REPUBLIC OF KENYA
IN THE HIGH COURT OF KENYA AT NAIROBI
COMMERCIAL & TAX DIVISION
HCCC NO. 362 OF 2016
ALBERT ALEXANDER AGGREY EKIRAPA…………….…………PLAINTIFF
-VERSUS-
SANLAM KENYA PLC
(Formerly known as PAN AFRICA INSURANCE HOLDINGS LIMITED……………………………………………………….……DEFENDANT
JUDGMENT
1. The plaintiff instituted a claim against the defendant which he later modified by an amended plaint dated 19/9/2023. His case is that in the year 2000, he charged his property L.R No. 209/9674 to PAN AFRICA INSURANCE COMPANY LIMITED in consideration of a loan advanced to him for the sum of Kshs.4,000,000/-. That on or about 29/3/2006, after the restructuring of PAN AFRICA INSURANCE COMPANY LIMITED, the defendant lodged a transfer of charge at the Land’s Registry in favour of the defendant without informing him.
2. The plaintiff contended that he entered into a sale agreement to sell the suit property and his Advocates offered their professional undertaking to pay the loan amount within 75 days in exchange of the release of the original title document to them. That however, on 15/7/2015, the defendant’s Advocates informed the plaintiff’s Advocates that the original grant and transfer of charge over the suit property could not be traced at the Land’s Registry and that it would be prudent to apply for a provisional title.
3. The plaintiff stated that it was only through his efforts and persistent follow ups that the provisional title was eventually issued on 9/12/2015 but he only received it on 1/2/2016, two (2) months after it was issued.
4. It was the plaintiff’s case that the sale transaction between him and the purchaser of the suit property was delayed for over seven and a half months due to the direct negligent delay attributed to the defendant which led him to lose out on interest amounting to Kshs.17,333,333.30 which he could have earned from the proceeds of the sale of the property of Kshs.260,000,000 during the period of 1/9/2015 to 1/2/2016 when the fixed deposit interest rates offered by commercial banks were at a high of 16% p.a.
5. That as at 1/2/2016, he had not repaid the loan amount to the defendant and therefore the amount payable to him by the defendant for the opportunity cost was Kshs.11,333,333.30 (being Kshs.17,333,333.30 less the loan amount of Kshs.6,000,000/-) which the plaintiff claims in this suit.
6. The plaintiff stated that he had paid the outstanding loan amount of Kshs.6,000,000/-, comprising the loan amount plus compound interest as at 31/12/2015.
7. Based on the aforementioned assertions, the plaintiff prays for judgement against the defendant for Kshs.11,502,563.30 being the total opportunity cost and loss as a result of the delay by the defendant. The plaintiff also prays for interest on the said amount at commercial rates of 16% p.a from 1/2/2016 until full payment, costs of the suit and interest thereon at Court rates.
8. The plaintiff relied on his witness statement dated 7/9/2016 and produced a list and bundle of documents of even date.
9. The contents of the plaintiff’s witness statement are a replica of those in the amended plaint therefore there is no need to regurgitate the same herein. In cross-examination he stated that when he entered into the sale agreement dated 15/6/2015, he had not repaid the loan that he had taken from the defendant and that the defendant was not a party to the said agreement. Further, that the Land’s Registry is in charge of issuance of provisional titles and a replacement was to be done.
10. The defendant opposed the plaintiff’s claim through a statement of defence and counterclaim dated 24/10/2016.
11. The defendant averred that the plaintiff failed to disclose that he had defaulted on loan repayments when they fell due despite numerous demand letters which led the defendant’s Counsel to institute debt recovery proceedings whereby an auction date was scheduled but the same was challenged in HCCC No. 679 of 2004, which suit was eventually dismissed for want of prosecution on 28/5/2010.
12. The defendant denied any inordinate delay in issuing a loan account statement which was done on 8/6/2015 and averred that it instructed Ms Mboya Wang’ong’u & Waiyaki Advocates to apply for a provisional certificate of title in respect of the property and that it continued to follow up with the said firm on the progress of obtaining the provisional title.
