[2003] KEHC 660 (KLR)

REPUBLIC OF KENYA

IN THE HIGH COURT OF KENYA

MILIMALI COMMERCIAL COURTS

CIVIL CASE NO. 3325 OF 1994

JANEVAMS LIMITED ……………………………………….. PLAINTIFF

V E R S U S

CALTEX KENYA LIMITED ……………………….…….… DEFENDANT

JUDGEMENT

In a plaint dated 14th September 1994 and filed on the same day, the

plaintiff Janevams Limited sued the Defendant Caltex Kenya Limited

seeking judgement against the same Defendant as follows:-

“(a) A sum of Kshs. 1,978,225. 80 together with interest

thereon at bank rate from 15 th July 1991 u ntil

payment in full;

(b) Damages for breach of contract;

(c) Costs of this suit;

(d) Such other or further relief as this Honourable

Court may deem fit to grant.”

The same judgment is sought according to the plaint on the basis that

the Defendant breached Operations agreement entered into between the

Defendant and the Plaintiff’s company and removed the Plaintiff company

from the Operations of a Service Station contrary to the terms of the

agreement and without any proper reasons, and in so removing the Plaintiff,

the Defendant detained and remained with the Plaintiff’s several equipment

(properties) including documents to facilitate collection of debts by plaintiff

despite demands that it releases the same properties to the Plaintiff. Further

the Plaintiff alleges in the same plaint that in so removing it from the station,

it failed to refund to the Plaintiff interest earned from the deposit earlier on

paid to the Defendant which was KSh.491,450.

The Defendant company in its statement of Defence stated in what I

do briefly summarise, that the suit offended provisions of Section 6 of the

Civil Procedure Act as there were a civil case No.200 of 1991 and Civil

Appeal No.116 of 1991 on the same subject which had not been finalised;

that the agreement or license was lawfully terminated and KSh.491,449/55

being the credit balance due to the Plaintiff was refunded; that the Defendant

is a stranger to the allegations in the plaint that equipment and machinery

were installed by the Plaintiff at the suit premises; that the termination of the

operations agreement was lawful as the plaintiff did not achieve the

minimum target; that it denies having taken Plaintiff’s tools of trade,

machines, equipment and trade debts and it denies each and every allegation

in the plaint.

The Plaintiff called five witnesses whereas the Defendant did not call

any witness in the case.

PW.1 Joseph Matu Mathondu was the Director of the Plaintiff

Company. His evidence was in a summary form that in August 1986 his

company was appointed by the Defendant as Defendant’s dealer in a Petrol

Station on Waiyaki Way near A.B.C. Complex in Nairobi. He executed a

dealer’s agreement Exh.1 and was promised that on satisfying the

Defendant, he would be offered operations agreement. The same operations

agreement was offered and was dated 1st June 1987 Exh.2. By that

agreement, exh.2, he was confirmed as a dealer at the service station. He

operated the station from August 1986 to 1989 without any problem, and

without any warning from the Defendant and there was no public complaint

during that period. On 5. 7.1990, he got a letter from Defendant – Exh. 3

asking him to improve the performance. The letter was from the Marketing

Manager and it revised the targets. The targets had declined because the

road was under repair and hence, the flow of motor vehicles to the station

was affected. On 20th August 1990, he was given conditions to meet the

targets within three months. He was also given a letter to that effect – exh.4.

He stated that he achieved the targets, i.e.both targets given in a letter dated

5. 7.1990 and the one given in a letter dated 20. 8.1990. However, despite his

achieving the targets given, he received a Notice dated 21. 12. 1990 – Exh.5

which was terminating his dealership. The reason given in the same notice

for terminating his dealership is that since 1986 he had never operated to the

Defendant’s satisfaction. He maintains that this is not true because

according to the agreement, if he did not operate to the Defendant’s

satisfaction he was to be fined but he had never been fined at all which to

him meant that he had operated the station to the Defendant’s satisfaction.

On one occasion on 3rd December 1990, he ran out of product but that was

because he had paid for the products on 30th November 1990, but by the time

the Defendant’s staff checked his products on 3rd December 1990, the

Defendant had not delivered the same products paid for on 30th November

1990. That was one example when the Defendant found him out of products

and that was in the morning when the checking took place whereas products

were delivered by the Defendant in the afternoon of the same day. He

produced Exh.6 & 7 as evidence of what happened. Another example was

that on 14th December 1990 he paid for products which were never delivered

till 17. 12. 1990 afternoon whereas Defendant carried out a check in the

morning of that same 17. 12. 1990 before Defendant delivered products. He

produced Exh.8 & 9 as evidence of the same. He complained to the

company on their conduct vide a letter dated 31. 12. 1990, Exh.10. he had

also complained about flooding next to the station which was interfering

with accessibility to the station especially by small vehicles. After the notice

of 21. 12. 1990, the Plaintiff did not move out of the station but he was

evicted. He filed application for injunction in court but that was rejected and

he was evicted on 15. 2.1991, by two employees of the Defendant company

Mr. Murila and Sam Gakiria who were accompanied by auctioneers and 20

guards. He was evicted and Sam Gakiria who used to supervise the station

took over the running of the station as a dealer. Actioneer took all personal

belongings, chairs, tables but left at the station a number of important

equipment and properties of the Plaintiff which are as per the plaint and their

values were also given in the plaint. The same values, according to this

witness were obtained from the dealers and were the values at the time he

got the quotations and the invoices. The equipment retained by the

Defendant were Wheel Balancing Machine, Tyre Change Machine, Trolley

Jack, Wheel Aligner, Welding machine and Spraying machine. If he had

those machines, he would have employed himself elsewhere after he was

removed from the service station. There was a vehicle he was repairing at

an agreed amount of KSh.38,000/-. As he was removed from the station he

could not repair it and he lost that money. He also failed to do engine

overhaul work for another customer who pulled his vehicle away and

demanded KSh.96,000. He had to pay the same. This was all because he

was removed from the station. He identified Proforma invoices he got from

Avon Rubber company Kenya Ltd. for the equipment and machines, that

were retained by the Defendant. He also identified one invoice he obtained

from East African Oxygen in respect of Oxygen Acetylene Cylinder’ which

were on lease from the same East African Oxygen. He claimed further that

he was prevented from pulling down a garage he had constructed and which

had an estimated value of KSh.35,000/-, and there was a Volks Wagen

vehicle door also at the garage which he could not get access to as he was

removed. He paid the owner of that vehicle door KSh.20,000/-. There were

other motor vehicle accessories in the shelves such as condensers, bulbs, and

reflectors of Peugeot vehicle which were valued at KSh.8,000/- and which

he did not take with him as he left the station. He used to give credit to his

customers. As a result of his being removed from the station, he could not

recover KSh.104,000/- from some of the customers. Lastly, the Defendant

paid him his deposit plus the value of the product that was at the station

when he was removed. The total he was paid was KSh.491,449/55 but this

was paid after 3 ½ years – i.e. in June 1994. He needed interest on that

money and he asked for interest at the rate of 35% because he used to

operate the business on overdraft from the bank. He stated at the end of his

evidence in Chief that he was claiming KSh.1,978,225. 80 and interest on

that amount which he did demand and was not paid by the Defendant. On

the question as to whether there were any cases pending by the time this case

was being heard he said that the Plaintiff had withdrawn the case that was

pending and this was done with the consent of the Defendant so that there

were no cases pending as at the time this case was heard. The Plaintiff’s

profits from the station were KSh.30,000 per month from the garage side

and KSh.30,000/- from the Petrol Station side.

