LYDIA NYAMIRA WANYOIKE VS EAST AFRICAN GROWERS LTD

1.    Through the Memorandum of Appeal dated 19th December, 2017, the Appellants appeal against the whole of the Judgment of Hon. D.W Mburu delivered on 15th December, 2017 in Milimani Chief Magistrates Court Civil Case No. 2202 of 2007.
2.     The Appeal was based on the grounds that:
i.    The Learned Senior Resident Magistrate erred in law and in fact in dismissing the Plaintiff’s suit on the erroneous basis of lack of evidence in support of the suit.
ii.    The Learned Senior Resident Magistrate erred in law and in fact in finding that Simon Wanyoike Mwaura (Deceased) was not an employee of the Respondent.

iii.    The Learned Senior Resident Magistrate erred in law and in fact in delaying delivering of judgment from 23rd November,2015 when submissions were filed to 15th December,2017 when the judgment was read.
iv.    The Learned Senior Resident Magistrate erred in law and in fact in exhibiting open bias against the Appellants when he allowed the reopening of proceedings after the same had been concluded on 2 November,2015 to accommodate the Respondents witnesses who despite evidence hearing notice and on the date being taken by consent had failed to present evidence or witnesses on the hearing date.
v.    The Learned Senior Resident Magistrate erred in law and in fact in ignoring and disregarding the Plaintiff’s exhibits and particularly Plaintiff’s exhibit No 8 which was a letter addressed to the Appellant’s Counsel by the Respondent admitting the relationship of employer-employee between the late Simon Wanyoike Mwaura and the Defendant.
vi.    The Learned Senior Resident Magistrate erred in law and in fact in failing to take in to account the inconsistencies in the Respondent’s evidence given by DW1, and thereby arriving at the wrong conclusion.
vii.    The Learned Senior Resident Magistrate erred in law and in fact in failing to find that the Respondent was the successor in business of Wilham(k) Ltd and had taken up all the liabilities and obligations of the said Wilham (k) Ltd.
viii.    The Learned Senior Resident Magistrate erred in law and in fact in failing to take in to account the evidence adduced on behalf of the Plaintiff/Appellants and particularly all the documents produced by the Appellants witness in her evidence and contained in the two list of documents dated 6th May,2015 and 1st July, 2015 respectively.
ix.    The Learned Senior Resident Magistrate erred in law and in fact in disregarding submissions of counsel for Appellants.
x.    The Learned Senior Resident Magistrate erred in law and in fact in failing to take in to account the conduct of the Respondent during the proceedings before him and particularly the lack of respect for the court during the hearing and the casual manner in which the Respondent was treating the proceedings of the court.
xi.    The Learned Senior Resident Magistrate erred in law and in fact in continuously indulging the Respondent to the detriment of the Appellant even after they had failed to pay convert adjournment fees, advocates and witness costs in the sum of Ksh 5,400 on the 2nd July 2015 and the sum of Kshs 3,100 on or before the 12th November,2015.
xii.    The Learned Senior Resident Magistrate erred in law and in fact in not finding that DW1 had openly lied to the court during her testimony.
xiii.    The Learned Senior Resident Magistrate erred in law and in fact in failing to appreciate that the Respondent had failed to comply with the provisions of Order 11 Rule 3(2) and the only evidence before the court were the documents filed on behalf of the Appellant.
xiv.    The Learned Senior Resident Magistrate erred in law and in fact in dismissing the Appellants evidence, yet there was no evidence filed by the Respondent to contradict or controverse the Appellant’s evidence.
xv.    The Learned Senior Resident Magistrate erred in law and in fact in conducting the trial as he did in an openly biased manner when he allowed the evidence of DW1 after the matter had been closed.
xvi.    The Learned Senior Resident Magistrate erred in law and in failing to take in to account the circumstances of the case as per the evidence on record.
xvii.    The Learned Senior Resident Magistrate erred in law and in fact in misapprehending the law of evidence.
xviii.    The Learned Senior Resident Magistrate erred in law and in fact in misapprehending the totality of the Appellants’ evidence.

3.    The Appellant prayed that the appeal be allowed and the Judgment of the Subordinate court of 15th December, 2017 be rescinded and/or set aside and allow Judgment to be entered in favour of the Appellants as prayed in the Plaint.
