REPUBLIC OF KENYA
IN THE HIGH COURT OF KENYA AT NAIROBI
CIVIL DIVISION
CIVIL CASE NO. E120 OF 2023
JACKSON MIGWI KIRIKA (Trading as Quan Systems)............................................................................................PLAINTIFF
-VERSUS-
FAMILY BANK……………………………………………….1 ST DEFENDANT
THE HON. ATTORNEY GENERAL...........…………..…2 ND DEFENDANT
JUDGMENT
Background
1. Jackson Migwi Kirika (Trading as Quan Systems) (the Plaintiff) filed the present suit through a plaint dated 20.05.2023 and amended on 18.03.2024 (the Amended Plaint) seeking judgment against Family Bank and The Hon. Attorney General (the 1 st and 2 nd Defendants respectively) as follows:
(a) Special damages for:
i) Loss of income in the sum of Kshs. 18,900,000/- and
ii) Legal costs in the sum of Kshs. 2,346,000/-
iii) Interest on cash bail deposited in Court being Kshs. 356,912/-
(b) General and exemplary damages for malicious prosecution.
(c) Interest on (a) and (b) above at Court rates.
(d) Costs of this suit.
2. In his pleadings as shown in the Amended Plaint, the Plaintiff has stated that he was at all material times a customer of the 1 st Defendant where he operated bank account number 065000005699 at the 1 st Defendant’s KTDA Plaza Corporate Branch, Nairobi. That sometimes on or about 24.03.2015, the 1 st Defendant without any justifiable or reasonable cause, falsely and maliciously lodged a complaint against him with the Police Banking Fraud Investigation Unit (the Fraud Unit) based in Nairobi, in respect of a sum of Kenya Shillings Four Million and Five Hundred Thousand (Kshs. 4,500,000/-) alleged to have been stollen by the Plaintiff from the 1 st Defendant’s premises.
3. It was pleaded that, the Banking Fraud Unit undertook investigations on the matter, and subsequently preferred criminal charges against the Plaintiff and other persons not before the court. That, the Plaintiff was charged in court with the offence of stealing contrary to Section 268(1) as read with Section 275 of the Penal Code, in Milimani Criminal Case No. 535 of 2015 (the criminal case).
4. It is the Plaintiff’s averment that the criminal charges were preferred against him by the 2 nd Defendant, notwithstanding the fact that his co-accused had admitted to the facts relating to the charges and statements by a witness and customer of the 1 st Defendant respectively, regarding the Plaintiff’s innocence. That, the 1 st Defendant admitted to the fact that no monies were lost in relation to the criminal matter and that he was ultimately acquitted under Section 210 of the Criminal Procedure Code (CPC).
5. The Plaintiff stated, further, that prior to his arraignment in court, he was arrested and detained at Kileleshwa Police Station where he was later released on a cash bail of Kshs. 500,000/- upon entry of his plea of ‘not guilty.’ He pleased that his arrest and prosecution were actuated by malice on the part of the Defendants, as particularized under paragraph 20 of the Amended Plaint.
6. The Plaintiff has pleaded that during pendency of the criminal case, the 1 st Defendant proceeded to make false and defamatory statements against the Plaintiff and caused the same to be published in the Standard Newspaper dated 26.03.2015 and 17.05.2015. That as a consequence of the criminal proceedings against him, he suffered great prejudice, anguish and loss resulting from his inability to obtain the requisite Certificate of Good Conduct from the police needed for purposes of sustaining his procurement business and this as a result, he suffered loss of business and income for which he is claiming damages for loss of income during the intervening period, as pleaded under paragraph 19 of the Amended Plaint.
The Defence
7. the 1 st Defendant filed the statement of defence dated 8.09.2023 and amended on 21.03.2025 (the Amended Defence) in which it is stated that the Plaintiff was indeed its customer at all material times, operating the bank account particularized in the Amended Plaint.
8. The 1 st Defendant has stated that while it is true that it lodged a complaint with the Fraud Unit, it did not do so maliciously or without reasonable cause. That there was reasonable and probable cause warranting the complaint and investigations into the events leading up to the Plaintiff’s arrest and that in lodging the said complaint, it was merely acting within its statutory and fiduciary mandate in ensuring the protection of funds held by its respective customers.
9. The 1 st Defendant has stated that suspicions arose following the receipt of instructions in December, 2014, from a former employee of the 1 st Defendant named Mary Wamaitha Muriu directing another customer of the 1 st Defendant, Joel Mwaniki (the third party), to transfer funds to the tune of Kshs. 3,500,000/- from his account to that belonging to the Plaintiff. That subsequently, the third party received instructions to transfer an additional sum of Kshs. 1,000,000/- to the Plaintiff’s account sometime in May, 2015, giving a total sum of Kshs. 4,500,000/- that was remitted to the Plaintiff’s account.
10. The 1 st Defendant has averred that the third party reported the matter to the 1 st Defendant’s security team, thereby prompting investigations which revealed that the unlawful transactions undertaken above contravened its internal processes and constituted a breach of duty on the part of Mary Wamaitha, who was ultimately summarily dismissed from employment. That following the culmination of the investigations, a decision was made to have the Plaintiff charged, which decision lay solely with the discretion of the Office of the Director of Public Prosecutions (ODPP). That save for lodging the complaint, the 1 st Defendant had no role in the arrest, detention and prosecution of the Plaintiff and that the mere fact that the Plaintiff was acquitted in the criminal case does not constitute legal basis for bringing the claim for malicious prosecution against it.
11. The 1 st Defendant admitted to the publications referred to in the Amended Plaint but denied that the same was malicious or defamatory in nature and that, furthermore, the impugned publications were made several years prior to filing of the present suit.
12. The 1 st Defendant has further denied the particulars of malice and loss and damage attributed to it and averred that the Plaintiff is not, at all, entitled to the reliefs sought in the Amended Plaint and therefore the Plaintiff’s suit ought to be dismissed with costs to the 1 st Defendant.
13. The 2 nd Defendant filed a statement of defence dated 29.08.2023 and amended on 8.04.2024 (the 2 nd Defendant’s Amended Defence). He has stated that the investigations, arrest and prosecution of the Plaintiff were driven by reasonable and probable cause and that, the investigations and arrest undertaken against the Plaintiff were in line with the mandate and statutory duties of the Banking Fraud Unit, the particulars of which are laid out under paragraph 4 of the 2 nd Defendant’s Amended Defence.
