South Nyanza Sugar Company v Owiti [2022] KEHC 13350 (KLR)

South Nyanza Sugar Company v Owiti (Civil Appeal 58 of 2019) [2022] KEHC 13350 (KLR) (3 October 2022) (Judgment)

Neutral citation: [2022] KEHC 13350 (KLR)

Republic of Kenya

In the High Court at Migori

Civil Appeal 58 of 2019

RPV Wendoh, J

October 3, 2022

Between

South Nyanza Sugar Company

Appellant

and

Nelson Owiti Owiti

Respondent

(An Appeal from the Judgement of the Hon. R.K. Langat Resident Magistrate at Rongo in PMCC No. 72 of 2016 dated 28/5/2018)

Judgment

1. The appellant, South Nyanza Sugar Company preferred the instant appeal dated 29/6/2018 against the judgement and decree of thehon RK Langat (RM) dated and delivered on 28/5/2018. The appellant is represented by the firm of Otieno, Yogo Ojuro & Co Advocates. The respondent is represented by the firm of Ochillo & Co Advocates.

2. By a plaint dated 2/2/2016 and filed in court on 5/2/2016, the respondent (formerly the plaintiff) sued the appellant (formerly the defendant) for damages for breach of contract, cost of the suit, interest from 4/4/2006 and any other relief.

3. It was the respondent’s case that by an agreement dated 4/4/2006, the appellant contracted him to grow and sell to it sugarcane on his land parcel number 345A in K/Lwala Sub - Location measuring 2. 0 hectares and he was assigned account number 253993; that it was both an express and implied term of the contract that the agreement would remain in force for a period of 5 years or until one plant crop and two ratoon crops of sugarcane are harvested on the plot whichever period shall be less.

4. It was contended that in breach of the said agreement, the appellant failed, refused and/or neglected to harvest the cane when the same was mature and ready for harvesting leading to waste and loss; that by the aforesaid reasons the respondent suffered loss, his bargain and expected profit from the three (3) crops and suffered loss and damage. It was further pleaded that the plot was capable of producing an average of 200 tonnes and the rate of payment then applicable per tonne was Kshs 2,000/= which the respondent claims as damages.

5. The appellant filed a statement of defence dated 22/2/2016 in which liability was denied and it put the respondent to strict proof thereof. The appellant averred that the plant crop having not been harvested there could not have been any ratoon to grow and be available for harvest; that it is the appellant’s policy not to cut or harvest poorly maintained cane; that the plaintiff having signed the agreement failed to properly maintain it. The appellant denied that the respondent suffered any loss or damage.

6. The suit was set down for hearing and both parties presented their respective witnesses. The trial court rendered its judgement on 28/5/2018 in favour of the respondent and awarded him Kshs 524,610/= in damages together with costs and interests to run from the date of filing suit.

7. The decision by the trial Magistrate gave rise to this appeal dated 29/6/2018. The appellant raised six (6) grounds of appeal as follows: -a.The learned Magistrate erred in law and in fact by wrongly evaluating the evidence on record and hence coming to a wrong conclusion;b.The learned Magistrate erred in law and fact by entering judgement on the rate of interest that was neither contracted nor permitted by law and which was not proved by evidence on record;c.The learned Magistrate erred in law and fact by entering judgement on interest from the date of filing suit when the same was not a liquidated claim as the amount could only be ascertained after trial.d.The learned Magistrate erred in law and fact by failing to evaluate the contract between parties and to determine the obligations of the parties before entering judgement.e.The judgement is unlawful and contrary to law.f.The learned Magistrate completely misinterpreted the contract between the parties and the evidence that he arrived at a wrong conclusion as to the import and effect of the evidence placed before him.

8. The appellant prayed that the appeal be allowed and the judgement of the lower court be set aside and, in its place, an order be made dismissing the respondent’s suit with costs.

9. Directions were taken that the appeal be canvassed by way of written submissions and both parties complied. The appellant filed its submissions on 9/5/2022 and the respondent his submissions on 6/8/2020.

10. 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. See the decision in Selle & Another vs Associated Motorboat Co Ltd(1968) EA 123.

11. 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.”

12. Bearing the above decisions in mind, I have carefully considered the grounds of appeal, record of appeal and the positions taken by each party in their submissions. The issues for determination are: -i.Whether the respondent proved its case.ii.Whether the respondent failed to mitigate his loss.iii.Whether the respondent was entitled to damages.iv.Whether the respondent was entitled to interest from the date of filing suit.

