Latimer Ruguaru Gacanja (Trading as Zoea Transporters Limited) v Trustees of the Lutheran World Federation [2021] KEHC 1343 (KLR)

REPUBLIC OF KENYA

IN THE HIGH COURT OF KENYA

AT NAIROBI

CIVIL SUIT NO. 668 OF 2001

LATIMER RUGUARU GACANJA(Trading asZOEA TRANSPORTERS LIMITED)......PLAINTIFF

-VERSUS-

THE TRUSTEES OF THE LUTHERAN WORLD FEDERATION....................................DEFENDANT

JUDGMENT

1. The plaintiff herein lodged a suit against the defendant vide theplaint dated 25thApril, 2001 and further amended on 11thJune, 2011 and sought for the following reliefs arising out of a claim for breach of contract:

a) An outstanding balance of Kshs.6,134,305/.

b) Special damages of Kshs.89,800/.

c) General liquidated damages for breach of contract in the sum of Kshs.4,983,823/.

d) Interest due on (a), (b) and (c) above at commercial rates prevailing at the material time of between 21% to 36% p.a annually from 30th September, 2016 until payment in full.

e) Such other reliefs that this Honourable Court deems fit to grant.

f)Costs of the suit.

2. While noting that the plaintiff later filed a further further re-amended plaint dated 18thMarch, 2015 this court did not come across anything from the record to indicate that leave was granted to the plaintiff to amend and to file the same. In the circumstances, this court will place reliance on the further amended plaint.

3. The plaintiff pleaded in his further amended plaint that he wasat all material times engaged in the transport business whereasthe defendant was running a refugee camp in Kakuma.

4. The plaintiff pleaded in his further amended plaint thatsometime on or about the 8thday of March, 1996 the defendant contracted him to transport poles/firewood from Eldoret to Kakuma.

5. The plaintiff further pleaded that between 6th March, 1996 and20thAugust, 1996 the defendant had also contracted him to transport poles and firewood from Eldoret to Kitale to Kakuma and that agreements were drawn and executed to that effect totaling a contractual sum of Kshs.9,385,000/, particulars of which are provided under paragraph 7 of the further amended plaint.

6. It is pleaded that out of the abovementioned sum, the defendantonly paid an amount of Kshs.3,395,057/= leaving an outstanding balance of Kshs.6,134,305/= which remains unpaid to date.

7. It is also pleaded that though the plaintiff continued to performhis contractual obligations, the defendant later purported to terminate the contract without prior notice, thereby resulting in loss/damage to the plaintiff totaling the sum of Kshs.89,800/= and further incurring additional losses totaling the sum of Kshs.4,983,823/= which he now claims as liquidated damages.

8. Upon service of summons, the defendant entered appearanceand put in its statement of defence dated 28thOctober, 2008 and amended on 8thMay, 2009 to deny the allegations made by the plaintiff.

9. More specifically, the defendant denied the existence of anytransport contract between the parties, contrary to theallegations being made by the plaintiff.

10. The defendant pleaded that instead, the plaintiff was engaged infraudulent collusions with one Zaka Kuawogai in his personal capacity and hence any breach or loss resulting therefrom cannot be attributed to the defendant.

11. At the hearing, the plaintiff testified and summoned one (1)additional witness. On its part, the defendant closed its casewithout relying on any witness testimony.

12. The plaintiff who testified as PW1 stated that he is a director ofthe plaintiff and that he transported goods for the defendant at all material times at various prices which are indicated in the contract entered into between the parties herein.

13. PW1 stated that out of a total sum of Kshs.9,385,000/= payablepursuant to the contract, he only received the sum of Kshs.3,395,057/= leaving an outstanding balance of Kshs.6,134,308/= by which time he had completed delivery.

14. It is the testimony of PW1 that at times, he would go to collectthe poles as per the request of the defendant, only to find no poles or related goods, while simultaneously incurring costs of travel and hire of vehicles which were intended to transport the said goods.

15. It is the testimony of the plaintiff that owing to the above, he hasincurred a loss of Kshs.89,800/= which he later corrected to constitute the sum of Kshs.89,500/=.

16. The plaintiff gave evidence that at one point, he had requestedthe defendant to make an advance payment which it did in thesum of Kshs.625,000/= prior to the breach of contract.

17. The plaintiff also gave evidence that at no point was the issue ofcollusion with one of the officers of the defendant ever brought to his attention and that he was the sole person appointed by the defendant to supply the goods from various places to Kakuma.

