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|Case Number:||Civil Case 22 of 1998|
|Parties:||Jackson Ruiru v Kenya Revenue Authority|
|Date Delivered:||14 Nov 2017|
|Court:||High Court at Eldoret|
|Citation:||Jackson Ruiru v Kenya Revenue Authority  eKLR|
|Advocates:||Mr. T. Mutei for the plaintiff instructed by Tom Mutei & Company Advocates. Ms. Sango holding brief for Mr. Ontweka for the defendant instructed by The Kenya Revenue Authority.|
|Advocates:||Mr. T. Mutei for the plaintiff instructed by Tom Mutei & Company Advocates. Ms. Sango holding brief for Mr. Ontweka for the defendant instructed by The Kenya Revenue Authority.|
|History Advocates:||Both Parties Represented|
|Case Outcome:||Claim dismissed.|
|Disclaimer:||The information contained in the above segment is not part of the judicial opinion delivered by the Court. The metadata has been prepared by Kenya Law as a guide in understanding the subject of the judicial opinion. Kenya Law makes no warranties as to the comprehensiveness or accuracy of the information|
REPUBLIC OF KENYA
IN THE HIGH COURT OF KENYA AT ELDORET
CIVIL CASE NO. 22 OF 1998
KENYA REVENUE AUTHORITY..................DEFENDANT
1. The plaintiff’s claim is on a three-strand. Firstly, he prays for release of his motor vehicle registration number KAG 031R which was seized by the defendant. Secondly, he claims for loss of use at the rate of Kshs 20,000 per day together with interest at the rate of 45% per annum. Thirdly, he seeks general and punitive damages.
2. The original plaint was filed on 22nd January 1998. It was amended on 1st September 1998. By an amended statement of defence dated 2nd May 2000, the defendant denied the claim in toto. At paragraph 4, the defendant justified the seizure to recover Value Added Tax (VAT) lost through diversion of transit goods into the local market. The defendant counterclaims for a penalty of Kshs 81,600 together with interest at the rate of 3% per month from July 1997 until full payment. It also claims a further sum of Kshs 182,700 for warehouse rent from the date of seizure until the date release of the vehicle. The plaintiff joined issues with the defendant through an amended reply to defence and counterclaim dated 30th May 2000.
3. By a consent recorded on 25th September 1998, the motor vehicle KAG 031R (hereafter the suit vehicle) was released to the plaintiff. It was a conditional order requiring the plaintiff to deposit of Kshs 116,000 into court. During the hearing, the plaintiff said that he paid the money to mitigate his losses.
4. The plaintiff (PW1) used to run a transport business and shop at Kitale. He made reference to his witness statement dated 26th May 2011. He said that the business was founded in the year 1988. By 1997 he had acquired six lorries. One of them was the suit vehicle. He secured a subcontract from some agents of the World Food Programme and Norwegian Peoples Aid. Two of those agents were Upland Agencies and Saki Holdings (hereafter Uplands and Saki respectively).
5. The plaintiff would transport goods on behalf of Saki to Rwanda and the Democratic Republic of Congo. In October 1997, a Mr Macharia from Saki called him. He informed him that there were goods from the Red Cross to be collected from New Nyanza Wholesalers, Bungoma. They were 300 bags of sugar weighing 50 kgs each. The plaintiff sent his driver, Mwangi, to collect the goods.
6. The consignment was loaded into the lorry registration number KAG 031R (the suit vehicle). The destination was Bukavu. The lorry proceeded to the Malaba border. Saki had undertaken to pay for the fuel and customs. At Malaba, the lorry was held up for 3 days. Saki did not pay for the fuel or customs. The plaintiff asked his driver to return to Kitale. He instructed the driver to store the goods at Kitale together with other goods belonging to Saki.
7. Saki gave the plaintiff a cheque for Kshs 910,000. It was dishonoured. The plaintiff held onto the goods as a lien. Saki failed to collect the goods. Saki later took advantage of the absence of the plaintiff, who had travelled to Uganda, and asked the plaintiff’s wife for the keys to the store. She gave the keys to one Githinji. They took all their goods without making payment. Soon thereafter, officials from the defendant, Kenya Revenue Authority (hereafter, KRA), arrived at the plaintiff’s shop. They accused the plaintiff of selling the sugar. The plaintiff denied the allegations. The KRA officials demanded for the sugar.
