South Nyanza Sugar Co. Ltd v Philip Omondi Oyugi [2019] KEHC 1398 (KLR)

REPUBLIC OF KENYA

IN THE HIGH COURT OF KENYA

AT MIGORI

[Coram: A. C. Mrima, J.]

CIVIL APPEAL NO. 96 OF 2018

BETWEEN

SOUTH NYANZA SUGAR CO. LTD......APPELLANT

AND

PHILIP OMONDI OYUGI...................RESPONDENT

(Being an appeal from the judgment and decree by Hon. M. M. Wachira, Senior Resident Magistrate in Migori Chief Magistrate's Civil Suit No. 106 of 2015 delivered on 21/06/2018)

JUDGMENT

1. Philip Omondi Oyugi,the Respondent herein, filed Migori Chief Magistrate’s Court Civil Suit No. 106of2015 (hereinafter referred to as ‘the suit’) against South Nyanza Sugar Co. Ltd, the Appellant herein, before the now defunct Sugar Arbitration Tribunal. The Respondent claimed that by a Growers Cane Farming and Supply Contract entered into on 10/12/2003 (hereinafter referred to as 'the Contract') the Appellant contracted the Respondent to grow and sell to it sugarcane at the Respondent’s parcel of land Plot No. 794D Field No. 177 in Kawere Sub-Location measuring 0. 3 Hectare within Migori County.

2. The Respondent pleaded that the Contract was for a period of five years or until one plant crop and two ratoon crops of the sugarcane were harvested from the subject parcel of land whichever event occurred first. The Respondent further stated that the cane was company-developed. He posited that he discharged his part of the contract until the plant crop was harvested by the Appellant. He was duly paid for the same. The Respondent further posited that he developed the first ratoon crop until it was ready for harvesting but the Appellant refused and/or failed to harvest it hence compromised the development of the second ratoon crop. The Respondent suffered loss.

3. Aggrieved by the alleged breach of the contract the Respondent filed the suit claiming compensation for the loss of the unharvested two cycles.

4. The Appellant entered appearance and filed a Statement of Defence dated 06/10/2009 wherein it denied both the contract and the breach and put the Respondent into strict proof thereof. The Appellant further averred the Tribunal lacked jurisdiction as the suit was premature. It also averred that the suit was devoid of proper pleadings and that it was incompetent for want of defined claim on specific damages. In the alternative the Appellant posited that if at all there was any such breach then the Respondent was the author of his own misfortune as he failed to employ the recommended crop husbandry to the extent that the cane was overshadowed and dwarfed by weeds and totally destroyed. The Appellant also declined the duty to harvest the mature cane, if any.

5. The Appellant prayed for the dismissal of the suit with costs.

6. The suit was finally settled down for hearing where both parties were represented by Counsels. The Respondent was the sole witness who testified and adopted his Statement as part of his testimony. He also produced the documents in his List of Documents as exhibits. The Appellant called one witness who testified and adopted his Statement as part of his testimony. He also produced the documents in his List of Documents as exhibits.

7. The trial court rendered its judgment and allowed the suit by remedying the Respondent the value of the two ratoon crops.

8. The Appellant was aggrieved by the judgment and lodged an appeal. In praying that the appeal be allowed and the suit be dismissed with costs the Appellant proposed 10 grounds in the Memorandum of Appeal dated 20/07/2018.

9. Directions were taken, and the appeal was disposed of by way of written submissions where the Appellant duly complied. The Respondent did not. The Appellant challenged the finding of the trial court vigorously on five aspects. That, the court erred in not finding that the suit was based on breach of contract and the pleadings did not meet the legal creation to sustain such a suit; that the suit was time-barred and not proved, in awarding the value of the ratoon crops the court did not take into account the fact that yields decrease with the harvests, that the court failed to take mitigation of loss into account and that interest was to begin running from the date of judgment. The Appellant referred to various decisions in support of its submissions.

