[2022] KEET 840 (KLR)

Mutiso v Kenya Power and Light Company Limited (Appeal E006 of 2022) [2022] KEET 840 (KLR) (Civ) (28 November 2022) (Ruling)

Neutral citation: [2022] KEET 840 (KLR)

Republic of Kenya

In the Energy & Petroleum Tribunal

Civil

Appeal E006 of 2022

D.K Mwirigi, Vice Chair, D Jemator, B.H Wasioya & F.S Ibrahim, Members

November 28, 2022

Between

: Stephen Mutuku Mutiso

Appellant

and

Kenya Power and Light Company Limited

Respondent

Ruling

1. This ruling is in respect of an appeal from the decision of the Energy and Petroleum Regulatory Authority (EPRA) made on 15th January 2020 on the grounds that the Director General of EPRA erred in law and facts by not:a.Awarding the Appellant damages, costs and interest for loss incurred as a result of delayed connection of power supply.b.Recognizing the agreement between the Appellant and the Kenya Power & Lighting Company (hereinafter referred to as the Respondent or KPLC) which resulted to the Appellant paying KShs. 34,980/= for (connection to a) supply of electricity.c.Compelling the Respondent pay the Appellant a refund of KShs. 34,980/= used for payment for (connection to a) supply of electricity.

Appellant’s Memorandum of Appeal 2. Mr. Stephen Mutuku Mutiso, the Appellant, is a resident of Machakos County and is an Electrical Technologist practicing locally and abroad (Australia). He filed the appeal dated 18th February 2020, in person. With leave of the Tribunal, he filed an amended appeal dated 5th July 2022 through the firm of Cherop & Marete Advocates.

3. The Appellant avers that on 4th September 2012 he applied to the Respondent for power supply to a house on LR No. Mutituni/Ithingu/264 in Machakos County. The Respondent issued him with Reference No. E21432012090492, and thereafter a quotation of KShs. 34,980/=.

4. The Appellant’s contractor, one Mr. Stephen Mbithi Mwangangi, paid the quotation of KShs. 34,980/= to the Respondent on 20th September 2013. The contractor also signed an electricity supply contract on behalf of the Appellant, which, together with a wiring certificate issued by the electrical contractor, he submitted to the Respondent.

5. In his witness statement, Mr. Mwangangi avers that KPLC failed to supply the house with electricity as expected. He further avers that he made more than Fourty (40) follow-ups on the matter with the Respondent, who neglected to connect electricity to the house, claiming that he was not their customer but a conman and that he should not go back to their offices on behalf of the Appellant.

6. Mr. Mwangangi goes on to state that he used to get many potential tenants willing to rent the house, only to decline after finding out that the house did not have electricity.

7. The Appellant avers that after his contractor gave up on the issue of getting the Respondent to provide electricity supply, he authorized his mother, Mrs. Veronica Mbithe Mutiso, to sell the house on his behalf, to forestall the losses he was incurring.

8. The Appellant further avers that the house was sold at KShs. 2. 5 Million, being below cost. The buyer was able to get the house supplied with electricity by the Respondent and she got a tenant immediately thereafter.

9. After returning back to Kenya, the Appellant made more than Thirty (30) attempts to get a refund from the Respondent of the money he had paid for the connection that was never made until the house was sold.

10. The Appellant states that offices of the Respondent approached for the refund include those of Customer Service Manager, County Sales Manager, in charge of Design and Construction, Construction Supervisor and Finance Officer (Nairobi) which yielded nothing.

11. Vide letter to the Respondent received by KPLC Manager Legal Services on 8th August 2019, the Appellant demanded:a.That no works be done on the subject site utilizing the funds paid for the connection that was never made.b.Immediate payment of KShs. 129,013 being the principal amount (KShs. 34,980/=) together with interest, expenses of following up the supply and time wasted.The Appellant went on to state that in the event of failure to comply, legal proceedings would be instituted against the Respondent.

12. The Appellant goes on to aver that he wrote a demand letter to the Respondent’s Chief Executive Officer, after which investigators were sent to unravel the matter, which also yielded nothing, even after the Appellant informed the Respondent that he was going to refer the matter to EPRA.

