Muoria & another v Synergy Industrial Credit & another [2022] KEHC 208 (KLR)

Muoria & another v Synergy Industrial Credit & another (Civil Appeal E045 of 2020) [2022] KEHC 208 (KLR) (Commercial and Tax) (17 March 2022) (Ruling)

Neutral citation: [2022] KEHC 208 (KLR)

Republic of Kenya

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

Civil Appeal E045 of 2020

WA Okwany, J

March 17, 2022

Between

George Muoria

1st Applicant

Beatrice Nyakio Mutharia

2nd Applicant

and

Synergy Industrial Credit

1st Respondent

Excell Holdings Limited

2nd Respondent

Ruling

1. The parties herein entered into a Hire Purchase agreement for the purchase of motor vehicle KAV 249M and trailer ZC 7843. The applicants defaulted in the repayments and judgment was entered in favour of the respondents before the lower court for the sum of Kshs 7,980,000.

2. Aggrieved by the said judgment, the applicants filed the instant appeal and an application for stay of execution. In a ruling delivered on 15th July 2021, this court granted orders for stay of execution, but on condition that the applicants deposit the sum of Kshs 1,500,000 as security in an interest earning account within 30 days.

3. The applicants did not deposit the security but filed the application that is the subject of this ruling.The application.

4. The applicants seek the following orders through the application dated 3rd August 2021: -1. THAT this application be certified urgent and service be dispensed with in the first instance and the same be set down for hearing on a priority basis.2. THAT the 1st respondent SYNERGY INDUSTRIAL CREDIT do reposes the motor vehicle KAV 249M and trailer ZC 7843 as agreed in the event of default by the appellant in the Hire-purchase agreement dated 19th January 2008. 3.THAT this Honourable Court do review its ruling of 15"" July 2021in terms of the security of costs set at Kshs. 1,500,000 to be paid by the Applicants/Appellants within thirty days (30) to be reviewed and replaced with an order that Motor vehicle KAV 249M and trailer ZC7843 be the security of costs in this matter and the same be produced in Court pending hearing and determination of the appeal.4. THAT in the alternative, security for costs be provided by the 2nd Respondent.5. Any other relief that this Honourable Court may deem just and fit to grant.

5. The application is supported by the affidavit of the 1st applicant, George Muoria, and is based on the following grounds;1. That this appeal emanates from a Hire purchase agreement dated 19th January 2008 between the Applicants/Appellants and the 1st Respondent.2. That the Motor vehicle KAV 249M and Trailer ZC7843 have all this material time been in the possession of the 2nd Respondent facts well Known to the 1st Respondent.3. That as per the Hire purchase agreement, if a party defaults in payment the goods hired ought to be repossessed by the owner, as is the case in all hire-purchase agreements.4. That the only remedy for the 1st Respondent in the event of breach of a hire purchase agreement was to repossess the goods, which they have not and they are colluding with the 2nd Respondent to frustrate the appellants.5. That the Applicants/Appellants had not exercised the option to purchase the motor vehicles subject matter herein and hence the 1st Respondent ought to repossess the goods, which they have not.6. That the 1st Respondent, being fully aware and in agreement that the goods were to be used by the 2nd Respondent, required them to execute a guarantee/undertaking and agreement/assignment.7. That the Applicants/Appellants being husband and wife, cannot raise Kshs. 1,500,000/= within such a short period because all their businesses have been greatly affected by the Covid 19 pandemic and inflation, and they have been making great losses.8. That it is in the best interest of justice that Motor vehicle KAV 249M and trailer ZC7843 be the security for costs in this matter and to be held as such security.9. That it is in the best interest of justice if the security of cost be reviewed from Kshs. 1,500,000/= payable by the Applicants/Appellants to the Motor vehicle KAV 249M and trailer ZC7843 be held as security for costs.10. That unless this Honourable Court intervenes and grants the orders the Appellants will suffer irretrievable harm and substantial loss.

6. The respondents opposed the application through Grounds of Opposition dated 13th August 2021 and the replying affidavit of the 1st respondent’s Legal Officer Mr. Jacob Mbae Meeme who states that the application does not meet the threshold set for the granting of orders for review. He states that while it was true that the 1st respondent had the remedy of repossessing the subject motor vehicles, the applicants had not disclosed that the vehicles were vandalized and rendered as scrap having been financed over 13 years ago. The main issue for determination is whether the applicant has made out a case for the granting of orders to review the court’s ruling dated 17th April 2020.