10. As the first appellate Court, it is now well settled that the role of this court is to revisit the evidence on record, evaluate it and reach its own conclusion in the matter. (See the case of Selle & Ano. vs. Associated Motor Boat Co. Ltd (1968) EA 123). This court nevertheless appreciates 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 the Court is shown demonstrably to have acted on wrong principles in reaching the findings.  This was the holding in Mwanasokoni – versus- Kenya Bus Service Ltd. (1982-88) 1 KAR 278and Kiruga –versus- Kiruga & Another (1988) KLR 348).

11. I have certainly perused and understood the contents of the pleadings, proceedings, judgment, grounds of appeal, submissions and the decisions referred to by the parties.

12. I have previously dealt with all the issues raised in this appeal. Since I have not changed my position on any of the issues I will reiterate what I previously held in past decisions. On how pleadings ought to be drafted in a suit on breach of sugar cane contracts, I must observe that the Respondent sufficiently pleaded and quantified his claim in paragraph 6 of the Plaint dated 17/09/2009. He claimed Kshs. 255,000/=. Even if the pleadings were silent on the actual compensation, the manner in which pleadings in a sugar dispute are to be drafted was discussed by the Court of Appeal at Kisumu in Civil Appeal No. 278 of 2010 John Richard Okuku Oloo vs. South Nyanza Sugar Co. Ltd (2013) eKLR where the Learned Judges stated as follows: -

In the case before the trial magistrate the appellant, as plaintiff, pleaded in the plaint acreage of the parcel of; and which was 0. 2 hectare (paragraph 3 of plaint), average cane proceeds per acre was given as 135 tonnes and the price per tonne was pleaded as Kshs. 1553/=. The trial magistrate was not unpersuaded by this pleading but dismissed the suit after holding that there was no breach of contract.

The learned judge in first appeal found that there was a valid contract between the appellant and the respondent and that the respondent had breached the same. The learned judge faulted the trial magistrate holding that the appellant had not specifically pleaded the claim nor proved it.

We have shown that the pleading on special damages suffered by the appellant was clear and sufficient enough and the learned judge was clearly in error to dismiss the appeal on the ground that the appellant had not specifically pleaded for the same to the required standard nor offered sufficient proof.

Having found that the learned judge erred in his findings this appeal has merit and is accordingly allowed. The orders of the High Court and those of the subordinate court are hereby set aside and we substitute thereof an order entering judgment for the appellant/plaintiff as prayed at prayer (a) in the plaint. We also award interest from the date of filling suit.(emphasis added).

13. I therefore find that the suit was not bad in law.

14. As to whether the suit was proved, there is no doubt that the contract was entered into. The Appellant’s witness so admitted in his statement and in his evidence before court. The witness further admitted that the Respondent developed the cane up to maturity but contended that he instead sold it to a third party; a jaggery. I however note that the issue of selling the cane to a third party was not part of the Appellant’s pleadings. It is an issue which came up at the trial and therefore infringed the rules on pleadings and evidence. The issue of selling the plant crop to a third party was hence a non-issue in the suit. Likewise, the issue of the suit being time barred was a non-issue as it only arose on appeal.  (See the Supreme Court ruling in Raila Amolo Odinga & Another vs. IEBC & 2 others (2017) eKLR and the Court of Appeal in The Independent Electoral and Boundaries Commission & Ano. vs. Stephen Mutinda Mule & 3 others (2014) eKLR).

15. The upshot of the Appellant’s evidence is that it did not controvert the Respondent’s evidence. There was no evidence to support the position taken by the Appellant in its pleadings inter alia that the Respondent did not employ the recommended crop husbandry to the extent that the cane was overshadowed and dwarfed by weeds and totally destroyed.

16. To the contrary, the Respondent contended that he discharged his part of the contract by ensuring that the ratoon crop was ready for harvesting and that the Appellant failed to harvest it thereby compromised the development of the second ratoon crop. The trial court was hence right in its finding that the Appellant breached the contract.

17. On the resultant remedy for the breach, I have previously held in Migori High Court Civil Appeal No. 10 of 2016 South Nyanza Sugar Co. Ltd vs. Joseph O. Onyango (2017) eKLR that once a farmer proves that the Miller failed to harvest the plant crop at maturity then the farmer is entitled to the proceeds of the plant crop as well as the ratoon crops subject to the pleadings. Equally, when a Miller fails to harvest the first ratoon crop then the farmer is entitled to compensation for the first and second ratoon crops subject to the contract. In this case the Respondent was entitled to the proceeds of the two ratoon crop yields since the pleadings claim as such.