18. In cross-examination, PW1 testified that he and his wife sit atthe Board of Directors of the plaintiff and that they used tooperate from Nairobi to Kakuma for the defendant.

19. PW1 also testified that both he and the Project Manager signedthe contracts in question, the latter having prepared them.

20. It is the evidence of the plaintiff that not all the contracts werestandard.

21. It is also the evidence of the plaintiff that he was paid for allgoods delivered and that his claim against the defendant is for breach of contract on the part of the defendant, on the failed journeys which caused him to suffer loss in the manner particularized in the pleadings.

22. The plaintiff stated that the breach resulted where anemployee/agent of the defendant would alert him on the availability of the goods in question for delivery but that upon arrival, the witness would discover that either another supplier had been engaged or that the goods were not available after all for purposes of transportation.

23. The plaintiff further stated that initially, he had beentransporting goods for the defendant from Nairobi to Kakuma for payment, and that through its Project Manager, the defendant asked him to ferry firewood on its behalf and that they met in Kitale and executed contracts to that effect.

24. It is the testimony of PW1 that while in Kitale, his driversnotified him that other persons were doing a similar job as thatassigned to the plaintiff.

25. The plaintiff stated that his work entailed transporting the goodsin question and that he was never a supplier for the defendant. However, the witness stated that what he was claiming from the defendant was for the losses incurred when he would be asked to collect firewood only to find that other persons had already undertaken that task.

26. The plaintiff also stated that some of the contracts had theperiod of delivery of the goods and completion of delivery, whereas others simply provided that delivery would be completed within the contract period.

27. It is the evidence of PW1 that going to the forest to collectsupplies for transportation was not part of the contract but that it was the responsibility of the suppliers to ensure the goods were placed in their proper designated places for collection, which was sometimes not the case. He stated that the contract provided for designated collection points of the goods for transportation.

28. It is also the evidence of PW1 that the defendant would instructhim and/or his drivers to collect the material goods from the suppliers upon confirming availability and location of the goods; and hence he depended on the instructions of the defendant on where to locate the suppliers.

29. Peter Mungai who was PW2 adopted his signed witnessstatement as his evidence and stated that he worked for the defendant at its Kakuma Refugee Camp as an assistant storekeeper and food monitor from the year 1997.

30. The witness stated that bundles of firewood were delivered toKakuma.

31. In cross-examination, the witness however stated that it is theplaintiff’s employees who transported the goods in question particularly firewood; long and short poles, which transportation differs from the supply of such goods.

32. It is the testimony of PW2 that on various occasions, he wasassigned duties outside his office and hence other persons were placed in charge of receiving the goods delivered.

33. The witness stated that he knew PW1 whom he had met on fewoccasions in Kitale in the year 1996 and that he knew the plaintiff as being the transporter of various goods on behalf of the defendant to Kakuma.

34. The witness also stated that at one point during his encounterwith PW1 in Kitale, he noticed that the vehicles belonging to the plaintiff would sit idle with no work to do and that the suppliers on the ground would often give conflicting information on the actual status on the ground, in the sense that they would contact him on the collection of goods but on taking the transporters to the ground, they would discover that what was on the ground differed from what had been communicated to him.

35. PW2 further stated that it is often the supplier of the goods whowould give conflicting information to the transporters includingthe plaintiff, but that the defendant was not the supplier.

36. It is the evidence of PW2 that most of the documentationtendered by the plaintiff was not signed by him.

37. In re-examination, the witness testified that the supplier wouldmake the respective goods available at a specific venue and thereafter notify the transporter of their availability for the purpose of delivery.

38. Upon close of the hearing, parties were directed to put in writtensubmissions which were followed by brief oral highlights by theparties’ respective advocates.

39. In his submissions, the plaintiff argues that he has tenderedsufficient evidence to prove the elements of breach of contract on the part of the defendant by allocating delivery of the goods in question to third parties despite contracting with the plaintiff for such delivery.

40. The plaintiff also argues that despite pleading the particulars offraud against him, the defendant did not tender any evidence tosupport any such claims.

41. The plaintiff is therefore of the view that he is entitled to thereliefs sought in his pleadings, as well as costs of the suit to be paid by the defendant. The plaintiff has cited a few authorities including the case ofSempra Metals Ltd v Inland Revenue Commissioners [2007] UKHL 34where the court held that it had jurisdiction to award compound and simple interest on damages for breach of contract.

