Background
1. This appeal arises from the judgment of the Kisumu CMCC No. 82 of 2017, delivered on 6th October 2021 by Hon. R.K. Ondieki, Senior Principal Magistrate. The dispute originated from a claim filed by New Kenya Co-operative Creameries Limited (the Respondent) against Jitu Dhokia T/A Sparco Motors (the Appellant) concerning the continued detention of Motor Vehicle Registration No. KAV 351E, which had been taken to the Appellant’s garage for repairs.
2. The Respondent in the lower court filed a suit seeking several remedies, including the release of the detained vehicle, payment of Kshs. 7,915,822.65 as special damages, general damages, and an award of costs and interest. It was the Respondent’s case that its insurer, African Merchant Assurance Company Limited (AMACO), had instructed the Appellant to repair the vehicle, setting a maximum repair cost of Kshs. 750,000. Upon completion of the repairs, AMACO confirmed full payment and issued a release letter on 15th January 2016, authorizing the Appellant to return the vehicle to the Respondent. However, the Appellant declined to release the vehicle, citing outstanding debts allegedly owed to the Appellants by AMACO, which debts, according to the Respondent, were unrelated to the specific repair contract for the motor vehicle in question.
3. The Respondent contended that the Appellant’s actions were unlawful, as the Appellant had no legal right to detain the vehicle after receiving full payment for the agreed repair costs. Due to the prolonged detention of the vehicle, the Respondent pleaded that it had to hire alternative transport services between February 2016 and August 2016 at an expense of Kshs. 7,915,822.65, for which it claimed special damages. The Respondent also claimed general damages, costs, and interest.
4. On 6th October 2021, the trial court delivered its judgment and found in favor of the Respondent. The court ordered the release of Motor Vehicle KAV 351E, awarded Kshs. 7,915,822.65 in special damages, nominal damages of Kshs. 500,000, and directed the Appellant to bear the costs of the suit, and interest until payment in full.
5. Aggrieved by the trial court’s decision, the Appellant filed the present appeal, challenging the trial court’s findings on the grounds that:
i. The trial magistrate grossly misdirected himself in treating the evidence and submissions on mitigation of loss of user superficially and consequently coming to a wrong conclusion on the same.
ii. The trial magistrate did not, in the alternative, consider or sufficiently consider that the payment received from the Respondent's insurer, being African Merchant Assurance Company (AMACO), was for payment of other debts owed to the Appellant and not for the vehicle owned by the Respondent.
iii. The trial magistrate erred by failing to note that there was no contract produced in any court for lease of motor vehicle between the Respondent and PW2s company, Semberia Enterprises Limited, and thus consequently coming to a wrong conclusion on the same.
iv. The trial magistrate misdirected himself in ignoring the principles applicable and the relevant authorities cited in the written submissions presented and filed by the Appellant.
v. The trial magistrate erred in not sufficiently taking into account all the evidence presented before him in totality and in particular the evidence presented on behalf of the Appellant.
vi. The trial magistrate erred in failing to hold that the Respondent had failed to prove loss of user on the part of the Appellant, while the onus of proof lay with the Respondent and AMACO.
vii. The trial magistrate proceeded on wrong principles (if any) when assessing the damages to be awarded to the Respondent and failed to apply precedents and tenets of law applicable.
viii. The trial magistrate failed to apply judicially and to adequately evaluate the evidence and exhibits tendered and thereby arrived at a decision unsustainable in law.
6. The appeal was canvassed by way of written submissions. The Appellant’s submissions are dated 7th March 2024, whereas the Respondent’s submissions are dated 11th April 2024.
The Appellant’s submissions
7. The Appellant submitted that the trial court erred in awarding Kshs. 7,915,822.65 as special damages for loss of user, arguing that the Respondent failed to mitigate its losses and that the awarded amount was excessive and unsupported by sufficient evidence. The Appellant maintained that the burden of proving the contract for alternative transport between the Respondent and Semberia Enterprises Limited lay with the Respondent, a burden, the Respondent failed to discharge.
8. The Appellant further argued that the Respondent failed to prove that the Kshs. 750,000 allegedly paid by AMACO was ever received by the Appellant. according to the Appellant, the trial court failed to appreciate that the payments made by AMACO during the period in question were for other pre-existing debts between the Appellant and AMACO.
9. The Appellant maintained that it was entitled to retain the vehicle under a right of lien until all outstanding debts were cleared, and that the trial court dismissed this defense without fully considering the prolonged business relationship between the Appellant and AMACO.
10. Additionally, the Appellant submitted that the Respondent failed to mitigate its losses, arguing that instead of settling the disputed repair costs, the Respondent chose to incur exorbitant truck hire charges far exceeding the value of the detained vehicle. The Appellant contended that this decision by the Respondent was unreasonable and should not be a basis to justify the claim for special damages.
