https://new.kenyalaw.org/akn/ke/judgment/kehc/2026/11940

**REPUBLIC OF KENYA** **IN THE HIGH COURT OF KENYA** **AT BUNGOMA** **CIVIL APPEAL NO. E021 OF 2023** **WONDERFUL WOMEN GROUP ................................... 1ST APPELLANT** **KENYA WOMEN FINANCE TRUST (KWFT) ................. 2ND APPELLANT** **THE MICRO FINANCE MANAGER, WEBUYE BRANCH .. 3RD APPELLANT** **VERSUS** **RACHEL NAFULA ........................................................... RESPONDENT** *(Being an appeal from the Judgment and Decree of Honourable Magistrate P.Y. Kulecho (SRM) in Webuye MCC No. 82 of 2020, delivered on 24th February 2023)* **JUDGMENT** **A. Introduction** 1. This is an appeal against the whole of the Judgment and Decree of Hon. P.Y. Kulecho (SRM) as he then was, delivered on 24th February 2023 in Webuye MCC No. 82 of 2020. The trial court entered judgment jointly and severally against the three Appellants in favour of the Respondent for Kshs 23,349/=, together with costs and interest. 2. The Record of Appeal, dated 27th February 2024, raises eight grounds. By direction of this Court, the appeal was canvassed by way of written submissions, which both sides filed and on which each relied in its entirety. **B. Background** 1. The Respondent herein was a member of the 1st Appellant, a women's table-banking group, whose members saved and borrowed as a group through an account said to be held with the 2nd Appellant. The Respondent's case, as pleaded and advanced at the lower court was that she had savings of Ksh. 29,100/= (later particularized at Ksh. 23,349/=) which were never refunded to her upon her withdrawal of membership, and that she duly prosecuted her claim to judgment. 2. The Appellants' case on the other hand, was that the 1st Appellant group operated under a written constitution which conditioned the release of a member's savings on clearance of that member's own loan and of any loan that the member had guaranteed a fellow member. That the Respondent had herself borrowed Ksh. 80,000/= and left an outstanding balance of Ksh. 16,594.68/=. 3. The appellants further pleaded that the respondent had guaranteed loans advanced to one Lilian Naliaka whose balance stood at Ksh. 12,295.37/= and to Betty Mukasia whose balance stood at Ksh. 12,000/=. Both loanees had defaulted and it was therefore the appellants contention that the respondent’s savings of Ksh. 24,339.64/= were, in consequence, applied against those obligations rather than refunded. 4. The trial court in its judgment found, among other things, that the Appellants had not shown the Respondent's loan balance, that her name did not appear in the group loan status report (DEXH-4), that no evidence had been led that Lilian Naliaka had not repaid her loan, and that the Respondent had proved her claim to Kshs 23,349/= on a balance of probabilities. It is that judgment which is impugned. **C. APPEAL** 1. The eight grounds of appeal, distilled, complain that the trial court: 2. ***Erred both in law and fact by pronouncing judgment in favour of the Respondent despite the fact that the respondent had not proved her case on a balance of probabilities;*** 3. ***Erred both in law and fact by entering Judgment against all the appellants jointly and severally for the sum of Ksh.23,349/= for exercising its right under the group constitution even though the respondent and other group members she had guaranteed had blatantly failed to repay their loan;*** 4. ***Erred in law and fact by finding that the Respondent had fully repaid her loan despite the appellants adducing evidence showing that the respondent had an outstanding balance of Ksh. 16,594/=;*** 5. ***Erred in law and fact by finding the respondents name was missing from DEXH-4, the groups loan status report, when the said report clearly indicates the name of the Respondent and her loan balance;*** 6. ***Erred in law and fact by failing to find that the Respondents suit was non suited as the Appellants are not legal personalities capable of suing or being sued, more so there is no registered entity in Kenyan law known as Kenya Women Finance Trust and or/ The Micro Finance Manager Webuye Branch;*** 7. ***Erred in law and fact by taking into account irrelevant factors and failing to take into account relevant factors and thereby arrived at an erroneous conclusion;*** 8. ***Erred in Law and fact by failing to properly and exhaustively evaluate the evidence on record hence arrived at wrong inferences and conclusions;*** 9. ***Erred in law and fact in failing to take into account the totality of the evidence and supporting judicial precedent presented by the appellants, thereby arriving at the wrong finding not supported by the evidence on the record and the law.