Odundo v South Nyanza Sugar Co Ltd [2023] KEHC 23580 (KLR)

Odundo v South Nyanza Sugar Co Ltd (Civil Appeal 119 of 2021) [2023] KEHC 23580 (KLR) (12 October 2023) (Judgment)

Neutral citation: [2023] KEHC 23580 (KLR)

Republic of Kenya

In the High Court at Migori

Civil Appeal 119 of 2021

RPV Wendoh, J

October 12, 2023

Between

Elisha Ogutu Odundo

Appellant

and

South Nyanza Sugar Co Ltd

Respondent

(An Appeal from the Judgement and Decree of Hon. C.M. Kamau Resident Magistrate (RM) dated and delivered on 19/9/2018 in Rongo PMCC No. 51 of 2014)

Judgment

1. This is an appeal by Elisha Ogutu Odundo (the appellant) against the judgement and decree of the Hon. C.M. Kamau dated and delivered on 19/9/2018. The appellant is represented by the firm of Oduk & Co. Advocates while the respondent is represented by the firm of Okong’o Wandago & Co. Advocates.

2. The appellant (formerly the plaintiff) commenced his claim by a plaint dated 14/10/2014 seeking damages for breach of contract, costs of the suit, interest from 22/3/2006 until payment in full and any other relief.

3. The appellant pleaded that by an agreement dated 22/3/2006, the respondent contracted him to grow and sell to it sugarcane on his land parcel being plot number 447B, field no. 68B in Kakmasia sub - location measuring 0. 8 hectares; that the appellant duly signed the agreement and was assigned account number xxxx and planted the cane as agreed.

4. It was further pleaded that it was a term of the contract that it would commence on 22/3/2006 and remain in force for a period of 5 years, or until one plant crop and two ratoon crops of the sugarcane are harvested; that within the 5 years period, the plant and ratoon crops would be harvested at 22 - 24months and 16 - 18 months respectively. The appellant contended that in breach of the said agreement, the respondent failed, refused and/or neglected to harvest the plant and ratoon crops. The appellant particularized the loss and damages at a total of Kshs. 810,000/=.

5. The respondent (formerly the defendant) filed a defence dated 28/4/2015 denying the allegations in the plaint and put the appellant to strict proof thereof. The respondent stated that it is the appellant who was in breach of the contract by failing to develop the cane to the satisfactory yield. The respondent further denied the claim of Kshs. 810,000/= as loss incurred by the appellant for the alleged breach of contract.

6. After the hearing, the trial court entered judgement in favour of the respondent and dismissed the appellant’s suit with costs.

7. Being dissatisfied with the judgement and decree, the appellant filed a Memorandum of Appeal dated 28/11/2021 on the following grounds: -i.That the learned trial magistrate erred in law and in fact in importing into the judgement the issue of “illegality” of the contract wholesale, when the said issue was never pleaded by any party and was never addressed or canvassed by any party to the contract or in the suit, and in the result came to a wrong conclusion;ii.That trial Magistrate erred in law in making a finding that the contract was illegal and void;iii.That the trial court erred in finding that the clause 3. 1.2 was not severable from the contract yet:a.The principal object of the transactions i.e. growing and supply of the sugar cane was in the face of several other provisions in the contract i.e. clause 2 (a), 3. 5, 3. 8, 3. 10, 3. 1.3, 3. 1.4, 3. 1.5, 3. 1.7, 3. 1.12, 6. 3.11 and 13 and still capable of performance;b.The parties had expressly in clause 11 of the contract (enforceability) evinced the desire to severe any provision in the agreement that is or may become invalid, illegal or enforceable and did not therefore contemplate breaking or breaching any law.c.There existed by way of legislation guidelines to the sugar industry agreement a provision, to wit, section 6 (2) of the Second schedule of the Sugar Act No. 10 of 2001 which provision constituted a statutory severance of any offending clause such as clause 3. 1.2iv.The trial court exhibited extreme and actual bias in irrationally, prejudicially and wrongly applying a law to circumvent the clear and ultimate result as would show that the appellant did prove his case on a balance of probabilities, did seek to pervert the High Court decision of Elena Olala vs South Nyanza Sugar Co. Ltd HCCA No. 86 of 2016 delivered on 10th May 2018 arising from a decision by the trial magistrate regarding clause 3. 1.3 of the contract;v.That the trial court erred in disregarding the doctrine of judicial precedence (stare decisis) and thereby brought the practice of the law into disrepute, through a strained effort and contrived result in the judgement;vi.The trial court failed to adequately, objectively and sufficiently evaluate the evidence on record as to come to a just and lawful finding and judgement.

