ANN KERUBO NYAGESIBA AND EDDINAH HULDAH N OGEMBO VS MELLEN KWAMBOKA ARIKA AND PATRICK NYABUTO NYAGESIBA

(Being an appeal from the Judgment delivered by Hon. C. Ocharo (SPM) on 25^th October 2022 in KISII CMCC NO 1510 OF 2004)

JUDGMENT

INTRODUCTION

1. This Appeal arises from the Judgment delivered on 14^th October, 2021 in Kisii CMCC NO 1510 of 2004. the Appellant filed this Appeal herein vide a memorandum of Appeal dated 1^st December, 2023 which was based on the grounds that;
2. The learned Magistrate wrongly computed the duration and nature of the contract entered between the Parties and thus arrived at an erroneous finding.
3. The learned Magistrate erred in law in purporting to apportion damages for breach of contract at 90%/10% in favor of the Appellant.
4. The learned Magistrate erred in law and in fact in finding in not properly and adequately evaluating the evidence adduced so as to come to a correct decision.
5. Based on the grounds of Appeal the Appellants sought for the following orders;
6. The decision and decree of the trial Magistrate be set aside.
7. There be judgement for the Appellant as prayed for in the Plaint.
8. The costs of the suit in the lower court and in the Appeal be borne by the Respondent.
9. An order do issue for payment of interest, the same do accrue from the date of filing of the suit.
10. The background of the matter is that the Appellant vide a plaint dated 12^th November 2004 filed a suit against the respondent seeking Damages for breach of the contract, an order that directing the Respondent to compensate the plaintiff for loss of sugar cane on 0.3 hectares of land at the rate of 135 tonnes per hectare and payment of Kshs. 1,730 per tonnes, costs of the suit and interests at the court rats from 4^th January, 1996 until payment in full. To support his claim, the Appellant alleged that on 4^th January, 1996, the Respondent contracted him to row and sell sugar cane on his land being plot number, 226 in field number 72 in Kakmasia Sub-location measuring 0.3 Ha. He duly signed the agreement and was assigned  account number, 260732 and proceeded to plant the cane as agreed.
11. He alleged further that it was an express term in the agreement that the agreement would commence on 4^th January, 1996, and remain in force for a period of 5 years or until one plant crop and two ratoon crops of sugar cane were harvested from the said parcel of land which ever period shall be the less. He alleged equally that that it was also a term in the agreement that within the 5 year period, or less the plant crop and ratoon crop cane would be harvested at the ages of 22 to 24 months and 16 to 18 months after planting and subsequent harvest respectively and that the defendant would under the contract be bound by the purchase of the cane that was available and capable of harvesting and delivery.
12. He claimed further that the Respondent in breach of the contract, failed to take delivery or harvest of the sugarcane when the same was mature and ready for harvesting either in time or leaving the whole crop to go to waste, consequence thereof the plaintiff suffered loss and damage
13. He decried that as a result of the said breach, the plaintiff lost three (3) crops cycle which cost him immense loss and damage. He explained that his plot was capable of producing an average of 135 tonnes per hectares and the rate of payment applicable per tone was  Kshs. 1730/=
14. In its defense the Respondent, filed a statement of defense 16^th December, 2004 wherein it denied allegations that it breached the contract by failing to harvest the plant crop and averred that the failure to harvest the same on time was due to tribal clashes that existed between neighboring communities and which were beyond its control.  The Respondent without prejudice averred that the Plaintiff’s plot could only have produced a maximum of 65 tonnes per hectare as this was the average yield of plant crops from plots in the vicinity of the plaintiff’s land.
15. The Respondent equally denied the plaintiff’s claim that his plot was capable of an average of 135 tonnes per hectare. To the contrary the Respondent averred that the plaintiff’s land measured only 0.2 hectares and thus it would only yield 13 tonnes whose price would be subjected to SONY out growers levy, presumptive tax, harvesting and transport charges and cess.
16. The respondent equally averred in the alternative that the plaintiff’s suit was statute barred and it offended the law of limitation of actions as the same had been filed well out of time and without leave of court.
17. The Respondent equally filed a preliminary objection claiming that the lower court did not have as the sugar Act did not have Jurisdiction to dispose of the matter. The preliminary objection was dismissed vide a ruling dated 20^th July, 2006 for reasons that the Act did not out rightly oust the jurisdiction of the court.
18. However on 25^th June, 2008, the Appellant filed a chamber summons Application seeking an order that the matter be referred to arbitration. He also in the Application sought appointment of an arbitrator at the sugar tribunal or any person or body to determine the dispute between the parties by the court. Vide an order of the court dated 5^th August, 2008 the matter was referred the matter to the sugar tribunal and the Arbitrator was required to file its award within 60 days from the date of the order.
19. On 14^th October, 2008, the Appellant once again file notice of motion Application under certificate of urgency seeking enlargement of time for filing the award by the arbitrator by a further 90 days. In support of his Application he claimed that the tribunal took excessively long time in fixing the suit for hearing.
20. However the sugar tribunal was disbanded and the parties resumed to court in 2016. Upon the trial court hearing both parties it delivered it’s judgement on 25^th December, 2024 wherein it dismissed the plaintiff’s suit for being time barred. The Learned trial Magistrate in her Judgment found that in as much as judgment would have been entered in favor of the Appellant for a sum of Kshs. 93,270.50 as damages for breach of contract, the suit having been filed beyond the limitation time set out under Section 4(1) (a) which provides that the limitation period as six years from the date which the cause of action accrues. The learned trial Magistrate underscored that she agreed with the parties that the cause of action was founded on contract which would have lasted up 4^th January, 2001 and the suit based on that contract was capable of being instituted  upto  4^th January, 2007. She however noted that the cause of action arose on 4^th January, 1998 when the Defendant failed to harvest the sugar crop as per the agreement and thus the suit having been filed 8 months and some days from 4^th January, 2004 when the 6 year statutory period ended the same was incompetent.
21. It against this decision that the Appellant filed this Appeal. This court  directed that the Appeal to be disposed of by way of written submissions. The Appellants filed the written submission through the learned counsel on 23^rd   February, 2023, while the Respondent’s submissions were filed on 8^th March, 2023.