13. Before proceeding with the first issue, I noted an anomaly in the record appeal although it has not been taken up by either party. Order 42 rule4 of theCivil Procedure Rulesprovides:-"Before allowing the appeal to go for hearing, the Judge shall be satisfied that the following documents are on the court record, and that such of them as are as not in the possession of either party have been served on that party, that is to say:-the memorandum of appeal;the pleadings;(c)the notes of the trial magistrate made at the hearing;(d)the transcript of any official shorthand, typist notes electronic recording or palantypist notes made at the hearing;(e)all affidavits, maps and other documents whatsoever put in evidence before the magistrate;(f)the judgment, order or decree appealed from, and, where appropriate, the order (if any) giving leave to appeal…”

14. The wording of the above provision uses the word ‘shall’ that is to mean, it is couched in mandatory terms; that the inclusion of the above listed documents are necessary to form part of the record of appeal for it to be a complete and competent record.

15. The record of appeal as filed is incomplete. It does not contain the complete transcript of the proceedings in the trial court. Order 42rule 4 of the Civil Procedure Rules (supra) is clear that the notes of the trial Magistrate made at the hearing should form part of the record of appeal. There is no exception on which parts of the notes made at the hearing should be omitted. The testimony of the respondent during the hearing does not form part of the record of appeal and neither are the proceedings after the close of the appellant’s case. In its submissions, the appellant refers to the testimony of the respondent in the trial court, which this court does not have an opportunity to read and appreciate. The complete record is necessary because, if it is not clear, the court has to sometimes refer to the lower court proceedings.

16. I have perused the original trial court file. The proceedings which were typed and certified on 25/6/2019 are complete. It is not clear why the appellant chose to omit the proceedings touching on the testimony of the respondent and the directions given after the hearing. The consequences of an incomplete record of appeal are well settled. The Supreme Court in Bwana Mohamed Bwana vs Silvano Buko Bonaya & 2 Others (2015) eKLR the learned Judges observed that:-"Without a record of appeal a court cannot determine the appeal before it. Thus, if the requisite bundle of documents is omitted, the appeal is incompetent and defective, for failing the requirements of the law. A court cannot exercise its adjudicatory powers conferred by the law, or the Constitution, where an appeal is incompetent. An incompetent appeal divests a court of the jurisdiction to consider factual or legal controversies embodied in the relevant issues. In the Nigerian Supreme Court Case, Ocheja Emmanuel Dangana v Hon Atai Aidoko Aliusman & 4 others, SC 11/2012, Judge Bode Rhode Vivour JSC highlighted the pertinent issues of jurisdiction:‘A court is competent, that is to say, it has jurisdiction when –1. It is properly constituted as regards numbers and qualifications of the members of the bench, and no member is disqualified for one reason or another; and2. The subject matter of the case is within its jurisdiction, and no feature in the case prevents the court from exercising its jurisdiction; and3. The case comes before the court initiated by the due process of law, and upon fulfillment of any condition precedent to the exercise of jurisdiction’”

17. Article 159 cannot come to the aid of the appellant. InRaila Odinga vs IEBC & Others(2013) eKLR, The Supreme Court held:-"Article 159 (2) (d) of the Constitution simply means that a court of law should not pay undue attention to procedural requirements at the expense of substantive justice. It was never meant to oust the obligation of litigants to comply with procedural requirements as they seek justice from court.”

18. Flowing from the above, there is no competent appeal before this court for consideration and it is enough to strike off this appeal. However, for the completeness of the record, I shall determine the other issues substantively.

19. The appellant contends that the respondent did not prove his case on a balance of probabilities. The basis of the submissions is that he did not avail photographs or an expert report to prove the development and growth of the plant crop. It was also contended that the respondent breached the terms of the contract by not harvesting and delivering the cane in breach of clause 3. 1.2 of the contract. It was further submitted that the respondent did not mitigate his loss.

20. I will first address the issue of the duty to harvest the cane. This has been the subject of numerous decisions. It is now well settled that all sugar contracts are to conform with the terms of the provisions of the Sugar Act No 10 of 2001. The contract in question was signed in the year 2006 when the Sugar Act was still in force.

21. Mrima J in Civil Appeal No 41 of 2016Jane Adhiambo Atinda vs South Nyanza Sugar Co Ltd (2017) eKLR extensively addressed the place of theSugar Act in sugar agreements. The Court of Appeal settled the issue on the place of statutes in agreements in the case ofNjogu & Company Advocates v National Bank of Kenya Limited (2016) eKLR held: -"…any contract that contravenes a statute is illegal and the same is void, ab initio and is therefore unenforceable. The logical conclusion of this finding would be that the contract between the appellant and the respondent regarding the payment of legal fees is unenforceable.”

