Snowline Food Industries Limited v Matu [2023] KEHC 23808 (KLR) | Sale Of Goods | Esheria

Snowline Food Industries Limited v Matu [2023] KEHC 23808 (KLR)

Full Case Text

Snowline Food Industries Limited v Matu (Civil Appeal E001 of 2020) [2023] KEHC 23808 (KLR) (17 October 2023) (Judgment)

Neutral citation: [2023] KEHC 23808 (KLR)

Republic of Kenya

In the High Court at Nanyuki

Civil Appeal E001 of 2020

AK Ndung'u, J

October 17, 2023

Between

Snowline Food Industries Limited

Appellant

and

George Mureithi Matu

Respondent

(Appeal from the original decree dated 22/12/2020 in Nanyuki Chief Magistrates Court Civil Case No 51 of 2019– V.M Masivo-SRM)

Judgment

1. The Appeal herein arises from the lower court judgement in Civil Case No. 51 of 2019 against the award of a sum of Kshs.353,500/-being the decretal sum plus interest and costs to the Respondent.

2. The Respondent had instituted a suit against the Appellant whose basis was an alleged sale agreement whereby the Respondent was to supply to the Appellant goods worth Kshs.750,000/-. The Respondent supplied the said goods after which the Appellant paid a sum of Kshs.400,000/- leaving a balance of Kshs.350,000/-. In a bid to pay the balance, the Appellant issued the Respondent with two cheques which were dishonored by the bank for want of funds in the Appellant’s account. As a result, the Respondent incurred charges of Kshs.3,500.

3. The Appellant filed an amended defence and counterclaim denying the Respondent’s claim. The Appellant claimed that it paid a total of Kshs.450,000/- to the Respondent and that it was the duty of the Respondent to assemble the goods which the Respondent failed to do and therefore, the Respondent was in breach of the terms of the agreement.

4. In the counterclaim, the Appellant averred that the Respondent was to supply three items whereas he supplied two items and further failed to assemble the goods. The Appellant prayed for a refund of Kshs.450,000/- being the deposit that had been paid to the Respondent.

5. By a judgement delivered on 26/11/2020, the trial magistrate awarded the Respondent the amount claimed in the plaint and dismissed the Appellant’s counterclaim.

6. Been aggrieved by the lower court decision, the Appellant filed this appeal raising the following grounds;i.The learned magistrate erred by inferring facts from the conduct of the parties which were not specifically pleaded and proved thereby occasioning a miscarriage of justice.ii.The learned magistrate erred by expunging proforma invoice dated 20/07/2017 which was relied extensively by the parties as evidence thereby shutting out the Appellant from the door of justice.iii.The trial magistrate erred by finding that the Appellant had not proved its counterclaim whereas the same was proved.iv.The learned magistrate erred by applying the wrong principles of the law of the sale of goods thus erroneously dismissing the Appellant’s counterclaim.v.The learned magistrate failed to address his mind to the pleadings on record and the evidence by the parties thereby occasioning a miscarriage of justice.vi.The learned magistrate erred by failing to evaluate the entire evidence as well as submissions as presented by the Appellant.vii.The learned magistrate erred by taking into account extraneous and irrelevant considerations thus arriving at an erroneous finding.

7. The appeal was canvassed by way of written submissions. Both parties filed their respective submissions.

8. The Appellants’ counsel argued that the trial magistrate made reference to a proforma invoice and stated that according to it, the Respondent had supplied the goods. It is urged that the Appellant had sought to produce it since parties had relied on it but it was expunged by the trial court. The magistrate took the Respondent’s word without evidence in support of their claim. That the respondent could not have proved its case without the pro forma invoice since the figures and the goods claimed were listed there. That the Appellant proved his counterclaim since he had evidence to prove that he had made payments to the Respondent and was therefore entitled to a refund. That it is puzzling that the Appellant was denied to use a document filed by the Respondent to prove his counterclaim.

9. The Appellant further submitted that the Respondent failed to provide the court with sufficient material for purpose of ascertainment of the price. That the Respondent did not supply the goods as per the description that was provided in the sale agreement. That the trial magistrate noted that it was not in dispute that the Appellant supplied one setter and one hatcher which was a violation of the agreement since the Respondent was supposed to supply one setter and two hatchers. The Appellant further submitted that the goods were not fit for the purpose they were intended for.

10. It was further submitted that the intention of the parties was that transfer of the setter and hatchers would be determined by whether the goods were fit for the purpose which they were purchased for. So, having failed to deliver setter and hatchers that were fit for the purpose which they were intended, no risk had passed to the Appellant then. Therefore, the mere delivery of the goods to the Appellant did not constitute passage of the goods to the Appellant hence the goods remained with the Respondent as the seller.

