HATARI SECURITY GUARDS LIMITED VS NAIROBI COUNTY GOVERNMENT AND CHIEF FINANCE OFFICER HATARI SECURITY GUARDS LIMITED VS NAIROBI COUNTY GOVERNMENT AND CHIEF FINANCE OFFICER

INTRODUCTION

The plaintiff is a Limited Liability Company duly registered which deals with the provisions of Security Services.
The 1^st defendant advertised through Tender No. NCC/CHS/T/175/2016-2017 for Security Services and the plaintiff responded to the same by submitting a bid for Kenya Shillings Nineteen Million, Four hundred and Eighty Eight Thousand (Kshs.19,488,000) for provision of services for a period of one year.
The 1^st defendant accepted the bid and an agreement was signed between them on 13^th December 2016.
The agreement was for one year and it provided among other things the number of guards the plaintiff was to supply/provide during the period as well as the places the guards would be stationed.
The contract was to run for the year 2016-2017.
The plaintiff has come to this court claiming that the agreement contract was performed and the defendants have jointly and severally declined not honour their part of the bargain.
The plaintiff by way of a plaint has pleaded as hereunder:-
That through a contract dated 13th December 2016, the 1st Defendant requested the Plaintiff to provide it with guards to guard various institutions owned by the 1st Defendant within the County as hereunder.

•RICE SCHEDULE

Item

Description

Timing

Cost per month
(Kshs.)

Total Cost per month (Kshs.)

Total Cost for
12 months
(Kshs.)

Night

Provision of
Security Guards —
PM H

Twenty Guards
(20)

23,200.00

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- 2

Provision Security
MLKH

of
Guards

Twenty
Guards
(20)

23,200.00

464,000.00

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- TOTAL

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That based on that executed contract the Plaintiff diligently and professionally provided its guarding services to the 1st Defendant without any complains of any nature from the 1st Defendant to date.
That further, the 1st Defendant wrote several engagement letters to its personels as well as to the Plaintiff spelling out how the Plaintiff should conduct its services and that a good atmosphere should be accorded to the Plaintiff to enable it render its services properly to the 1st Defendant professionally.
That the Plaintiff has been rendering services to the 1st Defendant by transporting its guards to designated areas and/or institutions diligently but unfortunately the 1st Defendant has refused, declined and or ignored to pay the Plaintiff for services rendered hence the debt due and owing to the Plaintiff has accumulated to Kshs.68,264,923.27.
That non-payment by the 1st Defendant of such colossal amount has rendered the Plaintiff's operations almost impossible to the extent that the Plaintiff has been forced to take loans with a view to pay its guards.
That despite numerous promises from the 1st Defendant, the 1st Defendant has failed and/or ignored absolutely to honour its pledges hence this suit.
That the 1st Defendant has admitted that indeed it owes the Plaintiff.
That despite demand and notice of intention to sue, the 1st Defendant has declined to make good the Plaintiff's claims and instead has resulted into purporting to subjecting the Plaintiff's claim to scrutiny which is an afterthought.
That there is no other suit and there have been no previous proceedings between the parties herein over the same subject matter in any Court.
The cause of action arose within the jurisdiction of this Honourable Court.

REASONS WHEREFORE the Plaintiff prays for judgment against the Defendants jointly and severally for:
a) Non-payment of monthly dues of the sum of Kshs. 68,264,923.27 together with interest from the date of filing.
b) Damages incurred for non-payment to be assessed by the Court.
c) Costs of the suit be provided for.
d) Any other or further reliefs that the Honourable Court may deem fit to grant.

The defendants filed a joint statement of defence dated 21^st February 2020 have generally denied each and every claim by the plaintiff.
In fact the defendants deny ever entering into any contract with the plaintiff thus their joint plea that the suit is misconceived , misconstrued and misdirected.
The defendants go further to plead that the plaint as presented discloses no cause of action against them thus the suit should be struck out according to them.
The defendants further contend that the suit is calculated at embracing them and or is meant to coerce them to pay that which they do not legally owe the plaintiff.
The defendants however acknowledge having received a demand notice from the plaintiff but for the reasons stated in their defence did not honor the same.