4.    The Appeal was disposed of by written submissions.
APPELLANTS’ SUBMISSIONS
5.    The Appellants filed written submissions dated 24th August, 2023.
6.    The Appellants submitted that the trial court erred in finding that the deceased was not the Respondent’s employee when they tendered enough evidence to prove otherwise.
7.    The Appellants submitted that the deceased was employed by Wilham (K) Limited which was later morphed to East African Growers Limited.
8.    The Appellants submitted that the staff identity card issued by Wilham (K) Limited on 5th June, 2004 at the back of it, it was indicated as a property of EAGA group of companies.  That the address of P.O Box 49125 for the East African Growers Limited was the same as the one given in the Staff identity card.
9.    The Appellants submitted that by a letter dated 24th May 2004 referring to the contract of employment of the deceased dated 1st January,1995 the Respondent required the deceased to execute a fresh contract. That the deceased was hesitant to sign the same since the letter was not signed and he did not understand why he needed to change his contract. That this was in contravention of section 10(5) of the Employment Act.
10.    The Appellants submitted that they produced documents to prove that the deceased was an employee of the Respondent ranging from the letter of appointment, staff identity card and copies of pay slips up to September, 2005.
11.    The Appellants submitted that the deceased could not clear with the Respondent in order to collect his dues since there was communication from Group Human Resource Manager for him not to be seen within the premises.
12.    The Appellants submitted that on 22nd December, 2005 3 days after the deceased dismissal he sought legal advice and instructed an advocate to make a demand to East African Growers Limited. That the Respondent replied to the same letter the same day and acknowledged that the deceased was its former employee. That the deceased and the other former employees had not handed over company property in their possession as instructed in dismissal letter of 19th December, 2005.
13.    The Appellants submitted that it was interesting how the Respondent required the deceased to hand over company property yet the Human Resource Manager had issued a memo to security on 19th December,2005 for the deceased not to be allowed in the premises.
14.    The Appellants submitted that the Respondent ought to have denied that the deceased was not their employee when they were issued with a demand letter which is a serious document. That the Human Resource Manager who was the custodian of the records of all employees records owned up that the deceased alongside other employees had been dismissed.
15.    The Appellants submitted that the Respondent could not therefore deny that the deceased was their employee when it was clearly in writing. That the postal address and phone numbers of Wilham (K) Limited and East African Growers Limited were the same. That the author of the unsigned letter of 21/5/2004 and the contract of employment was the Group Human Resource Manager.
16.    The Appellants submitted that the deceased who was a mere driver had no control on what stationaries the Respondent could use on its employees particularly him. That if the employer of the Human Resource was Wilham Limited then that was the same employer for the deceased and if the business of Wilham Limited migrated to EAGA then the employees of the said Wilham were migrated along.
17.    The Appellants submitted that the deceased could not dictate the internal workings of the Respondent. That the Respondent decided to go around its identity before dismissing its employees.
18.    The Appellants submitted that the Respondent did not lead evidence to show that the Human Resource Manager could not have been administering for two companies when it was convenient and one company when it suited the Respondent. If the Human Resource Manager worked for EAGA then so did the deceased. If he worked for both companies so did the accused.
19.    The Appellants submitted that the deceased started being harassed when he refused to execute the fresh contract of employment and started receiving memos accusing him of misconduct yet prior to 21/5/2004 he had never received any such memos.
20.    The Appellants submitted that the Respondent’s witness lied to the court when she said she did not recognize the said Human Resource Manager yet he was the Author of the letter dated 22nd December, 2005 to the deceased Advocates. That she did not recognize the said letter. That the Witness confirmed that there was no stealing of the Respondent’s letter heads hence the letters were authentic.
21.    The Appellants submitted that the Respondent’s witness admitted that the Human Resource Manager signed the deceased appointment letter and that the deceased worked under the said Human Resource Manager. That in cross examination the said witness acknowledged that the said Human Resource Manager was an employee of the Respondent.
22.    The Appellants submitted that the said witness confirmed that the two companies had one director. That the Human Resource Manager was for both companies.