THE APPELLANTS’ SUBMISSIONS

1. The learned counsel for the Appellant submitted that the nature of the contract that the parties herein engage in was one to which the obligation to perform is extended over a duration of time wherein in this case the it was to be performed at three intervals for a period of 5 years. According to him therefore time started running at the end of the contract period which was 4^th January, 2001. The learned counsel relied on the cases of Sipora Achieng Avege vs South Nyanza Co. Limited HCCA 105 OF 2019, South Nyanza Sugar Co. Ltd vs Paul N. Lila HCCA No. 161 of 2005, Zadack N Danda Vs South Nyanza Sugar LTD HCCA NO. 11 of 2017 where learned Justices observed that sugar contracts are special contracts and such for purposes of limitation of Action time starts running from the end of the contract period.  The learned counsel also relied on the case of Vai Industries (UK) Ltd vs Bustock & Bramely and other (2003) EWCA Civ 1069 and Bell vs Peter Brown & Co. (1990) All ER 124 which elaborated the concept of continuing breach of a continuing contractual obligation.
2. According to the learned counsel, when a party contracts expecting to make 3 harvest within a five year and is compelled through a contrary interpretation of the contract to rush to court midstream on a continuing contract, that party will be met with a defense that the suit is prematurely in court as its performance is still possible since the defendant would still be in a continuing obligation.
3. The learned counsel submitted even though the Appellant agreed with the trial court’s ruling that he would have been entitled to cash 103,633. 92, he did not  agree with the apportionment of damages reducing it by 10%. The learned counsel contended that breach of contract concerns compensation for total loss unless mitigation is pleaded. He contended too that mitigation was not pleaded, and even if it was pleaded it , would have been a matter of fact to be proved.

