Kiio v Kanuna t/a Eastern Gate Inventors (EGI) [2022] KEHC 10849 (KLR)

Kiio v Kanuna t/a Eastern Gate Inventors (EGI) (Civil Appeal 60 of 2020) [2022] KEHC 10849 (KLR) (4 May 2022) (Judgment)

Neutral citation: [2022] KEHC 10849 (KLR)

Republic of Kenya

In the High Court at Machakos

Civil Appeal 60 of 2020

MW Muigai, J

May 4, 2022

Between

Diana Katumbi Kiio

Appellant

and

Peter Kanuna T/A Eastern Gate Inventors (EGI)

Respondent

(Being an appeal from the Judgement and decree of the Chief Magistrates Court at Machakos Delivered on 30th July 2020 by Honourable A. Nyoike ,Principal Magistrate in Machakos Case Number 760 of 2018)

Judgment

Court Record 1. Vide a Plaint dated 3rd November 2018 The parties herein entered into an agreement in which the Respondent was to sell four (4) plots of agricultural land in Konza Ranch , plot number 48 for Kshs 300,000 per plot and Kshs. 200,000 was paid being part payment on 15th of December 2015. On 18th of November 2017 parties agreed that since the Appellant was not in a position to clear the balance then she should be refunded to which she was given Kshs 20,000 and the balance was to be paid in instalment between April 2018 and August 2018. The Respondent had committed to pay the balance on 4th of February 2017 but the same has not been honoured to date. The Appellant therefore prayed for the following orders;a.Kshs 180,000b.Costs of the suitc.Interest on (a) above at court rates from 9. 12. 2015 till payment.

2. The Respondent filed a Defence dated 7th January 2019 denying the contents of the plaint. However, he acknowledged receipt of Kshs 200,000 and that Kshs 20,000 was paid awaiting a decision of the company on the right procedure of refunding the money. He averred that the Appellant took too long to communicate her inability to pay occasioning him losses as the plots still remain unsold and prayed for judgement against the plaintiff for;a.Damages for breach of contract to buy 4 plots agricultural plot number 48 Konza ranchb.Costs of the suitc.Any other relief the court may find suitable under these circumstances.

3. The Appellant filed a reply to defence dated 7th January 2019 reiterated the contents of the Plaint and denied there being an agreement that she was to look for another buyer.

4. At the hearing, only the Appellant testified. The Respondent did not call a witness. The Appellant told the court that they entered into an agreement and upon payment was issued with a receipt which she produced. After two (2) years of non-payment, she wrote a letter and was paid Kshs. 20,000 and was given an assurance in writing that she would be refunded Kshs 180,000 by the Respondent in 4 months. She contended that the Respondent had acknowledged payment of Kshs. 200,000 in his Defence. There was no cross-examination.

5. From the record, the Respondent was present in court but did not testify not prosecute his defence.

Trial Court Judgment 6. The Trial Court entered judgement on 30th July 2021 in which it found that the Appellant did not have clean hands as she breached the contract by failing to honour it in 90 days and also waiting for the contract period to lapse before indicating her inability to pay. Reliance was placed on the case of National Bank of Kenya Limited v Pipeplastic Samkolit (K) Limited and another (2002) 2 E.A 503 and the suit was dismissed with costs to the Respondent.

The Appeal 7. Aggrieved by this judgement , the Appellant has filed a Memorandum of Appeal dated 11th of August 2020 seeking the following orders;a.The Appeal be allowedb.The judgement and orders of the subordinate court be reversed.c.The Appellant suit before the Chief Magistrate court be allowed as prayed.d.The costs of this appeal and the subordinate suit be awarded to the Appellante.Any further or other relief as justice of the case may require to be granted in the circumstances.

