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Court of AppealDismissedCivil Appeal (Nairobi)· [2014] KECA 591 (KLR)

Muthami v Bank of Baroda (Civil Appeal 21 of 2006) [2014] KECA 591 (KLR)

Court of Appeal of Kenya
23 May 2014
3,666 words in judgment
View original judgmentRead on Kenya Law Watch case
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The bottom line

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The Court of Appeal dismissed a Kshs. 57 million claim against Bank of Baroda because the buyer never testified and his father's power of attorney gave him no rights under the contract.

What this practically means

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Executive summary

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This was a first appeal to the Court of Appeal against the judgment of Kasango, J. delivered on 25th July 2005 in Nairobi HCCC No. 91 of 2004, dismissing the appellant's claim for special damages of Kshs. 57,622,844 and general damages. The claim arose from the respondent bank's statutory power of sale of property in Eastleigh, Nairobi to the appellant for Kshs. 15 million, in flagrant disobedience of a Court of Appeal order restraining disposal pending HCCC No. 1857 of 2000. The High Court had cancelled the conveyance, the property reverted to the original owner, and the purchase price was refunded. At trial, the appellant did not testify; his father, holding a general power of attorney, gave evidence that he, not the appellant, had purchased and paid for the property in his son's name. The Court of Appeal identified one broad issue: whether the appellant proved his claim. Reiterating the doctrine of privity of contract from Tweedle v Atkinson, Halsbury's Laws and its own decision in Aineah Liluyani Njirah, the Court held the father was a third party who had not brought himself within the exceptions to privity, and that the power of attorney vested no contractual rights in him. Applying Selle v Associated Motor Boat Company Ltd, Galaxy Paints v Falcon Guards and Mwanasokoni v Kenya Bus Services, the Court found the evidence did not flow from the pleadings and affirmed the judgment. The appeal was dismissed with costs to the respondent.

Key legal issues

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01

Privity of contract and locus standi of the appellant's father

Holding

The contract was between the appellant and the respondent; the appellant's father was a third party who did not establish any of the recognized exceptions to privity (collateral contract, agency, trust, or express/implied benefit), and the power of attorney conferred no rights under the agreement

Reasoning

The Court reviewed the common law doctrine of privity as stated in Tweedle v Atkinson and Halsbury's Laws, and this Court's decision in Aineah Liluyani Njirah v Aga Khan Health Services on express versus implied third-party benefits. The witness neither negotiated as agent nor established a trust or collateral contract. The power of attorney authorized him only to give evidence, not to claim under the contract.

p. 7
02

Proof of the claim and consistency of evidence with pleadings

Holding

The appellant failed to prove his claim for special and general damages; his witness substituted himself for the appellant, and the evidence did not follow the pleadings

Reasoning

The plaint pleaded an agreement between the appellant and the respondent, but the appellant's sole witness testified that he himself purchased and paid for the property in his son's name. The Court found the witness uncertain whether he was a witness or a claimant, and his application to be joined as plaintiff had been dismissed and never challenged. The trial judge properly directed herself to the pleadings and evidence.

p. 7
03

Role of a first appellate court

Holding

As a first appeal, the Court has a duty to re-evaluate the evidence and draw its own conclusions, subject to the absence of an opportunity to see and hear the witnesses

Reasoning

Applying Selle v Associated Motor Boat Company Ltd and Mwanasokoni v Kenya Bus Services Ltd, the Court restated the standard of review on fact and the limited circumstances in which appellate interference with factual findings is warranted, then applied that standard to the High Court's evaluation and found no basis for disturbance.

p. 4

Legal principles established

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  • On a first appeal, the Court reconsiders and re-evaluates the evidence and draws its own conclusions while making due allowance for not having seen or heard the witnesses
  • An appellate court will interfere with findings of fact only where the finding is based on no evidence, on a misapprehension of the evidence, or where the trial judge acted on wrong principles
  • Under the doctrine of privity of contract, a person who is not a party to a contract cannot enforce it or take advantage of it, and a power of attorney to give evidence confers no rights under the contract
  • Evidence adduced at trial must flow from the pleadings, and a trial court may pronounce judgment only on issues arising from the pleadings

Court orders

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  1. 1.The appeal fails and is dismissed
  2. 2.Costs of the appeal to the respondent

Authorities

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Legislation

  • Evidence ActSection 120
  • Indian Transfer of Property Act, 1882Section 69(B)(3)

Cases cited (7)

  • Jackson V. Horison Holiday Ltd
    (1975) 3 ALL ER 93
  • Tweedle V. Atkinson
    (1861) EWHCQBJ57
  • Selle V. Associated Motor Boat Company Ltd & Others
    [1968] EA 123
  • Mwanasokoni V. Kenya Bus Services Ltd
    [1985] KLR 931
  • Aineah Liluyani Njirah V. Aga Khan Health Services
    [2013] Civil Application No. 194 of 2009
  • Galaxy Paints Company Ltd V. Falcon Guards Ltd
    Civil Appeal No. 219 of 1998
  • Margaret Njeri Muiruri v Bank of Baroda
    Civil Appeal No. 9 of 2001
On appeal from
High Court of Kenya
Nairobi HCCC No. 91 of 2004
Jurisdiction invoked
First appeal to the Court of Appeal under the Constitution and the Appellate Jurisdiction Act (appeal as of right on first appeal re-evaluating evidence)

Key timeline

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Practical implications

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Frequently asked questions

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Later judgments citing this (3)

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Judgments in the corpus that rely on this one. Where the Court said how it treated the authority, that is shown.

Cite this brief

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Cite this brief

Caselaw, "Muthami v Bank of Baroda (Civil Appeal 21 of 2006) [2014] KECA 591 (KLR)", Case Analysis (2014). Civil Appeal (Nairobi). Source: https://new.kenyalaw.org/akn/ke/judgment/keca/2014/591/eng@2014-05-23

Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.