THE RESPONDENT’S SUBMISSIONS

1. The learned counsel for the Respondent on his part submitted that the commencement of the contract was 1^st January, 1996 according to the facts of the suit. he contended that according to the facts of the case, the plaintiff planted the sugar case in January, 1996 and the plant was to be harvested 24 months  later after  the contract had executed that is by 1^st January, 1998 but the same was not harvested.  According to the learned counsel therefore the contract was breached on 1st January, 1998 after the respondent failed to harvest the sugar cane. The learned counsel underscored that as was correctly found by the trial court time started running on 1^st January, 1998 and the Appellant was required to file his suit before 1^st January, 2004 and the suit having filed the suit on 22^nd November,2004 that same was statute barred having been filed 8 months and 22 days later.
2. The learned counsel relied in the cases of B Mathayo Obonyo vs South Nyanza Sugar, company (2021) eKLR, South Nyanza Sugar, company vs Joshua Aloo Aloo (2021) eKLR, South Nyanza Sugar, company vs Francis Koskei  Nduitai (2020) eKLR.
3. Referring South Nyanza Sugar, company vs Ezekiel Oduk (2019) eKLR the learned counsel pointed out that in that case, Justice Murima had departed from own decision in the case of  South Nyanza Sugar, company Dickson Aoro Owuor(2017) eKLR on when time starts to run that was relied on by the Appellant.
4. On the issue of mitigation, the learned counsel submitted that the Appellant had a duty to mitigate his losses after the Respondent failed to harvest his sugar cane in the 1^st round. The learned counsel contended that it was foolhardy for the Appellant to plant sugar for the remainder of the two seasons after his crop went wasted for the 1^st round as such a move amounted to self-exposure to losses. The learned counsel relied on the case of Kenya Power and Co. imited vs Henry Wafula Masibaye (2013) eKLR. The learned counsel thus insisted that if the court were to allow any compensation the same should be in relation to the first ratoon.
5. The learned counsel submitted the Appellant appeared to be floating a document namely South Nyanza Sugar cane productivity sublocationwise which Justice Justice Murima in the case of Munica Miranda vs South Nyanza Sugar, company (2017) eKLR found to be unreliable.
6. The learned counsel contend that according to the Respondent, the total tonnage according to the Respondents witnesses was 19.968 tones and having conceded to proposed price by the Appellant as being Kshs. 1, 730, the Appellant’s crop would bear Kshs. 34.544.64. The learned counsel equally submitted the appellant would have been entitled to a nominal damage of Kshs. 10,000 and he relied in the case South Nyanza Sugar, company vs Awino oreko (2016) eKLR among other cases.
7. On the issue of interest the learned counsel contended that the same should be calculated from the date of Judgement as opposed to the Appellants prayer that the same should be calculated from 1^st January, 1996. He relied in the case of South Nyanza Sugar, company vs Samwel Nyaniga Mac’Ondiwa (2021) eKLR.
8. On the issue of cost the Learned counsel urged that court to exercise its discretion and order that each party bears it’s own costs regardless of the outcome of the Appeal.
9. This is an appellate court and the duty of this court is to re-evaluate the entire evidence on record and come to it’s own conclusion bearing in mind that it did not have an opportunity to see the witnesses during their testimony as was held in the case of Sielle vs Associated motors EA 1968 EA 123.

ISSUES OF DETERMINATION

1. Having analyzed the grounds of Appeal, reviewed the written submissions of the parties in respect to this appeal and re-evaluated the evidence presented at the trial and also considered the Judgment of the trial, I find that the issues for  determination are
2. Whether the suit was filed out time; and if not
3. Whether the Appellant is entitled to his Prayers in the appeal

ANALYSIS AND DETERMINATION

1. It is not a contested fact the contract that is the subject of these proceedings was made on 1^st January 1996.  It is equally not a contested fact that the contract was to run for 5 years.  It further not a contested fact there were three harvests wherein each harvest was to take place after 24 months wherein the first harvest ought to have been on 1^st January, 1998. It is equally not a contested fact that the Respondent did not harvest the sugarcane on 1^st January, 1998 when it first matured. It is also not denied  that the contract was supposed to terminate on 1^st January, 2001.
2. However question that begs is when did the right of  Appellant to claim from the Respondent accrue? According to the Appellant the right accrued at the end of the contract that is on 1^st January, 2001 while according to the Respondent and the lower court, the right accrued when there the contract was breached that is on 1^st January, 1998 when the Respondent failed to harvest the sugar cane that had matured for the 1^st cycle.
3. It is important to state at this earliest opportunity that there is overwhelming authority that in contract, a cause of action arises at the time of breach of the contract.  For instance in  the case of, Diana Kathumbi Kiio =vs= Reuben Musyoki CA 211 / 2015 (2018)eKLR . the court stated :-

“According to the author in the Journal of International Banking and Financial Law, “What the Limit “(2007) 451BFL642, “in contract the cause of action accrues when the breach occurs when damage is first sustained.  The cause of action, whether in tort or contract, arises regardless of whether or not the claimant could have known about the damage.”

