[2022] KEHC 13544 (KLR)

Hamptons Hospital Limited v Sika Kenya Limited (Civil Appeal E049 of 2022) [2022] KEHC 13544 (KLR) (Commercial and Tax) (7 October 2022) (Judgment)

Neutral citation: [2022] KEHC 13544 (KLR)

Republic of Kenya

In the High Court at Nairobi (Milimani Commercial Courts Commercial and Tax Division)

Commercial and Tax

Civil Appeal E049 of 2022

DAS Majanja, J

October 7, 2022

Between

Hamptons Hospital Limited

Appellant

and

Sika Kenya Limited

Respondent

(Being an appeal from the Judgement and Decree of Hon A W Munene, RM/Adjudicator dated 23rd March 2022 in SC COMM No 1321 of 21 at the Milimani Small Claims Court)

Judgment

1. This is an appeal from the judgment of the small claims court entering judgment for the respondent against the appellant for Kshs 306,888. 00 on account of goods sold and delivered.

2. The respondent’s case set out in its statement of claim dated September 28, 2021, is that on May 8, 2020, the appellant requested it to supply various goods at an agreed price to be paid on delivery. Although it delivered the goods, the appellant failed to settle the amount it now claims.

3. When the appellant was served, it filed a notice of motion dated October 12, 2021 made under section 6 of the Arbitration Act seeking to stay the suit on account of an arbitration clause contained in clause 17. 1 of the Local Purchase Order (LPO). The respondent opposed the application. By a ruling dated February 7, 2022, the court dismissed the application on the ground that, ‘’the claimant did not sign the LPO agreement’’.

4. The appellant thereafter filed its response to the claim dated February 14, 2022. It disputed delivery of the goods and alleged fraud and unjust enrichment on the respondent’s part. It stated that there was no formal contract between the parties. It pointed out the respondent did not carry out the instructions set out in the LPO exhibited by the appellant namely provide two hard copies of the invoice and enter the order in accordance with the prices, terms, delivery method and specification therein. The appellant further stated that it did not have the opportunity to receive, verify and accept the goods, receive delivery notes and invoices in order to be liable. It contended that for it to be liable under section 3(1) of the Sale of Goods Act (chapter 31 of the Laws of Kenya), there ought to have been an order, invoice and delivery note. The appellant also disputed that the respondent had locus standi to prosecute the suit.

5. The parties each called a single witness. Thereafter, the adjudicator entered judgment as prayed on the basis that the respondent supplied the goods which were accepted, a fact admitted by the appellant’s witness.

6. The substance of the appeal is set out in the memorandum of appeal dated March 23, 2022. The appellant raised several issues; procedural and substantive. The former issue concerns the appellant’s application dated March 1, 2022 made, inter alia, under Order 2 rule 15 of the Civil Procedure Rules where it sought to strike out the statement of claim. When the application came up March 2, 2022 for directions, the adjudicator declined to adjourn the hearing and directed that the issues raised in the application be dealt with at the hearing.

7. I do not find any error in the approach taken by the adjudicator who was well aware of the strict time limits under which a matter in the small claims court should be heard. I agree that the issues raised by the appellant could be considered during the substantive hearing. In any event on the same day, the court heard the parties’ witnesses and concluded the case. The appellant was therefore not prejudiced in that respect.

8. On the substance, the gravamen of the appellant’s case is that in the ruling dated February 7, 2022, the court held that the respondent had not signed theLPO hence there was no contract yet its case was based on the LPO. The appellant contends that based on the said ruling, there is no written contract between the parties hence there is no reasonable cause of action and as such the claim is a non-starter.

9. The appellant’s case must be read in light of the facts admitted by the respondent. When cross-examined, this is what the appellant’s witness stated as follows:The respondent requested goods from the claimant through anLPO …. The goods were delivered on May 8, 2020. The goods were inspected upon delivery by myself. The goods were to expire in less than 3 months. At the time of delivery, they were not expired. They were to expire before August 8, 2020. The claimant was supposed to take them and have them replaced if they had any fault. When I rejected the goods, the claimant was supposed to pick them. The claimant did not return the goods as per clause 6. 1 of the agreement…..When re-examined by counsel, he continued:They were delivered on May 8, 2020. They were to expire before the end of 3 months……. We have been calling the supplier to replace them but they haven’t been collected.

10. It is clear from appellant’s testimony that it admitted receiving the goods and that it rejected them on account of expiry. Its case at the hearing is clearly inconsistent with that pleaded in the response to the claim. Having admitted that it received the goods and not paid for them, the pleaded defences became illusionary.

11. Finally, I understand that the ruling dated February 7, 2022 concerned whether there was an arbitration agreement in terms of section 4 of the Arbitration Act which requires such an agreement to be in writing and in a document signed by both parties. Once the ruling was disposed of and the parties proceeded for hearing, the court was entitled to consider the entirety of the evidence on its merits. The appellant’s own witness admitted that that the goods were supplied and delivered. It however, contended that it rejected the goods which is a defence that was not pleaded.

12. Under section 38(1) of the Small Claims Court Act , 2016 an appeal to this court is limited to matters of law only. Accordingly, the court is not permitted to substitute the subordinate court’s decision with its own conclusions based on its own analysis and appreciation of the facts unless the findings are so perverse that no reasonable tribunal would have arrived at them (John Munuve Mati v Returning Officer Mwingi North Constituency & 2 others [2018] eKLR). Having reviewed the facts of the case, I can only conclude that the adjudicator reached the correct conclusion consistent with the pleadings and evidence.

13. The appeal lacks merit and is accordingly dismissed. The respondent is awarded costs of the appeal assessed at Kshs 30,000,00.

DATED AND DELIVERED AT NAIROBI THIS 7TH DAY OF OCTOBER 2022. D. S. MAJANJAJUDGECourt Assistant: Mr M. Onyango.Ms Nasimiyu instructed by Javier, Georgiadis and Sylvester LAW LLP Advocates for the Appellant.Mr Otieno instructed by Luchiri and Company Advocates for the Respondent.