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JudgmentTribeka Bussiness Solutions Limited VS Lucia Juma Ochieno12 min read

Tribeka Bussiness Solutions Limited VS Lucia Juma Ochieno

High Court at Milimani High Court · · Peter Mulwa

(Being an appeal from the Judgment and Decree of Hon. J.P.A. Aduke, SRM dated 22nd November 2022 at the Magistrates Court, Milimani in Civil Case No. 2939 of 2019)

Introduction

  1. Before the court for determination is an appeal filed by the Appellant that is grounded in its Memorandum of Appeal dated 25th November 2022 where the Appellant seeks to set aside the dismissal of its suit by the subordinate court in its judgment of 22nd November 2022. In the suit, the Appellant sought a refund of some Kshs. 200,000.00 allegedly paid to the Respondent on account of an agreement for supply of services which the Appellant claimed the Respondent breached. The Appellant claimed that it had engaged the Respondent after coming across the latter’s advertisement in June 2018 for an ‘upmarket homes expo’ meant to avail a forum where real estate entities would market themselves.
  2. That sometimes during the course of the month of September 2018, the Respondent finally entered into an agreement for the supply of services to the Appellant at a consideration of Kshs. 200,000.00 as exhibition fees that would secure the latter a 3x3 booth at the Expo that was to be held by the former at The Hub in Karen from 21st to 23rd September 2018. 
  3. The Appellant claims that it duly paid the consideration of Kshs. 200,000.00 on 5th September 2018 and waited for 20th September 2018 which was the contractual set-up date but that day, the Respondent and her agents failed to facilitate the setting up of exhibition stands as contracted or at all and could not be reached for any explanation. That the Respondent communicated by way of email that she had postponed the Expo to a later unspecified date and that on 21st September 2018, the Respondent again communicated by email that she had set new dates for the Expo being 16th -18th November 2018.
  4. The Appellant further claimed that come November 2018, the Respondent would yet again “postpone” the Expo, this time indefinitely. The Appellant contended that the Respondent had since communicated that she would not refund the Kshs. 200,000.00 because it had utilized the same to advertise the Expo and the Appellant stated that this was clearly an afterthought and was not part of the contract in question. It is for these reasons that the Appellant sought the Kshs. 200,000.00, costs of the suit and interest.  
  5. The Respondent filed a defence where she denied the existence of an agreement between the parties and stated that the Appellant was not one of the participants in the Expo organized by the Respondent for a number of reasons. Firstly, that the Appellant failed to submit a duly filled application form showing interest to participate in the Expo; secondly, that the Appellant failed to forward a logo to the Respondent as part of the requirements to enable the Respondent customize the Appellant’s company into the Expo; and thirdly, that the Appellant did not send to the Respondent its company profile/a brief description of the Appellant to enable the Respondent ascertain the status of the Appellant before allowing clients to relate with it.
  6. The Respondent further stated that the deadline for the payment of all monies in cleared funds for the stand was on 4th September 2018 and the Appellant never paid the total amount as required. That interested applicants were to make non-refundable payments to cater for marketing, advertisements through billboards, road shows, Radios - Classic FM and Capital FM, digital screens at Nairobi's Kenyatta Avenue and to the Kenya Revenue Authority and that any money received was used solely for this purpose and was not refundable.
  7. The Respondent averred that the Expo was scheduled for 21st to 23rd September 2018 but the same. was adjourned to 16th, 17th and 18th November 2019 at The Hub, Karen on which dates the event took place. It asserted that the reason the Appellant did not participate in the Expo as scheduled for 16th – 18th November 2018 was due to the reason that the Appellant did not formally apply and failed to pay the required amount within the prescribed timeline. The Respondent thus denied the receipt of the Kshs. 200,000.00 from the Appellant.
  8. The Respondent proffered that the Appellant was barred from suing for a non-existent claim having failed to comply with the conditions precedent to being allowed to participate in the Expo within the stipulated timelines. The Respondent denied knowledge of any communication between the Plaintiff and the Defendant regarding the refund of the sum of Kshs. 200,000.00 or any amount. It urged that the suit was bare, raised no reasonable cause of action, was incompetent, frivolous, vexatious and a total abuse of court process.
  9. The trial court set down the matter for hearing where the Appellant availed one witness, its director, Rebecca Mbithe Mutua (Pw1). The Respondent did not avail any witness or produce any evidence. After considering the pleadings and evidence, the learned magistrate delivered the judgment on 22nd November 2022 where she found that this was a claim in respect of misrepresentation and breach of contract, and that from a reading of section 3 (1) and (2) of the Law of Contract Act such representations and contract ought to be in writing in a formal contract.
  10. The trial magistrate further found that the advertisement referred to, at best, was an invitation to treat and that when the Appellant expressed interest, then an offer was made. She held that whether there was acceptance thereafter could not be ascertained in the absence of a written contract. In her view, a claim for breach of contract and misrepresentation founded on an oral contract if any, fails in light of section 3 (1) and (2) of the Law of Contract Act. As such the suit was found to be unmerited and the alleged oral contract unenforceable.
  11. The lower court decision has precipitated the present appeal which the court directed that it be disposed by way of written submissions. Only the Appellant’s submissions are on record despite the Respondent being properly served with court process.

