Motorology Limited v Aao (minor Suing Through Her Next Friend and Mother, Mna) & 2 others

3. They stated that they were not liable for any claim as they were not in possession and control of the vehicle, nor were they the beneficial owner of the vehicle at the time of the accident. 4. In its judgement dated 30th May 2024, the trial court held that the Appellant was in control of the motor vehicle at the time of the accident, but that the vehicle was registered in the name of the Appellant, whereas the 2nd Respondent had the car. The court held that, despite the Appellant’s claim that they had sold the motor vehicle to the 2nd Respondent, the motor vehicle was still registered in their name and that the sale agreement was yet to be completed. 5. The court further held that the Appellant and the 1st and 2nd Respondents were jointly and severally 100% liable for the accident. On the quantum, the court awarded Kshs. 17,750/= in special damages, while for the general damages, it awarded Kshs. 200,000/= for pain and suffering. 6. Aggrieved by the decision on liability, the Appellant lodged the present appeal vide Memorandum of appeal dated 13th June, 2024, premised on the following grounds; 7. a. The learned Magistrate erred in law and in fact in finding the Appellant to be the owner of the accident motor vehicle on the ground that the Appellant was the registered owner of the same, without considering the compelling evidence that the possessory ownership and beneficial ownership had passed to the 2nd Respondent. b. The learned Magistrate erred in law and in fact in disregarding the proof that the subject motor vehicle had been sold to the 2nd Respondent and that the Appellant was no longer in ownership and control of the same as at the time of the accident in question. c. The learned magistrate erred in law and fact in disregarding the compelling evidence that the 2nd Respondent was to indemnify the Appellant in case of any liability or claim with respect to Motor Vehicle registration number KDB 562V whilst the same was in the 2nd Respondent’s possession. d. The Learned magistrate erred in law and, in fact, in failing to consider that it is trite law that, despite a person being the registered owner of the motor vehicle, there may exist beneficial and possessory ownership of the same, which may be more relevant than the registration thereof. e. The learned magistrate erred in law and in fact in failing to consider that it was the 2nd Respondent who was the insured of the subject motor vehicle as at the time of the accident in question. f. The learned magistrate erred in law and in fact in failing to consider that, other than the original vehicle copy of the search, a police abstract can be a part of section 8 of the Traffic Act to provide sufficient proof of ownership of the accident motor vehicle. g. The learned Magistrate erred in law and in fact in holding that the Appellant ought to have instituted third-party proceedings against the driver of the accident motor vehicle without considering that the said driver was already a party to the suit. h. The learned magistrate erred in law, and in fact, in failing to consider that, despite the 2nd Respondent being aware of the Appellant’s case, he did not dispute the Appellant’s averments. i. The learned Magistrate erred in law and in fact in holding the Appellant 100% liable for an accident wherein it had sold the accident motor vehicle to the 2nd Respondent. The appeal has been canvassed by way of written submissions, which may be summarized as below; https://new.kenyalaw.org/akn/ke/judgment/kehc/2026/1603/eng@2026-02-12 2

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Appellant’s Submissions 8. In their submissions dated 4th April 2025, the Appellant contends that on 12th February 2021, the 2nd Respondent, Shadrack Sumba Mukhotsa, approached them to purchase motor vehicle registration number KDB 562V for a purchase price of Kshs. 3,200,000/= to be paid in instalments. 9. They admitted that at the time of the accident, the 2nd Respondent was still paying the monthly instalments and was yet to clear the balance to enable them to transfer the subject motor vehicle, but had the actual and beneficial possession of the vehicle. They maintained that the 2nd Respondent had assumed full responsibility for any such liability and had indemnified them against it. 10. As to whether they were the owner of the subject vehicle at the time of the accident, they quoted section 8 of the Traffic Act, arguing that they were not in control of or benefitting from the motor vehicle at the time of the accident. They cited the cases of Securicor Kenya Ltd v Kyumba Holdings Ltd [2005] eKLR and Jared Magwaro Bundi & another v Primarosa Flowers Limited [2018] eKLR, holding that in the absence of evidence to the contrary, the registration certificate or logbook of the motor vehicle or abstract constitutes the best evidence to prove ownership of the motor vehicle and stated that the burden is discharged. However, they submitted that the vehicle was transferred although not yet registered, hence the 2nd Respondent was the de facto owner, the beneficial and/or possessory owner, and in support of this argument cited the case of Nancy Ayemba Ngaira v Abdi Ali, MSA HCCA No. 107 of 2008 [2010] eKLR. 11. They averred that at the time of the accident, they had transferred ownership to the 2nd Respondent, who had already insured the vehicle through Invesco Insurance Company, and the same was indicated in the police abstract as the 2nd Respondent had control and possession of the vehicle at the time of the accident. 12. They challenged the holding by the trial magistrate that they should have instituted third-party proceedings, given the fact that the driver of the subject motor vehicle was the 3rd defendant and a party to the suit, hence there was no need to institute the proceedings. 13. They further denied ownership, asserting that ownership of the vehicle had already passed to the 2nd Respondent as was indicated in the documents, such as the sale agreement of sale of motor vehicle dated 12th February 2021 and the deed of indemnity & consent. They denied being the driver or the beneficial owner of the motor vehicle in question at the time of the accident, as the police abstract showed that the 2nd Respondent was in possession and ownership of the same. They relied on the case of Gichira Peter vs Lucy Wambura Ngaku & another [2021] eKLR. 14. They denied any liability, faulting the trial court for apportioning them liability in the accident when they had nothing to do with the incident, as they had no control or ownership of the vehicle, and the 2nd Respondent was neither their agent nor employee. They prayed that the appeal be allowed with costs. 1st Respondent’s Submissions 15. The 1st Respondent filed their submissions dated 17th April 2025, where they opposed the appeal. They stated that they had conducted an official search in respect of the accident motor vehicle, which had revealed that the Appellant was the registered owner. They insisted that, at the time of the accident, the motor vehicle was still registered in the Appellant’s name because the sale agreement had not yet been completed, as the vehicle had been sold under a hire purchase agreement. https://new.kenyalaw.org/akn/ke/judgment/kehc/2026/1603/eng@2026-02-12 3