14. The 2 nd Defendant has denied any attribution on the particulars of malice, loss and damage allegedly suffered by the Plaintiff and has averred that the criminal proceedings lodged against the Plaintiff were justified and were the result of the Plaintiff’s own actions.
15. Similarly, the 2 nd Defendant has denied the particulars of the reliefs sought in the Amended Plaint and sought dismissal of the Plaint with costs to the 2 nd Defendant.
Oral Evidence
16. The Plaintiff testified as PW1. He adopted his signed witness statement dated 20.05.2023 as his evidence-in-chief and produced his list and bundle of documents of like date as Pex.1 and Pex.2 respectively. I have read the Plaintiff’s witness statement and noted its contents.
17. The Plaintiff testified that at the time of the incident, he was engaged in business where he supplied stationery and related items to various government agencies. That he received a text alert on his phone that a sum of Kshs. 4,500,000/- had been deposited into his account, from a person unknown to him and without a prior request on his part. That he visited the 1 st Defendant to inquire the origin and nature of the deposit transaction. That he was directed to see Mary Wamaitha, a credit officer with the 1 st Defendant, who instructed him to withdraw the said funds and hand the same to her, which he did. He denied utilizing the deposited funds and stated that he had no business or financial dealings with any employee of the 1 st Defendant. That he was not interrogated by the 1 st Defendant employees on the matter. That, nevertheless, he was instructed to proceed to the Banking Fraud Unit where he recorded a statement, only to discover that he had been implicated.
18. He testified that he was arrested and arraignment in court on criminal charges related to matter. That the 1 st Defendant caused his photo and name to be published in the Standard Newspaper, accusing him of committing banking fraud. That, despite the fact that he was eventually acquitted of the criminal charges, the Plaintiff lost various business opportunities as clients were hesitant to give him business thereafter. That he was unable to continue with his business operations between March 2015 and his acquittal in 2018, thereby causing him to suffer loss of business.
19. In cross-examination, the Plaintiff stated that prior to the incident, he had received a Local Purchase Order (LPO) for the tender to supply of stationery to a government institution. That at the time, he did not have the required funds amounting to Kshs. 1,2500,000/- to finance the said tender. That he approached the 1 st Defendant at its premises at KTDA Plaza Branch to obtain financing. That he met Mary Wamaitha, a the credit officer with the 1 st Defendant at the time, who advised him to obtain security for the intended loan from a fellow customer of the 1 st Defendant. That the Plaintiff was therefore introduced to one Deborah Karanja, who agreed to advance the funds he required, at an interest rate of 20%. That Deborah therefore guaranteed him a sum of Kshs. 3,000,000/- and which sum was eventually deposited into his account.
20. It is the Plaintiff’s testimony that during the intervening period, he was able to obtain a separate soft loan from a friend. That nevertheless, a sum of Kshs. 4,500,000/- was further deposited into his account and he later came to learn that the deposit transaction was made by the third party, who is unknown to him. That he withdrew the deposited amount and handed it to Mary Wamaitha upon the latter’s advice, with the understanding that the same would be refunded to the third party.
21. He admitted to not calling Mary Wamaitha as his witness and testified on cross-examination that following his arrest on 25.03.2015, the impugned defamatory publications were made on 26.03.2015. He admitted to not filing the defamation case within one (1) year.
22. In further cross-examination, the Plaintiff stated that he did not have any evidence to show that he was unable to obtain government tenders or related work following his arrest and prosecution and that though he did not have bank statements indicating his monthly earnings, he had audited accounts which show the extent of his earnings and which constitute part of his exhibits.
23. The Plaintiff also stated that the costs incurred in legal and related fees during the course of the criminal case was given to him by friends and was not personally incurred by him. That nonetheless, he is yet to refund the said monies.
24. In further cross-examination, the Plaintiff testified that the investigations into the incident followed a formal report to the police and that the said investigations did not involve the police attached to the Banking Fraud Unit. That the Banking Fraud Unit did not act wrongly in taking part in the initial investigations of fraud. That he is also aware that funds were fraudulently deposited into his account but that the same were ultimately refunded to their rightful owner, namely the third party.
25. Gerald Muchangi Njagi who was PW2 , testified that he was responsible for preparing the Plaintiff’s financial accounts from the year 2011 to date, and opted to rely on its contents as his evidence-in-chief. On cross-examination, the witness testified that he is an accountant by profession and that he had worked with the Plaintiff since the year 2011. He admitted that the statements produced in court did not contain the requisite signatures.
26. Mercy Wanjiku Ndaita ( DW1 ) testified as 1 st Defendant’s witness. She adopted her witness statement dated 2.04.2025 as her evidence-in-chief, and produced the 1 st Defendant’s list and bundle of documents dated 25.08.2024 and 2.04.2025 as D. Exhibits 1 and 2 respectively. She testified that she works for the 1 st Defendant as a Branch Manager.
27. In cross-examination, the witness testified that she has worked for the 1 st Defendant since 2013 and that she never directly dealt with the Plaintiff or his account. That the 1 st Defendant received a complaint on 19.03.2015 from the third party, claiming that he had received instructions from Mary Wamaitha on 29.12.2024 to transfer or withdraw funds from his account to another account, namely the Plaintiff’s. That he did so, though erroneously.
28. DW1 stated that the Plaintiff is at fault for withdrawing the transferred amount and handing it to Mary Wamaitha, rather than requesting the 1 st Defendant to reverse the transaction. That consequently, Mary was summarily dismissed from the 1 st Defendant’s employment, on grounds of acting fraudulently and misadvising a customer. That the funds were ultimately refunded to the third party but not through the Plaintiff and that she did not participate in the criminal proceedings against the Plaintiff.
29. She stated in further cross-examination, that both Mary Wamaitha and the Plaintiff were implicated in relation to the fraudulent transaction. That, Mary, being a Credit Officer, had access to customers’ account details and that the matter was investigated by the Banking Fraud Unit following a report by the 1 st Defendant.
30. In re-examination, she stated that had the complaint not been made by the third party, the 1 st Defendant would not have had knowledge of the transaction.