*** 10. The Respondent maintains, by her written submissions that the trial court properly evaluated the evidence. That the Appellants' documentary evidence; (DEXH-1 to DEXH-4), was internally inconsistent and that the appellant’s DEXH-4, was inadmissible for want of a certificate of production of electronic evidence as prescribed under section 106B (4) of the Evidence Act, and that the objection to the appellants legal capacity to be sued is a new point which cannot be raised for the first time on appeal given that no preliminary objection had been raised at trial. **D. Issues for Determination** 1. Upon considering the Memorandum of Appeal, the rival written submissions of parties, the Respondent's Replying Affidavit, and the record as summarized by the parties, I set out below my findings on each of the issues that fall for determination. 2. The following issues arise for determination: ***(a) Whether the 1st, 2nd and 3rd Appellants were entities capable in law of being sued, and whether that question is properly before this Court although not raised as a preliminary objection at trial;*** ***(b) Whether the Learned Trial Magistrate properly evaluated the documentary evidence, in particular the group loan status report (DEXH-4);*** ***(c) Whether DEXH-4 and the related exhibits ought to have been excluded for want of a certificate under section 106B(4) of the Evidence Act;*** ***(d) Whether the group constitution and the guarantee instruments were properly applied, and the correct incidence of joint and several liability among co-guarantors;*** ***(e) Whether, on a balance of probabilities, the Respondent proved that any, and if so what, sum remained due to her; and*** (***f) Who should bear the costs of the suit and of this appeal?*** **E. Analysis and Determination** 1. This being a first appeal, this Court's task is not confined to auditing the trial court's reasoning for error, but rather it is to reconsider the evidence afresh and reach its own conclusions, while giving due allowance to the fact that it neither saw nor heard the witnesses testify. 2. In the case of ***Selle & another v Associated Motor Boat Co. Ltd & others [1968] EA 123 it was held:*** ***“...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.”*** 1. That standard continues to be applied by this Court, most recently in ***Njoroge v Gakere & another (Civil Appeal E028 of 2024) [2025] KEHC 4048 (KLR)***, where it was reaffirmed that a first appellate court ***“must bear in mind and give due allowance for the fact that the trial court had the advantage of seeing and hearing the witnesses, while remaining under a duty to reconsider and re-evaluate the evidence on record and draw its own conclusions.”*** 1. It is not disputed that the 1st Appellant is an unregistered, unincorporated women's group. The law on the capacity of such a body to sue or be sued in its own name is settled. In ***Kipsiwo Community Self Help Group v Attorney General & 6 others [2013] eKLR***, it was held: ***“Unincorporated entities have no legal capacity and cannot therefore sue in their own names. They can however sue through an entity with legal capacity... Self Help Groups having no legal personality, cannot therefore institute proceedings in their own name.”*** 1. That reasoning applies equally where such a body is made a defendant. A group with no legal personality cannot have an enforceable decree entered against it, for the same reason it cannot itself sue, there is, in law, no one there to be bound. 2. The 3rd Appellant fares no better. ***“The Micro Finance Manager, Webuye Branch”*** is not a natural person identified by name, nor a body corporate. It is a bare description of an office, and no decree capable of execution can issue against an unnamed office holder in respect of whom no evidence of identity, appointment or personal liability was led. 3. The Respondent contends that this objection, never raised as a preliminary objection at trial, cannot now be entertained on appeal. I do not accept that submission. Capacity to sue or be sued, like jurisdiction, goes to the root of the proceedings. It cannot be conferred, waived or cured merely because a defendant chose to file a defence and contest a suit on the merits without objecting to how it had been sued. 4. As the Court of Appeal held in ***Owners of the Motor Vessel “Lilian S” v Caltex Kenya Limited [1989] KLR 1:*** ***“Jurisdiction is everything. Without it, a court has no power to make one more step.”*** 1. The same discipline attends questions of legal capacity. ***In Phare Omondi Okech & 3 others v Victory Construction Co. Ltd & another [2015] eKLR*** it was held that: “a ***defect of capacity cannot be cured under Article 159 of the Constitution as it goes to the substance of the case.”*** 1. I therefore find that the objection is properly before this Court notwithstanding that it was not raised as a preliminary point at trial, and that the suit as constituted against the 1st and 3rd Appellants was incompetent. 2. The position of the 2nd Appellant stands on a different footing. The complaint here is not that no transacting institution exists, but that it was sued under an inexact name ***“Kenya Women Finance Trust (KWFT)”*** rather than what the Appellants say is its correct registered name ***Kenya Women MicroFinance Bank Limited***. 