13. The defendant stated that the issuance of a provisional certificate of title is an administrative process which is at the sole discretion of the Land’s Registry. The defendant averred that delay, if any, in obtaining the provisional certificate of title was not attributable to the defendant given that the process was entirely in the hands of the Registrar of Lands after the defendant had lodged the application for a provisional title.
14. The defendant stated that the plaintiff is not entitled to the amounts claimed and that the alleged interest that the plaintiff would have earned is speculative. The defendant emphasized that it had no obligation to accept the plaintiff’s payment of the outstanding loan balance other than as provided for in the charge.
15. In its counterclaim, the defendant contended that the plaintiff paid Ksh.6,000,000/- on 14/4/2016, whereas the accrued loan amount as at October 2016 stood at Kshs.6,119,665.00 and that the plaintiff had failed to settle the balance of Kshs.119,665.00.
16. The defendant claimed that as at October 2016, the outstanding loan balance stood at Kshs.166,696.00, which sum continues to accrue interest until payment in full.
17. The defendant filed a witness statement dated 16/6/2023 by Gladys Muema, its Senior Legal Officer. Her witness statement echoed the contents in the statement of defence and counterclaim.
18. She testified that during the restructure of the defendant in the year 2002, its long term facilities were transferred to Pan Africa Life Assurance Limited, which necessitated the transfer of the plaintiff’s charge to the said company. That there was no need to notify the plaintiff of the transfer as he was notified of the same under clause 10(h) of the charge which indicated that the charge would not be invalidated by the amalgamation, consolidation or other change in the constitution of the defendant.
19. The defendant’s witness, DW1, reiterated that the defendant through its Advocates persistently followed up with the Land’s Registry to obtain the provisional certificate of title and that the defendant was not responsible for the delay in its issuance. That the defendant was not liable to pay the alleged interest in the sale transaction between the plaintiff and the third party, as the claim was premised on pure conjecture and speculation as the plaintiff assumed that the proceeds of the alleged transaction would have been invested in a fixed deposit account and not under any other scheme. Moreover, that the defendant had no obligation to accept the plaintiff’s offer for payment of the outstanding loan amount other than as provided for in the charge.
20. The plaintiff filed a reply to the defence and a defence to the counterclaim dated 10/11/2016 whereby he reiterated the contents of his plaint and denied the allegation contained in the counterclaim. He further averred that after the payment of the outstanding loan amount of Kshs.6,000,000/-, the defendant did not demand for any further amount therefore the sum claimed in the counterclaim was an afterthought. The plaintiff prays to have judgment entered as in the plaint and to have the defendant’s counterclaim dismissed with costs.
ANALYSIS AND DETERMINATION.
21. The plaintiff filed written submissions dated 10/8/2023 and supplementary submissions dated 20/9/2023 which this Court has considered. The defendant on its part had not filed its submissions as at the time of writing this judgement despite directions from the Court to do so.
22. Having analyzed the pleadings, the evidence and submissions in this suit, the following issues arise for determination:
I) Whether the plaintiff is entitled to judgment in the sum of Kshs.11,502,563.30 as claimed in the amended plaint;
II) Whether the defendant is entitled to judgment on the counterclaim.
Whether the plaintiff is entitled to judgment in the sum of Kshs.11,502,563.30 as claimed in the amended plaint.
23. In the year 2000, the defendant, then Pan African Insurance Company Limited, issued a loan facility to the plaintiff for the sum of Kshs.4,000,000/- which was secured by a charge registered against the suit property.
24. The record shows that the plaintiff defaulted in loan repayments when they fell due, which led to debt recovery proceedings against him. Before an auction could take place, the plaintiff instituted HCCC No. 679 of 2004 which halted the auction. However, the said suit was eventually dismissed for want of prosecution on 28/5/2010.
