JUDGMENT OF TUIYOTT, JA
1.Nemuel Moturi Nyamosi (the respondent or Nyamosi), a retired teacher, sought to improve his lot by getting into matatu business. To do so, he purchased a 12 seater passenger vehicle from Rana Auto Selection Ltd (the appellant or Rana) through a written agreement dated 3rd September, 2009.
2.It was a term of the contract that the purchase price was Kenya Shillings (Ksh) 1,500,000 and that after making a down payment of Ksh 700,000, the balance of Ksh 800,000 would be paid in monthlyinstalments of Ksh 65,000, envisaging payment in a period of 13 months. Although, from a reading of the contract, the parties intended to provide the date when the first instalment would be paid, that was not done. It is therefore not surprising that each side suggests different dates. To Nyamosi, it is on 3rd November, 2009 as the number plate was only made available by Rana 3 months after the agreement. Rana on the other led evidence indicating that the number plate was delivered on 28th September, 2009 and insisted that the first instalment was to be made on 3rd October, 2009.
3.Whichever the effective date, there is common evidence that Nyamosi failed to keep up with the instalments and the vehicle was repossessed by Rana on 5th May, 2011, way outside the 13 months of reckoning whether the date be 28th September, 2009 or 3rd October, 2009. At trial, Nyamosi conceded that he did not conclude the payment within the stipulated period of 13 months and that certain monthly payments made fell short of the agreed instalment of Kshs 65,000.
4.It was, however, the case of Nyamosi that the repossession was unlawful and without any repossession order, notice and/or justifiable cause. In the plaint filed before the trial court, Nyamosi contended that although he did not complete payment within the 13months, Rana accepted payments and was estopped from repudiating the agreement or carrying out repossession. It was also the argument of Nyamosi, but now abandoned, that the repossession was in breach of the provisions of the Hire Purchase Act.
5.In the plaint dated 20th June, 2011, Nyamosi sought the following prayers:
6.The claim by Nyamosi was rejected by the trial court (A.A. Odawo, RM (as she then was)) who made three fundamental findings: -
7.Aggrieved by those findings, Nyamosi preferred an appeal against the decision of the trial court to the High Court at Kisumu. Here, he was in better fortune as the High Court (Cherere, J) reversed the decision of the trial court and held that: -
8.After holding the repossession to be unlawful, the learned Judge ordered Rana to refund the purchase price of Ksh 1,108,000 to Nyamosi.
9.The pendulum had swung the other way and Rana is now before us on this appeal raising three grounds: -
10.While Mr. Odongo, learned counsel for the appellant, had dedicated substantial energy, both in his written submissions and in his initial address at plenary, in arguing that the learned judge erred in finding that the acceptance of late payment amounted to waiver of the vendor’s rights as to the time of completion of the contract, counsel eventually conceded on the matter. I shall shortly be proposing why this concession was well taken.
11.Counsel nevertheless contended that even if there was waiver by conduct, Rana issued a notice of 29th March, 2016 of its intention to repossess the vehicle and this had that effect of reinstating the “time of essence” clause. Counsel submitted that in the circumstances, his client was entitled to repossession once payment was not forthcoming.
12.On the order of refund, Rana’s argument is that there was no basis for making the order as it did not take into account that at the time the subject matter was repossessed, Nyamosi had enjoyed its use for about two (2) years.
13.Mr. Mose appearing for the client retorted that, emerging from the evidence in the lower court, the notice was not served. That there was no evidence of its service and that it was made for the purpose of the suit.
13.Regarding the argument that the order of refund would amount to unjust enrichment of his client, counsel argued that as the vehicle had been sold to a third party, the only option left for the Judge was to make an order for refund.
14.This is a second appeal and our remit is circumscribed to matters of law only, unless it is shown that the courts below considered matters they should not have considered or failed to consider matters they should have considered or, looking at the entire decision, it is perverse. (See Stanley N. Muriithi & Another versus Bernard Munene Ithiga (2016) eKLR).
15.Clause 5 of the agreement provided for the manner of payment of the balance of the purchase price. Then clause 25 read: -
16.Time and again Nyamosi not only failed to pay the instalments on time but also made underpayments. Yet on all those occasions Rana accepted the payment without protest. Rana therefore granted indulgence to Nyamosi. The law, however, is that mere indulgence for late payment may not constitute a waiver. It is for this reason that a party that argues that indulgence constituted a waiver or an abandonment of the “time is of essence” clause in a contract must specifically plead it. In Lombard North Central v Butterworth  EWCA Civ 5 (31 July 1986) Lord Justice Mustill observed:
17.Here, Nyamosi had pleaded this;
18.The pleading could have been more elegant but it is a sufficient foreshadow that Nyamosi would be urging that Rana had waived the “time as of essence” clause. The waiver having been properly pleaded and proved by evidence, the concession by Mr. Odongo that the holding by the High Court that the clause had been waived cannot be faulted is for applauding.
