FRANCIS WAWERU NDEGWA v KANYUA HENRY MAINA [2009] KEHC 2802 (KLR)

REPUBLIC OF KENYA

HIGH COURT OF KENYA AT NYERI

CIVIL APPEAL 38 & 39 OF 2001

FRANCIS WAWERU NDEGWA  …………….…  APPELLANT

versus

KANYUA HENRY MAINA …………………..… RESPONDENT

Consolidated with

Civil Appeal 39 of 2001

KANYUA HENRY MAINA …………………….…  APPELLANT

versus

FRANCIS WAWERU NDEGWA ………………RESPONDENT

(Being an appeal from the Judgment and orders of

M. G. RINTARI, Senior Resident  Magistrate in the Chief Magistrate’s Civil Case No. 282 of 2000  at NYERI)

JUDGMENT

For the purpose of this judgment the appellant shall be FRANCIS WAWERU NDEGWA.  The respondent shall be KANYUA HENRY MAINA.  The appellant filed a case in the lower court seeking judgment from the respondent for Kshs. 199,350.  This amount was the amount in a cheque written by the respondent in favour of the appellant.  The appellant stated in his plaint that the payment was in respect of hire of a vehicle by the respondent.  The respondent in his defence denied the plaintiff’s claim.  He stated that the cheque related to supply of goods by the appellant.  He counterclaimed for kshs.62,400.   In the hearing the appellant in evidence stated that he traded under the name W. Ndegwa Investments.  With that business he does transport business.  The respondent in 1988 approached him with a view to hiring his vehicle.  The respondent had a contract with Brookside to transport milk from Ruiru to Naromoru.  They had no written agreement but it was agreed that the respondent would hire his motor vehicle registration number KAH 018 P.  The respondent paid a deposit of Kshs. 100,000.  The respondent at the end of the contract owed him Kshs. 432,000.  After giving him credit for the expenses of Kshs. 132,650 the respondent owed him Kshs.199,350.  The respondent issued him with a cheque for that amount dated 15th October 1998.  On banking the cheque it was returned with the remarks that payment had been stopped.  He therefore stated that his claim was for the amount of the cheque.  He denied owing the respondent Kshs. 62,400.  He also denied that the respondent had lent him Kshs. 168,000.  He said that they had a prior transaction with the respondent whereby the respondent was buying his vehicle for Kshs. 378,000 and that amount he was paying by installments.   Other than that transaction and the one subject of this case he said that he had no other transactions with the respondent.  He said that he had a business of a super market which was a limited liability company and in that regard produced a certificate of incorporation of Priceworth Limited.  PW 2 was the appellant’s driver.  He confirmed that he was the driver driving the vehicle that had been hired by the respondent.  He used to carry milk from Naromoru to Ruiru Brookside company limited.  That the respondent paid him all the expenses and provided food.  The respondent in evidence stated that there was a transaction between him and the appellant whereby he was buying the appellant’s vehicle.  He remained with a balance owing to the appellant of Kshs. 105,600.  He admitted that he had hired the motorvehicle from the appellant and in that regard had paid a deposit of Kshs. 100,000.   They had agreed that the rate of hire was Kshs.9000 per month.  He however stopped using the vehicle when Brookside began to collect their own milk.  When he stopped using the vehicle he had no debt with the appellant.  He denied that he owed the appellant the amount claimed and stated instead that it was the appellant who owed him Kshs.62,400.  In respect of the cheque that he issued he stated that it related to his order of goods from Priceworth Kenya limited which goods were not delivered and hence why he stopped the payment of the cheque.   He stated that Priceworth supermarket and W. Ndegwa investments were one and the same. Further he stated that he lent to the appellant Kshs.168,000.  That amount when one deducts the amount he owed to the appellant that is Kshs.105,600 the amount that the appellant owed him was Kshs.62,400.  The learned magistrate when she delivered her judgment found that the appellant was owed Kshs.105,600.  She proceeded to enter judgment against the respondent for that amount plus interest.  It is that judgment that has provoked the two appeals by the two parties in this appeal.  The appellant in Appeal No. 38 of 2001 has brought forward the followings ground:-

1. That the learned magistrate erred in law and in fact in failing to determine the dispute before her and confused herself on the facts on two separate suits between the same parties.

2. That the learned trial magistrate erred in fact and law in failing the determine the dispute which was before the court and considering extraneous matters which were the subject of a separate and independent civil suit between the same parties which was then pending hearing and determination.

3. The learned magistrate erred in fact and in law in accepting inadmissible evidence which was fabricated and fraudulent to the detriment of the appellant.

4. The learned magistrate erred in fact and in law in failing to make orders pertaining the defendant’s counterclaim.

5. The findings by the learned magistrate were against the weight of the evidence adduced.

The respondent in turn in Appeal No. 39 of 2001 has brought the following grounds:-

1. That the learned trial magistrate erred in law and fact in refusing to accept the defence of set off while the same has been proved to the required standards on a balance of probabilities.

2. That the learned trial magistrate erred in law and fact in rejecting and dismissing the appellant’s counterclaim while the same had been proved to the required standards on a balance of probabilities.

3. That the learned trial magistrate erred in law and fact in rejecting that the appellant had advanced kshs. 168,000 to the respondent without a concurrent finding on the acknowledgment produced as defence exhibit 4.

4. That the learned trial magistrate erred in law and fact in not considering all the evidence tendered in support of the defence and counterclaim.