13. The Appellant referred the matter to EPRA on 18th October 2019. Vide letter under the hand of its Director General dated 15th January 2020,EPRA informed the Appellant that it “cannot compel the Respondent to compensate for damages/interest for loss of business and interest as a result of delayed connection of power supply. The Authority shall however address matters touching on its mandate as provided for in the Energy Act 2019. ”

14. The Appellant’s prayers are that:a.His Appeal be allowed and the decision of the Director General of EPRA be quashed and substituted by Orders of this Tribunal.b.This Tribunal do adjudicate and determine the issue of damages, costs and interest and arrive at a just judgment in light of the evidence on record.

c.The costs of this Appeal and proceedings be provided for.

Respondent's Reply to the Dispute 15. In its Reply to the Dispute, the Respondent denies each and every allegation contained in the statement of claim. KPLC goes on to aver that the Appellant’s claim is res sub-judice, incompetent, incongruous, misconceived, an abuse of the court process and inept in both legal, substance and form and that at an opportune moment shall crave for leave of the Tribunal to have the same struck out.

16. In particular, the Respondent further avers, inter alia, that:a.The dispute between the Appellant and the Respondent is still pending at the Energy and Petroleum Regulatory Authority and has not been finalized. In the alternative and without prejudice to the foregoing, the Respondent avers that the Appellant has made reference to the judgment and decree of EPRA of 15. 01. 2020 which is neither a ruling nor judgment but a correspondence dated 15. 01. 2020 addressed to the Appellant and copied to the Respondent.b.This dispute is premature, an abuse of Court process, frivolous and ought to be dismissed with Costs to the Respondent. The allegations that the Respondent accepted to supply electric power to the Appellant’s alleged premises are denied as the Appellant has failed to disclose to the Tribunal that all electricity supply applications are subject to wayleaves acquisition and subsidies from the Government of Kenya.c.The Appellant paid the amount quoted in two instalments with a spacing of over 4 months which is contrary to the Respondent’s required 90 days as per the Respondent’s quotation and further the Appellant has frustrated numerous attempts by the Respondent to refund the amount paid by the Appellant and instead, resolved to approach the Tribunal.d.The Appellant has no locus to invoke the jurisdiction of the Tribunal since the Appellant has confessed that the application of power supply was made by one Stephen Mbithi Mwangangi and not the Appellant. Further, the Appellant has not filed any power of attorney before the Tribunal authorizing Stephen Mbithi Mwangangi to act on his behalf.e.The Appellant has no claim at all against the Respondent as the Respondent has already connected electricity supply to the Appellant’s premises and the Appellant has already sold off the premises to a new owner.f.The alleged contents for determination of contract as outlined in the claim are all denied as there’s no contract between the Respondent and the Appellant. The alleged loss of money are all denied as the Appellant has neither proved any loss nor pleaded any specific amount from the Respondent.

17. In response to the prayers sought by the Appellant, the Respondent avers that the same are untenable and will only amount to engaging the Tribunal in an academic exercise.

18. The Respondent prays that the Appellant’s claim against the Respondent be dismissed with costs.

Directions of the Tribunal 19. After allowing the Appellant’s application to amend his appeal, which application was not opposed by the Respondent, the Tribunal directed the Appellant to serve the Respondent. Upon their request, the Respondent was allowed Twenty One (21) days to file their response and submissions on the amended appeal.

Respondent's Submissions on the Appellant’s Amended Memorandum of Appeal 20. The Respondent submits that they filed a reply to the dispute dated 25th April 2022 disputing breach of any contract for supply of electricity between the Appellant and the Respondent.

21. The Respondent identified Three (3) issues for determination being:a.Whether the Appellant and the Respondent entered into an agreement.b.Whether there was breach of contract.c.Whether the Appellant is entitled to damages.