8. The appellant prayed: -i.The judgement of the trial court dated 18/9/2018 be set aside and in its place the court do enter judgement for the appellant.ii.The court do assess and award the appellant damages for breach of contract.iii.There be an order for costs in favour of the appellant both in the subordinate court and in the appeal.iv.Interest.

9. Directions on the appeal were taken and the appeal was canvassed by way of written submissions. Both parties complied.

10. The appellant submitted that the trial Magistrate raised suo moto the plea of illegality of the contract and dealt with it himself and dismissed the suit; that the court is bound by its pleadings as the parties themselves, thus the issues which the court may pronounce itself on are those pleaded; that the issue of severability was not raised. The appellant relied on the decision by the Malawi Court of Appeal in Railway Ltd vs Peter Nyasulu (1998) MWSC 3 and the Court of Appeal in David Sironga Ole Tukai vs Francis Arap Munge & Others C.A No. 76 of 2014.

11. It was further submitted that the issue of severability was misplaced and unfounded; that in clause 11 of the contract, the parties shielded themselves from any clause in the contract that the law or the court may ultimately find objectionable; that the trial court erred in breaching the contract altogether while it is the duty of the court to enforce the parties’ agreement.

12. The appellant stated that in the case of Elena Olala (supra) and Peres Ogutu Omolo vs South Nyanza Sugar Co. Ltd HCCA No. 40 of 2016, this court had faulted the trial Magistrate’s interpretation of the provisions of clause 3. 1.2 of the contract and his erroneous application which ended up being dismissed. The appellant posited that the trial Magistrate knowingly subverted the law and subjected the rule of law into disrepute by not adhering to the doctrine of judicial precedent.

13. The respondent opposed the appeal through its submissions dated 3/7/2023. The respondent submitted that the argument that the issues were not pleaded does not hold since courts are presumed to know the law and are required to determine matters of law that arise before them in the pleadings. The respondent relied on the case of David Ogutu Onda vs Walter Ndede Owino (2016) eKLR where the Court of Appeal examined the circumstances where a court can deal with unpleaded issues. It was further submitted that since the claim before the subordinate court was for damages for breach of contract, it was jurisdictionally mandated to examine the legality and propriety of the contract. On the claim for damages, the respondent adopted its submissions at the subordinate court.

14. I have considered the appeal, the submissions of the parties and the trial court’s record. It is this court’s opinion that the sole issue for determination is whether the trial court erred by considering extraneous matters.

15. This being the first appellate court, the court has a duty to re-evaluate and analyse all the evidence tendered in the lower court and arrive at its own conclusions but bearing in mind that it neither saw nor heard the witnesses testify. It has to establish whether the decision of the lower court was well founded. The court is guided by the decision in Selle & Another vs Associated Motor Boat Co. Ltd (1968) EA 123.

16. A similar holding was held in the Court of Appeal for East Africa which took the same position in Peters v Sunday Post Limited [1958] EA 424 where Sir Kenneth O’Connor stated as follows: -“It is a strong thing for an appellate court to differ from the finding, on a question of fact, of the judge who tried the case, and who has had the advantage of seeing and hearing the witnesses. An appellate court has, indeed, jurisdiction to review the evidence in order to determine whether the conclusion originally reached upon that evidence should stand. But this is a jurisdiction which should be exercised with caution; it is not enough that the appellate court might itself have come to a different conclusion…”

17. The contract dated 14/6/2006 is not denied by either party. The appellant’s claim before the trial court was in regard to alleged breach by the respondent. In the judgement, the trial Magistrate, proceeded to examine whether the failure of the respondent to harvest the cane constituted a breach of contract. The trial court went ahead and interpreted clause 3. 1.2 of the contract vis a vis the provisions of the Second Schedule of the Sugar Act. The trial Magistrate further addressed the issue of severable clauses.

