Lumansi Ibrahim Uthuman v Betty Ombungu Dado & Kenneth Munguri Odado [2015] KEHC 2242 (KLR)

REPUBLIC OF KENYA

IN THE HIGH COURT OF KENYA AT BUSIA

CIVIL APPEAL NO.42 OF 2013

LUMANSI IBRAHIM UTHUMAN …………..…APPLICANT

VERSUS

BETTY OMBUNGU DADO……..……..1ST RESPONDENT

AND

KENNETH MUNGURI ODADO ……...2ND RESPONDENT

(An Appeal arising out of the Judgment of I.T MAISIBA PM delivered on 14th August 2013 in Busia Civil case no.132  of 2013)

J U D G M E N T

1) Betty Ombungu Dado (Betty) and Kenneth Nanguri Dado (Kenneth) are Half  Sister and Half brother.  The genesis of the dispute that gave rise to this Appeal is a Power of Attorney purportedly given by Betty to Kenneth to buy a lorry registered as UAP 816 C (the lorry) on her behalf.

2) It was the case of Betty that, on various dates, she deposited money totaling the sum of Ksh 1,400,000/- into the account of her Brother to enable him purchase a lorry on her behalf.  At trial Betty produced bank deposit slips,  Bank transfers and her bank statement in prove of her allegation.  No evidence was presented by Kenneth who neither entered appearance nor filed Defence to controvert this claim.

3) Having identified the lorry as good for her sister, Kenneth, on instructions of her sister Betty, negotiated the purchase from Habib Mboya (Mboya). From the sale agreement the consideration for the purchase was Kshs. 1,700,000/- . A down payment of ksh.1. 2 million was made and the balance was to be paid in 5 months.  It was the evidence of Betty that the lorry was then released to Kenneth who then took possession of it as a driver and Manager.  That after she paid the last instalment, Mboya released the original log book in respect to the lorry to her.  All seemed well upto that point.

4) It was the evidence of Betty that the log book was kept by the mother of Kenneth who apparently released it to Kenneth to enable him lodge a transfer of the vehicle to a company called Modern Generation.  That Kenneth later told her mother that the vehicle was involved in an accident and that he had sold it so as to pay off the damage that arose from the Accident.  But in April 2013, Betty learnt that the vehicle was in Busia.  She then moved Court through Busia CMCC No. 132 of 2013 – Betty Ombungu Dado  vs Kenneth Nanguri Dado for the attachment of the lorry.  On the strength of a Court order made in those proceedings, the vehicle was attached and released to Betty.

5) In the Amended Plaint, that formed the basis of Betty’s claim, she alleged that Kenneth had unlawfully and improperly purported to sell the lorry to one Lumansi Ibrahim Uthuman (Ibrahim) named therein as Kenneth’s co-Defendant.  She then sought the following to prayers against the Defendants jointly and severally:

“A Permanent injunction restraining the Defendants, jointly and severally and or their agents from interfering with Plaintiff’s free use of M/V Reg. No. UAP 816C.

6) Only Ibrahim entered appearance and filed Defence.  In it Ibrahim averred that he was an innocent purchaser for value.  He further averred that at no time did ownership of the motor vehicle pass to the Plaintiff.  He then mounted a counterclaim in which he stated that the attachment and seizure of the lorry by the Plaintiff was illegal and unlawful.  That as a result he had suffered loss of transport business in which the lorry was engaged.  He then sought judgment against Betty for:-

“General damages for loss of income from transport business from 7th April, 2013 upto the day he will return the motor vehicle to the second Defendant”

7) The evidence by Ibrahim is that by an agreement signed on 12th December 2012, he bought the lorry for Ugandan shillings 29,000,000/=.  He paid a substantial part of that consideration and was left with a balance of ksh.4,000,000/=. The vehicle was released to him and the transfer form and log book also given to him.  But on 6th April 2013 the vehicle was impounded at Busia Kenya while on transit to Nairobi carrying some batteries.  His driver Amiri Busuma (DW3) confirmed the impoundment.  From the handwritten proceedings of the trial magistrate (which seems to have been omitted in the typed proceedings), DW3 testified,

“I was travelling to Nairobi, when I crossed to Kenya the vehicle was impounded I had valid documents.”

8) Mboya testified on behalf of Ibrahim.  He told Court that he knows the Dados well.  Betty and Kenneth are Dados.  That he sold the lorry to Kenneth, but that Betty called him after he had received the last payment from Kenneth.  In that conversation Betty told him that the lorry belonged to her and that Kenneth was buying the vehicle on her behalf.  That by this time he had released both the lorry and a duly signed transfer to Kenneth.

9) After hearing both sides the learned trial magistrate held in favour of the Plaintiff and in respect of the counterclaim remarked,

The counter-claim against the Plaintiff is not supported fully by evidence. If the 2nd defendant has any claim, then that claim might be directed towards the 1st defendant. Infact the 2nd Defendant has not even complied with the terms of the sale agreement between him and the 1st defendant who had no authority to sell the motor vehicle UAP 816C. A close look at the proceedings shows that all Preliminary Applications were dispensed with whereas no specific order in the file allowing the 2nd  defendant to be enjoined in this suit and to entertain his counter-claim even if he were properly enjoined he did not prove his counter-claim for loss of business.

