Piulva Engineering & Technology Limited v Permanent Secretary Ministry of State for Special Programmes & Attorney General [2018] KEHC 10206 (KLR)

REPUBLIC OF KENYA

IN THE HIGH COURT OF KENYA AT NAIROBI

COMMERCIAL AND ADMIRALTY DIVISION

CIVIL CASE NO. 149 OF 2014

PIULVA ENGINEERING & TECHNOLOGY LIMITED...................PLAINTIFF

-VERSUS-

PERMANENT SECRETARYMINISTRY OF STATE

FOR SPECIAL PROGRAMMES................................................1ST DEFENDANT

THE HON. ATTORNEY GENERAL.........................................2ND DEFENDANT

JUDGMENT

INTRODUCTION

1. Piulva Engineering and Technology Limited is the plaintiff in this action.  The permanent secretary of the ministry of state for special programmes is the 1st defendant while the Attorney General is the 2nd defendant.  This case was fully heard by the late Justice Onguto and the responsibility that fell upon me was to write the judgment in accordance with order 18 Rule 8 of the CPR.

BACKGROUND

2. It is not denied that the 1st defendant and the plaintiff entered into a contract on 14th February 2013.  According to the plaintiff, the contract was for the supply of 100 units of lightening arrestors.

3. Both the plaintiff and the 1st defendant do not deny that the plaintiff on or about April 2013 supplied and delivered to the 1st defendant the 100 units of those arrestors.  The controversy is whether the plaintiff breached its contract in failing to install those arrestors.

THE EVIDENCE

4. The plaintiff’s evidence was adduced by David Macharia.  He is the technical manager of the plaintiff company.  He stated that he had personal knowledge of the facts in this case.

5. The plaintiff’s witness stated that the plaintiff was informed by the 1st defendant, by letter dated 26th February 2013, that it had been awarded  a contract to supply lightening protection arrestors in respect to the plaintiff’s quotation no. 00P/SP/033-2012-2013.

6. On 18th April 2013, the defendant issued the plaintiff with a local purchase order no. 0097143, dated 14th February 2013 for the supply of 100 arrestors for the amount of Kshs 4,950,000.

7. The plaintiff’s witness stated that on the 19th April 2013, an officer of the 1st defendant telephoned him on his cell phone and threatened to cancel the order of the arrestors unless the plaintiff delivered the arrestors by 22nd April 2013 at 8. 00am at the stores of National Cereal & Produce Boards at Industrial Area in Nairobi.

8. The plaintiff’s witness stated that the plaintiff complied with that request but that on his arrival at the cereal board, he found that there was no one who knew about the delivery and when he called the officer of the 1st defendant, he found that the cell phone number of that officer switched off.

9. After waiting at the cereal board upto 12 pm, the plaintiff made delivery of the arrestors at the 1st defendant’s premises where they were accepted by the officials but the officials refused to sign the delivery note.

10. The 1st defendant by letter dated 26th April 2013 written by its permanent secretary, informed the plaintiff that because the plaintiff had failed to install the arrestors no payment would be made for the arrestors unless the plaintiff met the terms of the contract.  The plaintiff witness stated that the writer of that letter did not indicate in that letter the specific location where the arrestors were to be installed.

11. The plaintiff by letter dated 2nd May 2013 demanded payment from the 1st defendant.

12. The 1st defednant by its letter dated 7th June 2013, cancelled the contract.  That letter is in the following terms:

“OOP/SP/033/2012-2013                     7th June, 2013

M/s Piulva engineering and Technology

P. O. Box 28890

NAIROBI

REF:       CANCELLATION OF LOCAL PURCHASE ORDER (LPO)NO. 009714 FOR KSH 4,950,000: SUPPLY AND INSTALLATION OF LIGHTENING ARRESTORS

Please refer to our letter reference MSSP/7/3 dated 26th April 2013.

Owing to your non-performance on the above matters and the need to conclude all payments before the closure of the financial year, the ministry has cancelled the above order.

Julius M. Kieni

For: Permanent Secretary

13. 1st defendant’s evidence was led by Vincent Matioli, the deputy secretary responsible for disaster management in the ministry of devolution and planning which formerly was the minsitry of state for special programs.  This witness confirmed that the plaintiff was given a contract as pleaded by the plaintiff.  The witness by his witness statement then stated:

“In the year 2013 the Plaintiffs were given a contract to supply and install lightening arrestors.  They proceeded to bring them to the store but the Procurement Inception Committee refused to receive the lightening arrestors because they did not meet the specifications of the contract which were that they should have been supplied and installed.

Payment was deferred until installation took place to various destinations in the country specifically Western Kenya as per the Contract Terms. The Permanent Secretary wrote a letter to the supplier and informed them that they would not be paid until fulfillment of the terms of the contract.

The Ministry denies the claim by Piulva Engineering and Technology Limited as there exists no legal basis for the settlement of the claim as alleged.”

