Agricultural Finance Corporation & another v Mwangi t/a Cash Crop Auctioneers [2022] KEHC 3129 (KLR)

Agricultural Finance Corporation & another v Mwangi t/a Cash Crop Auctioneers (Civil Appeal E259 of 2021) [2022] KEHC 3129 (KLR) (Civ) (17 June 2022) (Judgment)

Neutral citation: [2022] KEHC 3129 (KLR)

Republic of Kenya

In the High Court at Nairobi (Milimani Law Courts)

Civil

Civil Appeal E259 of 2021

JK Sergon, J

June 17, 2022

Between

Agricultural Finance Corporation

1st Appellant

Rashid Ngaira

2nd Appellant

and

Peter Maina Mwangi t/a Cash Crop Auctioneers

Respondent

(This was an appeal against the judgment and decree delivered by D.M. Kivuti (Mr.) (Principal Magistrate) on 16th April, 2021 in Milimani CMCC no. 3411 of 2019)

Judgment

1. The respondent herein filed a suit against the 1st and 2nd appellants by way of the plaint dated May 8, 2019 and sought for general, aggravated and exemplary damages plus costs of the suit and interest thereon, arising out of a claim for defamation.

2. The 2nd appellant was sued in his capacity as an employee of the 1st appellant at all material times.

3. The respondent pleaded in the plaint that he had at all material times been obtaining instructions from the 1st appellant to provide his services, which instructions gave rise to various fee notes, some of which were settled and others remained unpaid thereby resulting in taxation matters filed amongst the parties in court.

4. The respondent pleaded in the plaint that on December 14, 2018 he visited the 1st appellant’s offices with a view to following up on pending fee notes when the 2nd appellant confronted him and began to hurl insults and abuses at him, the particulars of which are set out in the plaint.

5. It is pleaded in the plaint that the words listed therein could in their natural and ordinary meaning, be taken to infer that the respondent is unqualified and lacks professional integrity as an auctioneer.

6. It is further pleaded in the plaint that as a result, the respondent suffered injury to his reputation and was subjected to ridicule and humiliation, among others.

7. Upon service of summons and entering appearance, the appellants filed their statement of defence on July 11, 2019 jointly to deny the allegations set out in the plaint.

8. At the hearing of the suit, the respondent testified whereas the appellants relied on the testimonies of two (2) witnesses including the 2nd appellant.

9. Upon close of submissions, the trial court delivered judgment on April 16, 2021 where it found the appellants 100% liable and awarded damages as follows:a.General damages Kshs 500,000/=b.Exemplary/aggravated damages NILTotal Kshs 500,000/=

10. The aforementioned judgment is now the subject of the appeal before this court. To challenge the judgment, the appellants have put forward the following grounds of appeal vide their memorandum of appeal dated May 10, 2021:i.Thatthe learned trial magistrate made a fundamental error of law and fact by finding that the 2nd appellant committed acts of defamation while disregarding his duties despite there being no evidence of the words spoken and/or proving malice on the part of the 2nd appellant.ii.Thatthe learned trial magistrate made a fundamental error of law by failing to find that the respondent did not prove or establish that the alleged statement said to be defamatory brought him to hatred, ridicule or contempt of caused him to be shunned or avoided or injured in his office, profession or calling.iii.Thatthe learned trial magistrate made a fundamental error of law in holding and proceeding to award damages without applying the required principles of awarding damages thus making the award unreasonable and manifestly excessive, preposterous, untenable, unconscionable and exorbitant.iv.Thatthe learned trial magistrate made a fundamental error of law and fact by relying entirely on the respondent’s personal views which is not material in a claim for defamation.v.Thatthe learned trial magistrate erred in law and fact by arriving at a decision that the respondent’s story was highly believable based entirely and solely on the uncollaborated evidence of the respondent.vi.Thatthe learned trial magistrate erred in law and fact by relying entirely on the pleadings filed by the respondent which was controverted by the appellants’ evidence and pleadings.vii.Thatthe learned trial magistrate erred in law and fact by forming and relying on his personal opinion which were entirely not based on any law, facts or evidence adduced during the trial.viii.Thatthe learned trial magistrate erred in law and in fact by awarding damages to the respondent without justification or proof of any loss suffered.ix.Thatthe learned trial magistrate erred in law and fact by ignoring the respondent’s conduct in exercise of his duties and justification for payment without work and that there was no such words uttered.x.Thatthe learned trial magistrate made a fundamental error of law and fact by failing to consider the appellants’ defence.xi.Thatthe learned trial made a fundamental error of law and fact by denying the 1st appellant costs of the suit despite exonerating it from the proceedings.xii.Thatthe learned trial magistrate erred in law and fact by failing to determine the case on merit.

