Kiautha & another t/a Briaton Bookshop v Longhorn Publishers PLC [2024] KEHC 15846 (KLR) | Company Witness Authority | Esheria

Kiautha & another t/a Briaton Bookshop v Longhorn Publishers PLC [2024] KEHC 15846 (KLR)

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Kiautha & another t/a Briaton Bookshop v Longhorn Publishers PLC (Civil Appeal E177 of 2023) [2024] KEHC 15846 (KLR) (13 December 2024) (Judgment)

Neutral citation: [2024] KEHC 15846 (KLR)

Republic of Kenya

In the High Court at Meru

Civil Appeal E177 of 2023

CJ Kendagor, J

December 13, 2024

Between

Zipporah Kaguri Kiautha & Lawrence Kiautha Ariithi T/A Briaton Bookshop

Appellant

and

Longhorn Publishers PLC

Respondent

(Being an appeal from the Judgment of the Chief Magistrate’s Court at Meru delivered by Hon. J.M. Njoroge dated 27th September, 2023 in respect of CMCC No. E094 of 2022)

Judgment

Introduction 1. The Appellants were customers of the Respondent and bought several consignments of books. A dispute arose on whether the Appellants had paid for all consignments ordered and received. The Respondent claimed that between 6th December, 2016 and 2nd March, 2017 it sold to the Appellants various books valued at Kshs.2,673,676. 46/= but the Appellants had refused to pay. On the other hand, the Appellants denied the debt and maintained that they had fully paid all consignments ordered for and received. The Respondent sued the Appellants and prayed for judgment against them for recovery of a liquidated sum of Kshs.2,673,676. 46/=.

2. The Appellants filed a Defense in which they denied the debt and insisted that they had paid for all consignments received from the Respondent. The matter went for hearing and the Respondent called one witness, Dennis Kariuki, who was its Credit Controller. The witness was not a director of the Respondent and he did not have the Respondent’s written authority to testify in the proceedings. The Appellants argued that Mr. Kariuki was not a competent witness for want of written authority to testify. The court delivered a judgment in favor of the Respondent on 27th September, 2023, and held that Mr. Kariuki’s testimony was properly on record and that he did not have to produce a written authority.

3. The Appellant’s were dissatisfied with the Judgment and appealed to this Court vide a Memorandum of Appeal dated 26th October, 2023. They listed the following grounds of Appeal;1. That the Learned trial Magistrate erred in Law and in fact in relying on the sole yet inadmissible evidence of Dennis Kariuki who was NOT a director of the Respondent nor testifying with the authority of the Respondent such authority having been donated to one Gabriel Temo Chikola who was never called as a witness. The authority of the Court of Appeal (Authority of Wines & Spirits Kenya Limited vs George Mwachiru Mwongu (2018) eKLR) relied, on by the learned trial magistrate to find that Dennis Kariuki did not require the Respondent’s, a limited liability company, authority to testify was completely irrelevant and out of sync with the law.2. That the Learned trial Magistrate completely erred in fact and law and misdirected himself in holding that the Appellant never demonstrated that the claimed amount was paid yet the Appellants’ case was;a.They never made the orders attributed to them in the suit.b.No goods purported in the suit were ever delivered to them.c.No goods were ever received as purported in the Plaint.d.No evidence was led to the orders or deliveries yet orders made by the Appellants were always paid for in case or post-dated cheques that were honoured.e.No pleadings or evidence was led as to lead to the findings by the learned trial magistrate that the Appellants requested the Respondent not to bank the cheques issued because of lack of funds or at all.f.In fact, the cheques exhibited being cheques Nos 005725, 005721, 005487 & 005482 for Kshs.50,000/=, Kshs.50,000/=, Kshs.200,000/=, & Kshs.200,000/= respectively, were exhibited to demonstrate that there existed business relationship between the Appellants and the Respondent and not to show that the same were not banked or dishonoured by the Respondent’s bankers. This is why they only total to a sum of Kshs.500,000/= and not the claimed amount of Kshs.2,673,676. 46/=.Similarly the alleged withheld cheques totaling Kshs.1,405,000/=were never pleaded or exhibited but were allegations arising through cross-examination of the Respondent’s witness.Hence, the Appellants were not in law, bound to demonstrate the honouring of cheques exhibited by their bankers when there was no complaint or indeed evidence that they were never honoured by the Appellants Bankers or that there was a request to the Respondent not to bank the same.3. That the Learned Magistrate further erred in fact and law in failing to find that the orders forms exhibited by the Respondents were those of the Respondent, making orders to itself by its own staff and there was no evidence of delivery to the Appellants. In fact, persons mentioned as the recipients of the goods on behalf of the Appellants, M/S Wainaina, Wafula, and Bilange were never the Appellants’ employees BUT employees of the Respondent. No evidence was called from the purported courier firm (EMS SPEEDPOST) to demonstrate that any if the purported orders were ever delivered to the Appellants.4. The proceedings were scantily recorded and failed to capture the Appellants’ Advocate’s cross-examination of the Respondents’ witness to the detriment of the Appellants’ case.5. The Judgment of the learned trial magistrate is otherwise against the weight of evidence in record which clearly had not proven its case on a balance of probabilities.