In cross-examination he agreed that under the agreement, the

Defendant could have terminated the agreement by one month’s notice but

with reasons. On being shown clause 8 of exhibit 2 and clause 3 of the same

exhibit, he admitted that there were times when Defendant could summarily

terminate the license. He also agreed that Defendant gave Plaintiff one

month’s notice – Exh. 5. Following the notice he filed an application in the

High Court H.C.C.C. No.200 of 1991, but the application for temporary

injunction was dismissed. He appealed vide Civil Appeal No.116 of 1991

but that appeal was later withdrawn and Defendant paid Plaintiff’s deposit as

well as value of fuel in 1994, but he agreed that he was paid his money in

1994 whereas he withdrew the cases in 1998 so that payment of his money

had nothing to do with the withdrawal of the suits that were then pending.

On the claim for interest of KSh.560,530/80 the Plaintiff claimed, he said he

had letter from the bank on the same but he had not produced the same in the

court. He did not demand his deposit between 1991 and 1994, as the cases

were still pending and Defendant maintained that he was not a licensee

whereas he maintained that he was a licensee. Plaintiff was a licensee upto

15th February 1991, but on 15th February 1991 the Plaintiff ceased to be a

licensee of the Defendant as it was evicted from the Defendant’s premises.

He wrote to Defendant demanding the money in February 1994. The letter

of demand was dated 25th April 1994 and was written by Kimundi &

Company Advocates on behalf of the Plaintiff company and it was written 3

½ years after the Plaintiff had been removed from the station. The same

letter included claim for Volvo repairs whereas the Plaintiff’s claim was not

for Volvo repairs. Plaintiff’s claim was for Prime Chemicals vehicle and not

for Volvo repairs. He admitted that what was stated in paragraph 9 of the

plaint was not correct as the Plaintiff was not making any claim for Volvo

repairs. He did not produce any documents in respect by East African

Oxygen Ltd., stated at paragraph 5 (I) of the plaint. Although the receipt of

payment in respect of Prime Chemicals says he paid on 25. 5.92, that is not

so as he paid the amount of KSh.91,613/- by installments and did not pay it

at once as indicated in the receipt. He said he did not make any complaint to

the police about Plaintiff properties detained by the Defendant because he

was dealing with a company. On the day of eviction he made a complaint to

the police that the Plaintiff was being evicted without a court order. He

admitted that he had not shown the court documents to show that the

properties he was claiming were his and he admitted plaintiff’s items were

old and had been used for many years. Shown MFI.D2 he accepted that the

auctioneers took the items recorded in that document only and that he later

collected all the items that the auctioneers took away from the same

auctioneer Rossam Enterprises. He stated that his assets were only tools in

the workshop and machineries which the Plaintiff was demanding and not

the motor vehicle. The items the plaintiff is claiming, he said were not in the

garage. They were outside in the greasing bay and auctioneers never took

them. Shown the Affidavit, he signed in his appeal to the Court of Appeal

earlier on, the stated that what was in the Affidavit to the effect that the

equipment belonging to him were few was correct. The debtors that had not

paid a total of KSh.104,500/- were Plaintiff’s customers and not customers

of the Defendant, but he agreed that those who paid their debts did so after

Plaintiff left the station and he had not sued the few customers who had not

paid the outstanding debts. One customer, the Nation Newspapers refused to

pay as copies of LPOs were not available. It owed KSh.67,000/-. There

were documents taken by the auctioneers and got misplaced by the same

auctioneers. He did not make any complaints about the same because at that

time the important matters were the money and the properties detained by

the Defendant. The amount of KSh.491,450 Plaintiff was claiming was

made up of KSh.100,000/- the Plaintiff paid to Defendant as deposit and

KSh.391,450/- which was the value of the products namely, Premium and

Regular Petrol as well as lubricants which had been paid for and were

properties of the Plaintiff. He admitted that his first formal letter of demand

was dated 25th April 1994. He had no tax returns to show he was getting a

total profit of KSh.720,000/- per year, but he insisted, he used to make that

money as profit. He had no audit report for the business although last audit

report was made for 1988 but he did not have that report either. He admitted

that he had no documents to show that the properties he was claiming

belonged to the Plaintiff as he also had no audit report that would have

shown that the properties belonged to the Plaintiff.

In re-examination, he said he was claiming either the same goods or

the value of the goods and that was why he produced Proforma Invoices. He

first demanded the release of the accessories in February 1994. In respect of

the Prime Chemicals, the Plaintiff’s claim was engine part which got lost.

That was engine that was taken to the station for repairs and which had been

partly repaired but at the time Plaintiff was evicted, the spare parts got lost

and the owner demanded the replacement of the engine and the Plaintiff paid

the same money to the owner by installments. The witness did not make any

reports about the detained equipment because Defendant said the same

would be paid for. The witness then described in details where equipment

taken by the auctioneers and those that he claimed from the Defendant were

before the Plaintiff was evicted from the station. He stated that the list of

debts was prepared a week after the Plaintiff was evicted. He did not sue the

four auctioneers who had not paid a total of KSh.104,000/- as he did not

have the original documents with him. They were misplaced when papers

were taken by auctioneers. He ended his evidence by saying that the garage

equipment belong to Plaintiff.

Samuel Gakiria Kingori, was PW.2. He worked for Defendant from

1986 to 1991. He was then Sales Representative in charge of Retail and

Consumer Customers. Plaintiff was one of the Defendant’s dealers at a

Petrol Station along Waiyaki Way. In the years 1990 to 1991 he was incharge

of Nairobi Central and Plaintiff was one of the Petrol Stations he was

in-charge of. He was aware that Plaintiff’s dealership was terminated in

February 1991. According to this witness the Plaintiff performed well and

that was the reason why the Plaintiff was given operations license and also

that was why Plaintiff was not penalised for failing to achieve the target as

he never failed to achieve the target set by the Defendant and revised by the

same Defendant. He said it was not true that the Plaintiff did not meet the

target. On 15. 2.1991 he was called by his boss Baraka and one Murila and

was directed to go and evict the Plaintiff from the Petrol Station. He went

with Auctioneer Rossam to evict the Plaintiff. PW.1 was not at the station at

that time of eviction. They evicted the Plaintiff and collected the goods in

full packets and loaded them in a vehicle and the key was given to Murila.

He gave to the court, the names of the Defendant’s items that were at the

Petrol Station. Murila gave the keys to this witness who did not become a

dealer but was running the station for the Defendant. They were using some

of the Plaintiff’s equipment which had remained there. These were

equipments such as wheel alignment machine, wheel balancing machines,

acetylene gas, spraying machines, loan mower, Garage chain, two doors of a

vehicle, some cases, some vehicles. None of these were released to the

Plaintiff during this witness’s stay at the station. When he took over, there

were fuel products which were valued and which he took over. He left the

station in June 1991 and a Mr. Singh took over and at that time the

accessories and equipment of the Plaintiff were still there. In cross

examination, this witness stated that he was the one supervising the dealers

work on the ground so that if the dealer was not achieving its target, he

would tell the Defendant. He was the man placed between the Defendant

and the Plaintiff. He attended meetings which decided on the targets for the

dealers but he was not in the meeting referred to in a letter dated 5th July

1990. The Plaintiff was achieving the targets set for it. He was present

when the Plaintiff was being evicted and he told Mr. Murila that it was not

proper to evict the Plaintiff. The eviction was peaceful and there was no

fight and security was not called. He did not see well what the auctioneers

took away from the station. He stated that he was the one running the

service station after Plaintiff had been evicted. Wheel balancing machine

was inside the office and it was operational. Tyre changer was outside the

office. Trolley jack was in use sometimes outside and sometimes in the

office, wheel balancing was there and welding machine was in the shed.