11. At the directions of this court, the parties were to file and exchange written submissions on the appeal.

12. The appellants on their part submit that the respondent did not meet the threshold for defamation, since he did not call any evidence to support his allegation that he had been defamed.

13. The appellants refer this court to the case of Selina Patani & another v Dhiranji V. Patani [2019] eKLR in which the following was held by the court:“The evidence on record is the testimony by the 2nd appellant that her boss read the letter. The alleged boss was never called to testify. No other third party was called to testify as to the publication and injury to reputation. As to whether the appellants character and reputation was destroyed, there is no evidence on record from a third party stating that as a result of reading the impugned letter, the appellants reputation and standing in society was injured. It is in this context that we agree with the learned Judge that a person’s own view about his/her reputation is not material in a claim for defamation; there must be evidence from a third party to the effect that the standing and reputation of the claimant has been lowered as a result of the defamatory publication. In the absence of third party evidence, we find no error of law on the part of the Judge in arriving at the determination that the appellants did not prove their claim for defamation.”

14. It is the submission by the appellants that the respondent also did not prove malice particularly on the part of the 2nd appellant and hence the trial court had no proper basis for finding that he had proved his claim for defamation.

15. It is also the submission by the appellants that the 1st appellant was not a necessary party to the claim and hence the trial court ought to have awarded it costs of the suit. To support their argument here, the appellants have cited the case of Football Kenya Federation v Kenyan Premier League Limited & 4 others [2015] eKLR where the court rendered itself thus:“In Amon v Raphael Tuck & Sons Ltd [1956] 1 ALL ER 273, the court held that:-“The party to be joined must be someone whose presence before the court is necessary as a party. What makes a person a necessary party?.....the only reason which makes a person a party to an action is so that he should be bound by the result of the action, and the question to be settled, therefore, must be a question in the action which cannot be effectively and completely settled unless he is a party. It is not enough that the intervener should be commercially or indirectly interested in the answer. The person is legally interested in the answer only if he can say that it may lead to a result that will affect him legally. That is by curtailing his legal rights. That will not be the case unless an order may be made in the action which he is legally interest.”

16. For all the foregoing reasons, the appellants urge this court to allow the appeal and to set aside the trial court’s judgment by dismissing the respondent’s suit with costs.

17. On his part, the respondent is of the view that the appeal is lacking in merit since he had proved his case on a balance of probabilities and hence the trial court acted correctly in awarding damages in the manner it did.

18. The respondent cites the case of Ken Odondi & 2 others v James Okoth Omburah t/a Okoth Omburah & Company advocates [2013] eKLR where the Court of Appeal determined that:“…In action of libel the trial court in assessing damages is entitled to look at the whole conduct of the defendant from the time libel was published down to the time the verdict is given. It may consider what his conduct has been before action, after action, and in court during the trial…”

19. I have considered the written submissions on record in respect to the appeal. I have also re-evaluated the evidence tendered before the trial court for consideration.

20. It is clear that the appeal is challenging both the findings on liability and quantum. I therefore deem it appropriate to address the grounds of appeal contemporaneously under those two heads.

21. On liability, the respondent adopted his signed witness statement and testified that on the material date, he had visited the 1st appellant’s offices to follow up on unpaid fees when the 2nd appellant confronted him and hurled insults at him in the presence of one Evans Mainga and Teresia Wairimu, both of whom were at all material times employees of the 1st appellant.

22. Job Kemei who was DW1 equally adopted his executed witness statement and stated that during the meeting held on the material date, the respondent was not at all abused or in any manner defamed by the 2nd appellant as claimed.

23. The above testimony was reiterated by the 2nd appellant through his oral testimony.

24. In his judgment, the learned trial magistrate reasoned that the circumstances of the matter led him to the conclusion that an exchange ensued between the parties herein and that he was convinced that the 2nd appellant had uttered the words particularized in the plaint and which were defamatory of the respondent.