3. The record shows that whichever entity holds that description maintained the group account, advanced the loans in issue, filed a full defence, called a witness and produced DEXH-1 to DEXH-4. At no stage before judgment did the said entity suggest that it did not know the case or that some distinct, unconnected entity ought properly to have been sued. 4. A mis-description of an identifiable party that has suffered no demonstrated prejudice is a matter of form, not substance, and does not attract the same fatal consequence as suing a body with no legal existence at all. I find the suit as against the 2nd Appellant to have been competently constituted. 5. Applying the duty of a 1st appellate court, I have re-examined the group loan status report, DEXH-4. The trial court found that the Appellants had not adduced evidence of the Respondent's loan statement and that her name was missing from that report, and drew from that supposed omission the inference that her loan had been cleared. 6. On the material before this Court, that finding cannot be sustained. DEXH-4 is said to identify the Respondent by member number 2624984 against loan account LD1700501388, disclosing a loan of Kshs 80,000/=, a balance of Kshs 13,333.30/= and interest of Kshs 3,261.38/=, totalling Kshs 16,594.68/= as at 17th November 2017, the date the group was closed. 7. A document that names a party and states a figure against her, cannot in the same breath, be treated as silent as to that party. This was a plain misapprehension of a primary document of the kind a first appellate court is bound to correct. 8. The Respondent urges, for the first time in her written submissions on appeal, that DEXH-4 and the related exhibits ought to have been excluded altogether for want of a certificate under section 106B (4) of the Evidence Act. Relying on ***County Assembly of Kisumu & 2 others v Kisumu County Assembly Service Board & 6 others [2015] eKLR***, where the Court of Appeal held: ***“...despite the introduction of the blanket declaration of admissibility under the provisions of section 78A, the requirement of a certificate as described in section 106B is a mandatory one which cannot be obviated by constitutional prohibitions against undue regard to procedural technicalities.”*** 1. The Court of Appeal in the same case cautioned that a court; ***“should not admit into evidence or rely on manipulated... electronic evidence or record hence the stringent conditions in sub-section 106B(2) of that Act to vouchsafe the authenticity and integrity of the electronic record sought to be produced,”*** 1. This position was reiterated in ***William Odhiambo Ramogi & 2 others v Independent Electoral & Boundaries Commission & 2 others [2017] eKLR***, where the Court of Appeal held that a document derived from an electronic record is itself electronic evidence requiring certification. 2. I accept these authorities as correctly stating the law where the objection is timeously taken. During the hearing before the trial court, the appellants’ exihibit DEXH-4 was marked, produced and used at trial. The respondent’s own testimony was tested against it in cross-examination, in the course of which she admitted that Lilian Naliaka had defaulted in servicing her loan account. 3. An objection going to the form in which a document is proved ought ordinarily to be taken at the first instance when the document is offered for production, so as to enable the trial court rule on it and, where the defect is curable, the tendering party can remedy the defect. 4. When raised for the first time in written submissions after the evidence has closed and judgment delivered, the objection comes too late to found the exclusion of evidence that was received, unchallenged, as part of the trial court’s record. I decline to strike out DEXH-4 on this ground. 5. What survives, and is properly for this Court to determine, is the separate question of the weight and internal consistency of that report, including the Respondent's contention that the loan account numbers and figures recorded against Lilian Naliaka and Betty Mukasia in DEXH-4 do not correspond with the sums pleaded in the defence. 6. On the material before me, no linkage has been demonstrated between the larger figures the Respondent points to and the loans she guaranteed, and that discrepancy does not displace the specific named entry, recording the Respondent's own loan balance of Kshs 16,594.68/=. 7. It is common ground that the 1st Appellant group operated under a constitution conditioning the release of a member's savings on clearance of that member's own loan and of any loan she had guaranteed. Further, that the Respondent executed guarantee documentation in respect of loans advanced to Lilian Naliaka and Betty Mukasia. These are contractual undertakings freely assumed. A court cannot rewrite the bargain that the parties made for themselves. 