18. In Vyas Industries -vs- Diocese of Meru (1982) KLR 114 the Court of Appeal cited with approval the decision of the Court of Appeal of East Africa in the case of Odd Jobs -vs- Mubia [1970] EA 476, as follows: -“a)a court may base its decision on an unpleaded issue if it appears from the course followed at the trial that the issue had been left to court for decision;b)on the facts the issue had been left for decision by the court as the advocate for the appellant led evidence and addressed the court on it.”

19. From the above reasoning of the court, there are two conditions which must be fulfilled and/or satisfied before a court can base its decision on unpleaded issues. Firstly, evidence must have been led on that issue in the trial court. Secondly, the issue has to be addressed before the court. Therefore, a court is not permitted to transcend beyond the issues presented to it.

20. The Court of Appeal in Independent Electoral and Boundaries Commission & Another vs Stephen Mutinda Mule & 3 others (2014) eKLR cited with approval the decision of the Supreme Court of Appeal of Malawi in Malawi Railways Ltd V. Nyasulu [1998] MWSC, 3 where the role of the trial court in a jurisdiction of a legal system similar to ours was encapsulated as follows:“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.”

21. In David Sironga Ole Tukai (supra), the Court of Appeal once again reiterated the limited role of the trial court in adjudicating the dispute framed by the parties:-“It is well established in our jurisdiction that the court will not grant a remedy, which has not been applied for, and that it will not determine issues, which the parties have not pleaded. In an adversarial system such as ours, parties to litigation are the ones who set the agenda, and subject to rules of pleadings, each party is left to formulate its own case in its own way. And it is for the purpose of certainty and finality that each party is bound by its own pleadings. For this reason, a party cannot be allowed to raise a different case from that which it has pleaded without due amendment being made. That way, none of the parties is taken by surprise at the trial as each knows the other’s case is as pleaded. The purpose of the rules of pleading is also to ensure that parties define succinctly the issues so as to guide the testimony required on either side with a view to expedite the litigation through diminution of delay and expense. The court, on its part, is itself bound by the pleadings of the parties. The duty of the court is to adjudicate upon the specific matters in dispute, which the parties themselves have raised by their pleadings. The court would be out of character were it to pronounce any claim or defence not made by the parties as that would be plunging into the realm of speculation and might aggrieve the parties or, at any rate, one of them. A decision given on a claim or defence not pleaded amounts to a determination made without hearing the parties and leads to denial of justice.” (emphasis mine)

22. The foregone conclusion of the above findings is that issues for determination should strictly flow from the pleadings and evidence led by the parties and it is only on those issues the court can address itself on. I have carefully read through the pleadings of both parties. There is no indication that the parties raised the issue of the legality or illegality of clause 3. 1.2 and/or severable clauses in the contract. Furthermore, even in their submissions, the issue was not raised. It is quite baffling why the trial Magistrate decided to suo moto take up the issue and address himself on it without affording the parties an opportunity to be heard. To this end, the trial Magistrate erred in making a determination on an extraneous issue.

