South Nyanza Sugar Co. Limited v Niala [2022] KEHC 11988 (KLR)

South Nyanza Sugar Co. Limited v Niala (Civil Appeal 68 of 2019) [2022] KEHC 11988 (KLR) (12 May 2022) (Judgment)

Neutral citation: [2022] KEHC 11988 (KLR)

Republic of Kenya

In the High Court at Migori

Civil Appeal 68 of 2019

RPV Wendoh, J

May 12, 2022

Between

South Nyanza Sugar Co. Limited

Appellant

and

Shem Ooko Ojwando Niala

Respondent

Judgment

1. This is an appeal by South Nyanza Sugar Company Limited against the judgement and decree of the Hon. M. Obiero (PM) dated and delivered on 23/4/2019.

2. The appellant is represented by the firm of Moronge & Co. Advocates whilst the respondent is represented by the firm of Kerario Marwa & Company Advocates.

3. By a plaint dated 22/6/2015 and filed evenly, the respondent (formerly the plaintiff) sued the appellant (formerly the defendant) for damages for breach of contract and the total value of the unharvested sugarcane for 3 cycles.

4. It was the respondent’s case that on or about the year 2012, the appellant entered into an agreement with the respondent to cultivate sugarcane on Plot Number 1258 (2), Field Number 357, vide Account Number 483791. By the terms of the agreement, the appellant was to purchase/harvest and transport sugarcane to the factory on its maturity and pay the appellant the value thereof.

5. Pursuant to the said agreement, the respondent grew sugarcane on a plot measuring 4. 21 Ha and, on its maturity, asked the appellant to harvest/purchase the sugarcane which it unreasonably refused to do so breaching the terms of the agreement. The respondent outlined the particulars of negligence and stated that as a result of the appellant’s breach, he suffered loss of approximately 420 tons for the plant crop and another 420 tons for each of the ratoons. Further, the respondent also pleaded that the price per ton at that time was Kshs. 3,800/=.

6. The appellant filed a statement of defence dated 21/7/2015 and filed evenly. Liability was denied and the respondent was put to strict proof thereof. The appellant stated that it was the respondent who failed to properly maintain his crop to the required standard or at all to warrant the same being harvested and milled and the harvesting would have been an uneconomical exercise.

7. After the hearing, the trial court entered judgement in favour of the respondent for Kshs. 2,324,559/= in damages for breach of contract, costs of the suit and interest at court rates from the date of filing.

8. Being dissatisfied with the judgement and decree, the appellant filed a Memorandum of Appeal dated 17/5/2019 on 21/5/2019. It preferred four (4) grounds of appeal as follows: -i.That the learned magistrate erred in law and in fact by failing to appreciate and take into account the evidence, testimonies and submissions on record;ii.That the trial court erred in law and in fact by failing to find that the plaintiff did not exhibit the original contract book and thus no contract as per the pleadings and the copies of the few pages filed and relied upon was proven;iii.That the trial court erred in law and in fact by arbitrarily awarding the plaintiff Kshs, 2,324,559/= with costs and interest from the date of filing suit when the plaintiff had failed to prove the suit having relied on four pages of unproven contract whose original was not produced;iv.That the trial court erred in entirely failing to appreciate the defendant’s evidence testimonies and submissions thereby arriving at an erroneous finding.The appellant prayed: -i.That this appeal be allowed.ii.That the entire judgment of the Principal Magistrate dated 23/4/2019 be set aside and its place and order of dismissal of the plaintiff’s suit with costs to the defendant/appellant be entered.iii.In the alternative, the judgement of the Principal Magistrate be varied to accord to the plot size as per the survey certificate of 0. 21 Ha in the place of 4. 21 Ha.iv.The appellant do have the costs of this appeal.

9. Directions were taken that the appeal be canvassed by way of written submissions. Both parties complied. In support of its appeal, the appellant filed its submissions dated 14/10/2020 on 19/10/2020. In response, the respondent filed their undated submissions on 7/4/2021.

10. I have carefully considered the record of appeal, the rival submissions and the proceedings in the trial court. The following are the issues for determination: -i.Whether the respondent proved his case in the trial court.ii.Whether the court awarded the damages based on proper legal principles.

11. This being a first appeal, this court has the duty to re-evaluate, and analyse all the evidence tendered in the lower court and arrive at its own conclusions but bear 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 v Associated Motorboat Co Ltd[1968] EA 123.

12. It is also settled that an appellate court will not ordinarily interfere with findings of fact by the trial Court unless they were based on no evidence at all, or on a misapprehension of it or on demonstrably wrong principles not supported by evidence or on wrong principles of the law. This was the finding of the Court of Appeal in Mbogua Kiruga v Mugecha Kiruga & another[1988] eKLR where the Court of Appeal held:-“An appeal court cannot properly substitute its own factual finding for that of a trial court unless there is no evidence to support the finding or unless the judge can be said to be plainly wrong. An appellate court has jurisdiction to review the evidence in order to determine whether the conclusion reached upon that evidence should stand but his is a jurisdiction which should be exercised with caution.