31. Moses Kosgey Kipkorir, the Security and Investigative Manager of the 1 st Defendant, testified as DW2. He adopted his witness statement dated 25.08.2014 as his evidence in chief. He testified that the trail of evidence shows that upon receipt of the material funds, the Plaintiff withdrew them at intervals, but that he never sought a reversal of the transaction with the 1 st Defendant. That, the third party raised issue with the 1 st Defendant regarding the suspicious transaction, thereby resulting in the investigations and subsequent arrest and prosecution of the Plaintiff.
32. The witness further testified that the third party’s concerns were against the staff of the 1 st Defendant and not necessarily the Plaintiff personally. That the third party did not accuse the Plaintiff of fraud or deceit, according to his statement which constitutes part of the 1 st Defendant’s bundle of documents.
33. It is his testimony that he is aware of the criminal proceedings and outcome thereof. That his colleague reported the matter to the Banking Fraud Unit, following which the Plaintiff and Mary Wamaitha were implicated and that
34. In re-examination, the witness briefly stated that following a complaint regarding a particular account, it is common practice for the 1 st Defendant to investigate both the holder of the account and the nature of the transaction in question, marking the close of the 1 st Defendant’s case.
35. Josiah Njue Gichobi, a retired Senrior Sergeant of police, testified for the 2 nd Defendant, as DW3. He adopted his witness statement dated 3.11.2024 and produced Charge Sheet and covering report as well as bundle of documents and crime incident report as the 2 nd Defendant’s Exhibits 1, 2, 3 and 4 respectively. He testified that, at the material time, he was working at the Banking Fraud Unit and that he participated in the investigations into the matter concerning the transfer of Kshs. 4,500,000/- from an account belonging to the third party, to the Plaintiff’s account; both accounts being held with the 1 st Defendant.
36. He testified that from his investigations, he found out from the third party that the instructions to make the above transfer emanated from Mary Wamaitha and that no loan application was tendered to support the same. The witness stated that he was able to recover the note written by Mary, directing the third party to transfer the material funds. That the said note was subjected to forensic examination which yielded a positive result. That consequently, it was decided that the Plaintiff be charged in a criminal matter in relation to that transaction.
37. He testified that the instructions to charge the Plaintiff were given by his seniors and that he did not make a personal decision to prefer charges against him. That according to his investigations, the Plaintiff had not followed proper procedure upon receiving the material funds into his account but acted in ignorance and without exercising due diligence on his part and that he found the note written by Mary Wamaitha as constituting fraud.
38. According to the witness, the Plaintiff ought not to have complied with the instructions given by Mary, that he withdraw the material funds and hand them to her. That he instead ought to have informed the 1 st Defendant. That the material funds were refunded to the third party.
Parties’ Submissions
39. The Plaintiff’s submissions are anchored on the case of Mbowa v East Mengo District Administration (1972) EA 352, where the elements for malicious prosecution have been outlined. On whether the complaint and prosecution of the Plaintiff was without malicious and unjustifiable, it was submitted that the evidence tendered shows that the transfer of the material funds emanated from instructions given by Mary Wamaitha to the third party. That the Plaintiff had no part to play in the said transaction and that as soon as he became aware of it, he visited the 1 st Defendant to find out about the issue whereupon he was directed by Mary Wamaithat to withdraw the funds and hand over the same her. That he did not retain the funds or utilize them for personal gain and that he was found not guilty in the criminal case and acquitted.
40. He submitted that both the third party and Mary, by way of their respective statements, confirmed his non-participation in the funds transfer, and yet the 2 nd Defendant went on to arrest and charge him with a criminal offence. That similarly, the 1 st Defendant’s action of lodging a complaint against the Plaintiff, notwithstanding the position taken by the third party, was vindictive in nature and that flowing from the foregoing, it can only be deduced that there was malice on the part of the Defendants herein.
41. The Plaintiff relied on the case of James Karuga Kiiru v Joseph Mwamburi & 2 others [2001] KECA 354 (KLR) where the Court of Appeal held that:
“To prosecute a person is not prima facie tortious, but to do so dishonestly or unreasonably is. Malicious prosecution thus differs from wrongful arrest and detention, in that the onus of proving that the prosecutor did not act honestly or reasonably, lies on the person prosecuted.”
42. It is the Plaintiff’s further submission that the third party clearly testified in the criminal case that he and the Plaintiff were previously unknown to one another and had no dealings between themselves. That, the third party had no issue, legal or otherwise, against the Plaintiff and that in the circumstances, there was no legal or reasonable basis to prefer criminal charges against the Plaintiff.
43. He submitted that sufficient evidence has been tendered to support the averments of loss suffered as a result of the malicious prosecution against him by the Defendants herein. That in the circumstances, he is entitled to the various reliefs sought in the Amended Plaint.
44. The 1 st Defendant relied on the case of Vastu Company Limited v Mwangi [2022] KEHC 3006 (KLR), in support of his submissions that much as the Plaintiff was acquitted in the criminal case, his claim for malicious prosecution has not been proved to the required standard and cannot therefore be sustained against the 1 st Defendant.
45. The 1 st Defendant further relied on the case of Central Bank of Kenya v Ndege & another [2026] KEHC 1844 (KLR) where the court laid out the elements that ought to be proved in order for a claim founded on malicious prosecution to succeed. It was submitted that the element of malice has not been established against it. That, the 1 st Defendant, being a financial institution, acted within its legal duty by reporting the suspected transaction to the Banking Fraud Unit, following the complaint lodged by the third party concerning the funds in his account. That independent investigations were carried out into the incident, before the decision to prefer criminal charges against the Plaintiff was arrived at. That in any event, the 1 st Defendant merely reported the matter to the police but was not responsible for the arrest and prosecution of the Plaintiff since the powers to prosecute lie with the ODPP and that it is not in dispute that the Plaintiff received the material funds and yet no evidence was tendered to demonstrate that he refunded the same to the third party.
46. It is the 1 st Defendant’s submission that, the element of reasonable and probable cause has been demonstrated, with reliance being placed on, inter alia , the case of Mbuvi v Astral Aviation Company Limited & 2 others [2023] KEHC 21086 (KLR) where the court acknowledged that:
“...Reasonable and probable cause is an honest belief in the guilt of the accused based upon a full conviction founded upon reasonable grounds of the existence of a state of circumstances, which assuming them to be true, would reasonably lead an ordinary prudent and cautious man placed in the position of the accuser to the conclusion that the person charged was probably guilty of the crime imputed…”
47. It was submitted that no evidence has been tendered to demonstrate that the 1 st Defendant acted maliciously towards the Plaintiff through abusing or influencing the criminal case in any manner and that, both the Plaintiff and Mary Wamaitha were prosecuted in the criminal case. The 1 st Defendant has urged this court to be guided by the earlier referenced case of Vastu Company Limited v Mwangi in which the court held that allegations of malice and ill-will must be supported by evidence by way of a plaintiff proving that the relevant criminal proceedings were either manipulated or abused, or that the criminal process was selective in nature.