8. On 27th October 1997 the Senior Commissioner of Customs, Serem, went to Kibera Nairobi. He had a towing vehicle. He was in the company of an Inspector Murage. They towed away the suit vehicle. They took the plaintiff’s driver, Jeremiah Mwangi, to Bungoma. They later released him. The plaintiff went to the C.I.D Headquarters to enquire about the matter. The police detained the plaintiff at Central Police Station.
9. The plaintiff and his wife were subsequently charged with theft of the sugar; and, acquiring uncustomed goods. The trial was in Nairobi Chief Magistrates Criminal Case 2769 of 1999 Republic v Jackson Ruiru & Mary Wakarima Ruiru (hereafter the criminal case). The plaintiff was not given the Notice of Seizure for his lorry. He testified that he saw the notice (Exhibit 1) for the first time during the criminal proceedings. The notice is dated 27th October 1997.
10. The plaintiff testified further that he purchased the lorry from Samcon Limited. He said that all duties had been paid. In his opinion, the lorry was not uncustomed because all taxes were paid. In January 1998 his lawyer wrote a demand letter seeking release of the vehicle (Exhibit 2). KRA replied on 13th January 1998 (Exhibit 3). They claimed that the plaintiff was diverting export goods into the local market. The plaintiff and his wife were acquitted in the criminal case. The court found no evidence of theft or diversion of the sugar by the accused persons. The court opined that PW1 (Githinji) is the one who ended up with the sugar. The proceedings were produced as exhibit 4.
11. The plaintiff produced an agreement for transport (Exhibit 5). The defendants objected to it because it was between Uplands and Jackson Ruiru Transporters. Since it was an original referring to the business name of the plaintiff, the objection was overruled. PW1 said the lorry was only released in October 1998 pursuant to the consent order. It was a conditional order requiring the plaintiff to deposit Kshs 116,000 into court. The plaintiff said he did so to mitigate his losses.
12. The plaintiff sought to produce 6 invoices to back up his claim of loss of use. He said his lorries would occasionally be hired by Uplands. He said the income form the lorry was Kshs 20,000 per day. The defence objected to the invoices because only a few related to the suit vehicle. The court upheld the objection; and, ruled that only two of the invoices met the evidential test of relevance and admissibility. They were dated 26th June 1996 and 23rd April 1997 (Exhibits 6A & B respectively). The plaintiff also produced two statements from Uplands confirming payment of the invoices (Exhibits 7A & B). The defence had no objection to the latter.
13. The plaintiff testified that the lorry was held for 389 days. The total claim for loss of use was thus 7,780,000. He said the lorry was under hire purchase with Nic Bank. The interest rate was between 21 to 24%. The default rate was 45%. As he was unable to pay the hire charges, the vehicle was repossessed by the bank. Lastly, the plaintiff claimed for refund Kshs 116,000 deposited into court.
14. When cross examined, the plaintiff conceded that the store at Kitale bore no names. It was situated along the Kitale-Endebess road. The plaintiff said he was not conversant with custom procedures; and, he was not aware whether the goods were cleared. He also conceded that the agreement with Uplands was in favour of Jackson Ruiru Transporters. He said he had not registered the business. He did not produce the log book of the suit vehicle or chattels mortgage with Nic Bank to support his claim for interest at the rate of 45%.
15. Under further cross examination, the plaintiff admitted that he sued Saki Holdings in a separate suit. He recovered the debt of Kshs 910,000 owed to him by Saki. He did not produce copies of the pleadings. He said he did not request the criminal court for release of the vehicle because by then, the High Court had ordered its release. He said that officers from KRA had demanded payment of Kshs 500,000. The demand was not in writing. He said the sugar originated from New Nyanza Wholesalers; and, that it was not imported. He testified that the Red Cross was buying it at Kshs 1,700 per bag which was the local price.