4. The Appeal was canvassed by way of written submissions.

The Appellants’ Written Submissions 5. The Appellants submitted that the lower Court should not have relied on Mr.Kariuki’s testimony. They argued that his evidence was inadmissible because he was not a director of the Respondent and did not have the Respondent’s authority to testify in the proceedings. They relied on the case of Raymark Limited vs John Lokoruu Nakuru ELC 147/2019 and Affordable Homes Africa Limited vs Henderson & 2 others. They also quoted Order 4 rule 1 (4) and Order 9 Rule 2 (c) of the Civil Procedure Rules. They also argued that the lower Court should not have relied on Wines & Spirits (K) Ltd vs George Mwachiru Mwongu (2018) eKLR because it was distinguishable from the current case.

6. In addition, the Appellants submitted that the lower Court should not have ruled in favor of the Respondent because the Respondent did not produce any evidence or documentation to show that the contested deliveries were ever made to the Appellants. They also argued that they never made the orders attributed to them in the suit and that the goods purported in the suit were never delivered to them. Lastly, they argued that the judgment should be set aside because the Respondent did not proof the case on a balance of probabilities.

Respondent’s Written Submissions 7. The Respondent submitted that the lower Court was right in relying on Mr. Kariuki’s testimony because he had met the qualifications of a competent witness as per Section 125 of the Evidence Act. It argued that Mr. Kariuki had the requisite authority to testify on its behalf as he had deponed in the Verifying Affidavit. It argued that the requirement for a written authority is not mandatory for any employee of a company to testify as a witness. It maintained that the lower Court was right in holding that Mr. Kariuki’s evidence was proper and admissible.

8. In addition, it submitted that the lower Court’s judgment was proper because the Appellants did not present documentary evidence to counter its assertions that the postdated cheques issued did not clear. It argued that it was upon the Appellants to lead evidence at trial and place material before the Court to prove the fact that all the monies as claimed by the Respondent had been duly paid and that no amount owed. They argued that it was upon the Appellants to prove that the order forms exhibited by the Respondent were those of the Respondent and that it made orders to itself.

Issues for Determination 9. I have considered the grounds of appeal and submissions by both counsels for the parties and I am of the view that the issues for determination are;a.Whether a witness must have a company’s written authority to testify on its behalf.b.Whether the Respondent proved the Debt on a balance of probabilities.

The Duty of the Court 10. It is trite law that the duty of the first appellate Court is to re-evaluate the evidence in the subordinate court both on points of law and facts and come up with its findings and conclusions. As the Court is re-evaluating the evidence, it is required to bear in mind that it had neither seen nor heard the witnesses. This principle was set out in Selle and another v Associated Motor Boat Company Ltd and others [1968] 1 EA 123:“…this court must reconsider the evidence, evaluate it itself and draw its own conclusions though it should always bear in mind that it has neither seen nor heard the witnesses and should make due allowance in this respect. In particular this court is not bound necessarily to follow the trial judge’s findings of fact if it appears either that he has clearly failed on some point to take account of particular circumstances or probabilities materially to estimate the evidence ...”