Lawn Mower was in the shed, spraying machine was in the shed while

acetylene cylinder and BMW door were in the garage. The Plaintiff never

collected the same properties while the witness was still running the station.

Although he signed operations agreement with Defendant, he was not

running the service station on his own. He remained an employee of the

Defendant and was running to station on behalf of the Defendant and he

signed the dealer’s agreement only as a proxy. He admitted that he signed

an affidavit on 17th May 1991 which affidavit had annexed to it several

documents like ledger cards, and documents not in the letter-heads of the

Defendant but he said that he did not know the contents of the same affidavit

as the Defendant’s advocate gave him only the last page to sign and he

signed it without knowing the contents of what he signed. He said what was

contained in that affidavit was false. After running the service station he

went back to the Defendant company and fell sick. He was admitted to

hospital. When he returned from the hospital he found allegation being

made that he had misappropriated Defendant’s funds and he was summarily

dismissed. There is a case in court on that dismissal. He was not charged

with any offence in a court of law. He ended his examination in chief by

saying he did not know whether Defendant advertised for the vehicles that

were left by the Plaintiff at the service station. In re-examination he mainly

confirmed that he did not read the contents of the affidavit he had signed

earlier in the case; that he was not a signatory to the accounts of the station

when he was running it after taking over from the Plaintiff and he never

benefited financially from the station and that he was still in the Defendant’s

payroll at the time he was running the station. He had not been required to

pay the defendant which the dealers are required to pay. The station was

earlier on achieving the targets set for it by the Defendant and only failed to

do so when the adjacent road was under reconstruction and also because the

same the company revised the target. He added that he objected to Mr.

Murila against the eviction of the Plaintiff and felt it was not fair because the

road was closed and so no sales could be made as no vehicles could access

the service station. Indeed the Plaintiff was never penalised for failure to

meet the target as would have happed under the normal circumstances. The

items he took over from the Plaintiff were not recorded in the Defendant’s

document MFI.D9 and lastly that the items left at the service station which

belonged to the Plaintiff were items necessary for the running of a service

station.

Joseph Waimeri Gathui worked for the Plaintiff as Pump attendant

from 1986. He was the Plaintiff’s third witness. He was later promoted to

the position of a clerk and was doing accounting work as well as banking.

He was also dealing with suppliers. When Plaintiff acquired the service

station, this witness was there. He confirmed that the items claimed to have

been left there were then at the service station. They belonged to Muthondu

PW.1 and they were Wheel balancing machine, Trolley Jack, cash paying

machine, welding machine, cylinder of Oxygen, Tyre changer, wheel

aligner. In the office there were metal safe and balancing machine, three

brooms and water horse pipe. All the items belonged to PW.1. Things in

the garage were brought within six months of the Plaintiff taking over.

Defendant had properties such as building, fuel tanks and others. The debt

list Exh.19 was written by this witness and he says it is in his handwriting.

He prepared the list on 14. 2.1991. When eviction was taking place he

carried with him the Debtors book. Some of the Debtors were people who

had taken fuel and sum were people whose vehicles were repaired. He took

the list to PW.1 and he did not know if the debts were recovered or not. The

auctioneer who removed them took some items but never took the items

which were left behind by the Plaintiff which he has mentioned above.

After the eviction of the Plaintiff, this witness returned to the Petrol Station

and was employed by the Defendant as pump attendant in April the same

year. The same equipments were still there and when he left the service

station in December 1991, the same equipments were still there. He

produced the Debtors list he prepared as Exh.19. In cross-examination, he

was shown Defence document which was marked for identification as D4

and he agreed that though it looked like Exh.19, there were however some

differences and it was not a copy of MFI.D4 and he could not be sure under

what circumstances he prepared MFI.D4 but both Exh.19 and MFI.D4 were

prepared by him. He could however not remember the total amount that was

owed to the Plaintiff. He agreed that according to Exh.19,, the amount owed

to Plaintiff by Debtors was KSh.343,176/- whereas according to MFI.D4 the

amount owed to Plaintiff was KSh.451,883/-. He said he took the amount of

KSh.451,883/- from the entries in Exh.19 and it is the debt as on 14. 2.1991.

He became involved with the Plaintiff’s properties when he became a clerk

and that was six months after Plaintiff employed him. He however could not

remember when Plaintiff took the items to the Petrol Station but they were

there although he got involved with them when he became a clerk. When he

was working there soon after the Plaintiff’s removal PW.2 was paying the

workers but he cannot remember if all that time he was dealing with PW.2

only. He could not remember when the garage shed was built. Shown

Exh.19 (list of debtors) he admitted that these debtors were customers and

they could look for them if they delayed in payments.

In re-examination he said that he obtained information which he used

in preparing Exh.19 and MFI.D4 from Debtor’s book. He first entered that

information into Exh.19 but later transferred the information into MFI.D4

and ignored exh.19. When he was working at the Petrol Station before

working with Plaintiff, the items he called Plaintiff’s items were not there.

The same items were owned by PW.1 who also owned the Petrol Station

before he was evicted. He concluded his evidence by saying that he knew

the debtors in Exh.19 and the same debtors could be traced even by

telephone numbers but he had no records which could be used in tracing

them.

Charles Gichuru Mbuthia sells chemicals under the name Prime

Chemicals. He was PW.4 in the case. He used to buy Petrol from Plaintiff

in 1991 and 1992. They used to repair his vehicles. He took his vehicle

KUD 369 to the Plaintiff for repairs. That was towards the end of 1991. It

was not repaired for a long time and when he went to take it back he noticed

the engine was missing. He went for the vehicle in early 1992. He reported

the matter to the Petrol Station. He demanded another engine. They got

another engine for KSh.91,613/- from Sharmas. He bought the same engine

but Plaintiff paid i.e. refunded to him the amount by installments and he

gave a receipt for the total payment on 25. 5.92. The money was paid by

three or four installments. He produced the Invoice No.3901 as Exh. 11(a)

and Receipt as Exh. 11(b)

In cross-examination he said that he took the vehicle to Plaintiff

towards the end of 1991 and went to collect the vehicle in February 1992 as

he had been sick for a month. The vehicle was at the Plaintiff’s workshop at

Caltex Petrol Station in Westlands opposite Army Barracks and that was

where he took the vehicle. He was adamant that he collected the vehicle in

February 1992 but he had no receipt for the money he paid to Sharmas. He

said the amount of KSh.91,612/- included the cost of labour in fixing the

engine and this was not the value of the engine alone. He admitted that there

could be confusion on dates as he was sick. In re-examination he said he

could not remember when he took the vehicle from PW.1, but PW.1 was not

there when he took the vehicle there and PW.1 was not there when he went

to check the vehicle and he was not there when this witness took the vehicle

away. The amount of KSh.91,613/- included cost of labour as well.

The last Plaintiff’s witness was Patrick Gakuru Kanoga. He worked

at Avon Rubber Company (Kenya) Ltd as General Manager. In 1993

Plaintiff sought Proforma Invoices in respect of Garage equipment from

their firm. The equipment for which Proforma invoices were required by the

Plaintiff were Tyre changer, wheel balance, a jack and wheel aligner. He

issued the required proforma invoices as they deal with the same garage

equipment. He identified the same proforma invoices and the prices quoted

in the same proforma invoices which prices were prices prevailing between

1990 to 1995. The Plaintiff did not purchase the same equipment and the

same invoices were prepared by a former colleague of the witness who had

left the company but who was in the witnesses’ department. He produced

the proforma invoices as Exhibits 12, 13, 14, and 15.