I am of the view that all those grounds can be considered together because each party faulted the judgment of the lower court in that it failed to consider the evidence presented before it.  The judgment of the court was to the effect that the court found that the respondent owed the appellant the balance of the amount due on the sale of the motor vehicle.  As correctly stated by the appellant that was not in issue in the lower court.  What was in issue was the appellant’s claim for the cheque that was stopped.  The respondent in turn claimed that the amount of the cheque related to goods that were not delivered by the appellant.  The respondent also claimed to have advanced a loan to the appellant and therefore counterclaimed for Kshs. 62,400.  At the hearing of this case when the respondent wanted to exhibit the document on which the appellant allegedly acknowledged the said loan the appellant’s advocate objected to its production.  The basis of the objection was that it was a copy and not an original document.  The respondent had not given notice to produce as provided under the Evidence Act.   In the learned magistrate’s ruling to that objection she found that she was satisfied that the appellant would not suffer prejudice by the production of that document.  That finding in my view was erroneous.  Section 69 of the Evidence Act provides that a secondary document cannot be produced unless notice to produce is served on the opposite side.  That section is in the following terms:-

“69. Secondary  evidence of the contents of the documents referred to in section 68(1)(a) shall not be given unless the party proposing to give such secondary evidence has previously given to the party in whose possession or power the document is, or to his advocate, such notice to produce it as is required by law or such notice as the court considers reasonable in the circumstances of the case:

Provided that such notice shall not be required in order to render secondary evidence admissible in any of the following cases: –

(i)When the document to be proved is itself a notice;

(ii)When from the nature of the case, the adverse party must know that he will be required to produce it;

(iii)When it appears or is proved that the adverse party has obtained possession of the original by fraud or force;

(iv)When the adverse party or his agent has the original in court;

(v)When the adverse party or his agent has admitted the loss of the document;

(vi)When the person in possession of the document is out of reach of, or not subject to, the process of the court;

(vii)In any other case in which the court thinks fit to dispense with the requirement.”

It is therefore clear that the appellant’s objection should have been upheld and that document should not have been accepted in evidence.  I do hereby proceed to expunge that document Defence exhibit No. 5 from the record.   Having so found there is therefore no evidence before court that the respondent advanced a loan to the appellant.  The stopping of the cheque issued to the appellant was on the basis that that the appellant did not supply the goods that it represented.   A cheque as defined under section 73 of The Bills of Exchange Act is a bill of exchange.  In the case of SHAH t/a PRASUL’S vs STEELCORD TYRES LTD (1990) KLRthe court held as follows:-

“ 1.  A cheque or any bill of exchange constitutes an agreement whichmay only be vitiated on grounds weighty enough to vitiate anyordinary contract, such as fraud, duress and misrepresentation.

2. Once a cheque has been given based upon some consideration, a court cannot go into the question as to whether or not the consideration was sufficient in a suit upon that cheque.”

It therefore follows that the respondent had a burden to prove that there was no consideration for the cheque.  The respondent in evidence produced an order addressed to Priceworth Supermarket for goods.  It is those goods that the respondent said were not supplied and hence why he stopped the cheque.   The appellant in evidence clearly showed that Priceworth Limited was a limited liability company.  The cheque issued by the respondent was addressed to W. Ndegwa Investments.  There is no correlation between the order and the cheque that was issued.  Priceworth being a limited liability company bears no relationship to Francis Waweru Ndegwa.   That being the case the defence raised by the respondent must be defeated.  It therefore follows that the court’s finding is that the appellant’s claim for the amount in the cheque does succeed.  The respondent’s counter claim as stated before is defeated because the document Defence Exhibit No. 5 was expunged from the record.  I have considered the submissions of learned counsels.  The respondent’s counsel submitted that the appellant did not disclose what the payment of the cheque represented.  Para 4 of the plaint indicates that the cheque was for hire of the appellants vehicle by the respondent.  That submissions therefore has no basis.  Similary the respondent’s submissions that W. Ndegwa investments did not file the claim for the cheque is defeated by paragraph one of the plaint.  In that paragraph the appellant pleaded that he carried out business under the name of W. Ndegwa investment.  The respondent in the statement of defence and counter claim admitted the description of parties in the plaint.  The appellant having disclosed that he was running the firm of W. Ndegwa investments was in my view quite entitled to bring the action for the unpaid cheque.  In the end the Appeal No. 38 of 2001 does succeed and the appeal no. 39 of 2001 does fail.  The only other thing to consider is the rate of interest claimed by the appellant.  He claimed 21% interest but that rate is not supported by any document and therefore cannot be granted.  The judgment of this court is as follows:-

1. HCCA No. 39 of 2001 is hereby dismissed with costs being awarded to Francis Waweru Ndegwa.  The counter claim by Kanyua Henry Maina in CMCC Nyeri No. 282 of 2000 is hereby dismissed with costs to Francis Waweru Ndegwa.

2. The judgment of CMCC Nyeri No. 282 of 2000 delivered on 27th March 2001 is hereby set aside and judgment is entered for Francis Waweru Ndegwa for Kshs. 199,350 together with interest at court rates from the date of filing the claim in the lower court as against Kanyua Henry Maina until payment in full..

3. The costs of HCCA No. 38 of 2001 are awarded to Francis Waweru Ndegwa.

Dated and delivered this 10th day of February 2009.

MARY KASANGO

JUDGE