19.It was, however, proposed by counsel that the letter of 29th April, 2011 reactivated the clause. I reproduce the letter: -
20.It is of course true that the “time is of essence” clause can be reactivated even where it had been waived. How reactivation can be achieved is explained in Halsbury’s Laws of England, 3rd Edition volume 8 paragraph 282 at page 165;A similar explanation is found in Chitty on Contracts 32nd Edition Volume I para 21-014 at p1595-1596:
21.This has been accepted by this Court to be the correct position of the law (See Sisto Wambugu –vs- Kamau Njuguna  eKLR).
22.All that remains therefore is to examine whether the contents of the letter of 29th April, 2011 constituted a notice reactivating clause 25 on time. For it to do so then it must have fixed a reasonable time within which Nyamosi was to make good his default and, without equivocation, to be a notice that in the event of non-performance within the time, Rana intended to treat the contract at an end. The letter called for immediate payment of the outstanding balance and warned of the consequence of repossession if payment was not immediately received.
23.According to the letter of 5th May, 2011, that followed, the outstanding sum was Ksh 450,000. Now, it has to be remembered that the contractual obligation was that Nyamosi would be making monthly payment of Ksh 65,000. It therefore does seem that calling up for the immediate payment of Ksh 450,000, about sevenfold the monthly obligation, would not amount to granting Nyamosi reasonable time to remedy his default. The rationale for requiring reasonable time is that because of Rana’s own conduct, Nyamosi was no longer attentive about prompt payment and it would only be fair for him to be given reasonable time to readjust. Reasonable time does not mean such extended time that it would oppressive to the innocent party and what is reasonable would vary from case by case. In this case an immediate demand of ksh 450,000 was not reasonable notice. For that reason, the letter could not, in law, constitute a revival of the “time is of essence” provision of clause 25 of the agreement. The end result is that the repossession of the motor vehicle was unlawful.
24.The second issue is whether the order of refund made by the learned Judge is defendable. Once it repossessed the vehicle, Rana sold it to a third party on 5th May, 2011. It was therefore unavailable for restitution as prayed for by Nyamosi. It was because of this that the learned Judge thought appropriate to order a refund of the purchaseprice which had been sought by Nyamosi as an alternative to restitution.
25.It is my understanding that by seeking an order for refund of the purchase price, Nyamosi was asking the court to grant him a relief that would place him in as much as possible the same place as he would have been if breach had not occurred. This in fact is one of the objectives for an award of special damages in the event of breach of contract. See Livingstone v. The Rawyards Coal Co.  UKHL 387 (13 February 1880). In the words of Lord Blackburn at page 390: -
26.The breach by Rana caused Nyamosi to lose the vehicle that was repossessed and sold, and also the loss of the matatu business. The latter was neither pleaded nor proved. In respect to the loss of the vehicle, Nyamosi would have lost the value of the vehicle as at the date of the repossession. The value may have been the purchase price or more than the purchase price if the vehicle had appreciated or less than the purchase price if it had depreciated. Yet there is no knowing the true value because Nyamosi neither pleaded nor proved it. This was a tactical error on his part.
27.It is for this reason that I would not endorse the holding of the learned Judge that refund of the purchase price would be a just remedy. I am however able to find a respite for Nyamosi in the evidence of Sultan Ali Khan who testified on behalf of Rana. His evidence was that on repossession of the vehicle they carried out a valuation of it although the witness did not give evidence of the value that was returned. Nor did he produce a copy of the valuationreport. However, it was his evidence that the vehicle was sold for Ksh.500,000. This may be less than ideal evidence of value of the vehicle but Nyamosi having failed in his duty of offering evidence of value must live with it, even if with some fortitude.
28.In the end, I would propose that the appeal be partially allowed by setting aside the decision of the learned Judge ordering the appellant to refund a sum of Ksh.1,108,000 to the respondent and substituting it with an order that the appellant do pay to the respondent a sum of Ksh.500,000 with interest thereon from the date of filing of the plaint until payment in full. I would further propose that, as there is no outright victor in this appeal, each party do bear its own costs. Dated and Delivered at Kisumu this 22ndday of September, 2023.