48. The 1 st Defendant contended that the claim for defamation brought by the Plaintiff is fatally defective for being both time-barred and for the Plaintiff’s failure to sue the relevant media company and that, the Plaintiff did not set out the particulars of defamation in his pleadings or establish the pertinent elements in ensuring the success of his claim for defamation.
49. On the issue of the reliefs sought, it is the 1 st Defendant’s submission that the Plaintiff, having failed to prove any of the damages being sought, is not entitled to any award thereon. Moreover, regarding the audit report tendered, it is the 1 st Defendant’s submission that the same cannot be relied upon in claiming damages since it was unsigned and was purportedly tendered by an unverified expert. The 1 st Defendant relied on the decision in Mugo Mungai & 4 others v Official Receiver & Provisional Liguidator (Capital Finance Limited and Pioneer) & 2 others [2019] KEHC 11476 (KLR) where the court declined to allow the production of an unsigned document as evidence, reasoning that the same lacked probative value.
50. The 1 st Defendant urged this court to dismiss the Plaintiff’s suit with costs.
51. The 2 nd Defendant also filed written submissions. Whilst citing the decision in George Masinde Murunga v Attorney-General [1979] KEHC 34 (KLR) where the court laid out the ingredients pertinent to a claim of this nature, the 2 nd Defendant contended that while the criminal proceedings in question terminated in favour of the Plaintiff, the elements of absence of reasonable or probable cause and malice respectively, have not been established.
52. The 2 nd Defendant has contended that the Banking Fraud Unit, being a specialized unit under the Directorate of Criminal Investigations (DCI), acted within its statutory mandate upon receiving a complaint relating to fraud, from the 1 st Defendant. That it has not been demonstrated that the Banking Fraud Unit acted outside its mandate or that its decision was motivated by malice.
53. The 2 nd Defendant cited the decision in Monari & another v Commissioner of Police & another; Abubakar & another (Interested Parties) [2012] KEHC 4595 (KLR) where it was held that the duty to investigate complaints rests with the police and that upon them preferring charges, the mandate shifts to the trial court to hear the matter and make a finding thereon. That as long as it is shown that the charges and prosecution were undertaken in a reasonable manner, the High Court will be hesitant to intervene and that the arrest and prosecution of the Plaintiff were instituted with reasonable and probable cause, as defined in the case of Kagane v AG (1969) EA 643 and therefore, the burden rests with the Plaintiff, to prove otherwise.
54. The 2 nd Defendant has submitted that the Plaintiff is not entitled to the reliefs sought in the absence of any supporting evidence. That the Plaintiff has not proved his claim on special damages in line with the legal principle that special damages must both be specifically pleaded and strictly proved, as echoed by the Court of Appeal in the case of Hahn v Singh [1985] KECA 129 (KLR) as well as the case of Douglas Odhiambo Apel & another v Telkom Kenya Limited [2014] KECA 868 (KLR). The 2 nd Defendant has urged this court to dismiss the Plaintiff’s case with costs.
Analysis and determination
55. I have considered the pleadings filed and evidence tendered at the trial, as well as the rival submissions and authorities cited by the parties. I am aware that the 1 st Defendant has raised the issue that the Plaintiff’s claim on defamation was brought outside the time allowed to file such a claim. However, upon my perusal of the record, I have noted that while the Plaintiff had initially founded his claim on both the torts of defamation and malicious prosecution, it is evident that by way of the amendments to his plaint, he opted to abandon the claim for defamation and reliefs sought in respect of that cause of action. It would appear that any subsequent reference made to the impugned publications is purely within the context of the claim for malicious prosecution and not necessarily in pursuit of a separate claim for defamation.
56. Moreover, the Plaintiff admitted to the court that the initial claim for defamation was brought outside the statutory timelines and there is nothing on the record to indicate that the said claim was being pursued at the trial stage. It is therefore not necessary to proceed with the determination of that issue.
57. To my mind, the following issues arise for determination:
(i) Whether the Plaintiff has made a case for malicious prosecution against the 1 st and 2 nd Defendants;
(ii) Whether the Plaintiff is entitled to the reliefs sought in the amended plaint.
58. On the first issue, I have considered the definition of the term “ malicious prosecution” in the case of Stephen Gachau Githaiga & another v Attorney General [2015] eKLR, where the court in that case defined that term as follows:
“Malicious prosecution is an action for damages brought by one against whom a civil suit or criminal proceeding has been unsuccessfully commenced without Probable Cause and for a purpose other than that of bringing the alleged offender to justice…Malicious prosecution is an intentional tort designed to provide redress for losses flowing from an unjustified prosecution.”
59. A party coming to court claiming malicious prosecution must establish the following elements, as articulated in the case of Kagane v Attorney General (1969) EA 643 as cited by the court in Kenya Power & Lighting Co Ltd v Maurice Otieno Odeyo & 2 others [2017] eKLR as hereunder:
“a) The plaintiff must show that the prosecution was instituted by the defendant; or by someone for whose acts he is responsible;
b) That the prosecution terminated in the plaintiff's favour;
c) That the prosecution was instituted without reasonable and probable cause; and
d) That the prosecution was actuated by malice.”
60. For the Plaintiff to succeed in this case and obtain the reliefs he is seeking from this court, he must establish the presence of the above ingredients collectively.