14. On being cross examined, this witness could not confirm whether an internal memo dated 10th October, 2012, which attached a list of the places the arrestors were to be installed was given to the plaintiff.  The witness however confirmed the internal memo was issued before the contract with the plaintiff.  The witness did confirm that the documents given to the plaintiff did not have a list of the location where the installation was to be undertaken.

15. Under cross examination, the defendant’s witness also confirmed that the LPO such as the one issued to the plaintiff are for purchase of goods and services while LSO are issued for services to be rendered.  He concluded while being re-examined by stating ‘we wanted to supply and instal hence we didnt need to use both LPO/LSO.  We issued only LPO’.

ANALYSIS AND DETERMINATION

16. It is admitted by the 1st defendant that there was a contract with the plaintiff, for the plaintiff to supply the arrestors.  It is also admitted by the 1st defendant that although the LPO indicated that the plaintiff was to supply and instal, no specification was given to the plaintiff of where the installation was to be made.

17. It no doubt then follows, that the quote given by the plaintiff, and which was accepted by the defendant, was for supplying the arrestors.  Otherwise, how could the plaintiff give a quote for installation when the place for installation was not indicated.  Looking at the LPO, it clearly refers to delivery of goods not installation.  This is what was in the LPO: “please deliver the goods listed here below to (full address) ....(blank)”.

18. Below those words, there is a table where one of the columns is entitled ‘description of goods’.  Below it, is a handwritten note that ‘supply and installation of lightening protector arrestors (SET).’ The quantities were indicated as 100 at Ksh 49,500 per unit and total cost was shown as Ksh 4,950,000.

19. The 1st defendant confirmed that the plaintiff did supply all the 100 arrestors.

20. The defendants by their defence raised a defence which it was admitted by the defendant’s witness cannot be supported by any document before court or any document supplied to the plaintiff.  If indeed it had a viable defence, as stated in the written submissions the 1st defendant would have filed a counter claim for an order for specific performance.  The remedy of specific performance was discussed in the case of Henry Mwangi Gatai & another v Margaret Wanjiku Godwin & 2 others [2018] eKLR as follows:

“Reliable Electrical Engineers Ltd (supra), the Court held that:-

“The Jurisdiction of specific performance is based on the existence of a valid enforceable contract.  It will not be ordered if the contract suffers from some defect, such as failure to comply with the formal requirements or mistake or illegality, which makes the contract invalid or enforceable.”

The defendants did not seek specific performance and neither did they return the good to the plaintiff.  There was no notice issued to the plaintiff to collect the arrestors delivered to the 1st defendant.  It follows that the defendants’ reliance on section 36 of the Sale of Goods Act Cap 31 is not supported by the evidence.  That section provides as follows:

“the buyer is deemed to have accepted the goods when he intimates to the seller that he has accepted them or when the goods have been delivered to him, and he does any act in relation to them which is inconsistent with the ownership of the seller, or when, after the lapse of a reasonable time, he retains the goods without intimating to the seller that he has rejected them.”

21. In my view the plaintiff has proved its case on a balance of probability. It is entitled to judgment for the amount claimed.

22. Before concluding this judgment, I wish to state that in considering the parties evidence, it becomes clear to me that the actions of the government of Kenya’s officials in the 1st defendant’s ministry, shows the impunity with which civil servants sometimes operate ministries, like they are their private entities.  This is done at the expense of the tax paying public which is made to bear the expenses of dubious decisions made by such government officials.

23. In this case the officials of the 1st defendant awarded the plaintiff a contract.  The contract curiously stated that it was for supply and installation of the arrestors.  No evidence has been adduced to show that the plaintiff contracted to instal such arrestors at any specific place.  That indication in the LPO on installation, no doubt to me, was intended to force the plaintiff to be at the mercy of those government officials.  When it seems the plaintiff refused to bend to those officials bidding, the plaintiff was denied payment for goods supplied and its contract was irregularly cancelled.

24. The above is made clear by the plaintiff’s evidence, which was not contradicted, that a government official phoned and threated the plaintiff’s officials.  The impunity with which the 1st defendant’s ministry officials operated will lead to the government paying not only the contractual amount but also interest and costs of this suit.  As a society, we may have to consider whether such government officials should be surcharged for the judgments, such as this one, that are entered against the government.

25. In conclusion, I enter judgment for the plaintiff as follows:

a.  Judgment is entered for the plaintiff against the 1st defendant for Ksh 4,950,000 plus interest at court rate from the date of this suit until payment in full.

b.  The 1st defendant shall also bear the plaintiff’s cost of this suit.

DATED, SIGNED and DELIVERED at NAIROBI this 30th day of October, 2018.

MARY KASANGO

JUDGE

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

Court Assistant....................Sophie

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

........................................... for the Defendants

MARY KASANGO

JUDGE