8. The same has been filed on the grounds that;i.The learned magistrate erred in law and in fact in disregarding the fact that the Plaintiff’s case and evidence was not challenged and stood uncontroverted due to the failure by the Defendant to adduce evidence and the standard of proof on the balance of probabilities has been attained by the Plaintiff.ii.The learned magistrate erred in law and in fact in failing to address herself to the fact that the Defendant acknowledged the Plaintiffs claim and made some payment in respect of it and the right of the Plaintiff to claim and made some payment in respect of it and the right of the Plaintiff to claim the balance accrued on the date the Defendant made the part payment.iii.The learned magistrate erred in law and in fact in considering the Defendants pleadings despite fact that the Defendant’s Defence was unsubstantiated and remained mere statements as the Plaintiff evidence remained unchallenged and uncontroverted.iv.The learned magistrate erred in law and in fact in failing to address herself to the fact that the Defendant/ Respondent admitted the entire claim as the pleadings presented by the Defendant admitted that the Defendant owe the Plaintiff.v.The learned magistrate erred in law and in fact in failing to address herself to the fact that there was admission of facts discerned from the documents which were admitted in evidence by the Plaintiffvi.The learned magistrate erred in law and in fact in finding that the Plaintiff was in breach of the agreement by failing to pay the balance in 90 days despite the issue not raised by the Defendant who did not give evidence in court.vii.The learned magistrate erred in law and in fact in finding that the Defendant lamented that at the time the subject area was of high interest to the investors despite that the Defendant did not adduce evidence.viii.The learned magistrate erred in law and in fact in finding that the default referenced in the agreement between the parties ought to be within 90 days otherwise the transaction would be frustrated despite that the agreement did not provide a default clauseix.The learned magistrate erred in law and in fact in failing to address herself and appreciate the fact that there was no agreement between the parties as what was presented was agreement form made by one party only the Plaintiff.x.The learned magistrate erred in law and in fact in finding that the Plaintiff allowed the time agreed for the performance of the contract to lapse before communicating her inability to perform despite no party raising the issue and despite there being no time agreed for performance of the contract.xi.The learned magistrate erred in law and in fact in finding that there was a contract between the parties which was breached which was not the case in the matter.xii.The learned magistrate erred in law and in fact in dismissing the Plaintiff claim with costs to the defendantxiii.The learned magistrate erred in law and in fact in failing to assess the overwhelming evidence and submissions presented by and for the Appellant.xiv.The learned magistrate erred in law and in fact in disregarding the agreement dated 4/2/2018 made by the Respondent that the Appellant presented in evidence and which constitute the Respondent’s admissions to the claim.xv.The decision of the learned magistrate was against the weight of the evidence adduced.

9. The Appellants filed submissions on 28th January 2022. while relying on the case of Stephen Gacha Githaiga vs Margaret Wambui Weru and Another [2015] eKLR, Trust Bank Limited versus Paramount Universal Bank Limited and 2 others [2009] and Kenneth Nyaga Mwigs vs Austin Kiguta Civil Appeal No.148 of 2008 she submitted that there was no evidence on record to support the Respondent’s case and since she had proved her case on a balance of probabilities, judgment should be entered in her favour.

10. She also submitted that the admissions in evidence and in the pleadings should be considered and the appeal allowed. She contended that the Respondent admitted to receipt of Kshs 200,000 in his Pleading and this should be considered an admission under Order 13 Rule 1 and 2 CPR 2010. Reliance was placed on the case of Abok James Odera T/A A.J Odera & Associates v. John Patrick Machira T/A Machira & Co. Advocates (2013).

11. On the issue of 90 days, the Appellant opined that it was not an issue in evidence nor the pleadings and the trial court misdirected itself in finding that that was a breach of the agreement. The appellant relied on the case of Daniel Otieno Migore v South Nyanza Sugar Co. Ltd [2018] eKLR and Philmark Systems Company Limited v Andermore Enterprises [2018] eKLR on reliance of evidence that has not been pleaded by a court.

12. The Appellant contended that he proved his case by producing evidence to show that there was an agreement between the parties and provided a sale agreement and receipts which the court did not take into account while arriving at its judgement. He opined that he also provided letters to show communication between the parties about the amount that was to be refunded. Reliance was placed on the case of East Produce (K) Limited vs Christopher Astiado Osiro, Civil Appeal 43 of 2001 and Kiema Mutuku vs Kenya Cargo Hauling Services Limited.

13. The Respondent did not participate in this appeal despite service.

Determination 14. I have considered the Record of Appeal, the Trial Court’s file and the submissions on record.