23.    The Appellants submitted that their case was heard and closed on 12/11/ 2015 and they closed their case only for the same to be reopened on 1/4/2016 without any explanation allowing the Respondent to cross-examine Appellants witness and present their evidence. That the trial court admitted the Respondent’s evidence even though there was no witness statement on record. That the court refused to record the protest and objections of the counsel for Appellants on failure to produce witness statement. That the Court failed to record production of witness statement by Appellants witness.
24.    The Appellants submitted that the letter dated 19th December,2005 which is the summary dismissal and the memo dated the same date addressed to security supervisor both were in letter head of Wilham Limited. That the memos dated 10/10/2004 titled show cause letter and 24/10/2005 titled second warning were addressed to the deceased in the letter head of the Respondent authored by the Respondent’s transport Manager. The said memos were not considered by the court.
25.    The Appellants submitted that the logbook for journeys made by deceased were on the Respondent’s letter head. That the court ought not to deny the deceased  estate dues only on account of pay slips being on letter head of Wilham Limited yet all other consequential administrative functions were carried out on Respondent’s letter head.
26.    The Appellants submitted that the said Transport Manager who issued the memos he working for both companies since the memos were on Respondent’s letter head?
27.    The Appellants submitted that the deceased understood that he worked for EAGA and he had no control over documentation. That the Respondent’s witness claimed that the genuine company logo was the one on her job identity card but she failed to produce it as an exhibit to contradict the documents produced by the Appellants. That the court did not explain why it did not consider the letter dated 22nd December,2005 where the Human Resource Manager confirmed that the deceased was their former employee.
28.    The Appellants submitted that the court ignored its evidence on the deceased being an employee of the Respondent. That the court ignored the evidence tendered on overtime worked of 80 hours per week.
29.    The Appellants submitted that the court was clearly biased against the Appellants. That the matter was adjourned for more than 28 times on account of the Respondent.
30.    The Appellants submitted that the court disregarded important signals that the deceased was the Respondent’s employee. That how could the Respondent issue show cause to non-employee? How could the Respondent issue log book of working trips to non-employee?
31.    The Appellants submitted on Order 21 Rule 1 of the Civil Procedure Rules to submit that the judgment was to be delivered on 23rd September, 2016 but the same was never delivered until 15th December, 2017 without any explanation by the Magistrate why he took over 580 days to deliver the judgment.
32.    The Appellants submitted that the Respondent treated the court with utmost contempt when they were ordered to pay court adjournment costs on numerous occasions but they never paid. That the court failed to give weight to the Respondent’s conduct in frustrating the expeditious delivery of justice.
33.    The Appellants faulted the authorities relied on by  the trial court submitting  that in this case the Respondent had already admitted that the deceased was their employee. That the trial court did not explain why it accepted that the Human Resource Manager worked for the Respondent as well as Wilham (K) Limited.
34.    The Appellants submitted that the Respondent did not dispute  his claims and prayers sought. That the same should be allowed as prayed.
35.    The Appellants submitted that the Respondent did not dispute all the  claims as it was concerned with denying that the deceased was its employee. That this court being a first appeal court was entitled to re-evaluate the evidence tendered by the Appellant and  make its own conclusions to defeat of course of justice.
36.    The Appellants submitted that the Respondent having failed to offer evidence of what was an authentic staff identity card and letter head then the Respondent could not deny the communication made to deceased and to his advocates by the Respondent. The Respondent failed to produce log books issued to its drivers to rebut log books produced by Appellants.
37.    The Respondent’s witness having confirmed that the Respondent and Wilham(K) Limited were sister companies that shared a director then she should have offered evidence that the termination  of the deceased was lawful.
38.    The Appellants relied on the case of Milano Electronics Limited v Dickson Muhaso(2021) eKLR on unfairness of the termination. The Appellants relied on section 10(5) &(7) of the Employment Act  that the Respondent when they took over Wilham (K) Limited they ought to adhere to requirements of the Act. That the Respondent was also the sole determinant of the letter heads it would use in its operations and the deceased could not compel the Respondent to stop paying him using the pays slips on the letter head of Wilham Limited.
39.    The Appellants submitted that the trial court having misdirected itself on relationship between the deceased and the Respondent declined to consider the other prayers and arrived at a wrong decision.