13. On whether the respondent proved his case in the trial court, the appellant submitted that the respondent did not prove the pleaded contract since he produced an incomplete contract.

14. The respondent’s claim was hinged on an alleged agreement entered into between himself and the appellant on 25/2/2012 in respect of Plot No. 1258 (2), Field No. 357 and Account No. 483791. Pursuant to the agreement, the respondent planted the sugar cane on a plot measuring approximately 4. 21 Ha.

15. It was particularly pleaded, that contrary to the terms and spirit of the contract, the appellant failed to harvest the plant crop thereby compromising the development of the 1st and 2nd ratoons; that the appellant deliberately and recklessly refused to give consent to the plaintiff to dispose of the developed sugarcane to 3rd parties or in the open market.

16. Since the claim was hinged on a contract, it goes without saying the same ought to have been produced in evidence, for the alleged breached terms thereof to be the subject of examination by the trial court so that the court could make its decision. The respondent testified on 27/7/2017 as PW1. From the court record, there is no indication that he produced and marked in evidence the said agreement as an exhibit. That in itself, is contrary to the rules of trial and evidence.

17. The contract which was the main document of contention was not produced as an exhibit. The effect thereof was discussed extensively in the Court of Appeal Case in Kenneth Nyaga Mwige vs Austin Kiguta & 2 Others (2015) eKLR. The learned Judges considered the issue of a document which has not been produced formally as an exhibit and what weight it carries. The court found that a document filed and/or marked for identification by either party passes through stages before it is proved or disproved. The first stage being the filing of the document, and even though it is filed, it does not become part of judicial record. Secondly, when the document is tendered or produced in evidence as an exhibit, it then becomes part of judicial record. Thirdly, the document becomes proved or disproved when the court is called upon to examine its admissibility.It went on further to state: -“The marking of document is only for purposes of identification and is not proof of the contents of the document. The reason for marking is that while reading the record, the parties and the court should be able to identify and know which was the document before the witness. The marking of the document for identification has no relation to its proof; a document is not proved merely because it has been marked for identification. Once a document has been marked for identification, it must be proved. A witness must produce the document and tender it in evidence as an exhibit and lay foundation or its authenticity and relevance to the facts of the case. Once this foundation is laid, the witness must move the court to have the documents produced as an exhibit and be part of court record. If the document is not marked as an exhibit, it is not part of the record. If admitted into evidence and not formally produced and proved, the document would be hearsay, untested and unauthenticated account.”

18. Since the document was not formally produced in evidence as an exhibit, it then follows that there was no contract that the trial court could have referred to in rendering its judgement. The document was hearsay, untested and unauthenticated.

19. I have perused and appreciated the terms of the contract as it was produced. The alleged breached contractual terms were for the unharvested plant crop and the 1st and 2nd ratoons. The respondent did not plead any timeline which the plant crop and the ratoons were meant to mature before harvesting.

20. Richard Muok, DW1 in his testimony said that the sugar cane was harvested before its maturity period of 24 months and instead the sugar cane was sold to them as a jaggery. The contract as filed in court, contains four pages. The outer cover, schedule A which contains the names of the parties, the first page which has some definitions and the execution page. The contract does not contain a clause or clauses which outlines the time span of the plant crop and the ratoons. The question becomes how did the trial court conclude that the respondent was entitled to the damages in the absence of the crucial timelines?

21. The defence by the appellant was that the sugar cane was harvested prematurely at 17 instead of 24 months. It therefore follows that since this was a suit based on a written contract, the contract should have guided the court to verify the time when the plant crop was to be harvested first before concluding that there was a breach of contract.

22. It is a longstanding principle that courts cannot re-write contracts on behalf of parties. The Court of Appeal in National Bank of Kenya Ltd v Pipe Plastic Samkolit (K) Ltd[2011] eKLR held: -“A court of law cannot rewrite a contract between the parties. The parties are bound by the terms of their contract, unless coercion, fraud or undue influence are pleaded and proved.”

23. In this case, the crucial terms of the contract which would have proved the alleged breach, are missing from the contract. On what basis therefore did the trial court reach its findings?

24. From the foregone, it seems the trial court imputed imaginary terms into the contract. This, I must say with tremendous respect, the trial court erred. The correct position is that the respondent never proved the terms of the contract and that should have been the holding of the court.

25. The foregone position is that the appeal succeeds on the basis that the crucial document that is to mean, the contract, which was the basis of the suit in the trial court was not produced and the document produced in court was incomplete.

26. The suit in the trial court cannot stand and the same is dismissed. The following orders do issue: -i.The appeal has merit and succeeds.ii.The Judgement and Decree dated and delivered on 23/4/2019 are hereby set aside.iii.Costs of this appeal and the main suit awarded to the Appellant.

DATED, DELIVERED AND SIGNED AT MIGORI THIS 12TH DAY OF MAY,2022. R. WENDOHJUDGEJudgment delivered in the presence ofMr. Odero holding brief Mr. Moronge for the Appellant.Mr. Onyango for the Respondent.Nyauke Court Assistant.**