22. As to whether the Appellant and the Respondent entered into an agreement, the Respondent submits that the basis of any suit in contract performance or non-performance is as per the requirements in the Law of Contract, Act (Cap 23 of the Laws of Kenya). The Appellant was therefore expected to prove on a balance of probabilities the following essential elements to a supply contract with the Respondent: (a) An offer; (b) An acceptance; (c) Any consideration and (d) Any intention to create legal relations.

23. The Respondent made reference to observations by Harris JA in Garvey vs. Richards {2011} JMCA 16 as well as the Supreme Court of United Kingdom in RTS Flexible Systems Ltd vs. Moikerei Alois Muller GMBH & Co K. G. {2010} UKSC 14 regarding essential components and general principles of contracts.

24. The Respondent concludes that on this issue, the Appellant has failed to prove the existence of a contract for supply of electricity between the Appellant and the Respondent.

25. As to whether there was breach of contract, the Respondent submits that the substance of the Appellant’s claim is that the Respondent breached the Agreement. The Appellant therefore bears the burden of proving the particulars of breach pleaded in his pleadings on a balance of probabilities.

26. The Respondent further submits that the Appellant has not referred to specific provisions of the agreement/contract breached and has failed to demonstrate by evidence how each provision was breached, and that closer perusal of the Appellant’s pleadings discloses no breach on the part of the Appellant on the following grounds:a.The copies of payment receipts produced by the Appellant does not disclose the beneficiary of the alleged payments.b.The payments were not made directly to the Respondent.c.The Appellant has not produced a copy of quotation originating from the Respondent advising the Appellant to pay KSh.34,980. 00. d.The Appellant has failed to produce a copy of the agreement for supply of electricity duly signed by the Appellant and the Respondent outlining the terms of the agreement.

27. On this issue, the Respondent concludes that the Appellant has failed to prove the existence of a contractual agreement between the Appellant and the Respondent; and that breach cannot exist where there’s not contractual obligation.

28. As to whether the Appellant is entitled to damages, the Respondent submits that had the Appellant succeeded in proving breach of the Agreement, the next issue for consideration would have been whether they are entitled to damages.

29. The Respondent submits that in his pleadings before the Tribunal, the Appellant has casually mentioned that he allegedly lost money in terms of rent for non-supply of electricity and sold the house at a lower value as he should have sold the house for KShs. 5 Million but was forced to sell it for KShs. 3 Million.

30. The Respondent further submits that the Appellant has not produced any valuation report to justify his assertions. In view of the foregoing, it is impossible to determine the nature and extent of special damages. The totality of the evidence is that the Appellant did not prove the special damages flowing from the alleged breaches.

31. In conclusion the Respondent submits that the appeal lacks merit and ought to be dismissed with costs to the Respondent.

Analysis and Determination 32. Having considered the record and submissions made by both the Appellant and Respondent herein as well as the law, we have established that the issues for determination are:a.Whether there was an agreement between the parties.b.Whether there was breach of contract and by which party.c.Whether EPRA has powers to grant reliefs sought by the Appellant.d.Whether the Appellant is entitled to damages.

33. As to whether there was an agreement between the parties, it is to be noted that the issue relates to an application by the Appellant for connection of his rental house to the Respondent’s distribution network to enable a supply of electricity.

34. Provisions relating to connections to distribution networks are set out in Section 142 of the Energy Act, 2019, titled Obligation to extend network to persons requiring supply of electrical energy, and states that:a.It shall be the duty of a distribution licensee to plan and construct the requisite electric supply lines to enable any person in the licensee's area of supply receive a supply of electrical energy either directly from the licensee or from a duly authorized electricity retailer as the case maybe.b.A person requiring a supply of electrical energy shall apply to the duly authorized retailer, but where there is no such retailer, to the distribution licensee.c.A person making application under sub-section (2) shall specify the premises in respect of which the supply is required and the maximum power required to be supplied, and a reasonable date when the supply is required to commence.d.Upon receipt of the application made under subsection (2) the retailer or the distribution licensee, as the case may be, shall within the period specified in the licence and any regulations made under this Act, notify the person by whom the application is made, of the terms and conditions, which may include payments of whatever nature, to be complied with by the applicant before the supply is availed:Provided that the licensee may in its discretion allow an applicant under this sub-section to pay the cost of the installation in instalments over such periods and on such terms and conditions as may be agreed upon between the licensee and such person.