16. When cross examined further, he said the invoice dated 22nd June 1996 was for Kshs 850,000. It covered a journey of 4 days. The one dated for 23rd April 1997 was for Kshs 771,000. He said it took 2 days to travel to Kigali. Two days would earn the plaintiff Kshs 40,000. He referred to his statement. He did not produce the manifest or job card for transport of the sugar to Bukavu, Congo. He said the payments from Uplands were in cash.
17. In re-examination, the plaintiff produced his identity card number 4099126. It is in the name of Jackson Ruiru. He clarified that the debt of Kshs 910,000 from Saki was not related to the present dispute with KRA.
18. The second witness was James Mbuti Kun’gu (PW2). He relied on his witness statement dated 26th May 2011. He is a partner and the administrative manager of a business styled Uplands Agencies (hereafter, Uplands). Between 1991 and 1997, Uplands had a contract to transport relief food to Sudan. They subcontracted the plaintiff’s lorry KAG 031R for that purpose. He referred to exhibit 5. It was a contract with the plaintiff dated 22nd June 1996. He said the plaintiff submitted the two invoices (Exhibits 6A & B). He said that he made the statement of payments to the plaintiff on 30th April 1997 (Exhibits 7A and B).
19. The witness said that the supervising clerk would receive the invoices; prepare the statements; and, authorize the payments to the plaintiff. The payment was in cash; US$ currency. However, invoice No. 27 (Exhibit 7A) was paid in Kenya Shillings. He said the payment depended on mileage per tonne. The accounting clerk, Mwangi, would deduct any advances for fuel. He said that a lorry of 15 to 20 tonnes would make about Ksh.900,000 in 4 to 6 days.
20. Under cross examination, he said that his partner was Evanson Kamende Munjua. The latter was an accountant and in charge of finance. He conceded that the two invoices were for Ksh 771,000 and Ksh 640,000 respectively. He also clarified that the contract for sugar in this case was not from his firm. In re-examination, he said that the amounts in the invoices were less the advance payment for fuel of Kshs 79,000 and Kshs 30,000 respectively. That marked the close of the plaintiff’s case.
21. The defendant called one witness, John Njeru Karuga (DW1). He works for the defendant’s Investigation and Enforcement Department at Eldoret. He relied on company records of the defendant and his witness statement dated 17th February 2015. He said that on or about 25th July 1997, the International Federation of the Red Cross declared 300 bags of sugar, which were VAT exempt, on Customs Export Entry No. 255 at Eldoret. The goods were for export to Kigali, Rwanda.
22. He said that the plaintiff was sub-contracted to transport the goods in the suit vehicle from the premises of New Nyanza Wholesalers of Post Office Box 67, Bungoma. He said the sugar was delivered to the plaintiff on 29th July 1997 as per Delivery Note 7395 (Exhibit D2). DW1 said the goods never reached Kigali.
23. The International Committee of the Red Cross and Crescent Societies raised a complaint. On 27th October 1997, the defendant’s officers seized the suit vehicle as per the Notice of Seizure No. 20276. The notice was issued under sections 184 and 196 of the Customs and Excise Act. (Plaintiff’s exhibit 2; defendant’s exhibit D3). He testified that it was erroneous to refer to the vehicle as “uncustomed”. To the witness, the vehicle was “used as the medium of diverting uncustomed goods for home use”. He admitted that the defendant wrote to the plaintiff’s advocate on 13th January 1998 asking for evidence of export of the consignment (Exhibit D4). He said the plaintiff never responded.
24. The witness testified that the failure to account for uncustomed goods for export amounted to an offence under section 12 of the Customs and Excise Act. That is why the defendant engaged the police and arrested the plaintiff. He said the plaintiff was charged for the offence of stealing goods on transit contrary to section 279 of the Penal Code. He said the seizure of the lorry was based on “reasonable grounds to believe that the plaintiff had not exported the sugar to Kigali Rwanda and the burden was on the plaintiff to prove that he exported the goods”. The vehicle was towed to JKIA where it was detained until its release under the consent order.