15. Noting that this is an appellate court that did not have the opportunity to see, listen to nor interrogate the witnesses and has to base its determination on the facts and the law presented before it, I will start by restating what was said in Selle v Associated Motor Boat Co. [1968] EA 123 that:“The appellate court is not bound necessarily to accept the findings of fact by the court below. An appeal to the Court of Appeal from a trial by the High Court is by way of a retrial and the principles upon the Court of Appeal acts are that the 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 the 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 or if the impression based on the demeanour of a witness is inconsistent with the evidence in the case generally.”

16. I will also reiterate the sentiments of the court in in Peters v Sunday Post Limited [1958] EA 424 where it was held that:“Apart from the classes of case in which the powers of the Court of Appeal are limited to deciding a question of law an appellate court has jurisdiction to review the record of the evidence in order to determine whether the conclusion originally reached upon that evidence should stand; but this jurisdiction has to be exercised with caution. If there is no evidence to support particular conclusion (and this really is a question of law) the appellate court will not hesitate so to decide. But if the evidence as a whole can reasonably be regarded as justifying the conclusion arrived at on conflicting testimony by a tribunal which saw and heard the witnesses, the appellate court will bear in mind that it has not enjoyed this opportunity and that the view of the trial Judge as to where credibility lies is entitled to great weight.

17. It is not in dispute that the Appellant and the Respondent entered into an agreement dated 22nd of January 2016 in which she was to purchase four (4) plots measuring 50 by 100 for Kshs 300,000 per plot and the deposit was a minimum of Kshs 50,000. It is also not in dispute that the Appellant paid 200,000 on 15th December 2015 to the Respondent.The balance was to be paid “in a duration of 90 days”.

18. The contract had a default clause which stated that“In the case of payment challenges during the process of payments and you are unable to meet your target (complete paying your plot) then the amount you will have paid/deposited shall be refunded Ninety Five percent (95%). Five percent (5%) will be retained by the office to meet all office processes and bank charges”

19. The Appellant signed a statutory declaration in which she deposed “That in my default, I will forfeit 5% of the total sum of money that I have deposited as per the agreement”

20. The Appellant wrote a letter dated 8th November 2017 to the Respondent and indicated that despite informing the Respondent of her inability to complete the transaction in November 2015, she was yet to be refunded. The Respondent is alleged to have responded vide a letter dated 4th February 2018 acknowledging the debt of Kshs 180,000 and promising to settle the same between April and August 2018.

21. Sections 109 and 112 of the Evidence Act provides as follows:109. The burden of proof as to any particular fact lies on the person who wishes the court to believe in its existence, unless it is provided by any law that the proof of the fact shall lie on any particular person.112. in civil proceedings, when any fact is especially within the knowledge of any party to those proceedings, the burden of proving or disproving the fact is upon him.

22. The burden of proof was discussed by the court of appeal in the case of Palace Investment Ltd v Geoffrey Kariuki Mwenda & Another [2015] eKLR referred to the case of Miller v Minister of Pensions [1947] 2 All ER 372 where held that:“That degree is well settled. It must carry a reasonable degree of probability, but not so high as is required in a criminal case. If the evidence is such that a tribunal can say: we think it more probable than not; the burden is discharged, but, if the probabilities are equal it is not.This, burden on a balance or preponderance of probabilities means a win however narrow. A draw is not enough. So, in any case in which the tribunal cannot decide one way or the other which evidence to accept where both parties…are equally (un) convincing, the party bearing the burden of proof will loose because the requisite standard will not have been attained.” - Denning J

23. In the case of Nizar Virani T/A Kisumu Beach Resort v Phoenix of East Africa Assurance Company Limited [2004] 2 KLR 269, the court held that:“Whereas a claim for special damages should not only be pleaded but strictly proved what amounts to strict proof must depend on the circumstances that is to say, the character of the acts producing damage, and the circumstances under which those acts were done.”

24. This court in Pius Kimaiyo Langat v Co-operative Bank of Kenya Ltd [2017] eKLR, observed that;“We are alive to the hallowed legal maxim that it is not the business of Courts to rewrite contracts between parties. They are bound by the terms of their contracts, unless coercion, Fraud or undue influence are pleaded and proved.”

