Nduati v Amica Savings & Credit Limited [2023] KECPT 60 (KLR)

Nduati v Amica Savings & Credit Limited (Tribunal Case 85 of 2020) [2023] KECPT 60 (KLR) (Civ) (26 January 2023) (Judgment)

Neutral citation: [2023] KECPT 60 (KLR)

Republic of Kenya

In the Cooperative Tribunal

Civil

Tribunal Case 85 of 2020

M Mwatsama, Vice Chair, Gitonga Kamiti & M. Mbeneka, Members

January 26, 2023

Between

Vincent Mwangi Nduati

Claimant

and

Amica Savings & Credit Limited

Respondent

Judgment

1. Matter for determination is brought under Statement of claim dated 25/2/20 filed on even date.The Claimant avers between 17/6/16 and 7/5/19 he has been the beneficial owner of motor vehicle KCB 093A.The motor vehicle was registered under the names Rewel Karanja Kariuki and Equity Bank.Rewel Karanja had taken a loan with Equity Bank and being unable to pay sold the motor vehicle KCB 093A to Claimant for a consideration of Kshs 3,400,000. 00.

2. In March, 2017 Claimant and Respondent entered into a loan brought agreement for Kshs 1, 600,000. 00 to enable him clear with Equity Bank.Instead of Respondent paying Equity Bank the whole amount they only advanced Kshs 1,282,406. 00 and did not clear Kshs214,639. 69. As a result Equity Bank did not transfer ownership of motor vehicle.The claim is thus for;a.Declaration that the repossession of the motor vehicle registration No KCB 093A by the Respondent is illegal, fraudulent and otherwise amounts to trespass;b.An order for general damagesc.An order for special damagesd.Mesne profitse.Cost of the suit and interests on (a)

3. Respondent filed a Statement of Defence dated 15/7/21 on 22/7/21. The Respondent stated the line between the proceedings and cause of action is that it financed the purchase of motor vehicle KCB 093A and has no obligation on any proceedings arising from use of the same by the Claimant.In paragraph 9 of Statement of Defence Claimant agreement with Respondent was that he was to repay the loan with Respondent in full. When he did not it prompted the sale of the security.The Respondent avers motor vehicle has already been transferred to a 3rd party. There is a counter claim by Respondent as well. The Respondent counter claims; The Respondent avers that out of the sale of the subject motor vehicle Kshs 1,410,000. 00 and Kshs 200,000. 00 was recovered on 3. 6.2019 and 30. 8.2019 respectively making a total of Kshs1,610,000. 00 as part of the loan amount.

The Respondent now counterclaims the sum of Kshs. 144,082. 33 owing by the Claimant as at 15. 7.2021 plus cost and interest.

4. Matter proceeded for hearing on 8/3/22 CW1 – Vincent Mwangi testified. He adopted his witness statement dated 23/8/21 as his evidence in chief.He stated he was not consistent with his payments. He came to court two weeks after repossession.He stated his communication with Respondent was through phone calls.He blames the Respondent because they did not transfer the motor vehicle to him as required.

5. Respondent also testified with Pius Hiira – RW1 adopting his witness statement dated 23/7/21 as his Evidence in Chief.His stated Claimant was in arrears and further they did not receive any instruction form giving details of transfer.He confirmed being in receipt of the document from Equity Bank on 23/1/17 and that is when they made payment of Kshs1,300,000. 00 million to Equity Bank.He confirmed they paid Kshs 100,000. 00 less. The motor vehicle was not charged as per Sec. 13 Chattels Transfer ActCap 28. He confirmed they transferred the document to themselves after attachment. Respondent not produce certificate of sale. He confirmed Claimant was informed via phone call that his motor vehicle would be proclaimed. There was no demand notice done. There was no redemption notice.

Issues For Determination Issue One: Whether repossession of motor vehicle KCB 093A was procedures? 6. Having considered the pleadings and evidence as produced during trial the issue above leads to be addressed as is the basis for the claim.It is the Claimant’s contention Respondent accepted to issue him with a loan facility. However the Respondent despite acceptance failed to remitted Kshs. 1,499,045. 69 instead of only remitted Kshs 1,610,000. 00. As a result the transfer could not be done and it was not transferred to him and being in the Matatu industry he could not get the relevant certificates to operate.Motor vehicle was reposed on 7/5/19 without a demand notice, proclamation or redemption notice.

7. The Respondent’s did not deny the averment only that the Claimant had arrears. They confirmed they did not due process of issuing Demand notice, Proclamation and Redemption notice.All these are crucial steps the Respondent ought to have followed before repossession of the motor vehicle.These are laws couched in mandatory terms. The mere fact that the Respondent did not deny they did not issue the aforementioned document puts the Respondent on the losing side.First we make reference to Sec 6 ChattelsTransfer Act Cap 28 states;-“The period within which an instrument may be registered is twenty –one days from the day on which it was executed”

8. We look into the case of Gladys Karimi Musyimi v Fahari CarsLtd & another [2021]eKLR where the court held that having found clause No 11 and 12 of the agreement dated January 25, 2017 as being illegal and void, there is therefore no jurisdiction for the repossession and re-sell of the motor vehicle without leave of court since two-thirds of the consideration was already settled.George Ndege OkellovK-RepBank Ltd [2017]eKLR ;-“Therefore, find that the instructions by the 1st Respondent to the 2nd Respondent for repossession issuing the requisite notice and action on the 1st Respondent’s behalf to be null and void as the said 2nd Respondent was not a registered auctioneer and their actions were in contravention to section 9 of the Auctioneers Act.Although this court notes that the appellant owes money to the Respondent such monies cannot be recovered by an unregistered Chattel instrument nor by an unauthorized person. The Respondent needs to go back to the drawing board and find other ways of recovering their monies.”

9. As much as the Claimant had loan arrears and was not consistent in his payment that did not give the Respondent the green light to act without due process of the law.

10. We thus find the Respondent did not act accordance to the law as it were and find in favour of Claimant against Respondent for;a.Repossession of motor vehicle registration No KCB 093A by Respondent is illegal, fraudulent and amounts to trespass – allowed.b.General damages of Kshs 100,000. 00 to the Claimant for the inconveniencec.Special damages – failsd.Mesne profits – failse.Costs and interest of the suit.

JUDGMENT, READ AND DELIVERED VIRTUALLY ON 26TH JANUARY,2023. HON. MJENI MWATSAMA - D/CHAIRPERSON SIGNED JANUARY 26, 2023. ........................................................GITONGA KAMITI - MEMBER SIGNED JANUARY 26, 2023. ........................................................MARIA MBENEKA - MEMBER SIGNED JANUARY 26, 2023. ........................................................