25. He testified that the Value Added Tax evaded was Kshs 81,600; with a penalty of 3% per month. Duty would be payable if the sugar is consumed locally. He said that the defendant’s record on Income Tax and Value Added Tax (VAT) returns showed that the plaintiff “never earned; or, declared the income from this business to the extent of the loss of income claimed in the suit”. He made reference to an Internal Memo dated 18th February 2015 giving the tax status of the plaintiff (Exhibit D5). He said the plaintiff was registered on 1st September 1994 for VAT but has never submitted returns. He opined that the plaintiff is not entitled to the claim for loss of business. He said that KRA is entitled to the sum deposited in court.
26. Under cross examination, the witness conceded that he only took over this matter in 2015; and, that he filed his witness statement on the date of the defence hearing. He admitted that the export entry document does not state the sugar was VAT exempt. He was unaware of the criminal case against the plaintiff and his wife. He could also not tell the price the sugar was sold at by New Nyanza Wholesalers.
27. The witness however stated that entry of goods for export means that they are VAT exempt. He said the letter (Exhibit D4) was sent three months after the seizure. He was unaware of any subsequent notice of seizure. The witness did not have a copy of the complaint mentioned in paragraph 16 of his statement. At paragraph 23 of that statement, he indicates that no income tax returns were filed by the plaintiff from the year 1995 to 2013. The witness could not tell whether the defendant tried to recover the tax. In his view, the seizure of the lorry was lawful. Upon re-examination, he was emphatic that the plaintiff did not account for the sugar. That marked the close of the defendant’s case.
28. All the parties have filed written submissions and lists of authorities. The defendant’s submissions were filed on 24th July 2017. Those by the plaintiff were filed on 21st August 2017. The defendant filed a further reply on 20th September 2017. I have considered the pleadings, evidence and rival submissions. The issues arising for determination can be summarized as follows-
i) Was the Notice of Seizure number 20276 dated 27th October 1997 and issued to the plaintiff regular or lawful?
ii) If so, is the defendant entitled to the penalty of Kshs 81,600 together with interest at the rate of 3% per month from July 1997 until full payment; and, a further sum of Kshs 182,700 being warehouse rent for the vehicle from the date of seizure until its release?
iii) Is the defendant entitled to the prayers in its amended counterclaim?
iv) If the answer to issue number i) above is in the negative, is the plaintiff entitled to release of the suit vehicle; special damages; general damages; or, punitive damages as prayed in the amended plaint?
v) Who should pay cost of this suit?
29. The plaintiff’s lorry was seized by the defendant on 27th October 1997. That fact is freely conceded by the defendant. The Notice of Seizure (Plaintiff’s exhibit 1; defendant’s exhibit D3) stated as follows-
“J. R. Transporters,
C/O Director of C.I.D,
P. O. Box 30031 Nairobi.
Take notice that your one lorry registration KAG 031R empty has been seized as liable to forfeiture under the Customs and Excise Act on the following grounds: It is uncustomed contrary to section 184 as read with section 196 of the Customs and Excise Act CAP 472 Laws of Kenya..…”
30. Learned defence counsel Mr. Ontweka justified the seizure under the provisions of section 184 as read with section 196 of the Customs and Excise Act. The relevant part of section 184 of the Act provides that-
“A master of an aircraft or vessel, and a person in charge of a vehicle, which is within Kenya and-
(b) Which has in it, or in any manner attached to it, or which is conveying, or has conveyed in any manner goods imported, carried coastwise or intended for exportation contrary to this Act; or
(c) ………iii) in the case of the person in charge of a vehicle, to a fine not exceeding one million five hundred thousand shillings; and the vehicle and goods in respect of which the offence has been committed shall be liable to forfeiture”
31. Section 196 on the other hand defines the types of goods that can be forfeited. Subsections (c) (e) and (g) list uncustomed goods; goods which are exported whose application for entry or shipment does not correspond with the goods; and, those whose certificate, application or other document, answer, statement or representation, which is knowingly false or knowingly incorrect in any particular has been delivered, made or produced”
32. I have juxtaposed those provisions against the Notice of Seizure in this case. True, the plaintiff’s lorry had ferried his client’s sugar for export to Kigali. The lorry did not cross Malava border; and, the sugar was returned to Saki’s storage in Kitale. The store, which was unmarked, was owned by the plaintiff. If the goods were uncustomed; or, their application did not correspond with the goods; or their certificate, application or other document, answer, statement or representation, which is knowingly false or knowingly incorrect in any particular had been delivered, made or produced, the defendant was entitled to seize the vehicle or goods.