1. In B. Mathayo Obonyo vs South Nyanza Sugar Co Ltd (2019)eKLR Majanja J, held as follows:-

“In my view, the question under section 4(1) of the LAA is when does the cause of action accrue? I adopt the question taken in South Nyanza Sugar Co Ltd vs Dickson Aoro Owuor (supra) in determining when the cause of action accrues.  Thus, under the Out growers cane agreement, such as the one subject to the suit, the right to sue for breach of contract arose when one of the parties failed to meet its obligations under the contract.

In the case at hand, this could only arise when the respondent failed to harvest the plant crop.   This is when the cause of action accrued and when, in terms of Section 4(1) (a) of the Limitation of Action Act, the time begins to run..”

1. I have considered the issue of limitation and  above cited cases which are persuasive .  The Appellant’s case was that the Respondent failed to harvest the cane crop and hence failed to meet its obligations under the contract. 
2. I have looked at  the case of Zadock Danda (supra) which was relied upon by the Appellant and in my view the facts were not exactly the same as the instant case.  The judge said in part:-

“It will therefore be without any basis to hold to the argument that the cause of action arose 24 months post the commencement of the contract since by then, the contract had not been formally executed.  The date a cause of action accrues depends on the nature and the provisions of that contract.   There are some straight forward and clear contracts which speak for themselves on such an such issue.”

1. I agree with the finding in that case that the date a cause of action accrues depends on the nature and the provisions of that contract.  In that case unlike in the instant  case, the contract had not been executed by the parties by twenty four (24) months when the contract was allegedly breached by the appellant’s failure to harvest the first crop. 
2. I have also seen the decision  of Mrima J in the case of South Nyanza Sugar Co Ltd vs Ezekiel Oduk (supra) relied upon by the Appellant to support his case. Just like Majanja J in the case B. Mathayo Obonyo vs South Nyanza Sugar Co Ltd (supra), I respectively disagree with it. I agree with Mjanja J  holding  that a cause of action arose at the end of the contract is inconsistent with the meaning of the legislative language particularly the ordinary meaning of the term “accrue”. Am equally persuaded by the learned Judge’s observation that even if an agreement is for 5 years and it is to be performed in 3 cycles, like any contract, it is terminated by breach and that it is the breach that brings about the accrual of the cause of Action.
3. The respondent filed his claim on 12/November 2004 which was 6 years, 8 months and 22 days after the appellant allegedly breached the contract by failing to harvest the sugarcane. Under Section 4(1) (a) of the Limitation of Actions Act, actions founded on contract may not be brought after the end of six years from the date on which the cause of action accrued.
4. I agree with the Learned Trial Magistrate that , the cause of action arose on 1^st January, 1998 i.e  two years after the contract was entered into and since the first crop was not harvested by the  the Respondent , the issue of harvesting the ratoon would not arise. 
5. By the time this suit was filed on 12 November 2004, 6 years, 8 months and 22 days had lapsed. It means that the suit was filed outside the six years period allowed under Section 4 (1) (a) of Limitation of Actions Act.  The suit was therefore filed over 8 months and 22 days, after the six years had lapsed and thus was statute barred. There is no evidence that the Appellant sought the leave of the court to extend the time for filing the suit.  
6. The learned trial magistrate thus did not err in dismissing the suit for being time barred. I uphold the decision of the lower court and find that the appeal is devoid of merit . I proceed to dismiss it .
7. On the issue of costs , it is trite law that costs follow event. The appeal has failed and thus the respondent is entitled to costs . I award costs with  to the respondent .

DELIVERED VIRTUALLY VIA TEAMS PLATFORM IN THE PRESENCE OF :

CA : OIGO

PARTIES ABSENT.