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16. They submitted that the sale agreement stated that the purchaser should indemnify the vendor of any liabilities. However, according to the hire purchase agreement, goods only passed upon payment of the last instalment, and since at the time of the accident, which had not yet happened, the subject vehicle rightfully belonged to the Appellant. 17. They contended that their remedy was not against the 1st Respondent, who was not a party, and should seek their claim in a different forum. 18. They finally submitted that the Appellant was properly sued as they were still in possession of the subject motor vehicle. They prayed that the court dismiss the appeal and uphold the judgment of the lower court with costs. Analysis and Determination 19. I have carefully considered the Record of Appeal, the impugned judgment, the grounds of appeal, the rival submissions, and the applicable law. Being a first appellate court, I am guided by the duty articulated in Selle v Associated Motor Boat Co. [1968] EA 123, namely, to re-evaluate, re-consider, and re-analyse the evidence on record and draw my own independent conclusion, while bearing in mind that I neither saw nor heard the witnesses testify. 20. The main issue for determination is whether the learned trial magistrate erred in law and fact in holding the Appellant jointly and severally liable as the registered owner of motor vehicle registration number KDB 562V at the time of the accident on 16th September 2021, notwithstanding the existence of a sale agreement in favour of the 2nd Respondent. 21. Section 8 of the Traffic Act, Cap 403 Laws of Kenya, provides as follows: “ The person in whose name a motor vehicle … is registered shall, unless the contrary is proved, be presumed to be the owner of the vehicle …” 22. The Court of Appeal has consistently held that while ownership may, in certain circumstances, be proved by evidence other than registration, the presumption under Section 8 of the Traffic Act remains strong and cannot be displaced by mere assertions as stated in the case of Securicor Kenya Ltd v Kyumba Holdings Ltd (Supra). 23. In the present case, it is not disputed that as at the date of the accident, the motor vehicle was still registered in the name of the Appellant. The Appellant conceded that the purchase price had not been fully paid and that transfer of ownership had not been effected. The logbook remained in the Appellant’s name. 24. The sale agreement dated 12th February 2021 was a conditional hire purchase agreement under which ownership was expressly reserved to the Appellant until full payment of the purchase price of Kshs. 3,200,000/= and as stated by the Appellant at the time of the accident, the 2nd Respondent had not cleared the outstanding instalments and therefore had not acquired legal title to the vehicle. 25. It was contended that beneficial and possessory ownership had passed to the 2nd Respondent. The evidence placed before the trial court demonstrated that the transaction between the Appellant and the 2nd Respondent was conditional, with the transfer expressly contingent on full payment of the purchase price. Until such completion, the Appellant retained legal ownership. https://new.kenyalaw.org/akn/ke/judgment/kehc/2026/1603/eng@2026-02-12 4

