Momentum Credit Limited v Mwaura [2022] KEHC 13720 (KLR)

Momentum Credit Limited v Mwaura (Civil Appeal E085 of 2021) [2022] KEHC 13720 (KLR) (Commercial and Tax) (7 October 2022) (Judgment)

Neutral citation: [2022] KEHC 13720 (KLR)

Republic of Kenya

In the High Court at Nairobi (Milimani Commercial Courts Commercial and Tax Division)

Commercial and Tax

Civil Appeal E085 of 2021

DAS Majanja, J

October 7, 2022

Between

Momentum Credit Limited

Appellant

and

Peter Kironjo Mwaura

Respondent

(Being an appeal from the Judgment and Decree of Hon. C. Ndumia, RM/Adjudicator delivered on 2nd June 2022 at the Small Claims Court,Milimani in SCC COMM E915 of 2022)

Judgment

1. This is an appeal from a judgment of the small claims court dismissing the appellant’s claim seeking judgment for Kshs 1,000,000. 00 against the Respondent.

2. The facts leading up to this appeal are set out in the respective pleadings and are not in dispute. The appellant’s case in its statement of claim dated February 18, 2022, was that it advanced the respondent a loan facility of Kshs 1,600,000. 00 on June 11, 2020 secured by motor vehicle registration number KBV 750F (“the motor vehicle’’). When the respondent defaulted on repayment of the loan, the appellant repossessed and sold the motor vehicle leaving the respondent indebted to the appellant to the extent of Kshs 1,103,097. 00. The appellant waived Kshs 103,097. 00 and claimed Kshs 1,000,000. 00.

3. Although the respondent opposed the claim, he did not attend the hearing hence the matter proceeded ex-parte.

4. In the judgment, the court framed two issues for determination. First, whether the sale of the motor vehicle by the appellant was conducted legally. Second, what was the amount due and outstanding to the appellant. On the first issue, the court held that in as much as the appellant followed due process in the repossession and sale of the motor vehicle, the disposition was irregular. On the issue of the amount owed by the respondent, the court found that the evidence presented was inconsistent and thus dismissed the claim.

5. In the memorandum of appeal dated July 1, 2022, the appellant contests the judgment on the ground that court findings on the two issues framed for consideration were contrary to the evidence adduced by the appellant. In essence, the appellant asks the court to review the evidence and reach a different conclusion. It must be recalled the extent of this court’s jurisdiction. Under section 38(1) of the Small Claims Court Act, 2016 an appeal to this court is limited to matters of law only. Accordingly, the court is not permitted to substitute the subordinate court’s decision with its own conclusions based on its own analysis and appreciation of the facts unless the findings are so perverse that no reasonable tribunal would have arrived at them (John Munuve Mati v Returning Officer Mwingi North Constituency & 2 others [2018] eKLR).

6. On the issue of the sale of the motor vehicle, the court found that the sale was irregular because the proclamation notices gave two different valuations for the motor vehicle. It noted that it was not clear how the motor vehicle was sold by private treaty at Kshs 1,200,000. 00 and that no memorandum of sale was produced. I have reviewed the record and I find that the appellant conducted a valuation of the motor vehicle which was prepared by Eexy Valuers and Assessors dated November 16, 2020 indicating the market value of the vehicle at Kshs 1,650,000. 00 and the forced sale value as Kshs 1,400,000. 00. The appellant further provided proof of sale of the motor vehicle including the memorandum of sale dated January 29, 2021 which showed that the motor vehicle was purchased by Jackson Tarus by private treaty.

7. It is clear that the Adjudicator failed to consider the evidence on record showing that the sale of the motor vehicle was regular. Any reasonable tribunal considering the evidence would not have come to the conclusion reached by the adjudicator. It is for this reason I set aside the finding that the sale of the motor vehicle was irregular.

8. On the second issue, the court considered the loan statement of September 22, 2022 which indicated an outstanding balance of Kshs 1,255,547. 65 and the amount set out in the proclamation of September 10, 2022 and October 9, 2020 which showed the amount due as Kshs 1,772,940. 00 and Kshs, 1,712,930. 00 respectively. The court also alluded to the loan statement showing that loan was attracting a daily penalty that kept varying and was unclear.

9. I agree with the appellant that the adjudicator erred in discharging the respondent from the debt when it was clear that the respondent was indebted. This finding is inconsistent with the finding that the sale of the motor vehicle was legal but irregular. Once the court accepted that the repossession and sale was legal, it means that the respondent was indebted. Even from the statements pointed out by the court, the respondent’s indebtedness exceeded Kshs 1,000,000. 00 hence it was only proper that the court enter judgment for the sum of Kshs 1,000,000. 00 since the appellant waived the excess amount. however, the evidence which the adjudicator failed to consider was that the respondent was indebted. The finding on the second issue is at variance with the evidence on record which the adjudicator failed to consider.

10. For the reasons I have set out, this appeal succeeds and I order as follows:a.The judgment of the small claims court dated June 2, 2022 be and is set aside and substituted with a judgment for the appellant against the respondent for Kshs 1,000,000. 00. b.The respondent shall pay costs of the subordinate court and of this appeal. The costs of this appeal are assessed at Kshs 25,000. 00.

DATED AND DELIVERED AT NAIROBI THIS 7TH DAY OF OCTOBER 2022. D. S. MAJANJAJUDGECourt Assistant: Mr M. Onyango.Mr Nyanchoga instructed by MMW Advocates LLP for the Appellant.