11. The Appellant also submitted that there was no evidence proving that it had received a formal instruction from AMACO to release the vehicle. The only document presented was an email from AMACO dated 8th June 2016, which merely stated that payments had been made but did not contain a specific authorization for the vehicle’s release. The Appellant argued that this omission demonstrated that the Respondent failed to discharge its evidentiary burden.
12. The Appellant therefore urged this Court to allow this appeal, dismiss the Respondent’s claim for special damages, overturn the order for the release of the vehicle, and award the costs of both the appeal and the trial court proceedings to the Appellant.
Respondent’s submissions
13. The Respondent, in opposing the appeal, submitted that the trial court correctly found in its favor, and that the decision by the trial court was based on sound legal reasoning and clear evidence. It submitted that the Appellant had no valid reason to retain the suit motor vehicle (KAV 351E) after AMACO, the Respondent’s insurer, had fully paid the agreed repair cost of Kshs. 750,000 and issued a release letter on 15th January 2016. The Respondent maintained that the Appellant’s claim that the payment by AMACO was for other outstanding debts was baseless since the contract between AMACO and the Appellant clearly capped the repair costs at Kshs. 750,000, which was fully settled.
14. The Respondent further argued that the Appellant’s claim of exercising a lien over the subject vehicle was legally flawed since a lien only applies where payment for a specific service remains outstanding. The Respondent contended that since full payment had been made for the repairs, the Appellant had no legal justification to withhold the vehicle. Additionally, the Respondent pointed out that the vehicle belonged to it, not AMACO, and that any disputes between the Appellant and AMACO regarding unrelated debts could not be used as a basis for detaining the vehicle.
15. The Respondent submitted that the award of Kshs. 7,915,822.65 for loss of user was properly made, as it was fully supported by cheques, invoices, and bank statements proving that it hired Semberia Enterprises Limited to transport goods between February 2016 and August 2016 due to the wrongful detention of its vehicle. The Respondent asserted that it made reasonable efforts to mitigate its losses, as it:
• Waited until February 2016 before hiring alternative transport, despite the vehicle being due for release in January 2016.
• Limited its claim to only seven months of transport costs, even though the vehicle remained detained for five years.
• Notified the Appellant in advance of the expected losses in a letter dated 11th February 2016.
16. The Respondent also countered the Appellant’s argument that other debts then owed by AMACO to the Appellant justified withholding the vehicle. According to the Respondent, the Appellant’s contract was with AMACO, not the Respondent, and that if there were any outstanding debts, then the Appellant should have pursued AMACO separately instead of unlawfully detaining the Respondent’s vehicle. The Respondent maintained that the trial court, therefore, correctly dismissed the Appellant’s defense of lien and alleged outstanding debts.
17. Additionally, the Respondent argued that the award of Kshs. 500,000 in nominal damages was justified, given the inconvenience and disruption caused to its business due to the vehicle’s unlawful detention. The trial court properly exercised its discretion in awarding damages, and there was no basis for appellate interference.
18. In conclusion, the Respondent prayed that the appeal be dismissed in its entirety, that the award of Kshs. 7,915,822.65 for loss of user and Kshs. 500,000 in nominal damages be upheld, and that the order for the release of the motor vehicle be affirmed. The Respondent also sought costs of the appeal and trial court proceedings.
Analysis And Determination
19. This being a first appeal, the role of this Court is to reconsider the evidence, evaluate it itself and draw its own conclusions, bearing in mind that it did not hear nor seen the witnesses testifying, as was well articulated in Selle & Another v. Associated Motor Boat Co. Ltd & Others [1968] EA 123, where the Court of Appeal stated that:
“An appeal to this court is by way of retrial, and the principles upon which this court acts in such an appeal are well settled. Briefly put, they are that this court must reconsider the evidence, evaluate it itself and draw its own conclusions though it should always bear in mind that it has neither seen nor heard the witnesses and should make due allowance in this respect.”
20. This court will therefore review the evidence afresh, evaluate the findings of the trial magistrate, and determine whether they were properly grounded in law and fact. However, the Court is equally aware that it should not lightly interfere with the discretion exercised by a trial court unless it is demonstrated that such discretion was exercised unjudicially or based on wrong principles. This was succinctly stated in Mbogo & Another v. Shah [1968] EA 93, where the court held:
“A court of appeal should not interfere with the exercise of discretion of a judge unless it is satisfied that the judge in exercising his discretion has misdirected himself in some matter and as a result arrived at a wrong decision, or unless it is manifest from the case as a whole that the judge has been clearly wrong in the exercise of his discretion and that as a result there has been misjustice.”
