Andrew Peter Ngirichi & another v Wanje Masha Wanje [2015] KECA 525 (KLR)
The bottom line
#The Court of Appeal upheld a Kshs 8.2 million award against a businessman who kept cars paid for by someone else, but cut the interest owed.
What this practically means
#Executive summary
#Questions the Court framed
#The issues the Court set itself to decide, in its own words.
- 1.Whether the respondent's suit was vitiated by lack of a resolution from the company, either to purchase the motor vehicles or to institute the suit
- 2.Whether the respondent proved on a balance of probabilities that he purchased the 5 motor vehicles and paid the purchase price and customs duty
- 3.Whether the learned judge erred in denying the 2nd appellant costs despite dismissing the suit against her
- 4.From what date interest was payable on the amount awarded
Key legal issues
#Capacity to sue without a company resolution
The respondent sued in his own name as beneficial owner claiming payment of the purchase price; no company resolution was necessary and the Macaura rule on shareholder lack of title to company assets did not apply
The court distinguished between a resolution to purchase vehicles and a resolution authorising a suit on the company's behalf. Reading the pleadings holistically, the respondent claimed the money he personally paid, not company property. The vehicles were never registered in the company's name. Macaura and The Maritime Trader state the law correctly but have no application on these facts.
Proof of purchase of the motor vehicles
The respondent proved on a balance of probabilities that he paid the purchase price and customs duty; the 1st appellant's invoices were not proof of payment and his contradictory explanations on the duty payments destroyed his credibility
The respondent produced bank statements showing withdrawals of Kshs 2 million and Kshs 4 million, payment to RwandaAir, and bankers cheques for customs duty. The 1st appellant gave contradictory accounts of the Kshs 2,400,392 and produced no evidence of his Euro Account. The trial judge's adverse credibility finding on demeanor could not be disturbed.
Costs where suit is dismissed against a defendant
The refusal to award the 2nd appellant costs was a judicious exercise of discretion given her role in the transfers and the respondent's legitimate grounds for joining her
Vehicles had been transferred to the 2nd appellant's name and then to third parties, defeating the respondent's original claim for return. Costs follow the event under the proviso to section 27 of the Civil Procedure Act unless the judge gives good reason; the judge's discretion was not exercised injudiciously on the facts and history of the matter.
Award of interest from a date before suit
Courts have discretion under section 26(1) to award interest ante-dating the suit, but here interest was properly awarded only from the date of the High Court judgment because the amount due was first determined then
Relying on Shah v Guilders International Bank, interest may cover the period before suit, suit to judgment, and judgment to payment. However, where the quantum was not ascertainable until judgment, ante-dating interest is inappropriate. The Court of Appeal varied the interest start date from 3rd June 2011 to 5th March 2015.
Legal principles established
#- In a first appeal from the High Court's original jurisdiction, the Court of Appeal must re-evaluate the entire evidence but defer to trial court findings based on witness credibility and demeanor
- A finding that a company did not pass a resolution to purchase property goes only to the strength of the claimant's case; only a suit filed in the company's name without the necessary resolution implicates the competence of the suit
- An invoice is not evidence of payment; it is issued where an order for supply of goods has been made but payment is not yet made
- Under section 26(1) of the Civil Procedure Act the court has discretion to award interest from a date before the filing of the suit, but where the amount due was not determined until judgment, interest ought to run from the date of judgment
- A discretionary decision as to costs is unimpeachable on appeal unless the judge took into account irrelevant or non-existent matters
Court orders
#- 1.The appeal is dismissed except in respect of the order on interest
- 2.The amount awarded to the respondent shall attract interest with effect from the date of the judgment of the High Court (5th March 2015) rather than 3rd June 2011
- 3.The respondent shall have costs in this Court and in the High Court
The bench
#One judgment of the whole court — no separate or dissenting opinions.
- On appeal from
- High Court of Kenya at Mombasa
- HCCC No. 638 of 2011
- Jurisdiction invoked
- First appeal from the High Court in exercise of its original jurisdiction under the Court of Appeal's appellate jurisdiction
Relief refused
#Setting aside the High Court award of Kshs 8,203,089 against the 1st appellant
The respondent proved on a balance of probabilities that he provided the purchase price and customs duty; the lack of a company resolution did not defeat the claim
The 2nd appellant's claim for costs after dismissal of the suit against her
The respondent had legitimate grounds to join her; she was not entirely blameless as vehicles had been registered in her name before transfer to third parties
Costs
The respondent shall have costs in this Court and in the High Court
Quotable passages
#Verbatim from the judgment, each located to the page it appears on in the official PDF — so these can be cited and checked directly.
In an appeal like the one before us arising from a judgment of the High Court in the exercise of its original jurisdiction, we are obliged to re-evaluate the entire evidence and come to our own independent conclusions.
A finding that the company had not passed such a resolution goes only to the strength of the appellant's case; it does not raise issues of locus standi or render the suit incompetent
an invoice is not evidence of payment because its is given in cases where an order for supply of goods has been made but payment is not yet made
This is a finding on the demeanor and credibility of a witness by the trial court which this Court cannot interfere with unless it is demonstrated that the finding was not supported by evidence or was otherwise plainly wrong.
Ultimately, save for the order that we make that the amount awarded to the respondent shall attract interest with effect from the date of the judgment of the High Court, this appeal is devoid of merit and the same is hereby dismissed. The respondent shall have costs in this Court and in the High Court. It is so ordered.
Issues in the judgment
#The judgment inconsistently records the amount due: the decree figure is stated as Kshs 8,203,089 in the decretal description but Kshs 8,203,098 in the appellants' submissions
The customs duty figures differ slightly within the judgment: Kshs 2,401,592.00 in the pleadings narrative versus Kshs 2,400,392 in the evidence narrative
Key timeline
#Practical implications
#Frequently asked questions
#Cite this brief
#Cite this brief
Caselaw, "Andrew Peter Ngirichi & another v Wanje Masha Wanje [2015] KECA 525 (KLR)", Case Analysis (2015). Civil Appeal No. 17 of 2015. Source: https://new.kenyalaw.org/akn/ke/judgment/keca/2015/525/eng@2015-07-17
Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.