10) Ibrahim being aggrieved by that judgment filed a Memorandum of Appeal with 15 grounds.  These grounds can, in my view, be collapsed into the following:

1) That the Trial Magistrate failed to frame issues for determination and also failed to determine every issue in dispute.

2) That the Trial Magistrate failed to find that the alleged Power of Attorney did not bind nor limit third parties to deal with the first Defendant in his personal capacity.

3) That the Trial magistrate failed to hold that the sale agreement between Ibrahim and Kenneth was valid and that Ibrahim had acquired a purchasers interest.

4) That the Trial magistrate failed to find that Plaintiffs remedy was for an order of account against Kenneth.

11) In the written submissions to Court, the Appellant argued that the alleged Power of Attorney was a fabrication, an afterthought and a conspiracy to deprive him of the motor vehicle.  It being argued that, on the evidence, the Power of Attorney must have been executed after the purchase of the vehicle by Kenneth.  Counsel for the Appellant argued that although the vehicle had not been bought by the time of execution of the Power of Attorney, Clause 1 thereof describes the suit vehicle as the property of the Betty.  That this demonstrated that the Power of Attorney was indeed an afterthought.  Secondly, the Appellant stated that the document had inconsistencies which rendered it senseless.  The Appellant was referring to Clause 2 of that document which reads

“The Attorney has authority in my name and on my behalf to execute the sale agreement relating to the motor vehicle but not to transfer or otherwise deal with the motor vehicle.”

12) On another front, the Appellant argued that, on the evidence, the bank account in which Betty is said to have deposited the purchase money was an account that contained the money of both Betty and Kenneth.  Counsel then argued that the presumption in law is that as Kenneth bought the vehicle in his own name he must have done so with his own money.  Counsel quoted the following passage from Snells Book on Equity:-

“Where the trustee mixes trust money with his own, the equities are unequal.  Accordingly the beneficiaries are entitled to a first charge on the mixed fund, or on any land securities, or other assets purchased with it.  Thus if the trustee purchases shares with part of mixed funds, leaving enough to repay the trust money, and dispates the balance, the beneficiaries  charge binds the shares….. Under the rule in Rehallett’s Estate, the trustee is presumed to have bought the shares with his own money; the charge attached to the entire fund, and could be discharged only by restoring the trust money.”

13) In supporting the decision of the lower court Counsel for the Respondents took a simple line that the Power of Attorney was valid and the motor vehicle purchased belonged to Betty.   For that reason, the purported sale of the motor vehicle by Kenneth to Ibrahim was unlawful.

14) In the Judgment at the lower Court, the Learned Magistrate did not concisely state the points for determination.  To that extent the Judgment did not meet  the requirements of Order 21 Rule 4 which provides:-

“Judgments in Defended suits shall contain a concise statement of the case, the points for determination,the decision thereon, and the reasons for such decision.”

That said, the following holding reveals one of the main reasons that the Learned Magistrate found in favour of Betty,

“The 2nd Defendant cannot be heard to say that he bought the motor vehicle from the lawfully registered owner”

The Learned Magistrate then held,

“The Power of Attorney was not revoked and it had full force of law.”

He then concluded,

“He (the 2nd defendant) can pursue the 1st Defendant for all the money he paid in a different suit.”

On my part I see two issues that needed to be determined both at the lower court and here:-

a. Was the purported Power of Attorney by Betty to Kenneth a valid Power of Attorney?

b. Could Kenneth pass good title of the motor vehicle to Ibrahim?

15) Although Counsel for Ibrahim assailed that Power of Attorney as vague, contradictory and fake. On my part, however I did not see much effort by the Ibrahim at Trial to impeach it. The Defence conceded to its production without requiring the maker to be present in Court and could not therefore question the validity or propriety of its attestation.  Well aware of this, Counsel for Ibrahim attacked the contents of the document.

16) The criticism of its contents is better appreciated when the document is looked at as a whole.  The Power of Attorney is reproduced below:-

THIS POWER OF ATTORNEY given on 12 day of May 2011 by BETTY OMBUNGU DADO holder of ID No. [particulars withheld] and of P.O. Box 8403-00300 Nairobi (hereinafter called “the Donor”) WITNESSES as follows:

1. I appoint KENNETH NANGURI DADO holder of ID Number [particulars withheld] and of Post Office Box 831 Busia (hereinafter called the “Attorney”) to be my attorney with authority to do the act specified in clause 2 on my behalf in relation to the purchase of Motor Vehicle Registration Number UAP 816C, belonging to me (hereinafter referred to as “the Motor Vehicle”).

2. The Attorney has authority in my name and on my behalf to execute the sale agreement relating to the Motor Vehicle but not to transfer or otherwise deal with the Motor Vehicle.