11. In rejoinder, the Respondent submitted that expunging the proforma invoice by the trial magistrate did not negate the fact that there was an agreement between the parties and the reason the court expunged the document was because the Appellant had not filed the said document as part of their documents hence, it could not be produced during trial. That according to the proforma agreement, the value of goods was Kshs.800,000/- which meant that the Appellant was paying for one setter and one hatcher and not two hatchers as claimed. The Respondent submitted that the Appellant has disobeyed the court for he failed to deposit the security as the court ordered while allowing his application for stay of execution.

12. On the issue of warranty, it was submitted that the Respondent testified that he assembled, tested and commissioned the goods upon delivery to the Appellant’s premises which the Appellant’s director confirmed and ascertained. The director acknowledged that delivery was done by signing.

13. This being the first appeal, it is trite law that the court ought to examine and re-evaluate the evidence on record, assess it and make its conclusion. This position was taken in Selle & Another –vs- Associated Motor Boat Co. Ltd. & Others (1968) EA 123 where the court held as follows:“I accept counsel for the respondent’s proposition that this court is not bound necessarily to accept the findings of fact by the court below. An appeal to this court from a trial by the High Court is by way of retrial and the principles upon which this court acts in such an appeal are well settled. Briefly put they are that 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 or if the impression based on the demeanor of a witness is inconsistent with the evidence in the case generally.”

14. The case before the trial court was as follows;

15. PW1, George Murithi Matu was the Plaintiff. He testified that they assembled egg incubators for the Defendant and he was issued with two cheques of Kshs.175,000/- each. He banked the cheques but they were not honored, they bounced which led him to incur bank charges of Kshs.3,500/-. He testified that they assembled the machine at the Defendant’s premises which were tested and the Defendant was satisfied that they were good. He testified that the order was for two machines and not three as claimed by the Defendant. He produced the bounced cheques as Pexhibit 1a and b, demand letter as Pexhibit2 and the certificate of postage as Pexhibit3.

16. On cross examination by the Defendant’s counsel, he testified that he was paid Kshs.450,000/- whereas the value of the contract was Kshs.800,000/- inclusive of Kshs.50,000/- being the installation costs. He stated that there was an error in the plaint for the plaint indicated that he was paid Kshs.400,000/-. He denied that he was to supply two setters. He added that the Defendant acknowledged delivery by signing proforma invoice. That he delivered to the Defendant’s manager who took photograph to confirm delivery and he trained the Defendant on operation of the machine and he would attend to the machine as per the warranty.

17. On re-examination, he testified that his claim was for the balance of Kshs.350,000/- and that he was not shown any document for the order of three items as was alleged.

18. The Defendant, Alfred Gitonga testified that he contracted the Plaintiff to supply a hatcher and two setters for the farm for a total value of Kshs.750,000/-. He paid a deposit of Kshs.450,000/-. That for the balance, he issued post-dated cheques which were to be paid upon satisfaction of the machines. That the Plaintiff refused to install the machines hence he contacted his bank not to honour the cheques for the balance. He stated that there was no agreement for installation fees of Kshs.50,000/- and that he refused to pay the balance as the Plaintiff failed to ascertain whether the machines were working and he failed to supply what was requested.

19. On cross examination, he testified that he could not differentiate between a setter and a hatcher and could not tell whether they were working or not. That he did not engage an expert to confirm whether the machines were functioning or not. That there was no technical report and when he attempted to get a technical report from another supplier, they declined his request. He confirmed that the bank documents confirmed that the cheques were dishonoured due to insufficient funds which meant that his accounts did not have funds.

20. On re-examination, he testified that the agreement was oral and that the costs of the machine was Kshs.750,000/-. That the Plaintiff failed to install the machines and he was not charged with any offence for issuing dishonored cheques.

21. That was the totality of the evidence before the trial court. From the foregoing evidence, it is not disputed that there was a contract between the Appellant and the Respondent for the supply of the setter and the hatcher. The trial court rightly found that the agreement was oral as no documents was produced in written form. There is also un-controverted evidence that the Respondent delivered one hatcher and one setter to the Appellant. There is no dispute that the Respondent was paid kshs.450,000/- as deposit and the Respondent was issued with two cheques worth Kshs.350,000/- . It is not disputed that the cheques were not paid but were dishonored by the Appellant’s bankers.

22. The issues in controversy are on the number of setters that the Appellant was to supply and whether the goods supplied were fit for the purpose.

23. It is the Appellants case that the trial magistrate made reference to a proforma invoice and stated that according to it, the Respondent had supplied the goods. It was submitted that the Appellant had sought to produce the proforma invoice since the parties had relied on it but it was expunged by the trial court.

24. From the trial court record, the Respondent had filed the said proforma invoice but it was not produced as evidence. During trial, the Appellant sought to produce the proforma which was objected by the Respondent’s counsel since the Appellant had not filed it as the document they intended to rely on. In allowing the application for expunging the proforma, the trial magistrate stated that no basis was laid by the Appellant as to why it could be allowed to produce a document they had not filed.