PLAINTIFF’S CASE

The plaintiff in support of his case called one witness Jackson Kimani Mwangi who by way of a letter of authority dated 23^rd January 2020 was duly appointed by the company to represent it in connection with the suit.
The letter of authority was duly signed by STEPHEN MWANGI KIMANI and JACKSON RUITIARI KIMANI who are directors.
The document was also duly sealed and file in court on 31^st January 2020.
The witness testified that the plaintiff company deals with security business and that the company was contracted by the defendants to offer security services by providing guards to the defendants on a daily basis to guard at locations appointed by the defendants.
The witness went further to produce a bundle of documents and his witnesses statement which he sought to rely on as Plaintiff Documents 1 and 2 respectively ( P1 and 2).
According to Jackson the plaintiff had a contract with the 1^st defendant which contract he indicated to the court was to be found at page 55 of the Bundle of Documents marked PD1.
The agreement as per the witness was for the defendants to pay to the company the sum of Kshs. 23,200 per guard.
The agreement was signed between Nairobi City County and the Company Hatari Security Services Limited .
The witness went further to state that the 1^st defendant Nairobi City County has paid Kshs. 11.1 million since the time they entered into the agreement.
The plaintiff Company has not withstanding continued to render Security Services to the 1^st Defendant since 2016 to date.
On Cross -examination by counsel for the Defendants the witness explained to this court that although their agreement with the 1^st defendant covered the period between 2016-2017 , the same was continued as proof thereof he referred the court to letters appearing at pages 38, 39 and 40 of the bundle of documents marked PD1.
Indeed at Page 41 of the document marked PD1 (an opinion generated by the County Attorney Lydiah Kwamboka) the 1^st defendant acknowledge the existence of an implied contract of service between the 1^st defendant and the plaintiff.
The plaintiff went further to testify that their guards were deployed to Pumwani Maternity Hospital, Mbagathi Hospital, Mama Lucy and Mutuini Health Centre all at the request of the 1^st defendant and to date the 1^st defendant continues to consume the services provided by the plaintiff.
According to the plaintiff the contract between them is still continuing and the defendants by conduct have not terminated the service thus they are bound to the plaintiff company.
The plaintiff’s witness testified further that at some point the company was about to withdraw services but when they were about to do so the 1^st defendant summoned them to a meeting and they were advised not to withdraw the service.
The witness referred the court to a document appearing at page 39 of the Bundle marked PD1 which documents is dated 22^nd August 2019.
It is the said document that the witness says was confirmation that there was a meeting called between the plaintiff company and the management of the 1^st defendant.
The plaintiff urged this court to consider the contents of the opinion of the County Attorney contained in the document at pages 40,41 and 42 of Exhibit PD1 and enter judgment in favor of the plaintiff.
The plaintiff maintained through out the evidence of the witness that they have diligently performed their part of the contract that is what led them to being paid 11.1 Million by the 1^st Defendant through the second defendant.
The witness under cross-examination maintained that their contract was still subsisting and if it were not so, the County Attorney would not in 2021 have rendered the opinion she did in which she essentially admitted the fact of their being a subsisting contract.
The plaintiff informed the court that the amount owed to them was Kshs. 145 Million less the sum of kshs. 11.1 million already paid to them.
The witness denied that there were any security gaps in the ended delivery of service thus their claim was properly founded.
In a bid to explain the disparity in the figure claimed in the plaint and the evidence the plaintiff’s witness stated that at the time of the filing of the plaint the figure indicated in the plaint is what was owing being Kshs. 68,264, 923.27.
The witness explained that the plaintiff did not anticipate a situation of continued breach.
The plaintiff’s witness ended by informing this court that the guards provided by them were still on site.