25. About 5 years later, in June 2015, while the loan debt remained outstanding, the plaintiff requested for a mortgage statement to show the balance thereof and informed the defendant that he had found a potential purchaser of the suit property. He also informed the defendant that his Advocates would make a professional undertaking to pay the outstanding balance of the loan from the proceeds of the sale of the property upon release by the defendant of the original grant of title.
26. It is the plaintiff’s evidence that vide a letter dated 8/6/2015, the defendant forwarded to the plaintiff the mortgage statement as requested, but a problem arose as to the whereabouts of the original title. Through a letter dated 29/6/2015, the defendant informed its Advocates, Waruhiu and Company Advocates, that the original title had been misplaced at the Ministry of Lands when the transfer of charge from Pan Africa Insurance Company Limited to Pan Africa Life Assurance was lodged at the Land’s Registry on 29/3/2006. The defendant’s evidence was that it had instructed the firm of Mboya Wangong’u & Waiyaki Advocates to trace the documents from the Land’s Registry.
27. It was the evidence of DW1 that as the original Title could not be traced, the defendant instructed its Advocates to apply for a provisional certificate of title which was eventually issued by the Registrar of Titles on 9/12/2015 and it was forwarded to the plaintiff’s Advocates on or about February 2016.
28. It is clear from the series of events above that the original Title was misplaced at the Land’s Registry during the transfer of charge in the year 2006, and since that time the defendant and its Advocates had not succeeded in tracing the original Title at the Land’s Registry and were only prompted to continue searching for it after the plaintiff informed them that they had entered into a sale agreement and requested for it. In my understanding of the evidence by the plaintiff, he attributes negligence for the delay occasioned in the sale transaction between him and the third party to the defendant for failing to follow up on the progress of the provisional title after the loss of the original Title document in the Land’s office.
29. The above comes out clearly in paragraphs 16 and 17 of the plaint, where the plaintiff contends that the transaction between him and the purchaser of his property was delayed for seven and a half months since 15th June, 2015 to 1st February, 2016 due to the direct negligent delay attributable to the defendant. He further contends that the said delay made him to incur a loss of Kshs. 17,333,333.30 which he could otherwise have earned as interest, from proceeds of the sale of the property at Kshs. 260,000,000/- during the period between 1st September, 2015 to 1st February, 2016 when fixed deposit interest rates offered by commercial banks hit a high of 16% per annum.
30. This Court notes that the loss of the Title is attributable to the Land’s Registry, as the said document did not get lost in the hands of the defendant or its Advocates. In this Courts view, if the defendant would have found out earlier that the original Title was missing, it would have applied for a provisional Ttitle much earlier and the entire situation could have been avoided.
31. Notwithstanding the facts aforementioned, this Court is alive to the fact that a loan was issued to the plaintiff in the year 2000 as evidenced in the charge instrument annexed to the defendant’s bundle of documents. The plaintiff failed make good the loan repayments for a period of over 11 years. He later informed the defendant that he had found a buyer of the suit property and the proceeds would be used to offset the loan balance. The plaintiff herein claims special damages of Kshs. 11,502,563.30, being the opportunity cost and loss suffered as a result of the defendant’s delay.
32. In the case of Mbuthia Macharia v Annah Mutua Ndwiga & another [2017] eKLR, the Court of Appeal when dealing with the issue of the burden of proof stated thus:
“The legal burden is discharged by way of evidence, with the opposing party having a corresponding duty of adducing evidence in rebuttal. This constitutes evidential burden. Therefore, while both the legal and evidential burdens initially rested upon the Appellant, the evidential burden may shift in the course of trial, depending on the evidence adduced. As the weight of evidence given by either side during the trial varies, so will the evidential burden shift to the party who would fail without further evidence".
33. From the circumstances of this case, the defendant was not obliged under the terms of the charge to accept the plaintiff’s offer for payment of the outstanding loan amount other than as provided in the charge. It would have been prudent for the plaintiff to obtain the consent of the defendant prior to entering into a sale agreement to sell the suit property which was charged to the defendant.