35. It is not disputed that the Appellant applied for a new connection on 4th September 2012 following which the Respondent issued him with Reference No. E21432012090492, and thereafter, a quotation of KShs. 34,980/=, payment of which was completed by the Appellant on 20th September 2013.

36. The Respondent’s contention is that the Appellant paid the amount quoted in two instalments with a spacing of over 4 months which is contrary to the required 90 days as per the Respondent’s quotation.

37. Whereas the Respondent acknowledges that the Appellant paid the amount quoted, they state that copies of payment receipts produced by the Appellant do not disclose the beneficiary of the alleged payments and that the payments were not made directly to the Respondent.

38. The Respondent’s final submissions on the issue of existence or otherwise of a contract or agreement for electricity connection that "the Appellant has failed to prove the existence of a contract for supply of electricity between the Appellant and the Respondent" concerns the contract that would apply after the subject premises are connected to the power distribution network. Those submissions are completely irrelevant to the issue of new connections.

39. It is apparent to the Tribunal that the Respondent put in a lot of effort to find excuses to deny the existence of an agreement between the two parties for connection of electricity to the Appellant’s house.

40. The finding of the Tribunal is that there was an agreement between the parties for connection of the Appellant’s house to the Respondent’s distribution network.

41. As to whether there was breach of agreement and by which party(ies), it is not disputed that the Appellant’s house was not connected to a supply of electricity until he sold it, out of frustration arising from the Respondent’s indolence.

42. The Respondent’s submission was that the Appellant:a.failed to disclose to the Tribunal that all electricity supply applications are subject to wayleaves acquisition and subsidies from the Government of Kenya;b.frustrated numerous attempts by the Respondent to refund the amount paid by the Appellant and instead, resolved to approach the Tribunal;c.has no locus to invoke the jurisdiction of the Tribunal since the Appellant has confessed that the application for power supply was made by one Stephen Mbithi Mwangangi and not the Appellant;d.has not filed any power of attorney before the Tribunal authorizing Stephen Mbithi Mwangangi to act on his behalf;e.has no claim at all against the Respondent as the Respondent has already connected electricity to the Appellant’s premises and the Appellant has already sold off the premises to a new owner.

43. Regarding the issue of non-disclosure to the Tribunal that all electricity supply applications are subject to wayleaves acquisition and subsidies from the Government of Kenya, it is surprising for the Respondent to transfer that obligation from itself to persons requiring connection to their network.

44. On the issue of the Appellant frustrating numerous attempts by the Respondent to refund the amount paid, it is to be noted that the genesis of the matter ending up at the Tribunal was failure by the Respondent to refund to the Appellant the amount paid on 20th September 2013 for connection which was not effected, even after reference of the same to EPRA.

45. It is incomprehensible for the Respondent to submit that its attempts to refund the amount paid for electricity connection that it failed to make, and demanded by the Appellant, were frustrated by the very Appellant demanding the refund. Why didn’t the Respondent just refund the amount and close the matter?

46. On the assertion that the Appellant has no locus to invoke the jurisdiction of the Tribunal since he confessed that the application of power supply was made by one Stephen Mbithi Mwangangi and not the Appellant himself, what is on record is that the what Mr. Mwangangi did, on behalf of the Appellant, was to:a.pay the quoted amount on 20th September 2013;b.sign an electricity supply contract, which, together with a wiring certificate issued by the electrical contractor, he submitted to the Respondent;c.make more than Fourty (40) follow-ups visits to the Respondent to try and get electricity connected to the house, all to no avail;d.scout for tenants for the Appellant’s house, who all declined to occupy the premises owing to lack of electricity therein.

47. If indeed the Respondent needed the Appellant to file power of attorney authorizing Stephen Mbithi Mwangangi to act on his behalf, they should have advised him so when he was following up on the matter.