1^STAND 2^ND DEFENDANT’S CASE

The defendants by way of a joint statement od defence dated 21^st February 2020 denied the claim and specifically pleaded at paragraph 4 of the Defence that:-

“The defendants deny ever entering into a contract with the plaintiff for supply of Security Services to their various hospitals and put the plaintiff to task in providing any advertisement for tender”

The defendants called one witness Zadock Angaya a health Administrative Secretary Nairobi County.
The witness testified that he was aware that the plaintiff took them to court over the issue of the unpaid services.
He went further to state that sometimes in 2021 he was nominated by his Director Health Services represent the County in mediation sessions between the County and the plaintiff.
The mediation effort collapsed and they filed a defence to the suit.
The witness produced his statement which he had filed in this matter and adopted it in evidence as his examination in chief.
The witness produced his bundle of documents and marked the same as DEXH11-D.
The witness testified that the plaintiff was contracted sometimes in 2016 and according to him the plaintiff was to begin rendering service in 2017. The guards here to be deployed at Mama Lucy Hospital , Pumwani , Mbagathi, Mutuini Hospitals.
MR. ZADOCK ANGANYA added that they got 24 HR Security Services from Hatari Security Guards Limited for a period of one year as per the contract.
According to him the contract was to lapse by December 2017.
He however, went ahead to state that the plaintiff continued to supply the service with 70 guards deployed to all the facilities.
The witness went further to testify that at some point there were complaints about the guards but he couldn’t tell the matter was regularized for he was not on the grounds.
The witness acknowledge that at some point the plaintiff’s wanted to terminate the services due to non payment.
The request to terminate was from the county but when the plaintiff got the notice informing them to withdraw service they claimed that they were not given adequate time to handover.
The witness also stated that Hatari Security Services had raised the issue of the outstanding payments with the 1^st Defendant.
The testimony of the witness as to the current status was that the services were still being rendered since 2017.
Further, the witness admitted that the 1^st defendant advertised for the services and the plaintiff responded.
He also admitted that the contract between the plaintiff and the defendant was signed.
On cross-examination the witness withdrew his statement that the services rendered were substandard.
He went on to testify that the county declined to renew the contract but he did not have the letter declining the renewal.
The witness also testified that the county had paid to the plaintiff about Kshs. 9 milion and that all that was owing according to him was approximately Kshs. 9 million for the contract period 2016-2017.
The witness confirmed that the letter appearing at pages 39, 40 and 41 of the Bundle marked PD1 was written by the County Attorney and the Conty Attorney had admitted in it that there was wrongdoing on the part of the county.
The witness further stated that he could not tell what was owing over and above the Kshs.19 million for the contractual period but the invoices amounted to Kshs. 68,000,000.

ANALYSIS AND DETERMINATION

The plaintiff and their defendants have each filed their written submissions which I have duly considered.
The case between the Plaintiff and the Defendants is premised on a contract for supply of services.
The evidence by both the Plaintiff and the defence witness confirms indeed there was a contract between the two parties in the period of 2016- 2017.
The parties further agree that there was partial payment made to the plaintiff for the period of 2016-2017 and thus the plaintiff stated was Kshs. 11.1 million whereas the defendants witness put it at 9 Million shillings.
The plaintiff having been the recipient of the payments and being the aggrieved party in this suit his word must be correct that it was 11.1 Million. The witness called by the defendant did not effect the payment thus his evidence as to what has been paid so far must be treated with circumspection.
It follows therefore that the two parties having agreed that there was a contract signed for the period of 2016-2017 through their respective witness, the obligation by the 1^st Defendant to pay is undoubled.
The defence by the defendants that there was no contract between them crumbles under its own weight.
The defence witness walked away from that lie and chose to seek the truth in line with the oath he took.
I must say that the witness appeared to this court to be candid and given to telling the truth however inconvenient and uncomfortable that would be to his employer the 1^st Defendant.
The testimony by the plaintiff’s witness compiled with the document authored by the County Attorney summed up the case.
The 1^st Defendant having entered into a written contract in December 2016 for a period of one year with the plaintiff, at the very minimum he was under duty to perform his part and clearly there was part performance by way of payment of the sum of Kshs. 11. 1 Million to the plaintiff.
The factual matrix that played out before this court established the existence of a valid legal and enforceable contract between the plaintiff and the 1^st Defendant for the period of 2016-2017.
The performance of the written contract spilled over and to date the 1^st defendant continues to enjoy Security services provided by guards supplied by the plaintiff.
That fact alone confirms that the contract by implication alluded to the County Attorney in his opinion contained in the plaintiff’s bundle marked PD1 at pages 39-41 still subsists to date.
The conduct by the 1^st Defendant of accepting to continue receiving services from the plaintiff conclusively sealed a contract between him and the plaintiff by operation of the law.
The plaintiff did not come into the premises of the 1^st Defendant to render volunteer services. The plaintiff was in business and the contract was concluded on that understanding.
The admission by the defence witness that the 1^st Defendant has continued to enjoy the services provided by the plaintiff company is sufficient ground for this court to imply that the two parties are in a contractual relationship which is capable of enforcement.
The conduct of the 1^st defendant of summoning the plaintiff’s representation to a meeting in 2019 as is apparent from the document appearing at page 39 of the Bundle by the plaintiff is sufficient proof of recognition of the continued relationship.
Further I am persuaded that the County Attorney in the opinion appearing at page 40, 41 and 42 of the Bundle Marked PD1 must have been full cognizant of the rights that had accrued to the plaintiff and the attendant obligations by the 1^st Defendant.
The opinion generated on 1^st March 2021 captured the matter in the following words:-