23. In addition, the issues which the trial Magistrate addressed himself on, are issues which this Court has severally dealt with. The instant decision subject of this appeal was delivered on 18/9/2018. The case of Elana Olala (supra), which was an appeal before this court against a similar decision of the trial Magistrate was delivered on 10/5/2018. The trial Magistrate addressed himself on the matters not placed before him for determination. The matters therein being the legality/illegality of clause 3. 1.2 and severable clauses. Mrima J on paragraph 17 held: -“It is therefore clear that the trial court determined the suit on an issue which had not been placed before it for determination. In that case, and with tremendous respect to the trial court, the finding was without any legal basis and must be interfered with. While setting the record straight on the essence of parties being bound by their pleadings and that a court can only decide on issues that arise from the filed pleadings, the Court of Appeal in Independent Electoral and Boundaries Commission & Ano. vs. Stephen Mutinda Mule & 3 others (2014) eKLR cited with approval the decision of the Supreme Court of Nigeria in Adetoun Oladeji (NIG) vs. Nigeria Breweries PLC SC 91/2002 where Slyvester Umaru Onu, JSC stated that: -‘….It is settled law that it is not for the courts to make a case of its own or to formulate its own from the evidence before it and thereafter proceed to give a decision based upon its own postulation quite separate from the case the parties made before it…..It is settled law that parties are bound by their pleadings……the court below was in error when it raised the issue contrary to the pleadings of the parties.’

24. In the same appeal, Mrima J made an elaborate finding on the reasoning of the trial Magistrate on the legality of clause 3. 1.2 of the contract and faulted the trial Magistrate on his finding. Therefore, even before delivering his judgement of 18/9/2018, the trial Magistrate had the opportunity to read and be duly guided by the decision of this court. In the instant impugned judgement, the trial Magistrate referred to the findings of this court in the Elena Olala decision and recognized that the contract was contrary to the Statutory provisions under the Sugar Act which regulate the sugar industry. It is therefore not clear why the Magistrate proceeded to dismiss the appellant’s case on the grounds that it was founded on an illegal contract.

25. Respectfully, the trial Magistrate ranks lower in the judicial hierarchy and he is bound by the decisions of the Superior Court. This is the basis of the doctrine of stare decisis which is the most basic principle of law taught in law schools. The objective of adherence to the doctrine is: certainty, clarity, predictability and legitimacy within the law when deciding on similar issues. The Supreme Court in Geoffrey M. Asanyo & 3 others v Attorney-General (2020) eKLR referred to the Canadian decision in David Polowin Real Estate Ltd. v. The Dominion of Canada General Insurance Co. (2008), 244 O.A.C. 151 (CA);2008 ONCA 703, where Judge Laskin, J.A. held:-“[t]he values underlying…stare decisis are well known: consistency, certainty, predictability, and sound judicial administration. Adherence to precedent promotes these values…Adherence to precedent also enhances the legitimacy and acceptability of judge-made law and by so doing enhances the appearance of justice. Moreover, courts could not function if established principles of law could be reconsidered in every subsequent case.”

26. The decision of the trial Magistrate to depart from the earlier decision of this court even when it was at his disposal, was tantamount to the lower court reviewing and/or setting aside a decision of the superior court.

27. An appellate court while invoking its jurisdiction, has to reassess and analyse the decision of the trial court before reaching its findings. This court is of the view that since the trial court did not properly address itself on the central issues for determination before it, there was no trial as contemplated under the law.

28. The proper procedure will be to remit this matter back to the Rongo Principal Magistrate’s Court for a proper determination on the issues raised by the parties before it. This court is duly guided by the finding of the Court of Appeal in Mumias Agricultural Transport vs Sony Agricultural Limited (1999) eKLR where it was held that where no trial is carried out as known to law the matter is to be remitted back for hearing.

29. In the end, I find that the appeal is merited and the following orders do issue:-1. The Judgement and Decree of Hon. C.M. Kamau dated and delivered on 18/9/2018 is hereby set aside.2. This matter will be remitted back to the trial court in Rongo for hearing and determination.3. The matter be mentioned on 25/10/2023 before Hon. Choka Oruo (SPM) for directions.4. Costs of the appeal awarded to the Appellant.

DATED, DELIVERED AND SIGNED AT MIGORI THIS 12TH DAY OF OCTOBER 2023. R. WENDOHJUDGEJudgment delivered in the presence of;N/A for the Appellant.Mr. Odero for the Respondent.Emma & Phelix Court Assistants