34. I find that the defendant is not liable to compensate the plaintiff for the alleged interest lost or for the costs of the rates and rates clearance certificates for the years 2015 and 2016. The relationship between the defendant and the plaintiff was that of a lender and borrower, respectively, and was dictated by the terms of the charge instrument. The professional undertaking given by the plaintiff’s Advocates did not review the terms of the charge instrument. It is my finding that the plaintiff failed to discharge the burden of proof on a balance of probabilities as required under the provision of Sections 107, 108 and 109 of the Evidence Act. I do agree with the defendant that the claim for the interest allegedly lost is based on pure speculation and conjecture and cannot from the basis of judgment being entered against the defendant as prayed in the plaint.
Whether the defendant is entitled to judgment on the counterclaim.
35. In its counterclaim, the defendant claimed that the defendant still owed it the sum of Kshs.166,696.00. The defendant claimed that on 14/4/2016 when the plaintiff paid it Ksh.6,000,000/-, the loan amount had accrued to Kshs.6,119,665.00 and that the outstanding balance as at October 2016 was Kshs.166,696.00.
36. The account statement found at pages 39-41 of the defendant’s bundle of documents indicates that the balance as at October 2016 was Kshs.166,696.00. The plaintiff did not challenge the credibility of the statement. I find that to be sufficient evidence of the balance owed as at October 2016. I therefore find merit in the counterclaim.
37. In the result, this Court makes the following final orders:
(i) The plaintiff’s suit against the defendant as set out in its amended plaint dated 19/9/2023 is dismissed; and
(ii) The defendant’s counterclaim has merit. Judgment is entered against the plaintiff for the sum of Kshs.166,696.00 with interest.
(iii) Costs of the main suit and the counterclaim are awarded to the defendant.
It is so ordered.
DATED, SIGNED and DELIVERED at NAIROBI on this 23rd day of February, 2024. Judgment delivered through Microsoft Teams Online Platform.
NJOKI MWANGI
JUDGE
In the presence of:
Mr. Thiga for the plaintiff
Mr. Kahura for the defendant
Ms. B. Wokabi – Court Assistant.
IN THE HIGH COURT OF KENYA AT NAIROBI
COMMERCIAL & TAX DIVISION
HCCC NO. 362 OF 2016
ALBERT ALEXANDER AGGREY EKIRAPA…………….…………PLAINTIFF
-VERSUS-
SANLAM KENYA PLC
(Formerly known as PAN AFRICA INSURANCE HOLDINGS LIMITED……………………………………………………….……DEFENDANT
JUDGMENT
1. The plaintiff instituted a claim against the defendant which he later modified by an amended plaint dated 19/9/2023. His case is that in the year 2000, he charged his property L.R No. 209/9674 to PAN AFRICA INSURANCE COMPANY LIMITED in consideration of a loan advanced to him for the sum of Kshs.4,000,000/-. That on or about 29/3/2006, after the restructuring of PAN AFRICA INSURANCE COMPANY LIMITED, the defendant lodged a transfer of charge at the Land’s Registry in favour of the defendant without informing him.
2. The plaintiff contended that he entered into a sale agreement to sell the suit property and his Advocates offered their professional undertaking to pay the loan amount within 75 days in exchange of the release of the original title document to them. That however, on 15/7/2015, the defendant’s Advocates informed the plaintiff’s Advocates that the original grant and transfer of charge over the suit property could not be traced at the Land’s Registry and that it would be prudent to apply for a provisional title.
3. The plaintiff stated that it was only through his efforts and persistent follow ups that the provisional title was eventually issued on 9/12/2015 but he only received it on 1/2/2016, two (2) months after it was issued.
4. It was the plaintiff’s case that the sale transaction between him and the purchaser of the suit property was delayed for over seven and a half months due to the direct negligent delay attributed to the defendant which led him to lose out on interest amounting to Kshs.17,333,333.30 which he could have earned from the proceeds of the sale of the property of Kshs.260,000,000 during the period of 1/9/2015 to 1/2/2016 when the fixed deposit interest rates offered by commercial banks were at a high of 16% p.a.