Analysis and determination

  1. This being the first appeal, this court is enjoined by the provisions of section 78 of the Civil Procedure Act to evaluate and examine the subordinate court’s record and the evidence presented before it in order to arrive at its own conclusion. This principle of law was well settled in the case of Selle v Associated Motor Boat Co. Ltd (1968) EA 123 where the Court of Appeal outlined the duties of a first appellate court as follows:

“[An appellate court] is not bound necessarily to accept the findings of fact by the court below. An appeal to this 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...”

  1. With the above in hindsight, the court is to determine whether the trial court arrived at the correct conclusion both in law and fact in its finding that the Appellant was not entitled to the Kshs. 200,000.00 refund sought in its suit. As stated, the Respondent filed a defence but never called any witness. I am in agreement with the Appellant’s submission that the effect of this is that it not only rendered the defence unsubstantiated but also left the Appellant’s case unchallenged (See Avtar Singh Bahra & Amarjit Kaur Bahra v Raju Govindji Ganatra T/A Sweetbite Manufacturers [2001] KEHC 375 (KLR)] And Motex Knitwear Limited v Gopitex Knitwear Mills Limited [2009] KEHC 4017 (KLR)].
  2. However, even though the Respondent failed to challenge the Appellant’s case, the latter still had a duty to prove its case on a balance of probabilities as is required by law. In Karugi & another v Kabiya & 3 others [1983] KECA 38 (KLR) the Court stated that: “The burden was always on the Plaintiff to prove his case on a balance of probabilities even if the case was heard as formal proof.” Likewise, failure by a defendant to contest the case does not absolve a plaintiff of the duty to prove the case to the required standard hence in Gichinga Kibutha v Caroline Nduku [2018] KEELC 3981 (KLR) the Court held that, “It is not automatic that instances where the evidence is not controverted the Claimant shall have his way in Court. He must discharge the burden of proof. He must prove his case however much the opponent has not made a presence in the contest.”
  3. The Appellant’s case was for breach of an alleged agreement for the supply of services at a consideration of Kshs. 200,000.00. The subordinate court held that this contract ought to have been in writing as per section 3(1) and (2) of the Law of Contract Act which provide as follows:

3. Certain contracts to be in writing

(1) No suit shall be brought whereby to charge the defendant upon any special promise to answer for the debt, default or miscarriages of another person unless the agreement upon which such suit is brought, or some memorandum or note thereof, is in writing and signed by the party to be charged therewith or some other person thereunto by him lawfully authorized.

(2) No suit shall be brought whereby to charge any person upon or by reason of any representation or assurance made or given concerning or relating to the character, conduct, credit, ability, trade or dealings of any other person, to the intent or purpose that such other person may obtain credit, money or goods, unless such representation or assurance is made in writing, signed by the party to be charged therewith.

  1. The learned magistrate held that the agreement of the parties had to be in writing as the Appellant’s claim was based on grounds of misrepresentation and breach of contract. The Appellant disagrees with this holding and submits that a contract for the supply of services may be in writing or by word of mouth or may be implied by the conduct of the parties as was held by the court in Telkom Kenya Limited v Kenya Railways Corporation [2018] KEHC 8424 (KLR). The Appellant further cites the decision of the Court of Appeal in Abdulkadir Shariff Abdirahim & Abdinarsir Abdirahim Mohammed T/A. S. Abdirahim Enterprises v Awo Shariff Mohammed T/A A.S. Mohammed Investments [2013] KECA 59 (KLR) where it was held as follows:

“There is no general rule of law that all agreements must be in writing.  The numerous advantages of a written agreement notwithstanding, all that the law requires is that certain specific agreements must be in writing or witnessed by some written note or memorandum.  Section 3(1) of the Law of Contract Act is one such provision…Section 3(1), therefore, applies where the defendant has guaranteed the creditor that he shall answer for the debtor’s debt should the debtor fail to pay.  In such a situation, the guarantee agreement between the creditor and the defendant must be in writing or witnessed by some note or memorandum in writing and signed by the parties.”