7. Section 80 of the Civil procedure Act and Order 45 rule 1 of the Civil Procedure Rules give the framework under which the court can exercise the power to review decisions.

8. Section 80 of the Civil Procedure Act provides that: -Any person who considers himself aggrieved—(a)by a decree or order from which an appeal is allowed by this Act, but from which no appeal has been preferred; or(b)by a decree or order from which no appeal is allowed by this Act, may apply for a review of judgment to the court which passed the decree or made the order, and the court may make such order thereon as it thinks fit.”

9. Order 45(1) of the Civil Procedure Rules sets out the requirements for an application for review as follows: -“Any person considering himself aggrieveda)by a decree or order from which an appeal is allowed, but from which no appeal has been preferred; orb)by a decree or order from which no appeal is hereby allowed and who from the discovery of new and important matter or evidence which, after the exercise of due diligence was not within his knowledge or could not be produced by him at the time when the decree was passed, or the order made, or on account of some mistake or error apparent on the face of the record, or for any other sufficient reason, desires to obtain a review of the decree or order, may apply for review of judgment to the court which passed the decree or made the order without unreasonable delay”.

10. The applicants argued that since the dispute emanated from a Hire Purchase Agreement the only recourse available to the 1st respondent was to repossess the subject motor vehicles. They therefore urged the court to review its ruling and substitute the order for security for costs of Kshs 1,500,000 with an order that Motor vehicle KAV 249M and trailer ZC7843 be security for costs.

11. The 1st respondent, on the other hand, submitted that applicant did not state that there was an error apparent on the face of the record or disclose any sufficient reason to justify reviewing of the court’s ruling.

12. In the case of Nyamogo & Nyamogo vs Kogo (2001) EA 170 the court held as follows concerning what amounts to an error on the face of the record: -“An error apparent on the face of the record cannot be defined precisely or exhaustively, there being an element of undefinitiveness inherent in its very nature and it must be determined judicially on the facts of each case. There is a real distinction between a mere erroneous decision and an error apparent on the face of the record. Where an error on a substantial point of law stares one in the face and there could reasonably be no two opinions, a clear case of error apparent on the face of the record would be made out. An error which has to be established by a long drawn process of reasoning on points where there may conceivably be two opinions can hardly be said to be an error apparent on the face of the record. Again, if a view adopted by the court in the original record is a possible one, it cannot be an error apparent on the face of the record even though another view was possible. Mere error or wrong view is certainly no ground for review though it may be one for appeal.”

13. As I have already stated in this ruling, this court allowed the applicants’ earlier application for stay of execution pending appeal but on condition that the applicants would deposit a sum of Kshs 1,500,000 in a joint interest earning account within 30 days.

14. The applicants’ contention is that the impugned ruling has an error on the face of record as the 1st respondent ought to have been ordered to repossess the suit vehicles as security. The applicants have therefore suggested that the court should substitute the security of costs of Kshs 1,500,000 with the motor vehicles. In Francis Njoroge vs Stephen Maina Kamore [2018] eKLR the court observed that the security is one of the key elements that the court is bound to consider when granting an order of stay. The court stated: -“One of the key elements a court is bound to consider when granting an order for stay is the security given by the Applicant for the due performance of the decree. And it is upon such consideration that a court of law will make a determination on the same. This court well considered the Appellant’s arguments on the same and made an order for the Appellant to deposit one half of the decretal sum in a joint interest earning account. This order was made after considering the arguments by the Respondent that he has a decree which he would like to execute versus the Appellant’s plea that he was in financial difficulties. Indeed, if parties were allowed to seek review of decisions on grounds that they are not in a position to carry out the orders sought to be reviewed, or rather that the orders are not convenient to them, then a dangerous precedent would be set in which court decisions that ought to be examined on appeal would be exposed to attacks in the courts in which they were made under the guise of review.”

15. Guided by the above-cited case, I find that the applicants have not demonstrated that there was an error in order for security of costs. The applicants have also not established any other sufficient ground for review. I further find that the mere fact that the applicants opine that repossession of the suit vehicles would have been a more convenient form of security for them does not connote that the order for the payment of money as security is an erroneous order. I also note that the applicants have not made effort to deposit any amount to the joint interest earning account.

16. In the upshot, I find no merit in the application dated 3rd August 2021 and therefore dismiss it with costs.

DATED, SIGNED AND DELIVERED VIRTUALLY AT NAIROBI THIS 17THDAY OF MARCH 2022. W. A. OKWANYJUDGEIn the presence of: -Mr. Meeme for the 1st respondent.No appearance for applicant.Court Assistant – Sylvia