“ The office of the County Attorney has come across communication dated the 12^th January 2019 and 26^th July 2020 from the said service provider requesting to have the contract extended upon expiry. Unfortunately the said letters never solicited any response from Nairobi City County Government instead a meeting was called vide a letter dated 22^nd August 2019 inviting the service provider amongst other Security Service providers.”

The above quoted statement in the opinion of this court is the clearest indicator or that the plaintiff made efforts to have the extension formalized but the 1^st Defendant slept on the letters.
The 1^st Defendant having continued to enjoy the services provided by the Plaintiff cannot be allowed to avoid the contract.
The court in Transnational Computer Technology (Kenya) Ltd v Principal Secretary, the National Treasury & Planning & 2 others (Civil Suit E321 of 2022) [2024] KEHC 2472 (KLR) (Commercial and Tax) (8 March 2024) (Judgment) the court held:-

“An implied contract is distinguished from an express contract by its formation, which is through the behavior and interactions of the involved parties rather than explicit written agreements. An implied-in-fact contract is inferred from the situation, conduct, activities, or established relationship between the parties, demonstrating a collective intent to form a contract. Conversely, implied-in-law contracts, or quasi-contracts, are not genuine contracts per se but are duties enforced by law to rectify instances of unjust enrichment.
The Halsbury’s Laws of England Vol 9(1) at pg 23 defines a contract implied by law as: an obligation imposed by law independently of an actual agreement between the parties and may be imposed notwithstanding an expressed intention by one of the parties to the contrary.
In other words, if the plaintiff performed work under the reasonable belief that they were acting within the scope of a contract, and the defendants benefited from this work without an intention to compensate, the principles of reliance and unjust enrichment could support the existence of an implied contract. This was echoed in Lamb V Evans, (1893) 1 Ch 218 where the Court stated that:“… What is an implied contract or an implied promise in law? It is that promise which the law implies and authorizes us to infer in order to give the transaction that effect which the parties must have intended it to have, and without which it would be futile.”