42. In his oral highlights, Mr. Kihara counsel for the plaintiff echoedthe written submissions save to add that the contracts entered into between the parties herein were both oral and written, and that the burden of proof has been discharged in this instance.

43. In reply, the defendant by way of its submissions dated 20thJanuary, 2017 contends that though it did not call any evidence,the evidence tendered by the plaintiff cannot support his claim.

44. The defendant also contends that it ought not to be held liablefor the losses suffered by the plaintiff since the latter should have taken active steps in mitigating his losses but did not, citing the case ofAfrican Highland Produce Limited v John Kisorio [2001] eKLRin which the court rendered the following:

“It is the duty of the plaintiff to take all reasonable steps to mitigate the loss he has sustained consequent upon the wrongful act in respect of which he sues, and he cannot claim as damages any sum which is due to his own neglect. The duty arises immediately a plaintiff realizes that an interest of his has been injured by a breach of contract or a tort, and he is then bound to act, as best he may, not only in his own interests but also in those of the defendant. He is, however, under no obligation to injure himself, his character, his business, or his property, to reduce the damages payable by the wrongdoer. He need not spend money to enable him to minimise the damages, or embark on dubious litigation. The question what is reasonable for a plaintiff to do in mitigation of his damages is not a question of law, but one of fact in the circumstances of each particular case, the burden of proof being upon the defendant.”

45. The defendant submits that there is no correlation between thealleged breach of contract on its part and the borrowing of a bank loan by the plaintiff, which the plaintiff was eventually unable to repay.

46. The defendant is of the view that the plaintiff is therefore notentitled to the reliefs sought, further submitting that any claimfor special damages must be specifically pleaded and strictlyproved.

47. For the foregoing reasons, the defendant argues that theplaintiff’s claim cannot hold and that in any event, the contracts referenced at the trial are tainted with fraud and forgery.

48. In his oral highlights, Mr. Nderitu advocate for the defendantargues that the originals of the documents were never produced and also reiterates the written submissions that the existence of a contract between the parties has not been proved by the plaintiff; and that any contracts tendered are clearly tainted with fraud.

49. The advocate therefore urges this court to dismiss the plaintiff’sclaim with costs.

50. In rejoinder, the plaintiff through his further submissionsarguesinter alia, that the claims of fraud and forgery pleaded bythe defendant have not been proved against it.

51. The plaintiff also maintains that it is the suppliers of thedefendant who caused him grave inconvenience and loss, andhence the present claim.

52. Overall, it is the submission of the plaintiff that his claimremains uncontroverted and hence it ought to be allowed. These sentiments were reaffirmed in the rejoinder arguments by Mr. Kihara.

53. The record shows that subsequently, two (2) applicants namelyPaul Kang’ori and Ben Ngumba Gacanja brought the application dated 1stOctober, 2018 and sought to substitute the plaintiff with their names, indicating that the plaintiff died on 21stSeptember, 2017.

54. Upon hearing the parties, this court by way of the rulingdelivered on 13thMay, 2021 substituted the name of Latimer Ruguaru Gacanja with that of the abovementioned applicants as plaintiffs in the matter.

55. I have considered the evidence tendered in court and thesubmissions filed plus the authorities cited, and I have identifiedthe following as the key issues for determination:

i. Whether the plaintiff and the defendant enjoyed a contractual relationship at all material times;

ii. Whether there was a breach of the contract by the defendant; and

iii. Whether the plaintiff is entitled to the reliefs sought.

56. To address the first issue, upon my examination of thepleadings and evidence collectively, I am satisfied that the plaintiff brought credible evidence to show that the defendant had at all material times contracted his services for purposes of transporting its goods, namely poles and firewood, from Eldoret/Kitale areas to Kakuma.

57. The evidence tendered also shows that such transportationservices were engaged at cost and that the plaintiff was required to issue invoices with copies of delivery notes to the defendant’s camp at Kakuma for payment.

58. Upon my further examination of the pleadings and evidence, Inote that whereas the defendant denied the existence of any such contracts and further alluded to the presence of fraud and forgery on the contracts tendered in evidence, it did not bring any credible evidence to support those allegations.

59. For the foregoing reasons and in the absence of any contraryevidence, I am satisfied that the plaintiff has proved the existence of a contractual relationship between him and the defendant at all material times.