48. Regarding the Respondent’s submission that the "Appellant has no claim at all against the Respondent as the Respondent has already connected electricity supply to the Appellant’s premises and the Appellant has already sold off the premises to a new owner", what is on record is that Respondent connected the supply to the house after it had been sold and against the Appellant’s demand that the amount he had paid be refunded to him and not used to carry out any works at the said premises.

49. Flowing from the foregoing analysis of the facts it becomes irresistible that the Respondent not only breached the agreement to connect electricity to the Appellant’s house but also refused to refund the amount paid for that purpose, choosing instead to use those funds to connect electricity to the property after it had been sold to another party, against the protestations of the Appellant.

50. As to whether EPRA has powers to grant the reliefs sought, it is to be noted that Appellant had written to the Respondent on 8th August 2019 and 18th October 2019, demanding (1) that no works be done on the subject house utilizing the funds he paid and (2) refund the amount he had paid together with interest thereon as well as expenses of following up the supply and time wasted.

51. There was no response from the Respondent and the Appellant referred its complaint to the Energy and Petroleum Regulatory Authority vide letter dated 18th October 2022.

52. In response to the Appellant’s complaint, EPRA in their letter dated 15th January 2020 stated that it had no powers to compel the Respondent to pay damages and interest. The Authority went onto inform the Appellant that it would however address matters touching on its mandate.

53. The decision by EPRA that it had no powers to compel the Respondent to pay damages and interest is surprising and, in the view of the Tribunal, contrary to Section 11 of the Energy Act which confers to the Authority all powers necessary for the performance of its functions, including the power to:(a)issue, renew, modify, suspend or revoke licences and permits for all undertakings and activities in the energy sector;e.make and enforce directions to ensure compliance with this Act and with the conditions of licenses issued under this Act;f.issue orders in writing requiring acts or things to be performed or done, prohibiting acts or things from being performed or done, and may prescribe periods or dates upon, within or before which such acts or things shall be performed or done or such conditions shall be fulfilled;(i)investigate and determine complaints or disputes between parties over any matter relating to licences and licence conditions under this Act;k.issue orders or directions to ensure compliance with this Act;l.impose such sanctions and fines not exceeding one hundred thousand shillings per violation per day for a maximum of thirty days;

54. It is noteworthy that the Appellant referred the matter to EPRA for redress on 18th October 2019, who communicated its decision on 15th January 2020, Eighty Nine (89) days later, being Twenty Two (22) days more than the Sixty (60) plus Seven (7) days allowed by Section 23 of the Act for the Authority to make and communicate its decision on any matter referred to it.

55. Additionally, it is not clear whether "the matters touching on its mandate" were ever addressed, never mind that the Authority was already in serious breach of the statutory timelines set out Section 23 of the Act.

56. With regard to damages, whereas it is clear that the Appellant suffered damages including being forced to sell the house, we agree with the Respondent that, from the documents on record, it is impossible to determine the nature and extent of special damages, neither has the Appellant pleaded any specific amount from the Respondent.

Disposition 57. The Appellant has demonstrated the frustrations visited on him by the Respondent, with the Energy and Petroleum Regulatory Authority delaying, or choosing not, to exercise the statutory powers donated to it to ensure that all players fulfil their obligations, and that the rights of each player are protected.

58. The Tribunal therefore makes the following orders:a.This Appeal is allowed.b.The decision of the Director General of EPRA dated 15th January 2020 is set aside.c.The Respondent shall refund to the Appellant the principal amount paid for the connection, being KShs. 34,980/=, together with interest thereon at court rates from the date the payment was made, being 20th September 2013, to the day the refund is made.d.The Respondent to pay general damages of KShs. 200,000/= .e.Costs are awarded to the Appellant.

DATED AND DELIVERED AT NAIROBI THIS 23TH DAY OF NOVEMBER 2022. In the Presence of:………………………Ms. Doris Kinya MwirigiVice Chairperson………………………Ms. Dorothy JematorMember………………………Eng. Buge Hatibu WasioyaMember………………………Mr. Feisal Shariff IbrahimMemberSIGNED BY: DORIS KINYA MWIRIGI