61. On whether the prosecution was instituted by the Defendants or any of them, the evidence shows that there is no dispute that the arrest and prosecution of the Plaintiff were instituted by the police and the ODPP, presently represented by the 2 nd Defendant in these civil proceedings, who were acting on a report made by the 1 st Defendant. The record shows that the Plaintiff and Mary Wamaitha, were charged with the offence of stealing contrary to Section 268(1) as read with Section 275 of the Penal Code, in the criminal case as shown in the copies of the charge sheet tendered in court in the respective parties’ bundle of docum
[...truncated]
IN THE HIGH COURT OF KENYA AT NAIROBI
CIVIL DIVISION
CIVIL CASE NO. E120 OF 2023
JACKSON MIGWI KIRIKA (Trading as Quan Systems)............................................................................................PLAINTIFF
-VERSUS-
FAMILY BANK……………………………………………….1 ST DEFENDANT
THE HON. ATTORNEY GENERAL...........…………..…2 ND DEFENDANT
JUDGMENT
Background
1. Jackson Migwi Kirika (Trading as Quan Systems) (the Plaintiff) filed the present suit through a plaint dated 20.05.2023 and amended on 18.03.2024 (the Amended Plaint) seeking judgment against Family Bank and The Hon. Attorney General (the 1 st and 2 nd Defendants respectively) as follows:
(a) Special damages for:
i) Loss of income in the sum of Kshs. 18,900,000/- and
ii) Legal costs in the sum of Kshs. 2,346,000/-
iii) Interest on cash bail deposited in Court being Kshs. 356,912/-
(b) General and exemplary damages for malicious prosecution.
(c) Interest on (a) and (b) above at Court rates.
(d) Costs of this suit.
2. In his pleadings as shown in the Amended Plaint, the Plaintiff has stated that he was at all material times a customer of the 1 st Defendant where he operated bank account number 065000005699 at the 1 st Defendant’s KTDA Plaza Corporate Branch, Nairobi. That sometimes on or about 24.03.2015, the 1 st Defendant without any justifiable or reasonable cause, falsely and maliciously lodged a complaint against him with the Police Banking Fraud Investigation Unit (the Fraud Unit) based in Nairobi, in respect of a sum of Kenya Shillings Four Million and Five Hundred Thousand (Kshs. 4,500,000/-) alleged to have been stollen by the Plaintiff from the 1 st Defendant’s premises.
3. It was pleaded that, the Banking Fraud Unit undertook investigations on the matter, and subsequently preferred criminal charges against the Plaintiff and other persons not before the court. That, the Plaintiff was charged in court with the offence of stealing contrary to Section 268(1) as read with Section 275 of the Penal Code, in Milimani Criminal Case No. 535 of 2015 (the criminal case).
4. It is the Plaintiff’s averment that the criminal charges were preferred against him by the 2 nd Defendant, notwithstanding the fact that his co-accused had admitted to the facts relating to the charges and statements by a witness and customer of the 1 st Defendant respectively, regarding the Plaintiff’s innocence. That, the 1 st Defendant admitted to the fact that no monies were lost in relation to the criminal matter and that he was ultimately acquitted under Section 210 of the Criminal Procedure Code (CPC).
5. The Plaintiff stated, further, that prior to his arraignment in court, he was arrested and detained at Kileleshwa Police Station where he was later released on a cash bail of Kshs. 500,000/- upon entry of his plea of ‘not guilty.’ He pleased that his arrest and prosecution were actuated by malice on the part of the Defendants, as particularized under paragraph 20 of the Amended Plaint.
6. The Plaintiff has pleaded that during pendency of the criminal case, the 1 st Defendant proceeded to make false and defamatory statements against the Plaintiff and caused the same to be published in the Standard Newspaper dated 26.03.2015 and 17.05.2015. That as a consequence of the criminal proceedings against him, he suffered great prejudice, anguish and loss resulting from his inability to obtain the requisite Certificate of Good Conduct from the police needed for purposes of sustaining his procurement business and this as a result, he suffered loss of business and income for which he is claiming damages for loss of income during the intervening period, as pleaded under paragraph 19 of the Amended Plaint.
The Defence
7. the 1 st Defendant filed the statement of defence dated 8.09.2023 and amended on 21.03.2025 (the Amended Defence) in which it is stated that the Plaintiff was indeed its customer at all material times, operating the bank account particularized in the Amended Plaint.
8. The 1 st Defendant has stated that while it is true that it lodged a complaint with the Fraud Unit, it did not do so maliciously or without reasonable cause. That there was reasonable and probable cause warranting the complaint and investigations into the events leading up to the Plaintiff’s arrest and that in lodging the said complaint, it was merely acting within its statutory and fiduciary mandate in ensuring the protection of funds held by its respective customers.
9. The 1 st Defendant has stated that suspicions arose following the receipt of instructions in December, 2014, from a former employee of the 1 st Defendant named Mary Wamaitha Muriu directing another customer of the 1 st Defendant, Joel Mwaniki (the third party), to transfer funds to the tune of Kshs. 3,500,000/- from his account to that belonging to the Plaintiff. That subsequently, the third party received instructions to transfer an additional sum of Kshs. 1,000,000/- to the Plaintiff’s account sometime in May, 2015, giving a total sum of Kshs. 4,500,000/- that was remitted to the Plaintiff’s account.
10. The 1 st Defendant has averred that the third party reported the matter to the 1 st Defendant’s security team, thereby prompting investigations which revealed that the unlawful transactions undertaken above contravened its internal processes and constituted a breach of duty on the part of Mary Wamaitha, who was ultimately summarily dismissed from employment. That following the culmination of the investigations, a decision was made to have the Plaintiff charged, which decision lay solely with the discretion of the Office of the Director of Public Prosecutions (ODPP). That save for lodging the complaint, the 1 st Defendant had no role in the arrest, detention and prosecution of the Plaintiff and that the mere fact that the Plaintiff was acquitted in the criminal case does not constitute legal basis for bringing the claim for malicious prosecution against it.
11. The 1 st Defendant admitted to the publications referred to in the Amended Plaint but denied that the same was malicious or defamatory in nature and that, furthermore, the impugned publications were made several years prior to filing of the present suit.
12. The 1 st Defendant has further denied the particulars of malice and loss and damage attributed to it and averred that the Plaintiff is not, at all, entitled to the reliefs sought in the Amended Plaint and therefore the Plaintiff’s suit ought to be dismissed with costs to the 1 st Defendant.
13. The 2 nd Defendant filed a statement of defence dated 29.08.2023 and amended on 8.04.2024 (the 2 nd Defendant’s Amended Defence). He has stated that the investigations, arrest and prosecution of the Plaintiff were driven by reasonable and probable cause and that, the investigations and arrest undertaken against the Plaintiff were in line with the mandate and statutory duties of the Banking Fraud Unit, the particulars of which are laid out under paragraph 4 of the 2 nd Defendant’s Amended Defence.