60. Concerning the second issue for determination, upon my studyof the pleadings and material placed before me, I observed that the plaintiff brought credible evidence by way of delivery notes to show that he had delivered the various material goods to the defendant on various dates.

61. The plaintiff also tendered credible evidence to indicate receipt ofthe goods on behalf of the defendant on various dates. It is therefore apparent that the plaintiff performed its contractual duties at all material times.

62. Upon considering the evidence of the plaintiff that on occasionhe would be contacted to transport poles or firewood and related items, only to discover that the said items were not at the site, I also observed that this evidence was echoed by PW2 in his oral testimony.

63. It is noteworthy that PW2 was at all material times an employeeof the defendant and working closely with the persons in charge of supplies and transportation, which would include the plaintiff and his drivers/agents.

64. I also note from the contract documents adduced as evidencethat communication on availability of the goods to be delivered by the plaintiff was to come from either the contractors or the defendant’s agents/staff. This supports the evidence of both the plaintiff and PW2 that whether or not the suppliers of the goods were the ones who altered the venue of collection of the goods, it is apparent that the defendant was at all material times aware of this fact and it is more plausible than not that its employees or officers gave instructions to the plaintiff to collect the goods, only to find that they were missing or had been collected by other parties.

65. In this sense and in the absence of any contrary evidence by thedefendant, I am satisfied that the plaintiff has reasonably demonstrated that by not ensuring that the material goods were always at the site of collection at the time of giving instructions for collection and delivery, the defendant had acted in breach of the agreement entered into between the parties.

66. This brings me to the third and final issue touching on thereliefs sought by the plaintiff. I will first address the sum of Kshs.6,134,308/= which the plaintiff claims as the outstanding balance.

67. Upon my examination of the evidence adduced, I note that onthe one hand, the plaintiff stated in his evidence that he was paid for all transportation work done and was only claiming for the days on which he was assigned with the task of collecting and transporting goods, only to find that the goods were not at the site of collection. On the other hand, the plaintiff states that the aforementioned sum remains unpaid out of the work done.

68. Upon my study of the record, I did not come across any credibleevidence to demonstrate what was paid and what was owing to the plaintiff from the defendant. I therefore decline to award that sum.

69. On the special damages sought, upon my examination of theevidence, I will award the sum of Kshs.89,500/= which was  pleaded and proved.

70. In the same manner, I am not convinced to grant the plaintiffthe sum of Kshs.4,983,823/= sought on liquidated damages in the absence of actual proof of the actual losses suffered in that respect.

71. All the same, I am convinced that the plaintiff would still beentitled to nominal damages in the absence of proof of actual loss/damage suffered. I find support from the case ofPeter Umbuku Muyaka v Henry Sitati Mmbasu [2018] eKLRin which the court held thus:

“A claimant for general damages for breach of contract who does not prove that he suffered loss is all the same entitled to damages, though nominal. In the Anson’s Law of Contract, 28th Edition at pg 589 and 590 the law is stated to be that:-

“Every breach of a contract entitles the injured party to damages for the loss he or she has suffered. Damages for breach of contract are designed to compensate for the damage, loss or injury the claimant has suffered through that breach. A claimant who has not, in fact, suffered any loss by reason of that breach, is nevertheless entitled to a verdict but the damages recoverable will be purely nominal.”

72. I also consider the case of Ronyad Enterprises Limited vKenya Commercial Bank Limited [2019] eKLRwhere an award of Kshs.100,000/= was upheld under this head and the case ofSupinder Singh Sagoo v Kenya Commercial Bank [2020] eKLRin which the court awarded a nominal sum of Kshs.100,000/= on general damages. In my opinion, the sum of Kshs.100,000/= would constitute reasonable nominal damages for breach of contract.

73.  In the end, judgment is hereby entered in favour of theplaintiff and against the defendant as follows:

a) General damages for breach of contract     Kshs.100,000/=

b) Special damages                                         Kshs.89,800/=

Total                                                          Kshs.189,800/=

c) The plaintiffshall also have interest on the special damages

at court rates from the date of filing suit and interest on the general damages at court rates from the date of judgment until payment in full.

d) The plaintiff to have costs of the suit.

DATED, SIGNED AND DELIVERED ONLINE VIA MICROSOFT TEAMS AT NAIROBI THIS 15TH DAY OF DECEMBER, 2021.

..........................

J. K.  SERGON

JUDGE

In the presence of:

.................................... for the Plaintiff

................................ for the Defendant