25. In National Bank of Kenya Ltd v Pipe Plastic Samkolit (K) Ltd & another [2011] eKLR, the Court stated that:“it is clear beyond para adventure ,that save for those special cases where equity might be prepared to relieve a party from a bad bargain, it is ordinarily no part of equity’s function to allow a party to escape from a bad bargain.”

26. The Appellant signed the contract willingly and there has been no indication to the contrary. From the contract she is entitled to the refund of Kshs 200,000 less 5% which is 190,000 However, the Appellant claims 180,000 and the Respondent’s agent admits to owing Kshs 180,000. It is acknowledged that the Defendant had paid back Ksh 20,000/- of the Ksh 200,000/-Parties are bound by their pleadings. This was stated by the Court of Appeal in the case of Independent Electoral And Boundaries Commission & Another v Stephen Mutinda Mule & 3 Others [2014] eKLR, where it stated as follows as follows-“… the decision of the Malawi Supreme Court of Appeal in Malawi Railways Ltd V Nyasulu[1998]MWSC 3, in which the learned Judges quoted with approval from an article by Sir Jack Jacob entitled “The present Importance of Pleadings.” The same was published in [1960] Current Legal problems, at P174 whereof the author had stated-‘As the parties are adversaries, it is left to each one of them to formulate his case in his own way, subject to the basic rules of pleadings … for the sake of certainty and finality, each party is bound by his own pleadings and cannot be allowed to raise a different or fresh case without due amendment properly made. Each party thus knows the case he has to meet and cannot be taken by surprise at the trial. The court itself is as bound by the pleadings of the parties as they are themselves. It is no part of the duty of the court to enter upon any inquiry into the case before it other than to adjudicate upon the specific matters in dispute which the parties themselves have raised by the pleadings. Indeed, the court would be acting contrary to its own character and nature if it were to pronounce any claim or defence not made by the parties. To do so would be to enter upon the realm of speculation. Moreover, in such event, the parties themselves, or at any rate one of them might well feel aggrieved; for a decision given on a claim or defence not made or raised by or against a party is equivalent to not hearing him at all and thus be a denial of justice….In the adversarial system of litigation therefore, it is the parties themselves who set the agenda for the trial by their pleadings and neither party can complain if the agenda is strictly adhered to. In such an agenda, there is no room for an item called “Any Other Business” in the sense that points other than those specific may be raised without notice.’

27. I find that the Appellant has only proved Kshs. 180,000 from the evidence on record and failure of the Respondent to prosecute his suit means that the allegations of the Appellant remain uncontroverted. In the case of Janet Kaphiphe Ouma & Another v Marie Stopes International (Kenya) Kisumu HCCC No. 68 of 2007 Ali-Aroni, J. citing the decision in Edward Muriga Through Stanley Muriga v Nathaniel D. Schulter Civil Appeal No. 23 of 1997 held that:“In this matter, apart from filing its statement of defence the defendant did not adduce any evidence in support of assertions made therein. The evidence of the 1st plaintiff and that of the witness remain uncontroverted and the statement in the defence therefore remains mere allegations…Sections 107 and 108 of the Evidence Act are clear that he who asserts or pleads must support the same by way of evidence”.

28. In the end, I find that the Trial Court judgment must be disturbed. The parties’ entered into an Agreement and executed the agreement signifying freewill and consent to terms of the Agreement. When it came to execution, the Appellant part performed and then defaulted. The default Clause mandated refund of payment minus 5% retention. Ksh 20,000/- was refunded by the Defendant. The balance of 200,000/- admittedly paid to the Defendant less 5% is due and payable to the Appellant as spelt out by the terms of the Agreement.

Disposition 29. Consequently, the Appeal succeeds and I set aside the judgment and decree of the trial court and substitute it with the following orders;Judgement is hereby entered in favor of the Appellant as follows;a.Kshs 180,000 in special damages(Taking into account Ksh 20,000/- refunded and 5% retention of Ksh 200,000/- part-payment actual payment shall be Ksh 170,000/-)b.Costs of the suit and the Appealc.Interest on (a) above at court rates from December 9, 2015 till payment.

30. It is so ordered.

DELIVERED SIGNED & DATED IN OPEN COURT ON 4THMAY 2022. (VIRTUAL CONFERENCE)M.W. MUIGAIJUDGE