14. The 2 nd Defendant has denied any attribution on the particulars of malice, loss and damage allegedly suffered by the Plaintiff and has averred that the criminal proceedings lodged against the Plaintiff were justified and were the result of the Plaintiff’s own actions.
15. Similarly, the 2 nd Defendant has denied the particulars of the reliefs sought in the Amended Plaint and sought dismissal of the Plaint with costs to the 2 nd Defendant.
Oral Evidence
16. The Plaintiff testified as PW1. He adopted his signed witness statement dated 20.05.2023 as his evidence-in-chief and produced his list and bundle of documents of like date as Pex.1 and Pex.2 respectively. I have read the Plaintiff’s witness statement and noted its contents.
17. The Plaintiff testified that at the time of the incident, he was engaged in business where he supplied stationery and related items to various government agencies. That he received a text alert on his phone that a sum of Kshs. 4,500,000/- had been deposited into his account, from a person unknown to him and without a prior request on his part. That he visited the 1 st Defendant to inquire the origin and nature of the deposit transaction. That he was directed to see Mary Wamaitha, a credit officer with the 1 st Defendant, who instructed him to withdraw the said funds and hand the same to her, which he did. He denied utilizing the deposited funds and stated that he had no business or financial dealings with any employee of the 1 st Defendant. That he was not interrogated by the 1 st Defendant employees on the matter. That, nevertheless, he was instructed to proceed to the Banking Fraud Unit where he recorded a statement, only to discover that he had been implicated.
18. He testified that he was arrested and arraignment in court on criminal charges related to matter. That the 1 st Defendant caused his photo and name to be published in the Standard Newspaper, accusing him of committing banking fraud. That, despite the fact that he was eventually acquitted of the criminal charges, the Plaintiff lost various business opportunities as clients were hesitant to give him business thereafter. That he was unable to continue with his business operations between March 2015 and his acquittal in 2018, thereby causing him to suffer loss of business.
19. In cross-examination, the Plaintiff stated that prior to the incident, he had received a Local Purchase Order (LPO) for the tender to supply of stationery to a government institution. That at the time, he did not have the required funds amounting to Kshs. 1,2500,000/- to finance the said tender. That he approached the 1 st Defendant at its premises at KTDA Plaza Branch to obtain financing. That he met Mary Wamaitha, a the credit officer with the 1 st Defendant at the time, who advised him to obtain security for the intended loan from a fellow customer of the 1 st Defendant. That the Plaintiff was therefore introduced to one Deborah Karanja, who agreed to advance the funds he required, at an interest rate of 20%. That Deborah therefore guaranteed him a sum of Kshs. 3,000,000/- and which sum was eventually deposited into his account.
20. It is the Plaintiff’s testimony that during the intervening period, he was able to obtain a separate soft loan from a friend. That nevertheless, a sum of Kshs. 4,500,000/- was further deposited into his account and he later came to learn that the deposit transaction was made by the third party, who is unknown to him. That he withdrew the deposited amount and handed it to Mary Wamaitha upon the latter’s advice, with the understanding that the same would be refunded to the third party.
21. He admitted to not calling Mary Wamaitha as his witness and testified on cross-examination that following his arrest on 25.03.2015, the impugned defamatory publications were made on 26.03.2015. He admitted to not filing the defamation case within one (1) year.
22. In further cross-examination, the Plaintiff stated that he did not have any evidence to show that he was unable to obtain government tenders or related work following his arrest and prosecution and that though he did not have bank statements indicating his monthly earnings, he had audited accounts which show the extent of his earnings and which constitute part of his exhibits.
23. The Plaintiff also stated that the costs incurred in legal and related fees during the course of the criminal case was given to him by friends and was not personally incurred by him. That nonetheless, he is yet to refund the said monies.
24. In further cross-examination, the Plaintiff testified that the investigations into the incident followed a formal report to the police and that the said investigations did not involve the police attached to the Banking Fraud Unit. That the Banking Fraud Unit did not act wrongly in taking part in the initial investigations of fraud. That he is also aware that funds were fraudulently deposited into his account but that the same were ultimately refunded to their rightful owner, namely the third party.
25. Gerald Muchangi Njagi who was PW2 , testified that he was responsible for preparing the Plaintiff’s financial accounts from the year 2011 to date, and opted to rely on its contents as his evidence-in-chief. On cross-examination, the witness testified that he is an accountant by profession and that he had worked with the Plaintiff since the year 2011. He admitted that the statements produced in court did not contain the requisite signatures.
26. Mercy Wanjiku Ndaita ( DW1 ) testified as 1 st Defendant’s witness. She adopted her witness statement dated 2.04.2025 as her evidence-in-chief, and produced the 1 st Defendant’s list and bundle of documents dated 25.08.2024 and 2.04.2025 as D. Exhibits 1 and 2 respectively. She testified that she works for the 1 st Defendant as a Branch Manager.
27. In cross-examination, the witness testified that she has worked for the 1 st Defendant since 2013 and that she never directly dealt with the Plaintiff or his account. That the 1 st Defendant received a complaint on 19.03.2015 from the third party, claiming that he had received instructions from Mary Wamaitha on 29.12.2024 to transfer or withdraw funds from his account to another account, namely the Plaintiff’s. That he did so, though erroneously.
28. DW1 stated that the Plaintiff is at fault for withdrawing the transferred amount and handing it to Mary Wamaitha, rather than requesting the 1 st Defendant to reverse the transaction. That consequently, Mary was summarily dismissed from the 1 st Defendant’s employment, on grounds of acting fraudulently and misadvising a customer. That the funds were ultimately refunded to the third party but not through the Plaintiff and that she did not participate in the criminal proceedings against the Plaintiff.
29. She stated in further cross-examination, that both Mary Wamaitha and the Plaintiff were implicated in relation to the fraudulent transaction. That, Mary, being a Credit Officer, had access to customers’ account details and that the matter was investigated by the Banking Fraud Unit following a report by the 1 st Defendant.
30. In re-examination, she stated that had the complaint not been made by the third party, the 1 st Defendant would not have had knowledge of the transaction.