25. I associate myself with the trial court findings. It is noteworthy that the Respondent merely filed the proforma but did not produce it in court. Even if it was produced, the same could not be relied on since it was not signed by either party. The documents could only have been relied on by the Appellant if they had been produced by the Respondent as was held in County Government of Homa Bay v Oasis Group International & Ga Insurance Limited [2017] Eklr- where the court held that;“From the outset, I wish to point out that no IPCs were equally produced by the first Defendant in this matter. The first Defendant attempted to rely of the IPCs which were contained in the List of Documents filed by the Plaintiff. The Plaintiff protested to such reference on grounds that the first Defendant had failed to give notice of its intention to rely on the documents filed by the Plaintiff in proof of its case. The first Defendant was of the contrary view that as long as the documents are already part of the record then any party in the case is at liberty to make reference to or use them in proof of its case. Whereas I readily agree with the first Defendant on that issue I have to qualify it and add that the mere presence of the documents on the record is insufficient to make a party rely on those documents. The documents must be produced as to be exhibits so as to enable the Court to look into their probative value. (See the case of Kenneth Nyaga Mwige (supra).”

26. I have also read the judgment of the lower court and at no time did the magistrate make reference to the proforma as alleged by the Appellant. The court termed the agreement between the parties as an oral agreement as no evidence was tendered of a written agreement.

27. As to the fact that the Respondent could not have proved the case without proforma agreement, it is noteworthy that the Appellant during the hearing did not deny owing the Respondent money and that he issued the Respondent with two cheques for payment of the balance. The cheques were dishonoured and the Respondent claimed that they were dishonoured upon his instructions to the bank. However, as the trial court noted, the cheques were dishonoured due to insufficient funds in the Appellant’s account. This was proved by Pexhibit 1 a and b produced by the Respondent. The Appellant in cross examination also admitted that the cheques were dishonoured on account of insufficient funds in his account.

28. As to the number of setters the respondent was to supply, the Appellant claimed the Respondent supplied one setter instead of two. I am persuaded that the trial magistrate properly applied his mind to the evidence since on my own evaluation, it is inexplicable why the Appellant would have issued the Respondent with two cheques for the settlement of the balance if at all the Respondent did not supply the number of setters as per the agreement.

29. The final issue is whether the supplied goods were as per the description and fit for the purpose intended.

30. From the record of trial court, there is no iota of evidence that the Appellant ever rejected the goods. Neither is there evidence of a technical person showing that the goods were contrary to the description and unfit for the purpose intended.

31. Section 35 (1) of the Sale of Goods Act states;“(1)where goods are delivered to the buyer which he has not previously examined, he is not deemed to have accepted them unless and until he has had a reasonable opportunity of examining them for the purpose of ascertaining whether they are in conformity with the contract.”

32. section 36 of the Act states;“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.”

33. It is clear from the above section, rejection ought to be carried out within a reasonable time. The subject goods were supplied sometime in the year 2017. The Respondent filed the lower court suit in the year 2019. In that period, the Appellant did not present any written or other proof that he complained to the Respondent on the non-fitness of the goods supplied. He only complained when he filed his defence. The Appellant, therefore, had sufficient opportunity to examine the goods and reject them, if at all they did not satisfy the merchantability test and his failure to do so meant that he had accepted the goods.

34. In Colourprint Vs Prepress Productions [2003] 1 EA 45 the court held that;“in my opinion the period of over two months was more than reasonable within the meaning of the above section (section 36 Sale of Goods Act) for the defendant to intimate to the plaintiff that it had rejected the items. The defendant’s failure to go intimate means that in law it accepted the goods”.

35. As to proof of the amount owed to the Respondent, the evidence reveals that the Appellant issued two cheques worth Kshs.175,000/- each which translates to Kshs.350,000/- which meant that the Appellant owed the Respondent Kshs.350,000/-. The Respondent further claimed Kshs.3,500/- as being the amount he was charged for the dishonored cheques. I did not see any document that was attached by the Respondent that he incurred bank charges of Kshs.3,500/-.

36. It is trite law that special damages must be specifically pleaded and proved. The Respondent did not prove the special damages. Therefore, in my finding, the award of Kshs.3,500/- was in error.

37. With the result that the Appeal succeeds only to the extent that the special damages were granted in error. The judgement of the trial court is upheld save for the setting aside of the award of Kshs.3,500/= in special damages which is hereby set aside. The Respondent shall have 90% of the costs of this Appeal.

DATED SIGNED AND DELIVERED AT NANYUKI THIS 17THDAY OF OCTOBER 2023. A.K. NDUNG’U...................................JUDGEI certify that this is a true copy of the originalSignedDEPUTY REGISTRAR