33. From the evidence, I readily find that the notice was highly irregular and unlawful for six main reasons: First, the seizure was expressly for “one lorry registration KAG 031R empty” liable to forfeiture under the Customs and Excise Act on the following grounds: “It is uncustomed”. It is conceded by the parties that the lorry, which was purchased from Samcon Limited, was not uncustomed. I agree with the plaintiff that all duties on the lorry were paid; and, that there was a chattels mortgage in favour of Nic Bank.
34 Secondly, the notice was not served on the plaintiff. The plaintiff testified that he first saw the Notice of Seizure during his criminal trial at the Chief Magistrates Court Nairobi. The plaintiff was only arrested when he pursued the defendant about the fate of his lorry. The defendant did not controvert that fact. It is also not lost on me that the notice is addressed to: “J. R. Transporters, C/O Director of C.I.D, P. O. Box 30031 Nairobi”
35. Thirdly, the goods in transit belonged to the International Committee of the Red Cross and Crescent Societies. The plaintiff was subcontracted by their agent Saki Holdings to transport them across the border. The plaintiff’s evidence was that he was not conversant with custom procedures. I do not think that that is a sound argument. But he said that Saki was to fuel the lorry and pay for customs clearances. At Malaba, the lorry was held up for three days. Saki defaulted on payments for the fuel and customs. The plaintiff asked his driver to return to Kitale. He instructed the driver to store the goods at Kitale together with other goods belonging to Saki.
36. Fourthly, the plaintiff denied that he diverted the sugar to the local market. The plaintiff stated that Saki took advantage of his absence in Kenya, and misled his wife to release the sugar to them. Saki did not pay for the goods. It still owed the plaintiff Kshs 910,000. The keys were taken by one Githinji (PW1 in the criminal case). The plaintiff insisted that Githinji ended up with all the sugar.
37. Fifthly, the defendant’s witness, John Njeru Karuga (DW1), clearly stated that the plaintiff was sub-contracted to transport the goods in the suit vehicle from the premises of New Nyanza Wholesalers of Post Office Box 67, Bungoma. He said the sugar was delivered to the plaintiff on 29th July 1997 as per delivery Note 7395 (Exhibit D2). It is conceded by the plaintiff that the goods never reached Kigali. As I shall discuss shortly, it remains doubtful that duty was applicable; and, whether the plaintiff acquired uncustomed goods.
38. Sixth, and most important, the plaintiff was acquitted of the charge of offence of stealing goods on transit contrary to section 279 of the Penal Code; and, acquiring uncustomed goods contrary to section 185 of the Customs and Excise Act. That was in in Nairobi Chief Magistrates Criminal Case 2769 of 1999 Republic v Jackson Ruiru & Mary Wakarima Ruiru. A certified copy of the transcript of the criminal proceedings was produced before me as exhibit 4. In the judgment at page J2, the learned trial magistrate found that-
“In the second count accused are charged with the offence of acquiring uncustomed goods…….Now I find no evidence to prove as stated that the accused were the ones who sold the goods. In any event there is evidence to show that price of sugar before the tax and price inclusive of tax. According to PW3, they sold the sugar to other local businessmen at the same price. I therefore find no evidence to prove any tax was due on the sugar…”
39. Under the Evidence Act, the criminal proceedings and judgment of the Chief Magistrates Court are conclusive evidence that the plaintiff did not acquire uncustomed goods. In the end, the seizure of the suit vehicle cannot be justified by sections 184 as read together with section 196 of the Customs and Excise Act. I am fortified there by the authority cited by both the plaintiff’s and defendant’s learned counsel: Great Lakes Transport Co (U) Ltd v Kenya Revenue Authority, Court of Appeal at Mombasa, Civil Appeal 106 of 2006  eKLR. The learned judges, faced with near similar facts, upheld the lower court’s finding that the respondent was liable to the appellant for illegally seizing and holding onto the appellant’s motor vehicle.