In cross examination, he said Avon Rubber Products were not the only

suppliers of the equipment. They had other competitors. He agreed that

there are other models of the same equipment and prices vary with the

models. The prices of the same equipment might have been different in

1986 but the difference margin was small. According to the witness, VAT

may make a difference but that difference would be known as the VAT

would range from 15% to 18% of the price. He ended his evidence by

stating that prices are not the same as every competitor fixes his own price

depending on where the equipment is imported from - as some come from

China while some come from Europe.

The above was the evidence adduced in the entire case. I do not

pretend to have recorded everything that was given in evidence here, but I

have endeavored to record the above which I do feel reflect the salient

aspects of what the witnesses did state in evidence, both in chief and in

cross-examination as well as in re-examination including references to the

exhibits that were produced.

I have considered the pleadings, the evidence as well as the able

submissions that were made by the learned counsels.

I do not think, the first four issues in the agreed statement of issues

dated 12th January 1995 and filed on 23rd January 1995 are any longer

issues. No reference was made on the same and record shows that HCCC

No.200 of 1991 which gives rise to these issues was in fact withdrawn

before the commencement of the hearing of this suit. Civil Appeal No.116

of 1991 was also withdrawn and consequently the questions as to whether

the suit is bad in law and is an abuse of the court process and ought to be

struck out are no longer available.

I will in considering the entire case start with what is put down as

issue No.8 in the statement of issues i.e. whether the termination of the

agreement of 1st June 1994 and subsequent taking over of the service station

was lawful or justifiable. I do feel this issue is not properly written down as

there as no agreement of 1st June 1994. The agreement which the Plaintiff

alleges existed was one of 1st June 1987. The Defendant is not disputing that

allegation and so I will consider whether the termination of agreement of 1st

June 1987 and subsequent taking over of the service station was lawful and

justifiable. There is no dispute as I have observed above that the Plaintiff

was at first a dealer at the Defendant’s Service Station situate along Waiyaki

Way in Nairobi and particularly at Westlands opposite the former

Department of Defence Baracks and near ABC Complex – particularly on

L.R. No.990/14. A letter addressed to Mr. Muthondu PW.1 dated 6. 8.86

from the Defendant and which was at the end of it signed by both Muthondu

PW.1 and Mathews Nyangor for the Defendant offered the same PW.1

licence to occupy the service station from 6th August 1986 till 7th February

1987. It also stated that that period of six months license of occupation

could be extended for such further period as was to be agreed upon. That

license could be terminated at any time by the Defendant by giving the same

Mr. Muthondu seven days notice. In that letter of offer (which was

accepted), the Defendant clearly spelt out the sales targets which the same

Mr. Muthondu was to reach and at the end of it was states as follows:-

“Operations Agreement

Subject to your conducting the Service Station to

our satisfaction during the term of this license, you

will be offered an operation’s Agre ement upon

such terms as we shall consider fit and upon

execution thereof by you this license will

automatically determine.”

As I have indicated herein above, that license was given to Muthondu PW.1

and was duly accepted by the same PW.1. The same Muthondu is the

Director of the Plaintiff herein. He produced the same letter as Exh.1 and it

was not disputed that he was a dealer of the station during the licence. I am

conscious of the legal position that Muthondu PW.1 and Plaintiff Janevams

Ltd. are separate and different personalities but in this case, it does not

appear that the same difference was pronounced, neither is there any

allegation that Muthondu himself considered Janevams Ltd, the Plaintiff as

significantly different from him to the extent that his business was affected

by the introduction of the Plaintiff at the stage of entering into operation

agreement with the Defendant. I do find that the Defendant was at all times

aware that the same PW.1 he offered dealers licence was later the director of

the Plaintiff company and the Defendant felt comfortable with that situation.

Be that as it may on 10th July 1987, the Plaintiff and the Defendant

signed operator’s agreement drawn between the two and dated 1st June 1987.

Clause 3 of the same agreement states as follows:

“3. The licence shall commence on the 1 st day of

June 1987 and shall, subject as stated in

Clause 8, continue until terminated by either

party giving to the other one month’s written

notice to that effect expiring at any time.”

Clause 8 states as follows:

“8. The licence may be terminated by Caltex

forthwith on the happening of any of the

following events:

(a) If the operator shall fail to perform any of

the obligations on the part of the operator

herein contained.

(b) If the operator s hall be convicted of any

offence against the laws for the time being

in force regulating the sale, storage or use

of petroleum products.

(c) If the operator shall commit an act of

bankruptcy or, being a company, shall

enter into liquidation whether voluntary or

compulsory, or make any arrangement or

composition with the operators creditors

or suffer execution to be levied upon the

goods of the operator.”

Thus, according to the agreement that was entered into between the Plaintiff

and the Defendant, the agreement could only be terminated if the Plaintiff

failed to perform any obligation in the agreement, or if the operator was

convicted of any offence related to the sale, storage and use of the products

or if the Plaintiff committed an act of bankruptcy, otherwise the agreement

would continue and would only be terminated by one party giving the other

party one month’s written notice. My understanding of clauses 3 and 8 of

the agreement is that if the Plaintiff committed any of the acts mentioned in

Clause 8, then Defendant would terminate the agreement without notice. If

however, the plaintiff did not commit any of the acts specified in clause 8,

then the agreement could be terminated by either party giving one month’s

notice in writing. It seems to me that under that clause no reason needs to be

given. It is however clear to me that the Defendant had to elect under which

clause to proceed in case it wanted to terminate the agreement. The Plaintiff

however had no choice but to proceed under clause 3 in case it wanted to

terminate the agreement.

On 5th July 1990, the Defendant, in a letter dated the same date

revised the targets and warned the Plaintiff that if the same revised targets

were not met, then the Plaintiffs’ dealership would be cancelled. A copy of

that letter Exh.3 indicates that the Plaintiff was supposed to sign a copy of

the same letter to confirm that he read it and understood the contents and to

undertake in that copy to voluntarily surrender the service station back to

Defendant if the targets were not met but there is no evidence that it did so

although there is evidence that the Plaintiff did write to explain his position

and that letter to the Defendant was dated 24th July 1990. Reacting to that

letter the Defendant wrote Exh.4, a letter dated 20th August 1990, in which

the Defendant gave Plaintiff three months from 1st August 1990 to improve

the performance. Apparently the Defendant felt there was no improvement

and so vide a letter dated 21st December 1990 produced as Exh.5 the

Defendant gave the Plaintiff one month’s Notice terminating the agreement.

The letter states as follows:

“21 December 1990

Janevams S/Station

P.O. Box 53504

Nairobi.

Dear Sir,

TERMINATION OF DEALERSHIP

We refer to our letters dated 5 th July 1990 and 20

August 1990 regarding poor performance and we

regret that despite the various verbal warnings by

our Marketing Staff your Service Station

performance still remains below the expected

level.

You have constantly run out of products

particularly on Monday due to low stocks carried

during weekends. You recall that on Monday 10 th

December 1990 you were completely out of stock

of Premium Petrol while regular Gasoline was

only being served through one pump as the other

one was dry. Since you acquired dealership of

Janevams S/Station in 1986 you have never

operated it to our satisfaction and we are now

totally convinced that you are not the right dealer

for the Petrol Station. We have given you ample

time to improve on your performance but no

improvement is being noted. As a result we are

giving you one month notice to vacate the service

Station. Our company representative will come to

your service station on 21 January 1991 and you

will be required to hand over all company

equipment and premises. The tanks wil l be dipped

and you will be given a credit note for any stock

balances taken over. Full cartons of company

branded tubes will also be taken over if you so

wish. Any damage to company equipment or loss

caused by you over negligence will be charged to

your A/C at replacement cost.