21. With these guiding principles in mind and having carefully considered the appeal, the trial court’s proceedings, the submissions by both parties, and the applicable legal principles, this court must now determine -
i. whether the Respondent, in the lower court, proved its case against the Appellant to the required standards
ii. Whether the trial court erred in awarding Kshs. 7,915,822.65 as special damages for loss of user.
iii. Whether the trial court properly awarded Kshs. 500,000 in nominal damages
22. From the pleadings in the lower court, it is not disputed that the Appellant herein was vide a letter dated 28th October 2015, instructed by the Respondent’s Insurance Company, African Merchants Insurance Co Ltd. (AMACO), to carry out repairs on motor vehicle registration No. KAV 351E, at an agreed sum of Kshs. 750,000/-.
23. The Respondent in the lower court alleged that upon completion of the repairs, AMACO paid to the Appellant the agreed sum of Kshs. 750,000/- for the repair services. That upon the repair costs having been fully settled, the insurance company, vide its letter of 15th January 2016, instructed the Appellant to release the said motor vehicle to the Respondent. That despite this, the Appellant unlawfully failed and/or refused to release the subject motor vehicle, necessitating the lower court suit.
24. The Respondent argued that the failure by the Appellant to release the motor vehicle despite the repair costs having been fully settled by the Respondent’s insurer was not only unlawful, but also led to the Respondent incurring a sum of Kshs. 7,915,822.65 in hire costs for alternative transport.
25. The Appellant, on its part, while not disputing that the subject motor vehicle was taken to them for repairs at the instance of the Respondent’s insurers at an agreed fee of Kshs. 750,000/-, maintained that the insurance company had not settled the fees, justifying their continued detention of the vehicle. According to the Appellant, any payments that were made Respondent’s insurer during the period in question were applied towards settling the insurance company’s debt with the Appellant, which then still stood at Kshs. 1,826,944.
26. From the above, it is the view of this Court that a determination of whether the Respondent proved its case against the Appellant at trial rests solely on the question whether the Respondent proved to the required standards that AMACO, having instructed the Appellant to undertake the repairs, actually settled the agreed repair fee of Kshs. 750,000/- in respect of the Respondent’s said motor vehicle.
27. With such diametrically opposing positions taken by the parties, the rules of evidence on the burden and standard of proof came into play. It is settled law that the burden of proof is on the party alleging. Section 107 of the Evidence Act sets a foundation and categorically provides that:
“Whoever desires any court to give a judgment as to any legal right or liability depends on the existence of facts which he asserts must prove those facts."
28. In Anne Wambui Ndiritu vs Joseph Kiprono Ropkoi & Another [2005] 1 EA 334, the Court of Appeal held that:-
“As a general proposition under Section 107 (1) of the Evidence Act, Cap 80, the legal burden of proof lies upon the party who invokes the aid of the law and substantially asserts the affirmative of the issue. There is however the evidential burden that is case upon any party the burden of proving any particular fact which he desires the court to believe in its existence which is captured in Sections 109 and 112 of the Act.”
29. The burden of proof in civil matters, as is the case herein, the standard of proof is always on a balance of probabilities. This degree of proof is well enunciated in the case of Miller vs Minister of Pensions [1947] cited with approval in D.T. Dobie Company (K) Limited vs Wanyonyi Wafula Chabukati [2014] eKLR, where the court stated: -
“That degree is well settled. It must carry a reasonable degree of probability, but not so high as is required in a criminal case. If the evidence is such that the tribunal can say ‘we think it more probable than not’, thus proof on a balance or prepodence of probabilities means a win however narrow. A draw is not enough. So, in any case in which the tribunal cannot decide one way or the other which evidence to accept, where both parties’ explanations are equally unconvincing the party bearing the burden of proof will lose, because the requisite standard will not have been attained.”
30. In the present appeal, from the proceedings, I note that the Respondent, in support of its case, called two witnesses. PW1 (NYATHIRA MUTHUMA), an employee of the Respondent, who testified that the subject motor vehicle was taken by the Respondent to the Appellant’s premises for repairs following instructions dated 28th October 2015 from the Respondent’s insurer, AMACO Insurance Co Ltd. According to the witness, payments to the Appellant were made by the insurance company vide two (2) cheques of equal amount, being Cheque No. 504600 and Cheque No. 504559, totaling to Kshs 750,000/-. The witness also produced in evidence a copy of a letter dated 21st July 2016 and an email correspondence of 3rd August 2016 from the Respondent’s insurer, indicating that the repair fees had been settled, and that the Respondent was entitled to collect their motor vehicle from the Appellant’s premises. PW2, DANIEL K. SARONEI, testified that the Respondent hired transport services from his company, SEMDERICA ENTERPRISES, and paid a sum of Kshs. 7.9 million in that regard.
