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JudgmentROSER ROOFING EAST AFRICA LIMITED VS ELKANA MWESELI MUGODO13 min read

ROSER ROOFING EAST AFRICA LIMITED VS ELKANA MWESELI MUGODO

High Court at Milimani High Court · · Andayi W.F.

(Being an appeal from the judgment and decree of Hon. E. A. Nyaloti CM in the Magistrates Court at Milimani Nairobi, CMCC No.3343 of 2016 delivered on 15/1/2019)

  1. This appeal arises from a suit by the respondent against the appellant in a plaint amended on 10/12/2014 for breach of contract. The respondent’s claim in the suit was for special damages of KShs 81,197.54/= and general damages for breach of contract plus interest and costs.
  2. The respondent’s claim was that on 26/3/2011 he entered into a contract with the appellant for the appellant’s supply of roofing materials by the name of Piano Shingles to the respondent for roofing part of his house, a servants quarter which was under construction. He paid KShs 81,197.54 for the same. The roofing materials together with the accompanying accessories were to be delivered to the construction site on 29/3/2011. The respondent thereupon had the timber works done and completed in readiness for fixing the cover of Piano Shingles.
  3. The appellant however failed to deliver the roofing materials on the date agreed or at all in spite of making a written commitment to deliver on or before 13/4/2011 or to refund the purchase price. As a result, the respondent’s timber material got spoilt due to weather conditions of a hot sun and he had to replace them at a cost of KShs 50,940/=.
  4. Upon demand by the respondent and after employing the services of M/s Salient Commercial Services to follow up, the appellant refunded the respondent KShs 52,020/= only by way of a cheque but declined to compensate the appellant for all other losses incurred as a result of the failure to deliver the roofing materials.
  5. According to the respondent he suffered psychological and emotional trauma of being lied to and unfulfilled promises, witnessing the fixed timber works on the roof being destroyed and wasted, being unsettled at work and other assignments, wasted time and resources as a result of the failure by the appellant to supply the roofing materials. 
  6. Arising from the foregoing, the respondent therefore claimed for special damages of KShs 60,117.54 as well as general damages for breach of contract.
  7. The appellant in its statement of defence amended on 29/1/2016 admits that there was a contract between itself and the respondent for supply of the roofing materials, that the respondent paid for the same KShs 61,197.54 on 26/3/2011 and that it was ready and willing to perform the contract but the respondent cancelled the same, after he became uncooperative, unreasonable and evasive, in spite of the roofing materials being available for delivery to the respondent’s site on 13/4/2011. That it refunded part of the purchase price KShs 52,020/= less 15% penalty for cancellation of the order after confirmation in terms of its terms of sale as contained in the quotation sent to the respondent. 
  8. Each of the parties testified in the case and was cross-examined largely upon the lines of their pleadings.
  9. Upon considering the evidence and submissions of parties, the learned trial magistrate found that there was a valid contract between the appellant and the respondent and that the appellant failed to deliver the roofing material as per the agreed timeline with the respondent. She found the case by the respondent against the appellant proved and entered judgment for the respondent against the appellant being KShs 9,177/= as the balance of the money paid by the respondent, KShs 50,940/= as the cost of timber and KShs 100,000/= general damages for breach of contract.
  10. The appellant now appeals against that decision raising five grounds which in summary are that the learned trial magistrate erred in fact and in law by:
    1. finding that the case had been proved on a balance of probability;
    2. failing to consider all the evidence tendered by the appellant and failing to consider and apply all the relevant laws; 
    3. rewriting the contract between the parties;
    4. awarding the sums hereinabove and for the general damages, disregarding the law that general damages are not awardable for breach of contract.
  11. The court directed that the appeal be heard by way of written submissions which learned counsels for both parties duly filed
  12. Learned counsel for the appellant has set out two issues for this court’s determination being:
    1. whether the learned magistrate erred by awarding general damages.
    2. whether the learned magistrate erred by finding that the plaintiff/respondent herein had proved his case.
  13. Learned counsel for the respondent has identified only one issue for the court’s determination, that is whether the appeal is merited.
  14. This being a first appeal, the duty of the court is to re-evaluate, re-analyze and re-consider the evidence and draw its own conclusions, bearing in mind that it did not see witnesses testifying and therefore give due allowance for that. See for example Selle & another vs. Associated Motor Boat Co. Ltd & others [1968] E.A at page 126 and Peters vs. Sunday Post Limited (1968) EA 123. (1956) E.A page 424.
  15. For me, the issues for determination are whether or not the appellant breached the contract and if so, whether the trial court was correct to award the respondent general damages for the breach.
  16. The contract between the appellant and the respondent is not disputed at all. It is also not disputed that whereas the respondent performed his part of the bargain by making payment for the goods ordered, the appellant never met its part of the bargain as no goods were delivered to the respondent at the appointed time on 29/3/2011 as promised at the time the order for the goods was made or on 13/4/2011 as per the appellant’s undertaking after failing to deliver on the initial date.
  17. The appellant’s position was that at the time the respondent placed his order it had informed the respondent that the materials were not in the warehouse. They gave him around two weeks for the materials to be delivered. However, they had arrived at the port of Mombasa when the respondent paid for the same. The consignment was only released to them on 12/4/2011. But again she says that they were not able to deliver on 11/4/2011 because the track that was transporting the materials broke down along the way. But how could they deliver on 11/4/2011 when the consignment was released from the port a day after, on 12/4/2011? That inconsistence in the appellant’s evidence lends weight to the respondent’s case that the date of delivery was not as alleged by the appellant.
  18. Even if that is taken to be the position, which the respondent denied, it means from 24/3/2011, two weeks would have ended by 8/4/2011. It is apparent from the evidence on record that by this date, no delivery had been made to the respondent. How could they have made the delivery within two weeks when the consignment was taking more than two weeks to be cleared from the port? The appellant seems to suggest that the delay was due to factors beyond its ability. Be that as it may, they had made a promise to the respondent which from this evidence I am inclined to believe the respondent that they had the material in their warehouse. If they were hoping that the consignment at the port would be released sooner, then they have themselves to blame.
  19. The appellant advances what I find to be a half-hearted argument that the parties had repudiated the contract. A contract is repudiated by one party not both. In this case, the respondent cannot be said to have repudiated the contract because he had already performed his part of the bargain by paying the full purchase price. The appellant was the one that repudiated the contract by way of breach for failing to supply the roofing materials at the appointed time. It was then open to the respondent either to proceed with the contract in spite of the breach by the appellant or to terminate it altogether. It was the failure to perform by the appellant that caused him to recall his purchase price. The respondent chose to terminate the contract.
  20. The evidence on record is that in performance of its part of the bargain, the appellant was required to deliver the roofing materials at the respondents building site first on 29/3/2011 and which was extended to 13/4/2011 by the appellant’s upon their own undertaking. That was never done. In the circumstances I find that the learned trial magistrate properly considered the evidence by both parties and correctly found the appellant liable for breach of the contract.
  21. In acknowledgment of its inability to perform its part of the bargain on time the appellant, refunded the purchase price less what it called penalty of 15%. In cross-examination, the witness for the appellant, DW 1 conceded that when it sent the quotation to the respondent by e-mail, the same did not contain the terms of sale upon which the appellant relied to retain the 15% payment made. That means, the issue of penalty was never brought to the attention of the respondent and the contention by DW 1 in her testimony that the respondent was informed of the terms of sale are discounted by her own evidence in cross-examination. Therefore, the respondent expected to receive full refund of the purchase price that he had paid.
  22. In any case, in the “terms of sale,” produced at the trial as exhibit, the provision on penalty for cancellation is that “cancellation of orders after confirmation shall attract a cancellation fee of 15% of the total Proforma invoice quotation amount.” That provision can only apply where the appellant was not in breach of the contract. In this case I have found that it was in breach of the contract and so it cannot call to its aid that provision.
  23. The next issue is whether or not the learned trial magistrate erred in awarding the respondent KShs 100,000/= for breach of contract.
  24. Learned counsel for the appellant submits that as a general principle of law “damages are not normally awarded for breach of contractual obligations.” I believe learned counsel meant to say general damages. So that, it is true that as a general rule general damages are not recoverable in cases of alleged breach of contract as was held in the decision cited by learned counsel by the Court of Appeal in Kenya Tourism Development Corporation v Sundowner Lodge Ltd [2018] eKLR. The reason for such was explained by the court in the case of   Consolata Anyango Ouma vs. South Nyanza Sugar Co. Ltd (2015) eKLR as follows:

“The next question is whether the appellant was entitled to damages as a result of the breach. As a general principle, the purpose of damages for breach of contract is, subject to mitigation of loss, the claimant is to be put as far as possible in the same position he would have been if the breach complained of had not occurred.  This is principle is encapsulated in the Latin phrase restitution in integrum (see Kenya Industrial Estates Ltd v Lee Enterprises Ltd NRB CA Civil Appeal No. 54 of 2004 [2009]eKLR,  Kenya Breweries Ltd v Natex Distributors Ltd Milimani HCCC No. 704 of 2000 [2004]eKLR). The measure of damages is in accordance with the rule established in the case of Hadley v Baxendale (1854) 9. Exch. 341 that the measure of damages is such as may be fairly and reasonably be considered arising naturally from the breach itself or such as may be reasonably contemplated by the parties at the time the contract was made and a probable result of such breach (see Standard Chartered Bank Limited v Intercom Services Ltd & Others NRB CA Civil Appeal No. 37 of 2003 [2004]eKLR).  Such damages are not damages at large or general damages but are in the nature of special damages and they must be pleaded and proved (see Coast Bus Service Ltd v Sisco Murunga Ndanyi & 2 others, NRB CA Civil Appeal No. 192 of 92 (UR) and Charles C. Sande v Kenya Co-operative Creameries Ltd, NRB CA Civil Appeal No. 154 of 1992 (UR))”.