Kindly sign and return one copy of this letter as an

acceptance of the above notice.

Yours very truly,

Caltex Oil (K) Ltd.

WS TIFFANI – MANAGER DIRECTOR”

By Signed

M. BARAKA – MARKETING MANAGER.”

This was the letter of termination of the agreement between the Plaintiff and

the Defendant. Was it written pursuant to Clause 3 of the agreement? That

clause does not require reasons to be given for termination of the agreement.

In any case, the Defendant has not specifically stated that that notice was

issued pursuant to that clause. It gives reasons that the Plaintiff has not

operated the service station to the satisfaction of the Defendant. It could

only have been under clause 8 of the agreement. That clause however does

not provide for one month’s notice. However, in the confused state of

affairs as was created here by the conduct of the Defendant in failing to state

under what clause of the agreement it was proceeding and as the notice

clearly gives reasons for termination of the agreement, I can only see it

proceeding under clause 8 and particularly under clause 8(a) which allows

the Defendant to terminate the agreement if the operator fails to perform any

of the obligations on the part of the Plaintiff as contained in the agreement.

When one reads the notice against the backdrop of the exchanges in the

letters of 5th July 1990, Exh.3, letter dated 20th August 1990, letter from

Plaintiff dated 24th July 1990 in reply to the letter of 5th July 1990, then one

sees that the main complaint that necessitated the termination was the

alleged Plaintiff’s inability to meet the targets set out by the Defendant.

That in effect meant that the termination letter was issued on the basis that

the Plaintiff did not comply with clause 5(b) of the agreement which states

as follows:

“(b) Subject as hereinafter stated, the operator

shall purchase from Caltex in each calendar

month the minimum quantities of petroleum

products specified in column 2of the second

schedule provided always that Caltex may at

its sole discretion –

(i) alter such minimum quantities from

time to time by giving to the operator

seven days notice in writing of any

such alterations;

(ii) in any one or more calendar month or

months waive the obligation of the

operator to pur chase the said

minimum quantities but any such

waiver shall not affect the obligation

of the operator in respect of any

calendar month subsequent to the

waiver.”

It is clear to me that the Defendant’s notice proceeded under an allegation

that the Plaintiff had not satisfied this clause in his operation of the subject

service station and therefore fell under clause 8 (a) and hence the notice.

Was the notice valid? i.e. were there good reasons for termination of

the agreement under that clause. Put another way, Is there evidence that the

Plaintiff breached clause 5(b) of the agreement? PW.1 in his evidence

maintains that his company, the Plaintiff had never failed to meet the targets

set for the Plaintiff except when the adjacent road and which is in effect the

road of access to the station was under construction and it became difficult

for vehicles to access the station. He also says, as concerns the allegation

that the station tanks were dry particularly on Mondays, that he used to order

for fuel in good time but the Defendant delayed in the delivery of petrol. He

has said in his evidence and in a letter Exh.10 and another one of 24th July

1990 that it was the Defendant to blame for the Plaintiff’s predicament as far

as shortage of fuel was concerned and has given instances when the same

omission took place. These allegations have not been refuted as the

Defendant never called any witnesses in its Defence. The allegations remain

as they were made even in July 1990 and I have not been shown any letter

refuting the same by the Defendant.

Further, the Defendant in its letter terminating the agreement says that

since the plaintiff acquired the dealership of Janevams S/Station in 1986 the

Plaintiff had never operated it to the Defendant’s satisfaction. Can that be

true? I doubt it. From what I have stated above and from the records

available as exhibits, the dealership was offered to PWI, as notice says in

1986, specifically it was on 6th August 1986. In that letter offering

dealership, there is a claim at the end which is headed ‘operations

agreement, it states as follows:-

“Operations Agreement

Subject to you conducting the service station to our

satisfaction during the term of this licence, you

will be offered an Operations Agreement upon

such terms a s we shall consider fit and upon

execution thereof by you this licence will

automatically determine.”

Thus the plaintiff could only be offered Operations agent if it

conducted the service station to the satisfaction of the Defendant during the

term of the licence. The licence was given on 6th August 1986 and was to

last for only six months unless extended. It was extended from time to time

till 1st June 1987 and on that day operations agreement was offered to the

Plaintiff. The operations agreement was to be offered to the Plaintiff

(according to the dealers licence I have quoted above) only if the operator(or

dealer) conducted the service station to the Defendant’s satisfaction. It goes

without saying that the act of the Defendant offering the Plaintiff operations

licence on 1. 6.87 was in itself a clear evidence that the condition in the

dealers licence had been satisfied, i.e. that the Plaintiff had conducted the

service station to the Defendant’s satisfaction for otherwise the Defendant

had no business offering the operators licence to the plaintiff. I therefore

find that the Defendant cannot be serious in its termination letter when it

says that since the Plaintiff acquired dealership for the service station in

1986 the plaintiff had never operated it to the Defendant’s satisfaction. That

cannot be true. In any event, if that were true then one is bound to wonder

where the Defendant was all these over four clear years since the Plaintiff

took over the station and why it never took action earlier on. I do find that I

am not satisfied that the Defendant’s Notice of termination, was given upon

valid reasons. I come to that conclusion because no evidence has been

adduced by the Defendant to support the alleged reasons for termination of

the agreement and some of the reasons appear to me as I have stated above

clearly untenable. Thus my answer to issue No.8 of the statements of issue

is that the termination of the agreement of 1st June 1987 and subsequent

taking over of the service station was not lawful and or justifiable.

I will now consider what the Defendant, having been found to be in

breach of the agreement, is liable to pay to the Plaintiff (if any). The

Plaintiff in its plaint is seeking judgment against the Defendant for a sum of

KSh.1,978,224/80 which is total amount of money in respect of the value of

equipment (KSh.1,154,292. 00), loss of money to Debtors which it said it

could not successfully recover as its documents for proving the same debts

were lost during the taking over of the station, (KShs.245,243. 00),

accessories (KSh.18,160/-_ and interest earned from the deposit of

KSh.491,450/- which interest the plaintiff says amounts to KSh.560,530. 80.

All these prayers are lumped together as prayer No.1 in the prayers for

judgment and all amount to KSh.1,978,225/80. It is also seeking damages

for breach of contract, costs and such other or further relief as the court may

deem fit.

The Defendant states as regards these claims that it did refund to the

Plaintiff the amount of KSh.491,449/55 which was credit balance of the

Plaintiff’s trading account with Defendant. As regards the claim for

equipment and accessories, it says that it is a stranger to the same and puts

the Plaintiff to strict proof of the same but it denies having taken over the

Plaintiff’s tools, and trade debts, machinery and equipment as alleged. All

these matters are covered by issues Numbers 5, 6, 7, 9, 10, 11, 12, and 13 of

the statement of issues filed by the parties. I do feel however that I need to

consider each special claim separately and I will consider them before I

consider the prayer for damages for breach of contract which though not

specifically stated, I do understand to be general damages for breach of

contract.

First, I will consider the claim for interest on KSh.491,450/-. At

paragraph 8 of the plaint the Plaintiff states as follows:

“At the time the Plaintiff was thrown out of the

premises it had a deposit account Number 100335

with the Defendant which as at 31 st March 1994

stood at KSh.491,450/ - and an interest of

KSh.560,530/80 calculated from 1 st February 1991

and last applied in June 1994 at 35% per annum.”

