NAIROBI, Kenya, Oct 6 – The Court of Appeal has upheld a High Court decision ordering Co-operative Bank of Kenya to compensate a customer Sh1.7 million after unlawfully repossessing and selling his vehicle.
A three-judge bench of the Court of Appeal dismissed the bank’s appeal against the High Court decision that awarded Peter Musya Kiteme Sh1.8 million, subject to specified deductions, together with Sh300,000 in exemplary damages.
“Accordingly, we are satisfied that the learned Judge did not fall into error in law in upholding the award of KSh1,777,541.28, exemplary damages, interest and costs in favour of the Respondent,” the court stated.
“This ground of appeal consequently fails. In sum, there is no merit in the appeal which we hereby dismiss with costs to the Respondent,” it added.
Kiteme had acquired a Toyota Harrier, valued at Sh2.95 million, through an asset-finance and hire-purchase arrangement with the bank.
He paid Sh718,000 as a down payment, with the bank financing the balance. The agreement required him to make 48 monthly instalments of about Sh60,434.
According to court documents, the bank repossessed the vehicle in May 2021, claiming Kiteme was in arrears of Sh455,029.
The repossession prompted Kiteme to seek legal intervention, arguing that he had already cleared the outstanding amount as well as auctioneer and storage charges by June 15, 2021.
Despite the payments, the bank did not release the vehicle and later sold it in September 2021 for Sh1.52 million.
At the centre of the dispute was Section 20 of the Consumer Protection Act, which restricts a supplier from repossessing or disposing of goods where a consumer under a future performance agreement has paid two-thirds or more of the payment obligation, unless the supplier obtains leave of the High Court.
The court found that Kiteme had already paid more than two-thirds of the amount due under the financing agreement with the bank.
The Court of Appeal rejected the bank’s argument that the Consumer Protection Act did not apply because the transaction was governed by the Hire Purchase Act.