40. It must follow that my answer to issue number i) above is in the negative: The Notice of Seizure number 20276 dated 27th October 1997, and issued to the plaintiff by the defendant, was irregular and unlawful.
41. From my answer to the issue framed as number i) above, it follows as a corollary that the defendant’s counterclaim must fail. The defendant is not entitled to the penalty of Kshs 81,600; or, the interest of 3% per month from July 1997. The defendant was not entitled to seizure of the lorry. Its claim for the sum of Kshs 182,700 for warehouse rent for the vehicle from the date of seizure is on a factual and legal quicksand. The sum of Kshs 116,000 deposited in court under the consent order of 24th September 1998 shall now be refunded to the plaintiff.
42. The answers above sufficiently deal with issue number iii) framed above. It is also answered in the negative: the defendant is not entitled to any of the prayers in its amended counterclaim.
43. The next key question is whether the defendant is entitled to release of the lorry. At page 7 of the defendant’s original submissions, it is stated that “the plaintiff did not make an application before the trial court for the release of the vehicle. Instead the plaintiff filed this suit on the ground of loss of business without disclosing that there was a case on an [sic] offence”. I found that submission baffling. The suit was commenced by a plaint dated 22nd January 2017. At page 2 of the defendant’s submissions, the defendant acknowledges that contemporaneously with the suit, the plaintiff filed a chamber summons seeking for release of the vehicle. Prayer 1 in the original plaint and the amended plaint is for release of the suit vehicle. I agree with the defendant however that the plaintiff omitted to plead that he and his wife were facing criminal charges.
44. Having found that the defendant issued an irregular and unlawful Notice of Seizure; and, that it continued to hold onto the suit vehicle illegally, I have no hesitation in ordering that the vehicle be released. See Great Lakes Transport Co (U) Ltd v Kenya Revenue Authority, Court of Appeal at Mombasa, Civil Appeal 106 of 2006  eKLR. I am of course alive to the consent order of 24th September 1998 releasing the vehicle. But the point is that the defendant was not entitled to the seizure from 27th October 1997 to that date.
45. I will now turn to the claim for special and general damages. The onus to prove special or general damages fell upon the plaintiff. See sections 107 of the Evidence Act. The plaintiff has established on a balance of probabilities that the defendant was not entitled to seize its vehicle. The plaintiff is accordingly entitled to general and special damages for loss of use. See Capital Fish Kenya Limited v The Kenya Power & Lighting Company Limited, Court of Appeal at Nairobi, Civil Appeal 189 of 2014  eKLR, Great Lakes Transport Co (U) Ltd v Kenya Revenue Authority, Court of Appeal at Mombasa, Civil Appeal 106 of 2006  eKLR, Emmanuel Hatangimbabazi v Commissioner of Customs & Excise, High Court, Mombasa, Civil Case 504 of 2000  eKLR.
46. The vehicle was held unlawfully for nearly one year. I think a sum of Kshs 500,000 is sufficient in general damages. I am well guided there by the decision in Great Lakes Transport Co (U) Ltd v Kenya Revenue Authority (supra), Emmanuel Hatangimbabazi v Commissioner of Customs & Excise (supra).
47. The claim for loss of use constitutes special damages. It is trite that special damages must be specifically pleaded; and, strictly proved. See Kampala City Council v Nakaye  E.A 446, Coast Bus Service limited v Sisco E. Murunga and others, Nairobi, Court of Appeal, Civil Appeal 192 of 1992 (unreported). The plaintiff specifically pleaded for compensation at the rate of Kshs 20,000 per day together with interest at 45% per annum.