21. Section 6 (a) of thesecond schedule of the Sugar Act, provides the role the millers as follows: -The role of the miller is to—harvest, weigh at the farm gate, transport and mill the sugarcane supplied from the growers’ fields and nucleus estates efficiently and make payments to the sugar-cane growers as specified in the agreement;

22. Therefore, the learned trial Magistrate reached a correct finding that the duty to harvest the sugar cane rests with the miller who is the appellant herein.

23. The plant crop was to be harvested not later than 24 months. The appellant assisted the respondent to develop the cane. Having reached the finding that the duty to harvest lay on the appellant, had the appellant been diligent enough to perform its duty to harvest the cane, it would have inspected the cane to determine whether the appellant had nurtured the plant crop to the standards required before the harvest. The appellant left the plant crop to waste away hence caused loss to the respondent.

24. On the issue of mitigating his loss, it is a matter of fact. The question of whether or not a party took steps to mitigate his loss, is one which should be put to test in a trial. The appellant did not plead this defence. It did not lead evidence in the trial court on the alternative steps that the respondent would have taken to avoid loss. The burden of proof lies with the defendant. Instead, the appellant through its witness Richard Muok (DW1) admitted the terms of contract, their input in planting the plant crop, the price per tonnage and the expected yields in the area where the plant crop was grown.

25. Majanja, J in Kisii High Court Civil Appeal No 60 of 2017 South Nyanza Sugar Co Ltd vs Donald Ochieng Mideny (2018) eKLR held:-"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…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……”

26. Further, Mrima J in Migori High Court Civil Appeal No 74 of 2018South Nyanza Sugar Co Ltd vs Rehema Joseph Nkonya (unreported) held:-"The question which now arises is how should adefendant handle the issue of mitigation of loss in a suit where the plaintiff did not plead how it/he/she mitigated the loss? That question is factual. To me, the burden rests upon thedefendantto demonstrate how the plaintiff ought to have mitigated the loss. Such approach must first find its basis in the pleadings. By doing so the plaintiff would be put in sufficient notice and accorded an opportunity to challenge the evidence on mitigation of loss if need be. That is the essence of a fair trialin article 50(1) of the Constitution. A defendant should not raise the issue of mitigation of loss on appeal at the first instance. By doing so, the issue becomes a non-issue. The issue must be pleaded and proved. (See the Supreme Court ruling inRaila 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)…In this case the issue of mitigation of loss was not pleaded by the appellant in the statement of defence. Instead, the appellant denied the existence of the contract. The appellant only pleaded in the alternative that upon proof of the contract then the respondent failed to exercise diligence in growing the cane. The appellant unfortunately did not lead any evidence on the position. There was no mention of the issue of mitigation of loss or at all. How then was the respondent expected to respond to a non-issue. I therefore find and hold that the issue of mitigation of loss having not been raised in the suit cannot be subject of an appeal.”

27. Guided by the above decisions, the mitigation of loss is a non-issue at the stage of appeal having not been pleaded so as to give the respondent an opportunity to respond. The conclusion therefore is that the respondent proved his case on a balance of probabilities, that the appellant was in breach of the terms of the contract.

28. On the award of damages, there is no dispute on the price of the cane. Both parties agreed on a figure of Kshs 2,000/=. The respondent in his statement of December 11, 2017, stated that the tonnage of cane in the area was 72. 34 while the ratoons were 49. 78. This is according to the research done by the appellant’s company. The learned Magistrate referred and correctly relied on the report by Kenya Research Foundation (KESREF) which shows that the average mean yields was 87 tonnes. The learned Magistrate considered the input by the appellant and deducted the same from the total to arrive at a figure of Kshs, 524, 610/=. I find that the learned trial Magistrate did not err in reaching his findings on the damages awarded to the respondent. I would find no reason to disturb the same.

29. In the end, not only was the appeal incompetent for having an incomplete record of appeal but the same lacks merit. I dismiss the appeal with costs to the respondent.

DATED, DELIVERED AND SIGNED AT MIGORI THIS 3RD DAY OF OCTOBER, 2022R. WENDOHJUDGEJudgment delivered in the presence of;Mr. Odhiambo for the Appellant.No appearance for the Respondent.NyaukeCourt Assistant.