31. Having carefully reviewed the evidence adduced by the Respondent, I am not satisfied that the Respondent proved to the required standards that the amount of Kshs. 750,000/- paid by its insurer, AMACO, to the Appellant, actually related to the motor vehicle registration No. KAV 351E, and to the other debts owed by the AMACO to the Appellant. In his evidence before the trial court, DW1 – JITENDRA DHOKIA told the court the amount of Kshs. 750,000/-, which the Respondent alleged was towards the fee for repair of the subject motor vehicle, was indeed received from AMACO, but was for the settlement of other outstanding debts, then owed by the insurance company to the Appellant. At this point, it was in my view, incumbent upon the Respondent to adduce evidence controverting the Appellant’s evidence. The Respondent needed to call evidence from its insurer demonstrating that there were no other outstanding debts from the insurance to company to the Appellant, or that if there were any such debts, then the Appellant and the insurance company had expressly or impliedly agreed that the said payment of Kshs. 750,000/- from the insurance company to the Appellant was to be exclusively used towards the settlement of the repair costs of the Respondent’s said motor vehicle.
32. It is settled law that whereas the legal burden of proof is static and rests on the Claimant throughout the trial, the evidential burden of proof may shift to the other party(ies) depending on the nature and effect of evidence adduced by the Claimant. This legal principle is stated in Halsbury’s Laws of England, 4th edition, Volume 17 at paras 13 and 14 as follows: -
“The legal burden is the burden of proof which remains constant throughout a trial; it is the burden of establishing the facts and contentions which will support a party’s case. If at the conclusion of the trial he had failed to establish these to the appropriate standard, he will lose. The legal burden of proof normally rests upon the party desiring the court to take action; thus a claimant must satisfy the court or tribunal that the conditions which entitle him to an award have been satisfied. In respect of a particular allegation, the burden lies upon the party for whom substantiation of that particular allegation is an essential of his case. There may therefore be separate burdens in a case with separate issues.
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 proceedings in the lower court, it is evident that the Respondent, for some unexplained reason chose not to join the insurance company to the proceedings, neither did they call any witness from the insurance company in support of their case.
34. Additionally, the fact that the insurance company chose not to tender any evidence at trial despite having been joined to these proceedings as a third party at the instance of the Appellant, in my view, makes the assertions/evidence by the Appellant that the insurance company, was at the time indebted to it, more credible.
35. The question then would be, if the insurance company was at the time relevant to this case, indebted to the Appellant, would the Appellant be faulted for failure to apply the Kshs. 750,000/- received from the insurance company towards the repair costs for the Respondent’s motor vehicle in question? I do not think so. There was no legal obligation (and none was shown by the Respondent) compelling the Appellant to apply the payment exclusively towards the repair costs of the Respondent’s vehicle.
36. In view of the insurance company’s then indebtedness to the Appellant, the mere fact that it wrote to the Appellant to release the motor vehicle to the Respondent (even assuming the letter was actually received by the Appellant), was not in my view, reason enough to fault the Appellant’s action of detaining the suit motor vehicle until repair costs were settled by the insurance company.
37. The insurance contract pursuant to which the subject motor vehicle was repaired by the Appellant was exclusively between the Appellant and the Respondent’s insurer, AMACO. The insurance company had a duty, not only to ensure that the Appellant’s repair costs are settled as per the contract, but also that the Respondent’s motor vehicle is released back to them. Failure to do either, in my view, makes them liable under the contract. The fact that the Respondent did not take any legal action against its insurer, coupled with the insurer’s failure to participate in the proceedings despite having been joined as a third party, in my view, makes the Respondent’s case against the Appellant less credible.
38. In the premises, I find that the Respondent did not, at trial, prove its case against the Appellant to the required standards.
39. Having found that the trial court erred in finding the Appellant liable for wrongful detention of the subject motor vehicle, it is equally the finding of this Court that the damages, both special and nominal, awarded by the trial court were equally not deserved, and were therefore erroneous. The same are hereby set aside.
Disposition
40. Drawing from the above analysis, the final orders of this Court are as follows; -
i. The appeal herein succeeds and is hereby allowed.
ii. The judgment of the trial court is hereby set aside in its entirety and substituted with the judgment of this court dismissing the Respondent's suit with costs.
iii. Costs of this appeal is hereby awarded to the Appellant.
41. It is so ordered.
SIGNED, DATED, and DELIVERED IN VIRTUAL COURT
THIS 24TH DAY OF APRIL 2025
ADO MOSES
JUDGE
In the presence of:
Moses – Court Assistant.
N/A – for Appellant
N/A – for Respondent