5. That as at 1/2/2016, he had not repaid the loan amount to the defendant and therefore the amount payable to him by the defendant for the opportunity cost was Kshs.11,333,333.30 (being Kshs.17,333,333.30 less the loan amount of Kshs.6,000,000/-) which the plaintiff claims in this suit.
6. The plaintiff stated that he had paid the outstanding loan amount of Kshs.6,000,000/-, comprising the loan amount plus compound interest as at 31/12/2015.
7. Based on the aforementioned assertions, the plaintiff prays for judgement against the defendant for Kshs.11,502,563.30 being the total opportunity cost and loss as a result of the delay by the defendant. The plaintiff also prays for interest on the said amount at commercial rates of 16% p.a from 1/2/2016 until full payment, costs of the suit and interest thereon at Court rates.
8. The plaintiff relied on his witness statement dated 7/9/2016 and produced a list and bundle of documents of even date.
9. The contents of the plaintiff’s witness statement are a replica of those in the amended plaint therefore there is no need to regurgitate the same herein. In cross-examination he stated that when he entered into the sale agreement dated 15/6/2015, he had not repaid the loan that he had taken from the defendant and that the defendant was not a party to the said agreement. Further, that the Land’s Registry is in charge of issuance of provisional titles and a replacement was to be done.
10. The defendant opposed the plaintiff’s claim through a statement of defence and counterclaim dated 24/10/2016.
11. The defendant averred that the plaintiff failed to disclose that he had defaulted on loan repayments when they fell due despite numerous demand letters which led the defendant’s Counsel to institute debt recovery proceedings whereby an auction date was scheduled but the same was challenged in HCCC No. 679 of 2004, which suit was eventually dismissed for want of prosecution on 28/5/2010.
12. The defendant denied any inordinate delay in issuing a loan account statement which was done on 8/6/2015 and averred that it instructed Ms Mboya Wang’ong’u & Waiyaki Advocates to apply for a provisional certificate of title in respect of the property and that it continued to follow up with the said firm on the progress of obtaining the provisional title.
13. The defendant stated that the issuance of a provisional certificate of title is an administrative process which is at the sole discretion of the Land’s Registry. The defendant averred that delay, if any, in obtaining the provisional certificate of title was not attributable to the defendant given that the process was entirely in the hands of the Registrar of Lands after the defendant had lodged the application for a provisional title.
14. The defendant stated that the plaintiff is not entitled to the amounts claimed and that the alleged interest that the plaintiff would have earned is speculative. The defendant emphasized that it had no obligation to accept the plaintiff’s payment of the outstanding loan balance other than as provided for in the charge.
15. In its counterclaim, the defendant contended that the plaintiff paid Ksh.6,000,000/- on 14/4/2016, whereas the accrued loan amount as at October 2016 stood at Kshs.6,119,665.00 and that the plaintiff had failed to settle the balance of Kshs.119,665.00.
16. The defendant claimed that as at October 2016, the outstanding loan balance stood at Kshs.166,696.00, which sum continues to accrue interest until payment in full.
17. The defendant filed a witness statement dated 16/6/2023 by Gladys Muema, its Senior Legal Officer. Her witness statement echoed the contents in the statement of defence and counterclaim.
18. She testified that during the restructure of the defendant in the year 2002, its long term facilities were transferred to Pan Africa Life Assurance Limited, which necessitated the transfer of the plaintiff’s charge to the said company. That there was no need to notify the plaintiff of the transfer as he was notified of the same under clause 10(h) of the charge which indicated that the charge would not be invalidated by the amalgamation, consolidation or other change in the constitution of the defendant.
19. The defendant’s witness, DW1, reiterated that the defendant through its Advocates persistently followed up with the Land’s Registry to obtain the provisional certificate of title and that the defendant was not responsible for the delay in its issuance. That the defendant was not liable to pay the alleged interest in the sale transaction between the plaintiff and the third party, as the claim was premised on pure conjecture and speculation as the plaintiff assumed that the proceeds of the alleged transaction would have been invested in a fixed deposit account and not under any other scheme. Moreover, that the defendant had no obligation to accept the plaintiff’s offer for payment of the outstanding loan amount other than as provided for in the charge.