Whether a witness must have a company’s written authority to testify on its behalf 11. The Appellants submitted that Mr. Kariuki’s testimony was inadmissible because he did not have the Respondent’s authority to testify in the proceedings. On the other hand, the Respondent argued that the requirement for a written authority is not mandatory for any employee of a company to testify as a witness. The lower Court interrogated this issue and held that Mr. Kariuki’s evidence was properly on record. It stated: ‘the provisions of Order 9 Rule 2 (c) of the Civil Procedure Rules do not make it mandatory for a written authority to be provided or filed in court for a party to be allowed to testify as a witness.’

12. I shall relook at the available evidence and the applicable law on this area to determine whether the lower Court arrived at the right conclusion on this issue. I shall begin on reevaluating the facts to ascertain whether Mr. Kariuki had any authority. Looking at the record, Mr. Kariuki did not tender any evidence to show that the company had given him a written authority to testify on its behalf.

13. From the Record, Mr. Kariuki filed a Verifying Affidavit dated 18th March, 2021, in which he stated that he was duly authorized to swear the affidavit. I note that he did not attach the company’s letter of authority to testify on its behalf or in the alternative company resolutions. That notwithstanding, courts have held that a statement made on oath should be expressly denied on oath, otherwise if not challenged, it remains a fact and the truth. The was restated in Kenya Akiba Micro Financing Limited v Ezekiel Chebii & 14 Others [2012] eKLR, where the court held;The Plaintiff has in paragraphs 12 to 15 of the Affidavit of Gideon Mwiti Irea sworn in support of the motion set out in detail the nature of the business it was carrying on prior to November, 2005. [….]. To begin with, the Defendants did not specifically or otherwise deny that the Plaintiff’s business was carried out as set out in those paragraphs. Further, none of the Defendants stated or submitted that the business of the Plaintiff as set out in those paragraphs of the Affidavit amount to banking business or financial business. In my view, a statement made on oath should as a matter of fact be expressly denied on oath. If not challenged, it remains a fact and the truth for that matter.

14. During trial, the Appellants did not formally challenge Mr. Kariuki’s authority to testify on the Respondent’s behalf. They did not raise a formal objection regarding Mr. Kariuki’s ability to testify and they only raised the issue in the submissions. I thus find that Mr. Kariuki’s assertion that he was duly authorized remained uncontroverted.

15. A similar issue arose in the case of Icea Lion General Insurance Company Limited v Chris Ndolo Mutuku t/a Crystal Charlotte Beach Resort [2021] eKLR, where the Respondent claimed that a manager of a company did not have authority to testify on behalf of a company. The Court dismissed the objection on grounds that the Respondent had not raised that issue at the lower Court, and that he had only raised it in the submissions. I find that the facts of that case resonate with the current case in that in both cases the witnesses were managers of the company, the issue was never raised during the trial, and it was only raised in the submissions.

16. Based on the above authorities, I agree with the lower Court’s finding that Mr. Kariuki’s testimony was properly on record.

17. In their submissions to this Court, the Appellants stated as follows; “There was no resolution of the Respondent authorizing; (i) the institution of the suit, (ii) the appointment of MS DANLE PARTNERS LLP to act for the Respondents, and (iii) Mr. Dennis Kariuki to act and/or testify or swear affidavits or make statements on behalf of the Respondent.” By these words alone, did the Appellants submit that the Respondent’s suit was incompetent for lack of authorization? I do not think so.

18. In my view, the issue of the competency of the Respondent’s suit is not properly before this Court and the same is not open for this Court’s determination. I have relooked at all the pleadings produced before the lower Court and it appears that the Appellants focused on the competency of the witness to testify on the company’s behalf. Their line of defense was that his testimony was inadmissible. They did not, at any point, claim that the Respondent’s suit was incompetent and bad in law for want of company’s authorization or resolution. They ought to have pleaded this at the lower Court or in the Grounds of Appeal.

