[2017] KEHC 10031 (KLR)

REPUBLIC OF KENYA

IN THE HIGH COURT OF KENYA AT NAIROBI

COMMERICIAL AND ADMIRALTY DIVISION

MILIMANI HIGH COURT

CIVIL CASE NO 258 OF 2007

AGENCY FOR DEVELOPMENT EDUCATION AND

COMMUNICATION LIMITED……….…PLAINTIFF

VERSUS

THE ATTORNERY GENERAL…….… DEFENDANT

JUDGEMENT

1. Agency for Development Education and Communication Limited (The Plaintiff or ADEC) has sued The Attorney General of The Government of Kenya for a liquidated sum of Khs.5,064,000/=.

2. ADEC is a Limited Liability Company offering Consultancy Services. In a Plaint presented to Court on 22nd May 2007, ADEC avers that it entered into a Contract for Consultancy services with the then Ministry of Justice and Constitutional Affairs (The Ministry)at an agreed contract price of Kshs.8,340,000/=. It is the case of ADEC that it fully complied with the terms and conditions of the Contract and now claims Kshs.5,004,000/= being the balance of the Contract sum which the Defendant has failed, neglected and/or refused to pay.

3. The Attorney General is sued in his representative capacity on behalf of the Ministry of Justice and Constitutional Affairs.

4. The Attorney General filed a Defence dated 10th October 2016. The Defence by the Attorney General is threefold. He first denies the entry into the Contract. In the alternative he states that the Plaintiff failed to satisfactorily perform its contractual obligation on the original Contract or as revised. The Attorney General alleges breach of Contract. Lastly, in paragraph 13 of the Defence it is averred that the claim is time barred.

5. The evidence of ADEC is not involved. It was presented on its behalf by one Cutha Robert Ngaruiya (Ngaruiya or PW1) He is the Executive Director of ADEC. ADEC was duly incorporated on 1st November 1994 under the provisions of the then Companies Act (P Exhibit 1).

6. Its bid for Consultancy work was accepted by the Ministry and in a letter of 26th May 2004, the Ministry notified ADEC of the Award. The Tender was in the nature of Consultancy on Consensus Building in respect to the famous Bomas Zero Draft. Subsequent to this, both parties executed a Contract on 21st June 2004 ( P Exhibit page 3-22).

7. Ngaruyia’s evidence is that in accordance with the terms of the Contract ADEC was paid Khs.3,336,000/= on execution of the Contract (P Exhibit 5). This would be 40% of the entire Contract.

8. His evidence is that ADEC performed its side of the Contract and on 17th August 2004 submitted a draft report. There is then a letter of 21st September 2004 (P Exhibit page 29) to the Ministry through which ADEC submitted its interim report. This was followed by a letter of 6th April 2015 submitting the final report.

9. The case for the Plaintiff is that under the terms of clause 6. 2(b) of The Contract 30%, payment was to be made upon submission of the draft report and the final 30% upon approval of the final report. In addition that payment was to be made 30 days of the Invoice and within 45 days in case of the final payment. It is the ADEC’s case that it submitted an invoice dated 29th June 2004 in respect to the interim report and another of 30th June 2004 in respect to the final report. None of these have been paid.

10. Answering questions in cross-examination, Ngaruiya gave some insight as to the timelines in the Contract. Clause 2. 3 was on the period of the Contract. It was for 40 days from the date of commissioning (see clause 2. 3 of Special Conditions of Contract). That 40 days was to end in August 2004. And he conceded that there was never an extension.

11. His evidence was the draft report was submitted on 17th August 2004. Asked about ADEC’s letter of 21st September 2004, submitting a supposed interim report, he commented that it was not beyond the Contract period. His evidence being that the forty days was to be reckoned by taking the 5 working days of a week.

12. Ngaruiya’s attention was drawn to the provisions of the Contract that required the interim report to be submitted within 20 days of commencement of the Contract. He conceded that ADEC was outside this timeline.

13. There was a letter of 21st December 2004 from the Ministry to ADEC in which the Ministry makes comments on an “interim draft” report presented to it by ADEC. Ngaruiya sought to clarify that this was infact the draft final report. It was his evidence that the Ministry did not acknowledge ADEC’s letter delivering the report. It was nevertheless his testimony that there is no contention that the reports were indeed delivered. His evidence was that the Client was happy with the services rendered.

14. Although the Attorney General filed a witness statement and list of documentS, neither the Attorney nor the witness attended Court on 12th May 2017 when this matter was due for hearing. On application of the Plaintiff’s Counsel, the Defence case was treated as closed. The Court then fixed the matter for 27th June 2017 for receipt of submissions by parties. On that day Counsel Wambui appeared for the Attorney General and indicted to Court that the Attorney General intended to file an application to set aside the proceedings of 12th May 2017. I have not seen any such application as I write this Judgement.

15. The issues this Court must determine are as follows:-

i. Was there a Consultancy Contract between ADEC and the Ministry?

ii. Did ADEC breach the Contract?

iii. Is this claim otherwise time barred?

iv. Is ADEC entitled to the Prayers sought?