8. In ***National Bank of Kenya Ltd v Pipeplastic Samkolit (K) Ltd & another [2001] eKLR***, the Court of Appeal stated: ***“A Court of law cannot re-write a contract between the parties. The parties are bound by the terms of their contract, unless coercion, fraud or undue influence are pleaded and proved.”*** 1. No coercion, fraud or undue influence was pleaded or proved in this matter. The trial court's finding that “adequate information” first had to be furnished to the Respondent before her savings could be applied to a defaulting co-guarantor's obligation is not grounded in any term of the constitution or the guarantee instruments in evidence, and, with respect, imports a condition the parties did not agree to. 2. As to the extent of that liability, a guarantor's obligation is a creature of the contract of guarantee itself. As the Court of Appeal (Koome, Warsame & Kiage, JJ.A) observed in ***Mwambeja Ranching Company Limited & another v Kenya National Capital Corporation [2019] eKLR:*** ***“It must be stated that the extent of the liability of a Guarantor is always dependent on the contract between the parties.”*** 1. Where, as here, several members jointly and severally guaranteed a loan, the creditor was entitled to look to any one guarantor's savings in full satisfaction of the default, leaving that guarantor to seek contribution from her co-guarantors. This is the settled incidence of joint and several liability, correctly stated in the authority the Appellants themselves rely upon, **Sammy Mbugua Njuguna v Wakalaba Agencies Limited & 3 others [2019] eKLR:** ***“Joint and several liability entitles a judgment creditor to elect to recover the full amount of the debt from any one of the defendants or recover a share from each or any of them... If the creditor chooses to recover from only one defendant, such defendant is entitled to recover by way of reimbursement from the other defendants.”*** 1. The trial court's finding that the 2nd Appellant was first required to show how the outstanding balance ought to have been apportioned among the several guarantors before resorting to the Respondent's savings inverts this settled principle and cannot stand. 2. Turning to the issue of whether the Respondent proved her claim on a balance of probabilities. Section 107(1) of the Evidence Act provides that ***“whoever desires any court to give judgment as to any legal right or liability dependent on the existence of facts which he asserts must prove that those facts exist... The burden of proof is on that person.”*** 1. Further, as was stated in ***Evans Otieno Nyakwana v Cleophas Bwana Ongaro [2015] eKLR***, ***“...as a general proposition the legal burden of proof lies upon the party who invokes the aid of the law and substantially asserts the affirmative of the issue.”*** 1. The Respondent's cause of action was a claim to recover savings said to be owing to her. It therefore lay on her, not the Appellants, to establish that her savings remained in credit after lawful deductions. The trial court's approach of calling on the Appellants to disprove repayment by Lilian Naliaka inverted that burden. 2. Reconstructing the figures that are common ground on this record; the Respondent's savings at closure stood at Kshs 24,339.64/=. Applying that sum first to clear her own loan balance of Kshs 16,594.68/= leaves a residue of Kshs 7,744.96/=. Lilian Naliaka's unrepaid loan balance at the same date stood at Kshs 12,295.37/=, a sum the Respondent guaranteed jointly and severally and could, on the principles set out above, be called upon to meet in full. That single guaranteed obligation exceeds and exhausts the residue of Kshs 7,744.96/=, before any account is even taken of the Respondent's separate guarantee of Betty Mukasia's Kshs 12,000/= loan. 3. On these figures, properly applied in accordance with the constitution and the guarantee instruments, no surplus remained available for refund to the Respondent, whether in the sum of Kshs 29,100/= originally claimed or the Kshs 23,349/= awarded by the trial court. 4. I am accordingly not satisfied that the Respondent discharged the burden resting on her to prove, on a balance of probabilities, that any sum remained due and owing to her from the 2nd Appellant. **F. Disposition** 1. For the foregoing reasons, I find that the appeal succeeds substantially, and I make the following orders: 2. ***The suit as constituted against the 1st Appellant (Wonderful Women Group) and the 3rd Appellant (The Micro Finance Manager, Webuye Branch) is struck out for want of legal capacity to be sued.*** 3. ***The Judgment and Decree of Hon. P.Y. Kulecho (SRM) delivered on 24th February 2023 in Webuye SPMCC No. 82 of 2020 is set aside in its entirety and is substituted with an order dismissing the Respondent's suit as against the 2nd Appellant***. 4. ***The costs of the suit in the lower court and of this appeal shall be borne by the Respondent.*** It is so ordered. **DATED, SIGNED AND DELIVERED AT BUNGOMA** **THIS 30 DAY OF July 2026.** **M. SHARIIF** **JUDGE**