  1. As stated in the case the measure of damages that a party is entitled to recover is what would naturally flow from the breach of the contract. In the case of Perpetua Atieno Vs Louis Onyango Otieno (2013) eKLR, the court of Appeal explained the type and measure of damages recoverable by a purchaser upon breach of contract by a seller of land. The court held that:

“Where it is the vendor who wrongfully refuses to complete the measure of damages is similarly, the loss incurred by the purchaser as the natural and direct result of the repudiation of the contract by the vendor. These damages include the return of any deposit paid by the purchaser with interest, together with expenses which he has incurred in investigating title, and other expenses within the contemplation of the parties, and also, where there is evidence that the value of the property at the date of repudiation was greater than the agreed purchase price, damages for loss of bargain …….”

  1. Further exposition of the issue is found in the case cited by learned counsel for the respondent of Kenya Breweries Limited v Natex Disributors Limited [2004] eKLR where the High Court, Ringera, J. (as he then was) held that:

“The general principle of compensation in both contract and tort is that subject to the doctrine of mitigation of loss, the claimant is to be put as far as possible in the same position as he would have been if the breach complained of had not occurred: restitutio in integrum. Accordingly, the claimant is entitled to gains prevented by the breach, expenses caused by the breach, and expenses rendered futile by the breach.” (emphasis mine).

  1. Arising from the exposition of the law in these decisions, I would find that the damages recoverable by the respondent herein for breach of the contract by the appellant are a return of the full purchase price, together with expenses which the respondent incurred within the contemplation of the parties, gains prevented by the breach, expenses caused by the breach and expenses rendered futile by the breach.
  2. The respondent outlined his special damages as KShs 81,197.54 being the amount he had paid to the appellant and KShs 50,940/= as loss suffered for wasted timber, other roofing materials and labour costs. The respondent produced receipts to support these expenditures. Even though the appellant’s witness cast doubt on their authenticity, there was no evidence to support her doubts and the trial magistrate who saw the witness testify believed him and I have no reason to doubt him. I am satisfied that these two items were properly proved on a balance of probability and I find no reason to fault the findings of the learned trial magistrate.
  3. The final issue is on the award of general damages of KShs 100,000/=. It is true that as submitted by learned counsel for the appellant, as a general rule general damages are not recoverable in cases of alleged breach of contract as was held by the Court of Appeal decision in Kenya Tourism Development Corporation Vs Sundowner Lodge Ltd 2018 eKLR above. 
  4. However, that is the general rule, and there are exceptions. It was held in the case of Peter Umbuku Muyaka v Henry Sitati Mmbasu [2018] eKLR on the same issue that:

“A claimant for general damages for breach of contract who does not prove that he suffered loss is all the same entitled to damages, though nominal.”

  1. Further elaboration is found in the case of Kinakie Co-operative Society Vs Green Hotel (1988) KLR 242, where the court of Appeal held that where damages are at large and cannot be quantified, the court may have to assess damages upon some conventional yardstick. But if a specific loss is to be compensated and the party was given a chance to prove the loss and did not he cannot have more than nominal damages.
  2. In the present case, the respondent had an opportunity to prove all the damage he suffered as a result of breach of the contract by the appellant but he was unable to quantify what he termed as wasted time and resources. He is therefore only entitled to nominal damages. I believe that was what the learned trial magistrate awarded. However, I find the award of KShs 100,000/= made by the trial court inordinately high and hereby set it aside. I am persuaded by the decision of Peter Umbuku Muyaka above which was decided some five years ago to award him nominal general damages of KShs 30,000/=.
  3. The trial court found that the balance of the purchase price payable by the appellant to the respondent was KShs 9,177.54. This seems to be an error in calculating the balance of the purchase price probably by using the figure of what had been pleaded as paid in the plaid before the amendment of the plaint, that is KShs 61,197.54 instead of KShs 81,197.54 pleaded in the amended plaint. Using the later figure this should make the balance of the purchase price not refunded and therefore payable by the appellant to the respondent, KShs 29,177.54. 
  4. Consequently, the trial court’s finding on liability for the respondent against the appellant is hereby affirmed while the finding on damages payable is disturbed and set aside to the extent that the balance of the purchase price paid is substituted with KShs 29,177.54 and the general damages are reduced to KShs 30,000/=. The other findings on special damages remain the same.
  5. The appellant having succeeded to a certain extent only shall pay half the costs of the appeal to the respondent.

Dated, Signed and Delivered at Milimani this 9th day of July, 2024.

In the presence of:

Kipng’etich for the Appellant.

Namada for the Respondent.

Eutropia Court Assistant.


    ROSER ROOFING EAST AFRICA LIMITED VS ELKANA MWESELI MUGODO ROSER ROOFING EAST AFRICA LIMITED VS ELKANA MWESELI MUGODO