20. The plaintiff filed a reply to the defence and a defence to the counterclaim dated 10/11/2016 whereby he reiterated the contents of his plaint and denied the allegation contained in the counterclaim. He further averred that after the payment of the outstanding loan amount of Kshs.6,000,000/-, the defendant did not demand for any further amount therefore the sum claimed in the counterclaim was an afterthought. The plaintiff prays to have judgment entered as in the plaint and to have the defendant’s counterclaim dismissed with costs.
ANALYSIS AND DETERMINATION.
21. The plaintiff filed written submissions dated 10/8/2023 and supplementary submissions dated 20/9/2023 which this Court has considered. The defendant on its part had not filed its submissions as at the time of writing this judgement despite directions from the Court to do so.
22. Having analyzed the pleadings, the evidence and submissions in this suit, the following issues arise for determination:
I) Whether the plaintiff is entitled to judgment in the sum of Kshs.11,502,563.30 as claimed in the amended plaint;
II) Whether the defendant is entitled to judgment on the counterclaim.
Whether the plaintiff is entitled to judgment in the sum of Kshs.11,502,563.30 as claimed in the amended plaint.
23. In the year 2000, the defendant, then Pan African Insurance Company Limited, issued a loan facility to the plaintiff for the sum of Kshs.4,000,000/- which was secured by a charge registered against the suit property.
24. The record shows that the plaintiff defaulted in loan repayments when they fell due, which led to debt recovery proceedings against him. Before an auction could take place, the plaintiff instituted HCCC No. 679 of 2004 which halted the auction. However, the said suit was eventually dismissed for want of prosecution on 28/5/2010.
25. About 5 years later, in June 2015, while the loan debt remained outstanding, the plaintiff requested for a mortgage statement to show the balance thereof and informed the defendant that he had found a potential purchaser of the suit property. He also informed the defendant that his Advocates would make a professional undertaking to pay the outstanding balance of the loan from the proceeds of the sale of the property upon release by the defendant of the original grant of title.
26. It is the plaintiff’s evidence that vide a letter dated 8/6/2015, the defendant forwarded to the plaintiff the mortgage statement as requested, but a problem arose as to the whereabouts of the original title. Through a letter dated 29/6/2015, the defendant informed its Advocates, Waruhiu and Company Advocates, that the original title had been misplaced at the Ministry of Lands when the transfer of charge from Pan Africa Insurance Company Limited to Pan Africa Life Assurance was lodged at the Land’s Registry on 29/3/2006. The defendant’s evidence was that it had instructed the firm of Mboya Wangong’u & Waiyaki Advocates to trace the documents from the Land’s Registry.
27. It was the evidence of DW1 that as the original Title could not be traced, the defendant instructed its Advocates to apply for a provisional certificate of title which was eventually issued by the Registrar of Titles on 9/12/2015 and it was forwarded to the plaintiff’s Advocates on or about February 2016.
28. It is clear from the series of events above that the original Title was misplaced at the Land’s Registry during the transfer of charge in the year 2006, and since that time the defendant and its Advocates had not succeeded in tracing the original Title at the Land’s Registry and were only prompted to continue searching for it after the plaintiff informed them that they had entered into a sale agreement and requested for it. In my understanding of the evidence by the plaintiff, he attributes negligence for the delay occasioned in the sale transaction between him and the third party to the defendant for failing to follow up on the progress of the provisional title after the loss of the original Title document in the Land’s office.
29. The above comes out clearly in paragraphs 16 and 17 of the plaint, where the plaintiff contends that the transaction between him and the purchaser of his property was delayed for seven and a half months since 15th June, 2015 to 1st February, 2016 due to the direct negligent delay attributable to the defendant. He further contends that the said delay made him to incur a loss of Kshs. 17,333,333.30 which he could otherwise have earned as interest, from proceeds of the sale of the property at Kshs. 260,000,000/- during the period between 1st September, 2015 to 1st February, 2016 when fixed deposit interest rates offered by commercial banks hit a high of 16% per annum.