40.    The Appellants proposed to rely on the case of Yaa v SGA Security Limited Appeal E002 OF 2022(2022) KEELRC 1553(KLR) 29 July 2022) in support of their submissions.
41.    The Appellants prayed that the Appeal be allowed as prayed.
RESPONDENT’S  SUBMISSSIONS
42.    The Respondent filed its submissions dated 17th October,2023 and on grounds 1,5,6,8,9,14,16,17&18 where the Appellants contended that the trial magistrate failed to consider their evidence in support of the suit and further that the trial court made an error by holding that the Appellants did not provide sufficient evidence to support their claim.
43.    The Respondent submitted that the Appellants evidence was extensively submitted upon by the parties before the trial court and formed significant portion of the court’s judgment. That the Appellants did not demonstrate in any manner how the trial court failed to consider their evidence on record.
44.    The Respondent submitted that the trial court considered the Appellants evidence and found correctly that they did not have a cause of action against the Respondent.
45.    On grounds 2 & 7 of the Appeal the Respondent submitted that the trial court arrived at the finding that the deceased was not in fact employed by the Respondent and as such the Appellants had no cause of action against the Respondent.
46.    The Respondent submitted that while the Appellants contended that Wilham Kenya Limited was either a sister Company or a subsidiary Company of East African Growers Limited (the Respondent herein) no concrete evidence was presented by the Appellants to substantiate the nature of the actual operational relationship between those two entities.
47.    The Respondent submitted that each entity being structured as Limited Liability Company both entities have distinct legal status of separate legal entities.
48.    The Respondent submitted that the Appellants were aware that the deceased was employed by Wilham Limited a fact which was admitted by PW1 and as such nothing could have been easier than enjoining Wilham Kenya Limited joining the proceedings so that their respective position/grievances could be addressed and considered during trial.
49.    The Respondent submitted that the magistrate was correct in finding that the deceased was not employed by the Respondent but by Wilham Kenya Limited.
50.    The Respondent submitted that there was no evidence adduced by the Appellants in the subordinate court to support their proposition that Wilham Company Limited was bought by the Respondent. The trial court could not issue orders against a party who was not a party to the proceedings. The Appellants ought to have sued Wilham Limited and not the Respondent.
51.    The Respondent relied on section 109 of Evidence Act on burden of proof of any fact to be on the person claiming it. The Respondent relied on the case of Jennifer Nyambura Kamau v Humphrey Mbaka Nandi(2013) eKLR on the initial burden of proof being on the Plaintiff.
52.    On ground 3 the Respondent submitted that the delay in delivery of judgment was as a result of judgment delivered in Malindi Constittutional Petition No.3 of 2016: Malindi Law Society vs Attorney General & 4 others (2016). That further a public notice was issued by the court informing the public that judgments related to employment and labour disputes could not be delivered. That these facts were within the knowledge of the Appellants hence the magistrate did not deliberately delay the judgment.
53.    On grounds 4, 10, 11, 12, 13 & 15 the Respondent submitted that the said grounds have not been demonstrated by the Appellants. That the trial court came to conclusion that the Appellants sued the wrong party when the deceased was employed by Wilham Limited who was not a party to the suit.
54.    The Respondent submitted that the Appellants did not place any evidence or material to show that the trial magistrate erred in dismissing the Appellants evidence or that the trial court was biased in any way towards the Respondent. That the Appellants did not dispute or express any concerns regarding the conduct of the Magistrate hence raising this at this juncture after delivery of judgment it was not permissible.
55.    The Respondent relied on the case of Daniel Toroitich Arap Moi vs Mwangi Stephen Muriithi & Another(2014) eKLR on burden of proof in submitting that the Appellants failed to establish that the deceased was employed by the Respondent.
56.    The Respondent submitted that the trial court could not proceed to issue orders against a party who was not a party to proceedings and prayed that this appeal lacks merit and should be dismissed with costs.