3. This Power of Attorney shall continue until withdrawn in writing by me.

17) Picking out clause 2, I was urged by Counsel for Ibrahim to find that the Power of Attorney “was executed long after purchase of the motor vehicle and back-dated”.  Is there evidence to support this assertion?  The uncontroverted evidence of Betty is that she gave Kenneth money to buy a lorry on her behalf and she made a first deposit of cash of Kshs. 600,000/- on 3rd May 2011 in his Barclays Bank Busia A/C [particulars withheld].   The date of the Power of Attorney is 12th May 2011 while the sale agreement for purchase of motor vehicle Registration UAP 816C was executed on 5th June 2011.  The sequence of events demonstrates that Betty had begun to deposit money towards the purchase of the lorry about a month before the actual purchase.  I do not find it unusual that the Power of Attorney made specific reference to the lorry to be purchased as it had been identified before a sale agreement to purchase it was executed. This is what Betty told court.

The 1st Defendant told me he has (sic) found a good lorry registration mark UAP 816C  Mitsubishi lorry. I told him to negotiate terms of payment with the seller Habib Mboya.  I appeared before Linet Olel on 12. 5.2011 to sign a power of attorney.  Power of Attorney is EXH 8.

Betty testified but no questions were fielded to her on the alleged backdating of the Power of Attorney.  By failing to do so, Ibrahim lost an opportunity of establishing that the Power of Attorney was indeed back-dated.  Neither can much be made from the use of the words “motor vehicle registration UAP 816C belonging to me” in Clause 1.  It was suggested by Counsel for Ibrahim that this proved that by the time the Power of Attorney was executed the vehicle already belonged to Betty. I take the position that what is critical as to whether the Power of Attorney was back-dated or is not the language of Clause 2 but the date it is alleged to have been executed being 12th May 2011. Since Ibrahim did not think it necessary to question the person who drew and attested to its execution, it is now too late in the absence of cogent evidence  to the contrary, to question the date of the document.

18) Is Clause 2 of the Power of Attorney contradictory? It reads

“The Attorney has authority in my name and on my behalf to execute the sale agreement relating to the motor vehicle but not to transfer or otherwise deal with the motor vehicle.”

Although the clause could have been more elegantly worded, it seems clear enough.  The Attorney given by Betty to Kenneth was limited to him executing the sale agreement on her behalf.  He was not authorized to do more.

19) Being of the view that the Power of Attorney is valid, I would hold, just as the Learned Trial Magistrate, that when Kenneth entered into the Sale Agreement for purchase of Motor vehicle Registration UAP 816 C with Ibrahim he did so on behalf of his Principal Betty. This Court reaches this Decision even in the face of the attractive argument by Counsel for  Ibrahim that, in equity,  Betty’s money having been paid into Kenneth’s Personal account as trustee, a presumption arose that Kenneth bought the motor vehicle with his own money.  That argument however loses its force because the Power of Attorney was very pointed that Kenneth was purchasing a specific vehicle namely motor lorry registration UAP 816 C on behalf of Betty.

20) An issue following is whether Kenneth not being the owner, nor having authority or consent from the owner to sell could pass title of motor lorry UAP 816 C to Ibrahim.  A defence of Ibrahim was that he was “an innocent purchaser for value and without disclosure of the Plaintiff’s interest in the motor vehicle, if any”. As correctly pointed out by Counsel for Betty, Section 107 of The evidence Act placed the burden of proving this Defence on Ibrahim. Section 107 provides:-

(1) 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.

(2) When a person is bound to prove the existence of any fact it is said that the burden of proof lies on that person.

21) The sale agreement between Kenneth and Ibrahim was made in Uganda. That simple agreement, not unexpectedly, was silent as to which law would be applicable to it.  The presumption would therefore be that  the law of Uganda would apply. At Trial, Ibrahim did not discharge the onus of proving that under Ugandan Law, he was an innocent purchaser for value without notice. It may well be that Ibrahim’s Defence went off the rail immediately he acceded to the Jurisdiction of the Kenya Court to hear and resolve this dispute as his Defence was that the Contract made in Uganda bestowed on him real ownership of the motor vehicle.  At the time of purchasing the vehicle, the vehicle was not registered in  the name of Kenneth. And although Kenneth possessed a blank transfer form duly executed by Mboya and the original log book, Ibrahim was always running a risk by dealing with someone who was not a duly registered owner.

22) In the end, I agree with the result reached by the Learned Magistrate.  I hereby dismiss the Appeal with costs.

23) As explained to the Parties, this Decision could only be delivered on Notice to them as I was proceeding for my Annual Leave and thereafter for August vacation. That explains the apparent delay.

Dated, Signed and Delivered at Busia this 1st day of October 2015

F. TUIYOTT

J U D G E

In the presence of :-

Oile………………………………….Court Clerk

Onsongo………………….For the Appellant

N/A………………………….For Respondents