reconsider and re-evaluate the evidence afresh while bearing in mind that it neither saw nor heard the witnesses testify, in accordance with the principles set out in Selle & Another v Associated Motor Boat Co. Ltd & Others [1968] EA 123. 54.Upon an independent review of the pleadings, documentary evidence, oral testimony and the impugned judgment, this court is satisfied that the learned trial magistrate properly identified the issues in controversy, considered the evidence adduced by both parties and applied the relevant legal principles in reaching the impugned decision. The mere fact that the conclusions reached were adverse to the Appellant does not of itself establish that the court misdirected itself or failed to consider the evidence. 55.An appellate court will only interfere with findings of fact where it is demonstrated that the trial court acted on no evidence, misapprehended the evidence, took into account irrelevant considerations, failed to consider relevant matters, or reached conclusions that are plainly wrong. The Appellant have failed to demonstrate any such error. 55.Having independently re-evaluated the entire record, this court finds that the learned trial magistrate properly dismissed the Appellants’ counterclaim and correctly concluded that the Respondent was entitled to the reliefs granted. The final determination was firmly grounded on the evidence on record and the applicable law, and there is therefore no basis upon which this court can interfere with the findings of the trial court. Who should bear the costs of the appeal and the suit 56.Costs follow the event under Section 27 of the Civil Procedure Act. 57.The award of costs is discretionary but must be exercised judicially. 58.The Appellant having failed in this appeal, the Respondent is the successful party. 59.Accordingly, the Respondent shall have costs of the appeal, and the order on costs in the subordinate court shall remain undisturbed. D. Disposition 60.Having carefully reconsidered the pleadings, the record of appeal, the judgment of the subordinate court, the submissions by the Appellant, and the applicable law, this court finds that the appeal is devoid of merit. The learned trial magistrate properly evaluated the evidence and correctly applied the law in finding that the Appellant breached the consent dated 27th September 2022, that the Respondent was entitled to a refund of Kshs. 1,504,010/=, and that the Appellant's counterclaim had not been proved. 61.Consequently, this court makes the following orders:a.The Appeal is hereby dismissed in its entirety.b.The Judgment and Decree of the Chief Magistrate delivered on 8th October 2025 in Kisumu CMCC No. E173 of 2022 are hereby upheld.c.The order directing the Appellant to refund the Respondent the sum of Kshs. 1,504,010/= shall remain undisturbed.d.The dismissal of the Appellant's Counterclaim is hereby affirmed.e.The Respondent shall have the costs of this Appeal, while the order of the trial court awarding the costs of the Suit to the Respondent shall remain undisturbed.It is so ordered. SIGNED BY/FOR:THE JUDICIARY OF KENYAHON. JUSTICE ABDI M. HASSANKISUMU HIGH COURT