Caroline Auma Omolo v South Nyanza Sugar Co Ltd [2019] KEHC 8664 (KLR) | Contract Breach | Esheria

Caroline Auma Omolo v South Nyanza Sugar Co Ltd [2019] KEHC 8664 (KLR)

Full Case Text

REPUBLIC OF KENYA

IN THE HIGH COURT OF KENY AT MIGORI

CIVIL APPEAL NO. 102 OF 2017

CAROLINE AUMA OMOLO.............................................................APPELLANT

VERSUS

SOUTH NYANZA SUGAR CO. LTD..............................................RESPONDENT

(Being an appeal from the judgment and decree by Hon. C. M. Kamau, Senior Resident Magistrate in Rongo Resident’s Magistrate's Civil Suit No. 19 of 2014 delivered on 10/10/2017)

JUDGMENT

1.  A Plaint was filed in Rongo Resident’s Magistrate’s Courtand registered as Civil Suit No. 19of2014(hereinafter referred to as ‘the suit’) against South Nyanza Sugar Co. Ltd, the Respondent herein, by the Appellant herein, Caroline Auma Omolo. The Appellant pleaded that by a Growers Cane Farming and Supply Contract dated 31/07/2008 (hereinafter referred to as 'the Contract') the Respondent contracted the Appellant herein to grow and sell to it sugarcane at the Appellant's parcel of land Plot No. 1905E Field No. 2B in Kakmasia Sub-Location measuring 0. 3 Hectare within Migori County.

2.  It was further pleaded that the Contract was for a period of five years or until one plant crop and two ratoon crops of the sugarcane were harvested from the subject parcel of land whichever event occurred first. That, the Respondent surveyed, ploughed, furrowed and harrowed the land and also supplied the cane seed, fertilizers and other inputs. That, the Appellant discharged her part of the contract until the cane was mature, but the Respondent failed to harvest it hence suffered loss.

3. Aggrieved by the alleged breach of the contract the Appellant filed the suit on the 13/11/2014 claiming compensation for the loss of the unharvested sugar cane, costs and interest at court rates.

4.  The Respondent entered appearance and filed a Statement of Defence dated 16/02/2015 wherein it denied the contract and put the Appellant into strict proof thereof. The Respondent further averred that if at all there was any such contract then the Appellant was the author of his own misfortune as she failed to properly maintain her crops to the required standards or at all to warrant the same being harvested and milled. The Respondent further prayed that the costs of the inputs it made in accordance with the contract be deducted in the event the claim succeeded otherwise the Respondent prayed for the dismissal of the suit with costs.

5. The suit was finally settled down for hearing. Both parties were represented by Counsels. The Appellant was the sole witness who testified and adopted her Statement as part of his testimony. She also produced the documents in her List of Documents as exhibits. The Respondent called its Senior Field Supervisor as its sole witness who also adopted his statement and produced the documents as exhibits.

6.  The trial court rendered its judgment and partly allowed the suit by remedying the Appellant the value of the plant crop only. The Appellant was aggrieved by the judgment and lodged an appeal. In praying that the appeal be allowed, and appropriate compensation be awarded proposed the following two grounds in the Memorandum of Appeal dated 24/10/2017 and filed in Court on 02/11/2017:

1.  The learned trial magistrate erred in law and in fact in holding as he did that for the breach committed by the Respondent / Defendant, the Appellant / Plaintiff was only entitled to the award of the damages for the plant crop which holding was unreasonable in the circumstances, and the compensation therefore inadequate.

2. The learned trial magistrate in the assessment of the award by making several deduction to the award, which deductions were neither pleaded as a set off and/or counterclaim, and the trial magistrate’s said act was in contradiction of the law and public policy  in that he reward the respondent for its breach.

7.  Directions were taken, and the appeal was disposed of by way of written submissions where both parties duly complied. The Appellant challenged the finding of the trial court vigorously and more so claiming that the court erred in making a finding that the Appellant was not entitled to the proceeds for the ratoon crops as she did not develop the same. She also contended that the court erred in deducting the transport and harvesting charges and prayed for full compensation for all the three cycles.

8. The Respondent supported the judgment and prayed for the dismissal of the appeal.

9.  As the first appellate Court, it is now well settled that the role of this court is to revisit the evidence on record, evaluate it and reach its own conclusion in the matter. (See the case of Selle & Ano. vs. Associated Motor Boat Co. Ltd (1968) EA 123). This court nevertheless appreciates that an appellate Court will not ordinarily interfere with findings of fact by the trial Court unless they were based on no evidence at all, or on a misapprehension of it or the Court is shown demonstrably to have acted on wrong principles in reaching the findings.  This was the holding in Mwanasokoni – versus- Kenya Bus Service Ltd. (1982-88) 1 KAR 278and Kiruga –versus- Kiruga & Another (1988) KLR 348).

10.  I have certainly perused and understood the contents of the pleadings, proceedings, judgment, grounds of appeal, submissions and the decisions referred to by the parties.