The Defendant’s response to this allegation is at paragraph 4 of the statement

of Defence and is as follows:

“Save that upon lawful terminat ion of the said

licence by the Defendant the Defendant refunded

the Plaintiff the sum of KSh.491,449/55 being the

credit balance of the Plaintiff’s trading account

with the Defendant the allegations contained in

paragraphs 5 and 8 of the plaint are denied in

toto.”

Thus it is not in dispute, that the Plaintiff did pay to the Defendant a sum of

KSh.491,450/- as deposit which was refundable. I have not seen this aspect

in the agreement itself, but as both parties agree that it was payable and was

actually paid, I do accept that it was payable. The Plaintiff says it was to be

refunded immediately on the determination of the agreement and claims that

as that was not done, it was entitled to interest on the same. The Plaintiff

was evicted from the service station on 15th February 1991. The deposit was

not refunded on that day neither is there any evidence that it was offered to

the plaintiff. PW.1 says the same deposit was paid to the Plaintiff in June

1994, some three years and four months later. In cross-examination, it

would appear that the Defendant is claiming that the payment was delayed

because there were court cases which were initiated by the Plaintiff. It is

however not suggested that this money was ever offered to the Plaintiff and

was rejected by the Plaintiff. The Defendant has not availed any evidence or

any legal proposition that necessitated this delay in the payment being made.

In my mind, as the Defendant has given what it called one month’s notice to

the Plaintiff of its intention to take over the station, it should have been

prepared to refund this deposit on the very day of taking over the station as it

knew all along for over a month that it was going to take over the station.

This was money for business. Its delay in being released to the Plaintiff

meant loss to the Plaintiff and the only way to compensate that loss is to

award interest on it for the period it delayed with the Defendant so that the

Plaintiff is reinstated to the position it would have been had the money been

paid in time and used for business. The Defendant has not challenged the

rate that the Plaintiff alleges was applicable at the relevant time and has in

fact not challenged the quantum claimed of KSh.560,530/80. It will be

awarded as claimed.

The next claim I do now consider is the claim for equipment and

accessories that were allegedly taken over by the Defendant. These are all

claimed at paragraph 10 and their value is also given in the same paragraph.

They are wheel balancing machine, Tyre changer, trolley jack, wheel

aligner, welding machine, Lawn mower, car spraying machine, garage

shade, oxygen acetylene cylinder, B.M.W two doors, fixed metal safe, car

repair tools, complete assembly of rear left light, two folks plus three

brooms and horse pipe. The amounts claimed for each is also included in

the plaint at the same paragraph No.10. The first aspect, I need to consider

is whether it has been proved that these equipment and accessories were

indeed at the service station and were left there when the Plaintiff was

evicted. The next matter I will consider is whether their alleged valued has

been strictly proved as is required in law for their loss is claimed as special

damages and must be strictly proved according to the law. PW.1 says

Plaintiff had certain items which he was not allowed by the Defendant to

take with him at the time he was evicted. He said in part of his evidence as

follows:

“Auctioneers took all my personal belongings’

chairs, tables, etc but they left the most important

aspects and those were motor vehicle repair tools

and machines which are the subject of my case. I

was not allowed to take them. I am not asking for

items such as accessories in the second schedule of

the operations agreement. The machines I claim

are:

(a) Wheel balancing m achine;

(b) Welding machines as per list.

I have given the value of the same in the plaint.

The value of the machines, I was refused to take

are as in the plaint. I got the value from the

dealers and the values are as at the time I got

quotations and invoic es:

(a) Wheel balancing machine

(b) Tyre changer machine

(c) Trolley jack

(d) Wheel aligner

(e) Welding machine

(f) Car spraying machine.”

He then proceeded to give evidence about a vehicle, he was to repair, at an

agreed amount of KSh.38,000/- and another vehicle which was for engine

overhaul for which he had to pay KSh.96,000/- as the overhaul was not done

and the owner had to buy a new engine. The Defendant has not adduced any

evidence to rebut the Plaintiff’s evidence that the same equipment and

accessories were at the service station. The Plaintiff says through PW.1 that

he was not allowed to take them with him i.e. he was refused access to them

and that again has not been rebutted. I have no alternative but to accept

evidence of PW.1 that the same equipment, machines and accessories were at

the service station prior to the Plaintiff’s eviction. In any case PW.2 who

took over the station from the Plaintiff and who was prior to taking over the

station working with Defendant company as supervisor of the same station

among others, PW.3 who was earlier on working at the station before

Plaintiff took it and who continued working there for the Plaintiff, both

support PW.1 that the same machines, equipment and accessories were at the

station; that they were in possession of the Plaintiff while at the station and

that the Plaintiff did not take them with it when it was evicted from the

station. Plaintiff is the one who took them to the station. I do find on the

evidence before me which I accept that the equipment and machines listed at

paragraph 6 of the plaint namely wheel balancing machine, Tyre changer, a

trolley jack, wheel aligner, welding machine, lawn mower, car spraying

machine, garage shade, oxygen acetylene cylinder, brooms, horse pipe, and

forks were at the service station, under the control of the Plaintiff who took

them there. I also find that the Defendant did not allow the Plaintiff

opportunity to take away the same equipment. I did not have sufficient

evidence on the existence of car repair tools the which tools the Plaintiff

claims to have left there. I do not think it is enough to just state that car

repair tools were left behind without specifying which tools were left behind.

Each car repair tool has a name and generalities cannot suffice. Further I was

not told in evidence to my satisfaction as to where the metal safe was in

particular and it was never described to satisfy me that such a safe existed

when the Plaintiff left the subject premises. I therefore do find that no

satisfactory proof has been adduced to satisfy me as to their existence. I do

reject them. Lastly no evidence was adduced on the existence of what is

stated at on paragraph 10 on accessories as complete assembly of rear left

light. I do reject that claim also.

As I have stated above, the next matter I need to consider is whether

the value of the equipment and accessories I have found were at the premises,

and belonged to the Plaintiff and which it was not allowed to take away have

been proved as required by law i.e. has been strictly proved. The Plaintiff did

not produce receipts for the equipment in question, it has alleged certain

values to each of them. It has not stated specifically when each of the same

equipment and accessories were bought. It has not availed the detailed

account of how much he paid for the materials and construction of the garage

shade. PW.1 in his evidence identified proforma invoices. These were

proforma invoices in respect of wheel balance valued at 468,460/-. The

invoice was dated 22nd December 1993, invoices for automatic Tyre changer

which showed an amount of KSh.225,000. It was also dated the same date

22nd December 1993. Invoice for KSh.175,000/- in respect of the value of

Trolley jack and Invoice for wheel aligner valued at KSh.75,000/-. The last

two invoices were both dated 22nd December 1993 also. These four

equipments were the ones in respect of which the Plaintiff made some effort

to prove their values. But even the same proof was only in respect of new

ones as on 22nd December 1993 and thus did not reflect their true values as on

the date the Plaintiff was evicted from the service station. In any case as no

evidence was availed as to when they were purchased and thus as to how

long they had been at the service station, it cannot be said that these values in