31. Moses Kosgey Kipkorir, the Security and Investigative Manager of the 1 st Defendant, testified as DW2. He adopted his witness statement dated 25.08.2014 as his evidence in chief. He testified that the trail of evidence shows that upon receipt of the material funds, the Plaintiff withdrew them at intervals, but that he never sought a reversal of the transaction with the 1 st Defendant. That, the third party raised issue with the 1 st Defendant regarding the suspicious transaction, thereby resulting in the investigations and subsequent arrest and prosecution of the Plaintiff.
32. The witness further testified that the third party’s concerns were against the staff of the 1 st Defendant and not necessarily the Plaintiff personally. That the third party did not accuse the Plaintiff of fraud or deceit, according to his statement which constitutes part of the 1 st Defendant’s bundle of documents.
33. It is his testimony that he is aware of the criminal proceedings and outcome thereof. That his colleague reported the matter to the Banking Fraud Unit, following which the Plaintiff and Mary Wamaitha were implicated and that
34. In re-examination, the witness briefly stated that following a complaint regarding a particular account, it is common practice for the 1 st Defendant to investigate both the holder of the account and the nature of the transaction in question, marking the close of the 1 st Defendant’s case.
35. Josiah Njue Gichobi, a retired Senrior Sergeant of police, testified for the 2 nd Defendant, as DW3. He adopted his witness statement dated 3.11.2024 and produced Charge Sheet and covering report as well as bundle of documents and crime incident report as the 2 nd Defendant’s Exhibits 1, 2, 3 and 4 respectively. He testified that, at the material time, he was working at the Banking Fraud Unit and that he participated in the investigations into the matter concerning the transfer of Kshs. 4,500,000/- from an account belonging to the third party, to the Plaintiff’s account; both accounts being held with the 1 st Defendant.
36. He testified that from his investigations, he found out from the third party that the instructions to make the above transfer emanated from Mary Wamaitha and that no loan application was tendered to support the same. The witness stated that he was able to recover the note written by Mary, directing the third party to transfer the material funds. That the said note was subjected to forensic examination which yielded a positive result. That consequently, it was decided that the Plaintiff be charged in a criminal matter in relation to that transaction.
37. He testified that the instructions to charge the Plaintiff were given by his seniors and that he did not make a personal decision to prefer charges against him. That according to his investigations, the Plaintiff had not followed proper procedure upon receiving the material funds into his account but acted in ignorance and without exercising due diligence on his part and that he found the note written by Mary Wamaitha as constituting fraud.
38. According to the witness, the Plaintiff ought not to have complied with the instructions given by Mary, that he withdraw the material funds and hand them to her. That he instead ought to have informed the 1 st Defendant. That the material funds were refunded to the third party.
Parties’ Submissions
39. The Plaintiff’s submissions are anchored on the case of Mbowa v East Mengo District Administration (1972) EA 352, where the elements for malicious prosecution have been outlined. On whether the complaint and prosecution of the Plaintiff was without malicious and unjustifiable, it was submitted that the evidence tendered shows that the transfer of the material funds emanated from instructions given by Mary Wamaitha to the third party. That the Plaintiff had no part to play in the said transaction and that as soon as he became aware of it, he visited the 1 st Defendant to find out about the issue whereupon he was directed by Mary Wamaithat to withdraw the funds and hand over the same her. That he did not retain the funds or utilize them for personal gain and that he was found not guilty in the criminal case and acquitted.
40. He submitted that both the third party and Mary, by way of their respective statements, confirmed his non-participation in the funds transfer, and yet the 2 nd Defendant went on to arrest and charge him with a criminal offence. That similarly, the 1 st Defendant’s action of lodging a complaint against the Plaintiff, notwithstanding the position taken by the third party, was vindictive in nature and that flowing from the foregoing, it can only be deduced that there was malice on the part of the Defendants herein.
41. The Plaintiff relied on the case of James Karuga Kiiru v Joseph Mwamburi & 2 others [2001] KECA 354 (KLR) where the Court of Appeal held that:
“To prosecute a person is not prima facie tortious, but to do so dishonestly or unreasonably is. Malicious prosecution thus differs from wrongful arrest and detention, in that the onus of proving that the prosecutor did not act honestly or reasonably, lies on the person prosecuted.”
42. It is the Plaintiff’s further submission that the third party clearly testified in the criminal case that he and the Plaintiff were previously unknown to one another and had no dealings between themselves. That, the third party had no issue, legal or otherwise, against the Plaintiff and that in the circumstances, there was no legal or reasonable basis to prefer criminal charges against the Plaintiff.
43. He submitted that sufficient evidence has been tendered to support the averments of loss suffered as a result of the malicious prosecution against him by the Defendants herein. That in the circumstances, he is entitled to the various reliefs sought in the Amended Plaint.
44. The 1 st Defendant relied on the case of Vastu Company Limited v Mwangi [2022] KEHC 3006 (KLR), in support of his submissions that much as the Plaintiff was acquitted in the criminal case, his claim for malicious prosecution has not been proved to the required standard and cannot therefore be sustained against the 1 st Defendant.
45. The 1 st Defendant further relied on the case of Central Bank of Kenya v Ndege & another [2026] KEHC 1844 (KLR) where the court laid out the elements that ought to be proved in order for a claim founded on malicious prosecution to succeed. It was submitted that the element of malice has not been established against it. That, the 1 st Defendant, being a financial institution, acted within its legal duty by reporting the suspected transaction to the Banking Fraud Unit, following the complaint lodged by the third party concerning the funds in his account. That independent investigations were carried out into the incident, before the decision to prefer criminal charges against the Plaintiff was arrived at. That in any event, the 1 st Defendant merely reported the matter to the police but was not responsible for the arrest and prosecution of the Plaintiff since the powers to prosecute lie with the ODPP and that it is not in dispute that the Plaintiff received the material funds and yet no evidence was tendered to demonstrate that he refunded the same to the third party.
46. It is the 1 st Defendant’s submission that, the element of reasonable and probable cause has been demonstrated, with reliance being placed on, inter alia , the case of Mbuvi v Astral Aviation Company Limited & 2 others [2023] KEHC 21086 (KLR) where the court acknowledged that:
“...Reasonable and probable cause is an honest belief in the guilt of the accused based upon a full conviction founded upon reasonable grounds of the existence of a state of circumstances, which assuming them to be true, would reasonably lead an ordinary prudent and cautious man placed in the position of the accuser to the conclusion that the person charged was probably guilty of the crime imputed…”
47. It was submitted that no evidence has been tendered to demonstrate that the 1 st Defendant acted maliciously towards the Plaintiff through abusing or influencing the criminal case in any manner and that, both the Plaintiff and Mary Wamaitha were prosecuted in the criminal case. The 1 st Defendant has urged this court to be guided by the earlier referenced case of Vastu Company Limited v Mwangi in which the court held that allegations of malice and ill-will must be supported by evidence by way of a plaintiff proving that the relevant criminal proceedings were either manipulated or abused, or that the criminal process was selective in nature.