  1. From the above provisions, it is clear that the trial court misapprehended the law when it held that the alleged contract between the parties was one based on section 3(1) and (2) of the Law of Contract Act and that it was mandatory for the same to be in writing. There was no such obligation as the alleged contract was one for supply of services and not guarantee or surety. I therefore agree with the Appellant that the trial court failed to follow a binding precedent and arrived at an erroneous finding both in law and fact on this issue.
  2. In any case, the Appellant still had to prove that there was a contract between the parties either orally or by conduct. From the record, the email correspondence of 13th June 2018 indicates that the Appellant received the invitation for the Expo and that on 14th June 2018, the Appellant informed the Respondent that it had accepted the invitation and evinced its intention to attend the same. It averred that it had filled the registration form and attached its company logo and brief description of the company, products and services.
  3. In its email of 16th June 2018, the Respondent, through one Lucia stated that it had received the aforementioned documents forwarded by the Appellant. In an email of 9th Augst 2018, the Appellant asserted that still planned to participate in the Expo and that it was in the process of processing the payments and that it was to forward the same once ready. The Appellant annexed an invoice of Kshs. 200,000.00 from the Respondent which was to be for a booked booth No. 58 and a “3x3 Both for the upcoming Homes Expo at the Hub Karen Nairobi from the 21st – 23rd September 2018”. It also annexed a cheque of a similar amount drawn by Skyview Gardens Limited to the Respondent which I believe was their evidence of paying the Kshs. 200,000.00. The payment was confirmed by Pw1 who produced an extract of Skyview Garden Limited’s bank account capturing the subject transaction and she stated in her evidence that the Appellant authorized the use of Skyview Garden Limited’s account to pay for the subject exhibition fees.
  4. In the email of 21st September 2018, the Respondent communicated that the Expo had been postponed to 17th and 18th November 2018. In the Appellant’s email of 16th November 2018, the Appellant informed the Respondent that it was seeking a refund of the aforementioned cheque paid and that the refund was to be paid to the said Skyview Gardens Limited.
  5. Upto this point, it is my finding that there was an offer by the Respondent to the Appellant to attend the Expo slated for 21st – 23rd September 2018 and that this offer was accepted by the Appellant who paid the Kshs. 200,000.00 by way of a cheque drawn by Skyview Gardens Limited. This evidence was not controverted and as such, it is my finding that there was a valid and enforceable contact between the parties that was created.
  6. As to whether the Respondent was in breach of this agreement, it was not controverted that the Expo of 21st -23rd September 2018 did not take place and that this was what the Appellant had paid for. Even though the Respondent communicated that the Expo had been moved to November 2018, it appears the Appellant did not agree to this hence the reason why it sought for a refund as the contract had not been performed at that point. Since the Appellant never got value for the Kshs. 200,000.00 it paid for the Expo, it follows that the Respondent was in breach of the contract and as such, it was entitled to a refund of the said Kshs. 200,000.00.  

Final Disposition

  1. My summation of the above findings is that the learned trial magistrate was clearly in error of both the law and the facts when she found that the parties’ agreement had to be in writing and that the Appellant had failed to prove its claim for the refund. This was a misapprehension of the evidence and the law that warrants interference by this Court. I find as follows:
  2. The Appellant’s appeal has merit and is allowed.
  3. The decision of the learned trial magistrate dated 22nd November 2022 is set aside and substituted by this court’s decision allowing the Appellant’s suit with the consequence that judgment is entered in its favour against the Respondent for the sum of Kshs. 200,000.00.
  4. The judgment sum will attract interest at court rates from 22nd November 2022 until payment in full.
  5. The costs of the suit in the lower court and this appeal will be borne by the Respondent which I assess at Kshs. 30,000.00.

Orders accordingly.

JUDGMENT delivered virtually, dated and signed at NAIROBI

This 7th day of November 2024.

…………………..………………

P. MULWA

JUDGE

In the presence of:

Mr. Omulama for appellant

N/A for respondent

Court Assistant: Carlos

    Tribeka Bussiness Solutions Limited VS Lucia Juma Ochieno Tribeka Bussiness Solutions Limited VS Lucia Juma Ochieno