Analysis & determination
57.    I have considered the pleadings by both parties and the submissions by the parties and this being a first Appeal I will proceed to reanalyze the evidence before me as was held in the case of Selle vs Associated Motor Boat Company Limited [1968] E.A 123 thus:-
An appeal to this court from a trial by the High Court is by way of retrial and the principles upon which this court acts in such an appeal are well settled. Briefly put they are that this court must reconsider the evidence, evaluate it itself and draw its own conclusions though it should always bear in mind that it has neither seen nor heard the witnesses and should make due allowance in this respect. In particular, this court is not bound necessarily to follow the trial judge’s findings of fact if it appears either that he has clearly failed on some point to take account of particular circumstances or probabilities……..or if the impression based on the demeanour of a witness is inconsistent with the evidence in the case generally.”
58.     In this case, the Judgment of the trial court was that the Plaintiffs’ suit against the Defendant be and is hereby dismissed with costs to the Defendant.
59.    The main issue in this appeal revolve around whether the trial court considering the evidence on record correctly held that the deceased was not employed by the Respondent herein or not.
60.    The trial court observed that the deceased was employed by Wilham Kenya Limited through the Appointment letter and his payslips were issued in the name of the Wilham Kenya Limited. That the two companies although sister companies had distinct legal entities.
61.    The Appellants on the other hand alleged that whereas the appointment letter and payslips were in the name of Wilham Kenya Limited all other administrative communications were done in the name of the Respondent herein.
62.    Whereas this court notes that the appointment letter and the pay slips were issued in the name of Wilham Kenya limited, this court also notes that the staff identification card on the front part it is indicated as Wilham Kenya Limited but at the back  it is written it is a property of EAGA Group of companies.
63.    This court interestingly notes that the postal address remains the same for the two entities. The Respondent’s witness did not produce her staff identity card to counter the Appellants evidence.
64.    In addition, the court notes of the memos issued in the name of the Respondent herein one dated 15/10/2004 titled show cause notice and another dated 24/10/2005 titled second warning. The said memos were issued in the letter head of the Respondent herein. The said memos were issued specifically to the deceased herein. The log books of trips made were also bearing the Respondent letter head herein. The Respondent did not produce any documents to counter this evidence. It therefore begs the question how the Respondent was issuing memos to the deceased if he was not its employee.
65.    This court notes that the dismissal letter dated 19th December, 2005 makes reference to the show cause notice dated 15th December,2015 which was issued in the name of the Respondent herein. This therefore means that the Respondent and Wilham Kenya Limited letter heads were used interchangeably to address the deceased.
66.    The court further notes the letter dated 22nd December,2005  to the deceased advocates admits that the deceased was their former employee and that he had not handed over company property  together with the other employees as per the dismissal letters dated 19th December,2005 this therefore meant that the two entities though supposed to be distinct were issuing communications to employees as it suited them.
67.    Furthermore a close look at the author of the letters shows that the author admitting that the deceased was a former employee was Peter Ouma the Group Human Resources Manager who is also the Author of the memo dated 19/12/2005 prohibiting access of the dismissed employees at the premises of the Wilham Kenya Limited.
68.    Does it then mean that the said Peter Ouma the Human Resource Manager was working for the both companies? Whereas I appreciate that the Respondent’s witness acknowledged that the two entities were sister companies having the same director I note that the two entities were used interchangeably as it suited the Respondent.
69.    The Admission by the Respondent’s witness that the two entities shared one director although had separate legal entities they belonged to one person. The two entities also shared the Human Resource Manager.
70.    Whereas I note that there is a unsigned letter dated 21st May,2004  directed to the deceased herein requesting him to execute a new contract in the letter head of the Respondent herein, I note the same will not be binding for it is not signed by either party. In addition, I note that the Respondent’s witness acknowledged that there was no stealing of their letter head hence she must have produced an authentic letter head of the Respondent to illustrate that the said letter heads provided by the Appellants were not theirs. Without any rebuttable evidence of the same it is imperative that even the unsigned letter emanated from the Respondent herein in a bid to change particulars of the deceased contract of employment.
71.    Whereas the employer is mandated under section 10(5)&(7) in case of change to notify the employee of such change and it be in writing I note that the Respondent herein engaged in cunning conduct in order to defeat justice where they interchangeably used the two entities letter heads in regards to the deceased but its personnel like the Human Resource  Manager remained the same when it was not possible that the same personnel could work for the two entities.