30. This Court notes that the loss of the Title is attributable to the Land’s Registry, as the said document did not get lost in the hands of the defendant or its Advocates. In this Courts view, if the defendant would have found out earlier that the original Title was missing, it would have applied for a provisional Ttitle much earlier and the entire situation could have been avoided.
31. Notwithstanding the facts aforementioned, this Court is alive to the fact that a loan was issued to the plaintiff in the year 2000 as evidenced in the charge instrument annexed to the defendant’s bundle of documents. The plaintiff failed make good the loan repayments for a period of over 11 years. He later informed the defendant that he had found a buyer of the suit property and the proceeds would be used to offset the loan balance. The plaintiff herein claims special damages of Kshs. 11,502,563.30, being the opportunity cost and loss suffered as a result of the defendant’s delay.
32. In the case of Mbuthia Macharia v Annah Mutua Ndwiga & another [2017] eKLR, the Court of Appeal when dealing with the issue of the burden of proof stated thus:
“The legal burden is discharged by way of evidence, with the opposing party having a corresponding duty of adducing evidence in rebuttal. This constitutes evidential burden. Therefore, while both the legal and evidential burdens initially rested upon the Appellant, the evidential burden may shift in the course of trial, depending on the evidence adduced. As the weight of evidence given by either side during the trial varies, so will the evidential burden shift to the party who would fail without further evidence".
33. From the circumstances of this case, the defendant was not obliged under the terms of the charge to accept the plaintiff’s offer for payment of the outstanding loan amount other than as provided in the charge. It would have been prudent for the plaintiff to obtain the consent of the defendant prior to entering into a sale agreement to sell the suit property which was charged to the defendant.
34. I find that the defendant is not liable to compensate the plaintiff for the alleged interest lost or for the costs of the rates and rates clearance certificates for the years 2015 and 2016. The relationship between the defendant and the plaintiff was that of a lender and borrower, respectively, and was dictated by the terms of the charge instrument. The professional undertaking given by the plaintiff’s Advocates did not review the terms of the charge instrument. It is my finding that the plaintiff failed to discharge the burden of proof on a balance of probabilities as required under the provision of Sections 107, 108 and 109 of the Evidence Act. I do agree with the defendant that the claim for the interest allegedly lost is based on pure speculation and conjecture and cannot from the basis of judgment being entered against the defendant as prayed in the plaint.
Whether the defendant is entitled to judgment on the counterclaim.
35. In its counterclaim, the defendant claimed that the defendant still owed it the sum of Kshs.166,696.00. The defendant claimed that on 14/4/2016 when the plaintiff paid it Ksh.6,000,000/-, the loan amount had accrued to Kshs.6,119,665.00 and that the outstanding balance as at October 2016 was Kshs.166,696.00.
36. The account statement found at pages 39-41 of the defendant’s bundle of documents indicates that the balance as at October 2016 was Kshs.166,696.00. The plaintiff did not challenge the credibility of the statement. I find that to be sufficient evidence of the balance owed as at October 2016. I therefore find merit in the counterclaim.
37. In the result, this Court makes the following final orders:
(i) The plaintiff’s suit against the defendant as set out in its amended plaint dated 19/9/2023 is dismissed; and
(ii) The defendant’s counterclaim has merit. Judgment is entered against the plaintiff for the sum of Kshs.166,696.00 with interest.
(iii) Costs of the main suit and the counterclaim are awarded to the defendant.
It is so ordered.
DATED, SIGNED and DELIVERED at NAIROBI on this 23rd day of February, 2024. Judgment delivered through Microsoft Teams Online Platform.
NJOKI MWANGI
JUDGE
In the presence of:
Mr. Thiga for the plaintiff
Mr. Kahura for the defendant
Ms. B. Wokabi – Court Assistant.