19. This decision is limited to the question of whether a witness must have a company’s written authority to testify on its behalf. This decision does not relate/touch on the authority/competency of a company officer to institute a suit on behalf of a corporate. This is because the Appellants did not question the competency of the Respondent’s suit.

Whether the Respondent proved the Debt on a balance of probabilities 20. The Appellants submitted that the lower Court should not have ruled in favor of the Respondent because the Respondent did not produce any evidence or documentation to show that the contested deliveries were ever made to the Appellants. They also argued that they never made the orders attributed to them in the suit and that the goods purported in the suit were never delivered to them.

21. I have relooked at the evidence adduced by the Respondent and the Appellants. I note that the Appellants did not furnish the court with documentary evidence that would have helped the lower Court ascertain whether the cheques issued were honoured within the required time. Although the Respondent produced 11 cheques issued by the Appellants, the Appellants did not demonstrate by evidence that they had paid each of the amounts indicated in the cheques. I thus find no reasons to disturb the lower Court’s decision.

22. On the other hand, I have looked at the Respondent’s documents to ascertain whether it proved the sum as claimed. The Respondent produced copies of invoices and corresponding Dispatch Slips. It produced 12 invoices. A perusal of these invoices demonstrates that, while 10 of them had corresponding Dispatch Slips, 2 invoices did not have corresponding Dispatch Slips. The two invoices are;a.Invoice No. PSIN189127 (Order SO-0020538)- Kshs.653,903. 60/=b.Invoice No. PSIN189126 (Order SO-0020535)- Kshs.171,900. 40/=Total - Kshs.825,804/=

23. Courts have held that a person seeking to prove a debt against another ought to adduce sufficient evidence to guide the court. Where applicable, the litigant is mandated to production of invoices with corresponding dispatch Slips or delivery notes. In Securex Agencies (K) Limited v Resort Kenya Limited & another [2023] KEHC 21751 eKLR, the High Court held as follows:Since the Respondents did not admit the debt and the Appellant did not produce the delivery notes in support of the invoices, the trial court was correct to conclude that the Appellant did not prove its claim. I also cannot fault the trial court for stating that production of invoices alone was not enough to prove the amount claimed and that the delivery notes were important to prove the Appellant’s claim as the same were expressly sought by the Respondents. The Appellant’s claim thus remained unsupported.

24. Similarly, in Mandalia v Coolxtreme Limited [2024] KEELRC 59 eKLR, the Court found that a claimant had not proved a debt because he did not produce corresponding delivery notes. It held:On the prayers of the Respondent, the Claimant admitted that he owed only the first invoice of Ksh.25,000. 00 and the last invoice of Ksh.60,000. 00. The Claimant stated that all other invoices produced by the Respondent did not have corresponding delivery notes to prove that he received the items or services. The Respondent did not prove that the goods and/or services were supplied to the Claimant. I therefore award the Respondent only the sum of Ksh.85,000 being the sum admitted by the Claimant.

25. For these reasons, I find that the Respondent proved its claims save for the two invoices without corresponding Dispatch Slips. The upshot is that the amount awarded at the lower Court is hereby reduced by Kshs.825,804/=.

Disposition 26. The Appeal succeeds partially.

27. I enter judgment for the Respondent against both the 1st and 2nd Appellants jointly and severally in the sum of Kshs.1,847,872. 46/= with interest at Court rates from the date of lower Court Judgment.

28. No order as to the costs of this appeal.

29. It is so ordered.

DATED, DELIVERED AND SIGNED AT NAIROBI THROUGH THE MICROSOFT TEAMS ONLINE PLATFORM ON THIS 13TH DAY OF DECEMBER, 2024. ……………………………C. KENDAGORJUDGEIn the presence of:Court Assistant: BerylMr. Muthomi Njeru Advocate for AppellantMs Awuor Advocate for the Respondent