Whereas, in the year 2016 to 2017 the parties had an express contractor after the expiry of the contract the plaintiff requested the 1^st Defendant to have the contract extended but that never happened since as ably stated by the County Attorney the requests by the plaintiff were met with dead silence. In line with the above cited authority, this court finds that an implied contract continued upon the expiry of the express contract therefore the 1^st defendant cannot avoid liability. Needless to say, the 1^st Defendant had an opportunity to expressly indicate to the plaintiff that she did not wish to renew the contract in which case the court would have excused the 1^st Defendant from satisfying the contract.
The defence by the two defendants was a sham. It amounted to nothing since the only witness who testified for the defence admitted each and every allegation made by the plaintiff including the fact that there was a contract between the plaintiff and the 1^st Defendant, a fact that the defendants had expressly denied in their written statement of defence. In this court’s view, the defence would have been a good candidate for striking out had the plaintiff made an application to that effect.
The Court of Appeal in Coast Projects Ltd =vs= M. R. Shah Construction (K) Ltd (2004) K.L.R 119 at page 122 stated in part as follows:

“The Plaintiff is entitled to proceed with an application for striking out a defence with the consequential entry of judgement for liquidated claim in situations where the defence is frivolous and or vexatious. It is a procedure, which is intended to give a quick remedy to a party which is being denied its claim by what may be described as a sham defence. This is, however, a procedure which is to be resorted to in very clear and plain cases. A mere denial is not sufficient defence in most cases.”
The plaintiff opted to let the matter proceed to full hearing and through evidence by the defendant’s witness it has emerged that the defence was frivolous and vexatious thus this court rejects the same in toto.
Although, the plaintiff pleaded in his evidence to have this court award him the sum of Kshs. 145,000,000 this court finds that that sum is not supported by the evidence and neither is it specifically pleaded in the plaint. The figure stated in the plaint is Kshs. 68,264,923.27 thus this court cannot award that which was not specifically prayed for. It is settled in law that parties are bound by their pleadings therefore the plaintiff having filed the suit way back in 2020, wisdom should have prevailed that since the contract was still continuing, an amendment to the pleadings should have been done. Having failed to do so the plaintiff cannot ask this court to go against the law and award a figure that is unsupported by the pleadings and evidence.
In the case of Daniel Otieno Migore v South Nyanza Sugar Co. Ltd [2018] eKLR, A C Mrima stated as follows: -“

11.It is by now well settled by precedent that parties are bound by their pleadings and that evidence which tends to be at variance with the pleadings is for rejection. Pleadings are the bedrock upon which all the proceedings derive from. It hence follows that any evidence adduced in a matter must be in consonance with the pleadings. Any evidence, however strong, that tends to be at variance with the pleadings must be disregarded. That settled position was re-affirmed by the Court of Appeal in the case of Independent Electoral and Boundaries Commission & Ano. vs. Stephen Mutinda Mule & 3 others (2014) eKLR which cited with approval the decision of the Supreme Court of Nigeria in Adetoun Oladeji (NIG) vs. Nigeria Breweries PLC SC 91/2002 where Adereji, JSC expressed himself thus on the importance and place of pleadings: -
“…..it is now trite principle in law that parties are bound by their pleadings and that any evidence led by any of the parties which does not support the averments in the pleadings, or put in another way, which is at variance with the averments of the pleadings goes to no issue and must be disregarded………In fact, that parties are not allowed to depart from their pleadings is on the authorities basic as this enables parties to prepare their evidence on the issues as joined and avoid any surprises by which no opportunity is given to the other party to meet the new situation.”

Following in the wisdom expressed in the above quoted decision, this court declines to enter judgment for the plaintiff in the sum of Kshs. 145,000,000.
However, this court acknowledges that from the evidence adduced by both parties the plaintiff has incurred costs through payment of wages to his guards at the instance of the 1^st Defendant who continues to consume the service without pay. That by itself is unjust enrichment on the part the 1^st Defendant thus this court shall consider making a provision for damages incurred for non-payment of the sums due and owing to the plaintiff. Thus court doing the best it can in the circumstances will assess damages at 14% of the sum pleaded in the plaint being the commercial rate applicable in Kenya today.
In the end, this court enters judgment in favor of the plaintiff in the following terms:-
Special damages in monthly dues of the sum of Kshs. 68,264,923.27 together with interest from the date of filing.

Damages incurred for non-payment Kshs. 9,557,089.26

c) Costs of the suit

It is so ordered.

HATARI SECURITY GUARDS LIMITED VS NAIROBI COUNTY GOVERNMENT AND CHIEF FINANCE OFFICER

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