25. This being a claim for defamation, the case of Samuel Ndungu Mukunya v Nation Media Group Limited & another [2015] eKLR would apply, wherein the court aptly laid out the ingredients to be proved in a defamatory claim as follows:a.The libel must be published by the defendant.b.The published words must refer to the claimant.c.The statement as published must be false and defamatory of the plaintiff.d.The publication was malicious.

26. Furthermore, I considered the definition of what constitutes a defamatory statement as demonstrated by the Court of Appeal in the authority of SMW v ZWM [2015] eKLR thus:“A statement is defamatory of the person of whom it is published if it tends to lower him/her in the estimation of right thinking members of society generally or if it exposes him/her to public hatred, contempt or ridicule or if it causes him to be shunned or avoided.”

27. Upon my re-examination of the pleadings and evidence, it is not in dispute that the respondent enjoyed some form of contractual relationship with the 1st appellant at all material times and that he had visited the 1st appellant’s offices on the material date.

28. Upon my further re-examination of the pleadings and evidence, I note that whereas the respondent pleaded and stated in his evidence that the 2nd appellant had uttered the defamatory words against him during the material meeting, this was denied by the 2nd appellant and DW1.

29. The proviso of Section 107 of the Evidence Act stipulates that a person who desires judgment on liability must prove that the facts pleaded exist.

30. In view of the fact that the alleged defamatory words were denied in the present instance, the respondent was required to bring credible evidence to support his claim that the said words were truly uttered and that the same were defamatory of him but he did not, in my view.

31. Further to the foregoing, I also did not come across anything credible to indicate the presence of malice and/or injury to the reputation of the respondent as a result of the words spoken, in the event that there was sufficient proof to show that the said words were truly spoken by the 2nd appellant as claimed by the respondent.

32. To my mind, while it may be plausible that there was a confrontation between the parties on the material date thereby resulting in an exchange of words, I am not satisfied that there is credible evidence to show that the same amounted to defamation.

33. I am therefore of the view that in the present circumstances, the respondent had not proved his claim for defamation on a balance of probabilities and hence the learned trial magistrate fell into error by finding the appellants liable. I am inclined to disturb the finding on liability.

34. On the limb to do with quantum, I am enjoined to determine whether the award made was inordinately excessive and whether the learned trial magistrate applied the correct principles.

35. The above is in line with the case of Butt v Khan [1981] KLR 349 where it was expressed that:“An appellate court will not disturb an award of damages unless it is so inordinately high or low as to represent an entirely erroneous estimate. It must be shown that the Judge proceeded on wrong principles, or that he misapprehended the evidence in some material respect, and so arrived at a figure which was either inordinately high or low.”

36. Upon my study of the record, I note that none of the parties gave suggestions on the awards to be made at the trial.

37. Upon my further study of the record, it is clear that the learned trial magistrate restricted his award to general damages in the sum of Kshs 500,000/= and declined to make an award on exemplary and/or aggravated damages. However, he did not cite any authorities which guided his decision to award the above sum.

38. From my re-examination of the pleadings and evidence, it is uncontroverted that the respondent was a practicing auctioneer at all material times.

39. I therefore considered the case of Migori County Government & another v Josiah Onyango Okello t/a Cargo Secured Services [2019] eKLR where the High Court sitting on appeal upheld an award made on general damages in the sum of Kshs.500,000/= to a person having a relatable professional standing to the respondent herein.

40. In view of the foregoing, I am satisfied that even though the learned trial magistrate did not cite any supporting authorities, he arrived at a reasonable award on general damages.

41. Suffice it to say that, having found above that the learned trial magistrate erred in his finding on liability, I am inclined to interfere with the decision.

42. The upshot therefore is that the appeal partially succeeds, on the finding on liability. Consequently, the judgment delivered on April 16, 2021 is hereby set aside and is substituted with an order dismissing the respondent’s suit with costs to the 1st and 2nd appellants. The appellants herein shall also have the costs of the appeal.

DATED, SIGNED AND DELIVERED ONLINE VIA MICROSOFT TEAMS AT NAIROBI THIS 17TH DAY OF JUNE, 2022. J. K. SERGONJUDGEIn the presence of:................. for the 1st and 2nd Appellants................. for the Respondent