72.    In the upshot the Court agrees with the appellant that the trial magistrate overlooked this scheme and arrived at the wrong decision. The Respondent herein ought to have explained the relationship between it and the Wilham Kenya Limited as an employer who had higher bargaining power than an employee who became confused on who to address since communications came from the two entities as much as he was employed by the Wilham Kenya Limited.
73.    In the case of Solanki v Hard Tech Industrial Supplies Ltd (Cause E752 of 2021) [2024] KEELRC 202 (KLR) (13 February 2024) (Ruling) the court faced with similarity of two companies had this to say;
As regards similarity of physical and postal addresses of the Respondent and Camtech Ltd, it is true that the two companies were incorporated in 1980 and 2022 respectively and shared the physical and postal addresses.
43.Similarly, the directors and owners of the two companies, though different, share the same postal address.
   44.Intriguingly, the Respondent tendered no evidence to demonstrate that the two companies carried on different activities but shared the physical location.
45.As argued by the applicant’s counsel, an affidavit by Mr. Ishitiaq, the sole shareholder and director of Camtech Ltd would have explained the relationship, if any, between the parties and the circumstances in which they share both physical and postal addresses.
46.Although it is trite law that a company is a legal person distinct and separate from its members and managers and with certain capacities, as exemplified by the House of Lords decision in the celebrated decision in Salomon v Salomon & Co. Ltd (1897) A.C. 22, there appears to be more as between the Respondent company and Camtech Ltd than the Respondent is willing to divulge.

74.    In this particular case it was upon the Respondent to illustrate what relationship existed between it and Wilham Limited in order for them to issue communications to the deceased interchangeably. This court notes that the two companies were using this legal technicality to avoid liability upon dismissal of its employees. The Respondent is therefore estopped from denying employment relationship between it and the deceased.
75.     In Prisca Kemboi & 2 others v Kenya Post Office Savings Bank [2014] eKLR the court defined estoppel as follows;
Defining the doctrine of estoppel, the Court in Serah Njeri Mwobi Vs John Kimani Njoroge [2013] eKLR held as follows:
“The doctrine of estoppel operates as a principle of law which precludes a person from asserting something contrary to what is implied by a previous action or statement of that person”
76.    The Respondent’s conduct was that the deceased was its employee and it is estopped from denying this fact.
77.    On the issue raised by the Appellants that the trial court proceeded to take evidence of Respondent’s witness without filing any witness statement despite their counsel objections I note that the trial court ought to have addressed itself to this issue since it is a requirement that the parties file their witness statements before hearing so that the opposing counsel can prepare to cross examine the witness based on their witness statement.
78.    In the case of Paul Gitari v Board of Management Kanyakine High School [2019] eKLR Justice  Nzioki Wa Makau had this to say;
The counter to that is that article 25 behooves parties to share evidence to be adduced before it is adduced at the hearing to enable the effect of a fair hearing to be actualized.  The rules of this court being the Employment and Labour Relations Court (Procedure) Rules 2016 provide in Rule 14 (8) that a party in submitting a statement of claim or response to a statement shall notify the court of any witness it proposes to call in support of its submissions, file witness statements and shall at the same time notify the other party.  As seen from Rule 14 (8) the fact that the Respondent does not have a witness statement precludes the testimony of the witness the Respondent proposes to call. The provisions of Article 25 are not abridged if parties are required to abide by certain rules in the quest for a fair trial.  It would not be fair if the witness is permitted to testify absent any statement or an affidavit setting out his statement.  It would be a travesty of justice to allow that and even Article 159 is no panacea to abridgment of procedure as proposed by the Respondent.
79.    This court has nothing to add on the above since the trial court ought to have considered that fact that the Respondent had not filed any witness statement before the court.
80.    On the other issue of the unfairness of the termination I note that the trial court did not address this issue. This means that the matter was not determined on merit. It would therefore be proper for this court to order this case to be taken back to trial court and tried by a different Magistrate other than Hon.D.W. Mburu.
81.    The Appeal is therefore found merited and is hereby allowed with costs as follows:-
a.    The matter is referred back to the trial court to a different magistrate other than Hon. D.W. Mburu for hearing and determination on merit.
82.    It is so ordered
Dated at Nairobi this 27th day of September, 2024
Delivered virtually this 27th day of September, 2024

Abuodha Nelson Jorum
Presiding Judge-Appeals Division