48. The plaintiff produced two invoices dated 26th June 1996 and 23rd April 1997 (Exhibits 6 A & B respectively). The plaintiff also produced two statements from Uplands supporting the payment of the invoices (Exhibits 7A & B). The defence had no objection to the latter. I am alive that a proforma invoice on its own would not be sufficient proof of payment. See Capital Fish Kenya Limited v The Kenya Power & Lighting Company Limited, Court of Appeal at Nairobi, Civil Appeal 189 of 2014  eKLR.
49. The plaintiff testified that the invoice dated 22nd June 1996 was for Kshs 850,000. It covered a journey of 4 days. The one dated for 23rd April 1997 was for Kshs 771,000. He said it took 2 days to travel to Kigali. Two days would earn the plaintiff Kshs 40,000. There is then the confirmation of payment of the two invoices by James Mbuti Kun’gu (PW2). He said that he made the statement of payments to the plaintiff on 30th April 1997 (Exhibits 7A and B). The supervising clerk, Mwangi, would receive the invoices; prepare the statements; and, authorize the payments to the plaintiff. The payment was in cash; US$ currency. However, invoice No. 27 (Exhibit 7A) was paid in Kenya Shillings. PW2 has endorsed the statements signifying payment to the plaintiff.
50. From that evidence, I am satisfied that the lorry would fetch income of Kshs 20,000 per day. I am alive that the contract with Uplands was in the name of Jackson Ruiru Transporters. The plaintiff confirmed that he was trading in that name and style. The business name was not registered. The plaintiff is accordingly entitled to claim the benefit. It is also not lost on me that the impugned Notice of Seizure was addressed to J.R. Transporters but directed to the plaintiff.
51. The defendant made capital out of the income tax returns or lack of it by the plaintiff. Although the evidence was relevant, it lacked support in the pleadings. The defendant’s witness was at a loss why the defendant had not made any effort to recover the income tax. That evidence was a red herring; and, an insufficient traverse to the plaintiff’s claim. The vehicle was held from 27 October 1997 to the date of the consent on 24th September 1998. That is 333 days. 333 x 20,000 =6,660,000.
52. I am not persuaded that the plaintiff is entitled to a further 30 days that it took him to repair the vehicle and get it on the road. I am also not satisfied that the plaintiff was entitled to interest at the rate of 45%. It was premised upon the default interest rate on a chattels mortgage with Nic Bank. The instrument was not produced in evidence. Section 26 of the Civil Procedure Act clothes the trial court with discretion on awarding interest. I cannot blame the defendant for the nine years of delay in concluding this suit. To avoid unjust enrichment of the plaintiff; and, to be fair to the defendant, interest shall apply at court rates from the date of the decree.
53. I will now turn to the claim for punitive damages. The plaintiff submitted for a figure of Kshs 5,000,000. No evidence was led to justify the award of punitive damages. In Kenya, punitive or exemplary damages are available where there is oppressive, arbitrary or unconstitutional action by the servants of the Government. See Bank of Baroda (Kenya Limited) v Timwood Products Limited  KLR 236 at 250. I am not persuaded that a basis has been laid for punitive damages in this case. That claim is dismissed.
54. There shall thus be final judgment in favour of the plaintiff against the defendant in the total sum of Kshs 7,276,000 made up as follows-
a) General damages……………………………………….Kshs 500,000.
b) Special damages (Loss of use)………………………….Kshs 6,660,000.
c) Refund of sum deposited in court………………………Kshs 116,000.
55. The suit vehicle shall be released to the plaintiff. For the reasons expounded in paragraph 52 of this judgment, interest shall apply on the above sum at court rates from the date of the decree until full payment. The defendant’s amended counterclaim is devoid of merit and is dismissed with costs.
56. The claim by the plaintiff for punitive damages is dismissed. Finally, costs follow the event and are at the discretion of the court. I award the plaintiff costs of the suit and the counterclaim to be paid by the defendant.
It is so ordered.
DATED, SIGNED and DELIVERED at ELDORET this 14th day of November 2017
Judgment read in open court in the presence of-
Mr. T. Mutei for the plaintiff instructed by Tom Mutei & Company Advocates.
Ms. Sango holding brief for Mr. Ontweka for the defendant instructed by The Kenya Revenue Authority.
Mr. J. Kemboi, Court Clerk.