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26. Courts have consistently held that registration is only prima facie evidence of ownership and that beneficial or possessory ownership may, in appropriate circumstances, displace the statutory presumption. 27. In Securicor Kenya Ltd v Kyumba Holdings Ltd [2005] eKLR, the Court of Appeal held that while registration is prima facie evidence of ownership, it is not conclusive. The court observed: “ It was apparent, therefore, that though the appellant was the registered owner of the vehicle, the evidence showed that the vehicle had been sold to another party who had taken possession and control. In the absence of an agency relationship, the registered owner cannot be held vicariously liable for negligence arising from the use of the vehicle." In that case, the appeal was allowed, absolving the registered owner of liability as the vehicle had been sold and possession transferred. 28. Similarly, in Nancy Ayemba Nsgaira v Abdi Ali [2010] KEHC 1866 (KLR), the court emphasised the distinction between registered ownership and other forms of ownership. Justice Ojwang (as he then was) stated: "There is no doubt that the registration certificate or logbook relating to a motor vehicle is prima facie proof of ownership... However, in judicial practice, concepts have arisen to describe such other owners as 'actual owner', 'beneficial owner', and 'possessory owner'. A person who enjoys any of these statuses has such interest as, in the circumstances, may found liability in a suit in tort." The court found that the Respondent, despite being the registered owner, had sold the vehicle and was not liable, as beneficial ownership had passed. 29. The Court of Appeal in Jared Magwaro Bundi & another v Primarosa Flowers Limited [2018] KEHC 7792 (KLR) reaffirmed that the presumption under Section 8 is rebuttable. It held: "It was therefore held in Muhambi Koja (supra) that the presumption that the person registered as owner of a motor vehicle in the log book is the actual owner is rebuttable. A person seeking to prove ownership contrary to the registration must adduce evidence to that effect." In cases involving sales or hire purchase agreements, evidence of transfer of possession and control can shift liability to the buyer or hirer. 30. Applying these principles to the instant case, the evidence on record shows that on 12th February 2021, the Appellant entered into a sale agreement with the 2nd Respondent for motor vehicle KDB 562V at a price of Kshs. 3,200,000/= to be paid in instalments under a hire-purchase arrangement. He was to pay Kshs. 97,917/= for 24 months from 12/04/2021 until 12/03/2023. The 2nd Respondent took possession of the vehicle, insured it through Invesco Insurance Company, and executed a deed of indemnity dated 12/02/2021, absolving the Appellant of any liability arising from its use while in his possession, both civil and criminal. At the time of the accident on 16th September 2021, the 2nd Respondent was still paying instalments, but had actual possession and control of the vehicle. The police abstract also listed the 2nd Respondent as the owner. 31. While the logbook remained in the Appellant's name pending full payment, this does not automatically impose liability on the Appellant. The hire purchase agreement expressly provided that ownership would pass upon completion of payments; however, Kenyan courts have consistently held that, in such arrangements, the hirer assumes beneficial ownership and liability upon taking possession, particularly where indemnity clauses exist, and the hirer insures the vehicle. The Appellant was neither in control of nor benefiting from the vehicle's use at the time of the accident. The 3rd Respondent, as the driver, was under the 2nd Respondent's employment or direction, not the Appellant's. 32. The trial court erred in holding the Appellant liable solely based on registration, without adequately considering the rebutting evidence of the sale agreement, indemnity deed, insurance by the 2nd https://new.kenyalaw.org/akn/ke/judgment/kehc/2026/1603/eng@2026-02-12 5

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Respondent, and police abstract. There is no evidence of an agency relationship between the Appellant and the 2nd or 3rd Respondents that would justify vicarious liability amongst the three. 33. On the issue of third-party proceedings, the trial court's suggestion that the Appellant should have instituted such against the driver is misplaced, as the driver, who is 3rd Respondent, was already a party to the suit. Moreover, the 2nd Respondent did not dispute the Appellant's averments regarding the sale and indemnity of the subject motor vehicle. 34. In light of the foregoing analysis and authorities, I find that the presumption of ownership under Section 8 of the Traffic Act was rebutted. The 2nd Respondent was the beneficial and possessory owner at the time of the accident, and the Appellant is not liable for the accident. 35. Accordingly, the appeal is allowed. The judgment of the lower court dated 30th May 2024 is set aside insofar as it holds the Appellant jointly and severally liable. Liability is apportioned 100% against the 2nd and 3rd Respondents. 36. On the question of quantum, the Appellant has not raised any specific ground of appeal challenging the awards of Kshs. 200,000/= (general damages) and Kshs. 17,750/= (special damages). Those awards are reasonable in the circumstances and are hereby upheld. 37. The Appellant shall have the costs of this appeal and of the suit in the lower court. DATED, SIGNED AND DELIVERED AT KAKAMEGA THIS 12TH DAY OF FEBRUARY 2026. A. C. BETT JUDGE In the presence of: Ms Cherop holding brief for Mr Osoro for the Appellant Mr Idi for the 1st Respondent Ms Nafuye for the 2nd Respondent Court Assistant: Polycap https://new.kenyalaw.org/akn/ke/judgment/kehc/2026/1603/eng@2026-02-12 6

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