16. Although the Attorney General put forward in defence that no Contract was ever entered between the ADEC and the Ministry, it is beyond any doubt that on 21s June 2004 a Contract for Consultancy Services was signed between the Ministry and ADEC. The signatories to the agreement were Mr. J.M.K. Matagaro described as The Permanent Secretary in the Ministry of Justice and Constitutional affairs and Mr. Robert Ngaruyia described as the Executive Director of ADEC.

17. ADEC asserts that it performed its side of the Contract and generated interim and final reports which were accepted by the Ministry. The Defence of the Ministry is that the services rendered by ADEC were unsatisfactory. The Defence does not however specify or set out the unsatisfactory nature of the services.

18. The nature of the Consultancy services was that ADEC was to carry out an urgent survey on consensus Building to resolve the impasse on the Constitutional marking process that was then ongoing in the Country. That period of the Contract was stipulated as forty (40) days from the date of commissioning (clause 2. 3. of special condition of contract).

19. The evidence by ADEC was that it carried out the assignment satisfactorily and submitted to the Ministry an Interim Report through a letter of 21st September 2004, draft final report and then a final report on 6th April, 2005. The first and last reports are said to have been delivered by mail (P Exhibit pages 29 and 30). While the second report was hand delivered.

20. Although there is no evidence that the letters forwarding the two reports were acknowledged by the Ministry, the Ministry did not present its said side of the story through evidence as it failed to attend Court. In the absence of evidence to the contrary, I would believe that these reports were submitted and indeed received to the Ministry. In respect to the interim final report that is said to have been hand delivered, there is a letter of 21st December 2004 (P Exhibit page 25) from the Ministry making comments on it.

21. From this letter, it was evident that the Ministry wanted the Consultant to improve on the interim report. The comments of the Ministry were:-

1. “There is need for an executive summary that condenses the many issues for investigation, methodology applied, the many findings and recommendations.

2. Kindly note that the study is quite dated. There is therefore need to update the same to capture recent events and ensure relevance.

3. It will be necessary to review the recent surveys conducted by other agencies to inform your study on current developments.

4. It is also necessary to capture the Naivasha Consensus agreement as it substantially determines the war forward in the review process. The current government route map on the review as captured in the Constitutional review (amendment) bill which was passed in August, should also be incorporated.

5. Issues around the dangers posed by the holding of a referendum, to sitting governments need to be comprehensively discussed in your study.

6. The appendices indicating who was interviewed, the role of Steadman, the questionnaires applied etc, should be included in the final draft.”

22. What followed was the submission of the final report vide a letter of 6th April, 2005. The witness explained the delay as follows:-

“The final report was nearly a year later. It was the client’s fault for taking time to read the same. It delayed us”

23. Now it is the finding of this Court that while as at 21st December 2004 the Ministry needed the report by the Consultant improved, there is no evidence that it was dissatisfied or otherwise unhappy with the final report submitted to it through the letter of 6th April 2005. There is no evidence that it made any comments, complimentary, adverse or otherwise on this final report. This Court holds that there is no evidence to impeach the contents or quality of the ADEC’s report.

24. But could the dissatisfaction have been because of breach of timelines by ADEC? As stated earlier, under clause 2. 3 of the special conditions, Contract was 40 days from the date of commissioning. Although there was no evidence as to the date of commissioning, the witness of ADEC readily accepted that the services were out of time in two respects:-

i. The interim report which ought to have been submitted on the 20th day after commencement of the exercise was submitted out of time on 21st September 2004.

ii. The final report was delivered on 6th April, 2005, way after the 40 days.

25. The witness sought to explain that the client took time with the draft report which delayed other deliverables. Can the delays defeat the Plaintiff claim?

26. Clause 2. 3. of the Contract is on the expiration of the Contract and provided:-

‘Unless terminated earlier pursuant to Clause 2. 6, this Contract shall terminate at the end of such time period after the Effective Date as is specified in the SC”.

27. Clause 2. 5.3 is on extension of time in the event of force majeure which is not relevant here.

28. Although there was no express extension of time for the Contract, it is clear from the conduct of the parties that they both treated the Contract as extended beyond its term months after the Contract term had passed. The Ministry in a letter of 21st December 2004 was asking ADEC to revise its study so as to “provide the final draft”. The revision included updating the report to “capture recent events and ensure relevance”.

29. The delay or delays was therefore accepted or acquiesced by the Ministry and it is little wonder that it did not in its defence, raise the issue of delay as an issue of displeasure.

30. This Court turns to consider the final line of defence. Section 3(2) The Public Authority Limitation Act provides:-

“No proceedings founded on contract shall be brought against the Government or a local authority after the end of three years from the date on which the cause of action accrued”

31. This is a defence that the Plaintiff has very little difficulty overcoming. This is the reason. The letter of the Ministry of 21st December 2004 expressly acknowledges the subsistence of the Contract. Even if this is taken to be the last day when the Plaintiff’s cause of action accrued, these proceedings which were presented on 22nd May 2007 would still be within three (3) years of that day. The Defence fails.

32. ADEC has proved its case on a balance of probabilities and judgment is hereby entered in its favour against the Defendant for Khs.5,004,000/= and costs. There shall also be interest on the principal sum at court rates from the day of filing this suit.

Dated, Signed and Delivered in Court at Nairobi this 5th Day of October, 2017.

F. TUIYOTT

JUDGE

PRESENT;

Onyancha h/b for Gitau for Plaintiff

Wambui for Attorney General

Alex - Court clerk