the proforma invoices did reflect the true values. Further no attempt was

made to prove how far they had depreciated since they were purchased. In

cross-examination, PW.5 agreed that there were different models of the same

equipment and that value added tax element could also have made some

difference in the value of the same equipment and that there were other

suppliers who were competing with Avon Rubber company (Kenya) Ltd and

could have different values for the same equipment. With all these in mind,

and doing the best I can, I will reduce the value given in the invoices, i.e. in

Exh. 12, 13, 14, and 15 by 25% in an attempt to arrive at a value which

would reflect all the above. Thus I do allow an amount of KSh.351,345/- for

Wheel Balance, I allow KSh.168,750/- as the value of tyre changer. For

Trolley jack, I accept the amount of KSh.131,250/- and finally on that, I do

allow KSh.562,250/- for wheel aligner. These were the only equipment

whose values were to an extent availed in accordance with the legal

requirements. PW.1 indicated that he had received some other proforma

invoices from Car and General in respect of the values of spraying machine,

welding machine, and proforma invoice from East African Oxygen. These

proforma invoices were marked for identification as MFI.16, 17 and 18 but

the records do not show that they were produced as exhibits in the case. In

fact MFI.18 which was meant to be proforma invoice for Oxygen Acetylene

Cylinder was an invoice for compact set and it was not explained as to

whether that was a cylinder. Be that as it may proforma invoices for the

other equipment in this category were not produced as exhibits and I cannot

assess any value for the same equipment. I had earlier stated the law that

these were special damages and needed to be proved strictly. This had not

been done in respect of welding machine, lawn mower, car spraying machine,

and oxygen acetylene cylinder. No attempt was made to prove the values of

two forks, three brooms and horse pipe. There was no proof of the value of

B.M.W. two doors alleged to have been left in the service station as well. In

fact the witness PW.1 talked of V.W. vehicle doors and not B.M.W. As to

Garage shade all that PW.1 has said is as follows:

“I had constr ucted a garage, I would have pulled

that one down and would have taken away the

materials and CI sheets then. The estimate of the

garage is KSh.35,000/ - i.e. Garage shade.”

That evidence cannot be anywhere near proving the value of the alleged

Garage Shade. I cannot rely on it to say the shade was valued at

KSh.35,000/- and award the same amount as indeed there was nothing like

valuation report produced or receipt for materials and for labour charged to

prove the alleged estimated value of the garage.

What I have stated above leave only the claims for loss alleged to

have been incurred by the Plaintiff in respect of its inability to recover what

Plaintiff states at paragraph 9 of the plaint as “Volvo repairs settlement made

to the Defendant company on the Plaintiff’s behalf” plus claim for what is

stated as “Garage Work in progress as at February 1991, stores of car

accessories and East African Oxygen Head Deposit. The total claim under

that heading is KSh.245,243/-. The claim in respect of garage work in

progress was stated to be KSh.38,000/-. The only evidence in support of

that claim is by PW.1 who says:

“There was a vehicle I was to repair and the

agreed amount was KSh.38,000/ -. I had bought all

the necessary spare parts for that vehicle. As I

was ejected out of the place, I could not repair the

vehicle and I was not able to get that money.”

He never stated what vehicle it was. Surely vehicles in Kenya are normally

registered and they have registration numbers. He did not state what spare

parts he had bought for the same vehicle. He did not produce any receipts

for the same alleged spare parts nor did he state whose vehicle that was and

whether any agreement existed for the same repair at KSh.38,000/-. He did

not state where the spare parts went to and what was the labour charge and

the cost of materials. If he had bought spare parts and remained with the

same then he could sell them to recover the costs of materials for the repair

of the same vehicle and thus would have lost only in respect of labour which

had not been spent as yet and is in any event unknown. It is not possible to

allow this claim. I reject it. There is also a claim for stores of car

accessories sold by Defendant company for which an amount of KSh.8,000/-

is claimed. No evidence was given to support this claim and also no

evidence was adduced to support claim for East African Oxygen Head

Deposit and how the same claim came about.

I will now consider the claim for KSh.91,613/- and the claim for

uncollected debts. On claim for KSh.91,613/- PW.1 says that claim is based

on the allegation that there was a customer who had taken his vehicle to the

service station for the overhaul of engine. Plaintiff could not complete the

work (presumably because the Plaintiff was evicted from the station before

he could complete the work). The owner took away his vehicle and had it

repaired on their own and then claimed the cost of the same repair. Plaintiff

paid owner KSh.96,000/- and got a receipt for the same from the owner. It

thus claims that amount as, according to plaintiff, that was a loss arising

directly from the eviction of the Plaintiff by the Defendant. There are two

matters that make it difficult to understand and appreciate this claim. These

are first whether this claim arose directly from eviction of the Plaintiff by the

Defendant and secondly (even if I feel it was not remote) whether this claim

is supported and proved in the light of the evidence adduced by PW.4.

Overhauling motor vehicle engine is a major repair of a vehicle which

should normally be done in a fully fledged garage. I do accept that there are

minor repairs that can be done at a Petrol Station. I have looked at the

operations agreement and I cannot see where such heavy repairs were

allowed to be carried out at the subject garage. Further, it is not clear that

this was a loss that could be anticipated by the Defendant. However, as I

have stated above, the Defendant never adduced any evidence challenging

the Plaintiff’s evidence and so I will not reject this claim on the two

arguments I have raised hereinabove. On the evidence adduced before me

there were several disturbing aspects. First PW.1, the Director of the

Plaintiff did not state when the relevant motor vehicle was taken to the

service station and how long the vehicle was to be there before the owner

could collect it already repaired. He does not state when the engine got lost.

All he said was that there was another customer who wanted to overhaul

engine of his vehicle. That customer was Prime Chemicals. He could not

complete work and the owner pulled his vehicle away and repaired it on

their own and demanded the expenses incurred of KSh.96,000/- which he

paid vide Exh. 11(a) and 11(b) (which receipts show KSh.91,613/- as the

amount that was paid). The undisputed evidence however is that the

Plaintiff was evicted from the subject service station on 15th February 1991.

PW.1 says so in evidence and that is not challenged at all. In the plaint, the

Plaintiff is rather vague and talks of having been removed in the month of

February 1991 but that vagueness is made clear when evidence clearly said

the eviction was on 15th February 1991. The evidence of PW.4 Charles

Gichuru Mbuthia is that he used to buy petrol from Plaintiff in 1991 and

1992 and the Plaintiff used to repair their vehicles. At the end of 1991 he

took his vehicle to the station and it was not repaired for a long time. He

went and took it back but found the engine was not there. It had not been

repaired for about three months and he went for the vehicle in early 1992.

When he found the engine missing Mr. Muthondu PW.1 was there and

Plaintiff’s workers were there. He repeated that evidence in cross

examination and added that he took away the vehicle in February 1992 and

said by 8. 3.92 when the invoice was made out he had identified the engine.

In re-examination he said he could not remember the actual dates and that

when he took the vehicle away Muthondu PW.1 was not there. Three

observations come to mind. First is that PW.4 is not a reliable witness. He

clearly changed his evidence in cross-examination and abandoned his earlier

stand on dates some of which were specific and also changed his evidence as

to whether when he took away the vehicle Muthondu was there or not.

Second is that if his evidence in chief is to be believed then whatever date he

picked his vehicle plaintiff was still operating the petrol station and cannot

say that the vehicle was not repaired because of eviction. Third is that he

took away his vehicle because the Plaintiff failed to repair it after three

months and that was clearly not the mistake of the Defendant. The other

aspect one sees in the matter is that there is no evidence as to who took the

engine which necessitated the replacement of the same with a new engine

and made it impossible any longer to overhaul the old engine. If PW.4’s

evidence is to go by then he took the car for repair (note he has not said for

overhaul of engine specifically) and it was not repaired within the time

agreed. When he went to pick it, engine was not there and the Plaintiff’s

workers were there (even if one accepts his later version in cross

examination that Muthondu was not there). One question that needed to be

answered by the Plaintiff (i.e. assuming PW.4 forgot the correct dates and

he went to collect the vehicle after eviction), did the Plaintiff have that

vehicle at the station with its engine intact (i.e. the engine that was to be

overhauled)? There is no evidence on that. The next question is – If PW.4

found Plaintiff’s workers there when he went to collect the vehicle, then

what did they tell him about the lost engine. In any case, if the engine was

still there for overhauling then why hold Plaintiff liable for a new engine. I

am not satisfied that the Defendant was in any way involved in the loss (if

any) of the alleged engine as the evidence before me does not point to the

Defendant even within the required standard, of probability. I will not allow

that amount of KSh.91,613 as there is no proper basis for the claim.