11.   I will first deal with the issue raised in the second ground of appeal, I must concur with the trial court. That is because the Appellant was very clear in her statement over the matter. She admitted that the Respondent had ploughed, harrowed and furrowed her land and also supplied her with seed cane and fertilizer. She also admitted that the cost of harvesting and transporting the cane was deductible from the proceeds of the cane. That position is backed by the contract.

12. The Respondent produced various documents on the services rendered and the prevailing charges for harvesting and transport charges. The Appellant neither objected to their production nor challenged their contents. I therefore find that since the Appellant admitted her indebtedness to the Respondent and did not object to the sums claimed, then the sums were recoverable from the proceeds of the cane, the failure to put up a set-off or a counterclaim notwithstanding. However, the deductions were subject to proof. That ground therefore fails.

13.  On the first ground, it is true I have dealt with the issue of whether a farmer whose plant crop was not harvested was entitled to the proceeds from the ratoon crops. Since I have not changed my position on the same I will reiterate what I stated in Migori High Court Civil Appeal No. 10 of 2016 South Nyanza Sugar Co. Ltd vs. Joseph O. Onyango (2017) eKLR as under: -

’21. I will now look at whether the Respondent was in a position to mitigate loss in this type of a contract. As stated elsewhere above the contract was for a period of a period of five years or until one plant and two ratoon crops of sugar cane are harvested on the farm whichever period shall be less. Therefore, the success of the main plant crop determines the success of the first ratoon and likewise the success of the first ratoon determines the success of the second ratoon. In other words, if the main plant crop is compromised then the ratoons will definitely be equally compromised. Hence unless the miller is in a position to foresee its failure to harvest the cane in advance and put the farmer on appropriate notice and in accordance with the Agreement, there is very little a farmer can do to salvage the situation once the miller fails to harvest the cane under the Agreement.

22.   Looking at the Agreement, there are several restrictive clauses such that it would not be possible for the Respondent to take any reasonable steps to mitigate the loss unless the Appellant takes the first step in informing the Respondent of its intended breach of the Agreement. The Appellant's argument that the Respondent failed to mitigate its loss cannot stand and is hereby rejected.

23.     I therefore find that the Respondent was entitled to the proceeds from the ratoons. ….…’

14. According to the Plaint, the Appellant prayed for the proceeds from the plant crop and the two ratoon crops in accordance with the contract. The trial court awarded her the proceeds for the plant crop and declined any award for the proceeds for the ratoon crops on account of having not developed the ratoon crops. From the above holding the finding by the learned trial magistrate to the extent that the Appellant was not entitled to any proceeds from the ratoon crop yields is hereby, and with utmost respect, set aside. The Appellant was entitled to the proceeds from the two ratoon crops as well.

15.  The trial court calculated the proceeds for the plant crop on the basis of the size of the land in the Contract which was 0. 8 Hectares. However, the Appellant pleaded the area as 0. 3 Hectares in the Plaint, her Statement and submissions. Since there was no appeal on the issue, I will not disturb that finding but will adopt the size of 0. 3 Hectares in computing the expected yields for the ratoon crops. The trial court further used the Respondent Cane Yields Schedule in calculating the yields for the plant crop. I will likewise adopt the Schedule for the ratoon crops which settles it at 48. 76 tonnes per hectare. According to the Cane Prices Schedule on record the prices for the first ratoon crop yields and the second ratoon crop yields at their respective maturity periods being December 2009 and June 2011 would have been Kshs. 2,850/= and Kshs. 3,128/= respectively. The Appellant would have earned gross income for the first ratoon crop yields and the second ratoon crop yields at Kshs. 41,690/= and Kshs. 45,760/= respectively. The sums of Kshs. 10,240/=on harvesting charges and Kshs. 33,640/= on transport charges would then be deducted on each ratoon cycle. The record has the documents on the said charges which were produced by the Respondent as exhibits. The net proceeds for the first ratoon crop would have been a debit of Kshs. 2,190/= and for the second ratoon crop would have been a credit of Kshs. 1,880/= thereby bringing the total to a loss of Kshs. 310/-. The ratoon crop yields were hence of no economic value.

16. Consequently, the appeal partly succeeds on the aspect of the Appellant’s entitlement to the proceeds from the ratoon crop yields but fails on the aspect of deductions. However, since the ratoon yields were uneconomical the Appellant would not have derived any income therefrom. The upshot is that the only income payable to the Appellant was what was decreed by the trial court. Since the appeal partly succeeded each party shall bear its own costs.

17. Orders accordingly.

DELIVERED, DATED and SIGNED at MIGORI this 9th day of April 2019.

A. C. MRIMA

JUDGE

Judgment delivered in open court and in the presence of: -

Mr. Ezekiel OdukCounsel instructed by the firm of Messrs. Ezekiel Oduk & Co. Advocates for the Appellant.

Messrs. Otieno, Yogo, Ojuro & CompanyAdvocates for the Respondent.

Evelyne Nyauke –Court Assistant