48. The 1 st Defendant contended that the claim for defamation brought by the Plaintiff is fatally defective for being both time-barred and for the Plaintiff’s failure to sue the relevant media company and that, the Plaintiff did not set out the particulars of defamation in his pleadings or establish the pertinent elements in ensuring the success of his claim for defamation.
49. On the issue of the reliefs sought, it is the 1 st Defendant’s submission that the Plaintiff, having failed to prove any of the damages being sought, is not entitled to any award thereon. Moreover, regarding the audit report tendered, it is the 1 st Defendant’s submission that the same cannot be relied upon in claiming damages since it was unsigned and was purportedly tendered by an unverified expert. The 1 st Defendant relied on the decision in Mugo Mungai & 4 others v Official Receiver & Provisional Liguidator (Capital Finance Limited and Pioneer) & 2 others [2019] KEHC 11476 (KLR) where the court declined to allow the production of an unsigned document as evidence, reasoning that the same lacked probative value.
50. The 1 st Defendant urged this court to dismiss the Plaintiff’s suit with costs.
51. The 2 nd Defendant also filed written submissions. Whilst citing the decision in George Masinde Murunga v Attorney-General [1979] KEHC 34 (KLR) where the court laid out the ingredients pertinent to a claim of this nature, the 2 nd Defendant contended that while the criminal proceedings in question terminated in favour of the Plaintiff, the elements of absence of reasonable or probable cause and malice respectively, have not been established.
52. The 2 nd Defendant has contended that the Banking Fraud Unit, being a specialized unit under the Directorate of Criminal Investigations (DCI), acted within its statutory mandate upon receiving a complaint relating to fraud, from the 1 st Defendant. That it has not been demonstrated that the Banking Fraud Unit acted outside its mandate or that its decision was motivated by malice.
53. The 2 nd Defendant cited the decision in Monari & another v Commissioner of Police & another; Abubakar & another (Interested Parties) [2012] KEHC 4595 (KLR) where it was held that the duty to investigate complaints rests with the police and that upon them preferring charges, the mandate shifts to the trial court to hear the matter and make a finding thereon. That as long as it is shown that the charges and prosecution were undertaken in a reasonable manner, the High Court will be hesitant to intervene and that the arrest and prosecution of the Plaintiff were instituted with reasonable and probable cause, as defined in the case of Kagane v AG (1969) EA 643 and therefore, the burden rests with the Plaintiff, to prove otherwise.
54. The 2 nd Defendant has submitted that the Plaintiff is not entitled to the reliefs sought in the absence of any supporting evidence. That the Plaintiff has not proved his claim on special damages in line with the legal principle that special damages must both be specifically pleaded and strictly proved, as echoed by the Court of Appeal in the case of Hahn v Singh [1985] KECA 129 (KLR) as well as the case of Douglas Odhiambo Apel & another v Telkom Kenya Limited [2014] KECA 868 (KLR). The 2 nd Defendant has urged this court to dismiss the Plaintiff’s case with costs.
Analysis and determination
55. I have considered the pleadings filed and evidence tendered at the trial, as well as the rival submissions and authorities cited by the parties. I am aware that the 1 st Defendant has raised the issue that the Plaintiff’s claim on defamation was brought outside the time allowed to file such a claim. However, upon my perusal of the record, I have noted that while the Plaintiff had initially founded his claim on both the torts of defamation and malicious prosecution, it is evident that by way of the amendments to his plaint, he opted to abandon the claim for defamation and reliefs sought in respect of that cause of action. It would appear that any subsequent reference made to the impugned publications is purely within the context of the claim for malicious prosecution and not necessarily in pursuit of a separate claim for defamation.
56. Moreover, the Plaintiff admitted to the court that the initial claim for defamation was brought outside the statutory timelines and there is nothing on the record to indicate that the said claim was being pursued at the trial stage. It is therefore not necessary to proceed with the determination of that issue.
57. To my mind, the following issues arise for determination:
(i) Whether the Plaintiff has made a case for malicious prosecution against the 1 st and 2 nd Defendants;
(ii) Whether the Plaintiff is entitled to the reliefs sought in the amended plaint.
58. On the first issue, I have considered the definition of the term “ malicious prosecution” in the case of Stephen Gachau Githaiga & another v Attorney General [2015] eKLR, where the court in that case defined that term as follows:
“Malicious prosecution is an action for damages brought by one against whom a civil suit or criminal proceeding has been unsuccessfully commenced without Probable Cause and for a purpose other than that of bringing the alleged offender to justice…Malicious prosecution is an intentional tort designed to provide redress for losses flowing from an unjustified prosecution.”
59. A party coming to court claiming malicious prosecution must establish the following elements, as articulated in the case of Kagane v Attorney General (1969) EA 643 as cited by the court in Kenya Power & Lighting Co Ltd v Maurice Otieno Odeyo & 2 others [2017] eKLR as hereunder:
“a) The plaintiff must show that the prosecution was instituted by the defendant; or by someone for whose acts he is responsible;
b) That the prosecution terminated in the plaintiff's favour;
c) That the prosecution was instituted without reasonable and probable cause; and
d) That the prosecution was actuated by malice.”
60. For the Plaintiff to succeed in this case and obtain the reliefs he is seeking from this court, he must establish the presence of the above ingredients collectively.
61. On whether the prosecution was instituted by the Defendants or any of them, the evidence shows that there is no dispute that the arrest and prosecution of the Plaintiff were instituted by the police and the ODPP, presently represented by the 2 nd Defendant in these civil proceedings, who were acting on a report made by the 1 st Defendant. The record shows that the Plaintiff and Mary Wamaitha, were charged with the offence of stealing contrary to Section 268(1) as read with Section 275 of the Penal Code, in the criminal case as shown in the copies of the charge sheet tendered in court in the respective parties’ bundle of docum
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