[1996] KECA 178 (KLR)
The Court of Appeal held that both parties had recognized the inadequacy of the original contract price of Shs.15/= per plate and had entered into negotiations for a fairer compensation. The appellant's reliance on the lowest tender of Shs.19.50 from an outsider, who was not called as a witness and whose basis for...
Source-derived case information.
- Citation
- [1996] KECA 178 (KLR)
- Parties
- Appellant: Bamburi Portland Cement Company Limited; Respondent: Mrs. Philemon Oyigo
- Court
- Court of Appeal
- Court Station
- Court of Appeal at Malindi
- Jurisdiction
- Kenya
- Case Number
- Civil Appeal 119 of 1996
- Procedural Posture
- Civil Appeal / Judgment on Appeal
- Outcome
- appeal dismissed
- Legal Topics
- Breach of Contract, Quantum of Compensation, Supply of Goods and Services
- Source Language
- en
Source-derived case record
Summary, issues, holding and outcome
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Parties
Bamburi Portland Cement Company Limited
Appellant
Mrs. Philemon Oyigo
Respondent
Procedural Posture
Civil Appeal / Judgment on Appeal
Legal Issues
- 1 Whether the respondent was entitled to compensation above the contract price of Shs.15/= per plate for meals supplied to the appellant.
- 2 Whether the trial judge erred in preferring the respondent's proposed compensation rate of Shs.25/= per plate over the appellant's figure of Shs.19.50.
- 3 Whether the appellant's reliance on an outsider's tender to determine compensation was justified.
Ratio Decidendi
The Court of Appeal held that both parties had recognized the inadequacy of the original contract price of Shs.15/= per plate and had entered into negotiations for a fairer compensation. The appellant's reliance on the lowest tender of Shs.19.50 from an outsider, who was not called as a witness and whose basis for the quotation was unknown, was found to be arbitrary and unjustified. The trial judge was entitled to prefer the respondent's figure of Shs.25/=, which was supported by an accountant's report and reflected the actual costs incurred. The appellate court found no reason to interfere with the trial judge's exercise of discretion in awarding compensation at the respondent's proposed...
Court Disposition
appeal dismissed
Orders
- The appeal is dismissed with costs to the respondent.
Full Case Text
Judgment text and source record
17 paragraphs
REPUBLIC OF KENYA
IN THE COURT OF APPEAL AT MOMBASA CORAM: GICHERU, OMOLO & TUNOI, JJ.A. CIVIL APPEAL NO. 119 OF 1996
BETWEEN
BAMBURI PORTLAND CEMENT COMPANY LIMITED ............... APPELLANT
AND
MRS. PHILEMON OYIGO ................................... RESPONDENT
(Appeal from a judgment and decree of the High Court of Kenya at Mombasa (Justice I.C.C. Wambiliyangah) dated 21st November, 1995 in H.C.C.C. NO. 331 OF 1989) ***************
JUDGMENT OF OMOLO, J.A.
I think that on the material which was placed before the learned judge of the superior court (Wambiliyangah, J.), he did arrive at a reasonable decision and I see no occasion for us to interfere with him. One thing was established by the evidence which was before the judge and that was that since 1985, the respondent had been running the appellant's staff canteen and was supplying the appellant with various types of cooked meals. Whether that agreement was in writing or verbal does not seem to matter very much. At first the agreement was that the food was to be supplied at a charge of Shs.15/= per plate but it is clear to me from the recorded evidence that that price was always a sore point between the respondent and the appellant. The canteen was originally run by one Ben Holland and the respondent started by running the canteen on behalf of Holland. The respondent's evidence on this was, and I quote her:-
"I had started negotiation for price increase even when I was standing in for Mr. Holland. They raised the prices we kept on negotiating the price increases. In April, 1987 we discussed the matter. We postponed the matter. In November, 1987 I told them I could charge a minimum amount of Shs.25/= per plate. They told me to go back and document how I had arrived at that figure. ......................"
It is obvious to me that it was at the stage when the respondent was asked to document the proposal to charge a minimum of Shs.25/= that she commissioned an accountant (P.W. 2) who produced a full report supporting the respondent's claim to Shs.25/=. I note that at this stage when the respondent insisted on a minimum of Shs.25/=, the appellant did not tell her that it (appellant) would not be able to pay that much and that she ought to pack up and go away. Instead they told her that they were going for tenders but that in the interim she should continue to run the canteen. The tendering process was finalised in March, 1988. The lowest bid accepted by the appellant was Shs.19. 50. The respondent's tender of Shs.25/= was rejected. The appellant then gave the respondent notice to vacate by 31st July, 1988 but in the meantime, they would compensate her by paying to her Shs.19. 50 instead of Shs.15/= which they had been paying her previously. This was clear evidence that even the appellant must have realised that the respondent was making a loss. They chose Shs.19. 50 because that was the lowest tender they had received but as the learned judge points out in his judgment, correctly in my view,:-
"It must be remembered that she sold food. One had to analyse her inputs before one can fairly determine the profitable price at which it could be sold. The tenderer who had quoted Shs.19. 50/= upon whose figure the compensation was based was not called as a witness. So no-one can say by what factors or circumstance his quotation was influenced. It was, therefore, erroneous on the part of the defendant to base its so called "compensation" figure on the quotation of an outsider - who had not yet started operating. .............."
The truth of the matter is that both the appellant and the respondent had come to recognise that the Shs.15/= in the agreement was too low. In November, 1987 the respondent told the appellant she would now charge a minimum of Shs.25/=; the appellant, as I have said, did not tell her it could not pay that amount and ask her to go away. They instead asked her to establish a basis for that claim. She did so but the appellant chose to "compensate" her using the lowest tender of Shs.19. 50. As the learned judge correctly says, no one knew how that figure had been arrived at. The simple position appears to me to be this. Both the appellant and the respondent agreed or realised the need that over and above the Shs.15/= in the agreement the respondent should be compensated. The appellant thought Shs.19. 50 would be adequate "compensation"; the respondent thought only Shs.25/= would do. The judge had before him these two figures. He chose to use the respondent's figure and rejected that of the appellant. The judge gave his reasons for doing this. I think the learned judge was perfectly entitled to do this and it would not be right for us to interfere with his judgment.
That being my view of the matter my judgment shall be that this appeal must be dismissed with costs thereof to the respondent.
Dated and delivered at Nairobi this 11th day of October, 1996.
R. S. C. OMOLO ---------------
JUDGE OF APPEAL