18. I have noted in the judgment that the court relied on the Kesref Report as a basis for the yields. I do not think the trial court was right. The reason being that the Report was not produced as an exhibit. It was instead marked for identification. Such a document cannot form the basis of a decision since it is not part of the evidential record of the court. (See the Court of Appeal in Kenneth Nyaga Mwige v Austin Kiguta & 2 others (2015) eKLR).

19. The correct document to be used was therefore the Appellant’s Cane Yield Report which was produced as an exhibit by the witness. According to the Report the expected yield for the ratoon crops was 51. 91 tonnes per hectare. The ratoon crop would yield Kshs. 38,930/= thereby totaling to Kshs. 77,860/= for the two crops. The sum would be subject to the transport and harvesting charges at a total of Kshs. 31,790/=. The net income for the two ratoon crops would hence be Kshs. 46,070/=.

20. The issue of mitigation of loss is one which is hotly contested almost in every appeal. The issue is pending determination at the Court of Appeal. There are divergent views by the High Court on the matter. I agree with my brother Majanja, J. in Kisii High Court Civil Appeal No. 60 of 2017 South Nyanza Sugar Co. Ltd vs. Donald Ochieng Mideny (2018) eKLR when he rendered himself on the issue after considering several decisions including some by yours truly and held that: -

15. Mitigation of damages is not a question of law, but one of fact dependent on the circumstances of each particular case, the burden of proof being on the defendant (See African Highland Produce Limited vs. Kisorio (1999) LLR 1461 (CAK). Since the appellant did not contest the respondent’s claim, it did not show how the respondent could mitigate the loss.

16. The appellant’s arguments in support of the appeal were attractive but at the end of the day the respondent’s case before the trial court was not contested and for this reason, I dismiss the appeal……

21. I must add that indeed the issue of mitigation of loss only arose on appeal. It was a non-issue.

22. On the argument that the trial court failed to take into account the fact that yields generally decrease with the crops and that they cannot be uniform, I must first say that the issue is factual. That being so, the Cane Yield Report by the Appellant sorted out the Appellant’s concern.

23. On the issue of interest, the Court of Appeal at Kisumu in Civil Appeal No. 278 of 2010 John Richard Okuku Oloo vs. South Nyanza Sugar Co. Ltd(supra) settled the same. It held that interest must run from the date of filing the suit and as such the trial court did not err in making that order.

24. I must add that the Court of Appeal was alive to the fact that the lower court case had been filed in 1998 when it rendered its judgment in 2013. That was after a period of 15 years. The simple reason thereto is that it is well settled in law and has been so held over time that interest starts running from filing of suit in special damages claims like in this case. The Respondent was denied the use of his money for all that period and the interest remain the sole consolation. Further, if the trial court was to otherwise find that interest ought to begin running from any other date then that was a factual issue which ought to have been pleaded and proved and the Respondent given an opportunity to respond to. The argument comes too late in the day and is for rejection.

25. Having dealt with all issues raised in this appeal and there being a single ground to disturb the decision of the trial court I hereby make the following orders: -

a)  The appeal hereby succeeds and the finding of the learned magistrate awarding Kshs. 98,710/20 be and is hereby set aside accordingly;

b)  Judgment is hereby entered for the Respondent as against the Appellant for Kshs. 46,070/=.

c)  The sum of Kshs. 46,070/= shall attract interest at court rates from the date of filing of the Statement of Claim before the Tribunal;

d) The Respondent shall have costs of the suit whereas the Appellant shall have costs of the appeal.

Orders accordingly.

DELIVERED, DATED and SIGNED at MIGORI this 11th day of  December, 2019.

A. C. MRIMA

JUDGE

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

Mr. Marvin OderoCounsel instructed by the firm of Messrs. Okong’o Wandago & Company Advocates for the Appellant.

Mr. Kerario MarwaCounsel instructed by the firm of Messrs. Kerario Marwa & Company Advocates for the Respondent.

Evelyne Nyauke –Court Assistant