The last claim in that category is the claim for uncollected debts

which amounts to KSh.104,330/-. The evidence adduced in court on this

was as follows:

I used to give credit to customers for petrol, diesel

and upto the time of eviction the amount due was

about KSh.450,000/ -, most of the customers paid

me but four took advantage and did not pay. The

amount I could not recover is KSh.104,000/ - from

four customers. Given another one month and I

would have recovered that money from the

debtors.”

He then referred to MFI.19. In cross-examination, he said that the four

customers who had not paid him were Plaintiff’s customers and not those of

Caltex. He said further though some of those four such as Nation

Newspapers could not pay Plaintiff KSh.67,000/- because the Plaintiff had

no copies of L.P.O. as the same copies could not be traced. He felt the

auctioneers had taken some documents and the copies could also have been

taken by the auctioneers, but he did not make any complaint about that to the

Defendant. There is no proper evidence as to why the Plaintiff could not sue

the four debtors to recover its money. PW.1 said a letter was written to the

four alleged debtors but no copies of such letters were exhibited. In any case

the claim that the auctioneers took away the necessary documents that would

have enabled Plaintiff sue the four debtors for the recovery of the same

amount owed cannot stand as against the Defendant because although

auctioneers were agents of the Defendant, there is nothing to show they had

taken the same documents. Debtors list prepared on 14. 2.1991 – a date

before the eviction was still intact, and in his evidence PW.1 said:

“Auctioneers took all my personal belonging,

chairs, tables, etc but they left the most im portant

aspects as those were motor vehicles, repair tools

and machines which are the subject of my case."

In cross examination, he was much more specific as to what the auctioneers

took away and their fate. He said:

“I now see this document MFI.D2. Ac cording to

this document, auctioneers took 2 tools Boxes, one

desk, one executive chair, two metal chairs, two

arm chairs, one Frig., Two wheel spares, 2

wooden chairs, assorted engine parts, and drive

shaft, one jerrican, one cabinet (wooden), one

secreta rial desk, six car doors, seven cans of

distilled water, six crates of soda, nine crates of

empty bottles, one typewriter IBM. Those were the

items taken by auctioneers. I later collected all of

them from the auctioneer.”

The above makes it clear that even by the evidence of PW.1 alone, there is

nothing to show that documents (let alone documents such as LPOs) were

taken by auctioneers. The above also makes it clear that whatever the

auctioneers took (even if he were to be shown to have taken such

documents), were all recovered by the Plaintiff. Where is the basis of this

claim? Why could not the |Plaintiff sue his debtors even after he left the

station for they remained its debtors whether or not it was still operating the

station? The answer to that question is in my humble opinion – no reason

whatsoever or at least no acceptable reason has been adduced. That claim

cannot stand.

The sum total of all the above as concerns prayer 1 of the plaint, is

that I do award KSh.560,530/- claimed as interest on KSh.491,450/- as at

31st March 1994. I award a total of KSh.706,595 in respect of value of

wheel balance, tyre changer, trolley jack and wheel aligner. Thus total

allowed under prayer 1 of the plaint shall be KSh.1,267,125/-. The rest of

the claims under that prayer are rejected.

I now proceed to consider the claim for damages for breach of

contract. The agreement provided as I have stated above that it could,

without any reason be terminated by either party giving to the other one

month’s notice (Clause 3 of the agreement says so.) PW.1 said in evidence

in chief that the Plaintiff was making a profit of KSh.30,000/- per month on

the garage side and KSh.30,000/- per month on the petrol station side. Thus

in a month he alleged that he was making a profit of KSh.60,000/- per

month. He did not produce any evidence on the same. He agreed in crossexamination

that he did not have tax returns showing that he was paying tax

on that profit (which is KSh.720,000/- per year) and he agreed that there was

no audit report to indicate that Plaintiff was making that profit. Last audit

report for the Plaintiff’s business was in 1988 but that was also not availed

to the court. It is thus difficult to arrive at a proper figure in respect of

general damages. I do agree that the purpose of the award of general

damages is to enable one to be as much as possible in the same position as

he would have been had the breach not taken place. Here, without such vital

evidence one is at a loss as to what was his position before the breach.

However, the Plaintiff must have suffered some loss resulting from the

eviction which did not even proceed after a court order. I was not told

whether it did relocate elsewhere its garage business, but whatever happened

there must have been some elements of suffering by the Plaintiff as a result

of what happened. Doing the best I can in the circumstances, I will award

KSh.50,000/- as general damages.

The Plaintiff in its submissions by its learned counsel has stated that

the Plaintiff has sued the Defendant for and I quote:

(a) Release of the equipment, accessories, and the

machinery detailed at paragraph 6 of the plaint.

(b) Release of funds held by the Defendant in deposit

together with interest thereon at commercial rates

and damages for unla wful detention and loss of

use thereof.

(c) Damages for conversion and unlawful detention of

the equipment, accessories and machinery together

with interest.

(d) Compensation for being prevented from collecting

debts.

(e) Damages for loss of use of the said equipme nt.

(f) Exemplary damages.

(g) Costs and interest thereon.”

I have reproduced the above because, the claim before me as per plaint

(which claim I have also reproduced hereinabove) is in every way different

from what the Plaintiff now claims in its submissions unless the plaint the

Plaintiff is referring to is a different one from what I have in the file. I have

not been shown that other plaint, neither have I been referred to an amended

plaint. In the plaint before me there are certainly no prayers for release of

accessories, nor for damages for conversion and unlawful detention of

equipment, accessories and machinery together with interest; no prayer for

damages for loss of use, and finally no prayer for exemplary damages. In

law a party must stick by its pleadings and prayers in its plaint. It cannot on

the convenience of circumstances seek to have court’s judgment for matters

it did not plead and prayed for. I am aware that there are situations where

courts can make awards on matters that have been made issues during the

hearing, but those are matters that both parties were aware of and canvassed

during the hearing and during the submissions. In this case the Plaintiff in

its plaint clearly opted for the value of the equipment taken and did not in its

pleadings seek their return nor damages for conversion and unlawful

detention. It had to stick by those pleading and either succeed or fail but not

change midstream to seek another judgment without amending the plaint and

pleading the same. In fact Plaintiff is clear in its Reply to Defence where it

talks of value of the equipment as alternative claim. I have seen and perused

the authorities that were submitted. Most of them were on the matters that

were not pleaded and they were not of much help to me.

Finally, although during cross examination of witnesses, the

Defendant’s counsel did show to the various Plaintiff’s witnesses various

documents which were then marked for identification, these documents were

eventually not produced as exhibits as defence never called witnesses in the

case. I have not referred to the same as evidence as indeed they were not

exhibits and were not eventually of any value to the court. This judgment is

therefore not in any way tainted by the same documents.

In conclusion, judgment is entered for Plaintiff against Defendant in the sum

of KSh.1,267,125/- being value of the equipment, plus interest on

KSh.491,450/- and also for KSh.50,000/- being general damages for breach

of contract. Total amount awarded in KSh.1,317,125/-. Interest on both

awards shall be at court rates from the date the suit was filed. The Plaintiff

will have costs of the suit. Judgement accordingly.

Dated and Delivered at Mombasa this 4th Day of March, 2003.

J.W. ONYANGO OTIENO

JUDGE