[2023] KEHC 25000 (KLR)

Obonyo v South Nyanza Sugar Co. Ltd (Civil Appeal E057 of 2022) [2023] KEHC 25000 (KLR) (9 November 2023) (Judgment)

Neutral citation: [2023] KEHC 25000 (KLR)

Republic of Kenya

In the High Court at Migori

Civil Appeal E057 of 2022

RPV Wendoh, J

November 9, 2023

Between

Samwel O. Obonyo

Appellant

and

South Nyanza Sugar Co. Ltd

Respondent

(An Appeal from the Judgement and Decree of Hon. C.M. Kamau Resident Magistrate (RM) dated and delivered on 23/1/2019 in Rongo PMCC No. 218 of 2016)

Judgment

1. Samwel O. Obonyo (the appellant) commenced this appeal against the judgement and decree of the Hon. C.M. Kamau dated and delivered on 23/1/2019. The appellant is represented by the firm of Oduk & Co. Advocates while South Nyanza Sugar Co. Ltd (the respondent) is represented by the firm of Moronge & Co. Advocates.

2. The appellant filed a suit by a plaint dated 13/7/2016. The appellant sued the respondent for damages for breach of contract, costs of the suit, interest from 14/7/2005 until payment in full and any other relief. The appellant pleaded that by an agreement dated 14/7/2005, the respondent contracted him to grow and sell to it sugarcane on his parcel of land measuring 1. 6 hectares being plot number 112C, Field no. 102 in Kakmasia sub - location; that the appellant duly signed the agreement and was assigned account number 263054 and planted the cane as agreed.

3. It was further pleaded that it was a term of the contract that it would commence on 14/7/2005 and remain in force for a period of 5 years, or until one plant crop and two ratoon crops of the sugarcane are harvested whichever period shall be less. It was a further express/implied term of the contract that within the 5 year period, the plant and ratoon crops would be harvested at 22 - 24 months and 16 - 18 months respectively. The appellant contended that in breach of the said agreement, the respondent failed, refused and/or neglected to harvest the plant and ratoon crops. The appellant particularized the loss of damages at a total of Kshs. 1, 620,000/=.

4. The respondent filed a defence dated 30/8/2016 denying the allegations in the plaint and put the appellant to strict proof. It was averred that the suit was statute barred. The respondent further stated that if the court finds for the appellant, the court should deduct the sum of total costs of goods and services provided to the appellant and eventual costs of transport and harvest charges. The respondent asked the trial court to dismiss the suit with costs.

5. The suit proceeded for hearing. On behalf of the appellant, one Richard Aran Obonyo (PW1) testified in support of the appellant’s case while George Ochieng (DW1) testified on behalf of the respondent. The trial court dismissed the appellant’s suit with costs on two grounds. The trial Magistrate found that it was improper for the appellant’s agent to testify on his behalf. The second ground was that the suit was statute barred.

6. Being dissatisfied with the judgement and decree, the appellant filed a Memorandum of Appeal dated 10/5/2022 which was later amended and dated 23/9/2022, on the following grounds: -i.That the learned trial magistrate erred in law in disregarding the evidence tendered in court by the plaintiff’s witness;ii.That the learned trial magistrate erred in law by failing to consider the evidence of the plaintiff PW1 Richard Aran Obonyo, yet the said witness was a competent and compellable witness;iii.The learned trial Magistrate erred in law in failing to notice that the evidence of PW1 was in law cogent and credible and want to proof of the suit, being that the said witness was an agent employed pursuant to the contract and did sign and execute the contract and was a witness of fact;iv.That the trial court erred in law in failing to appreciate the duration of the expiry of the contract and therefore wrongfully computed the running of time.The appellant prayed: -i.That the judgement and the decision in PMCC No. 218 of 2016 dated 23/1/2019 be set aside;ii.There be judgement for the appellant and the damages therein be assessed and awarded by this court;iii.Interest;iv.Costs of the suit in the trial court and in this appeal, be borne by the respondent.

7. Directions on the appeal were taken that the appeal be canvassed by way of written submissions. Both parties complied.

8. The appellant submitted that he filed the suit and as per clause 3. 8 of the contract, there was need for a person who is a full time agent or manager for purposes of managing the cane; that PW1 was therefore not only an agent but also a fulltime manager appointed by the appellant under the contract as required by the miller; that PW1 was a competent witness by virtue of his appointment and he can testify on issues arising out of the performance of the contract. The appellant stated that the issue of the power of attorney was raised by the trial magistrate and it was not canvassed by the parties. The appellant relied on the findings of the Court of Appeal in Juliane Ulrike Stamm v Tiwi Beach Hotel HCCA No. 57 of 1996 where the court addressed the issue of a plaintiff being present when prosecuting his suit.

9. The appellant submitted that the trial Magistrate computed wrongly the duration and scope of the contract in issue when he found that the cause of action arose at 24 months for failure to harvest the plant crop; that the correct position is that time starts running at the end of the contract as the nature of the contract was a continuing contract; that the cause of action begins running at the end of the contractual period as the instant contract states that it shall continue for a period of 5 years. The appellant asked that this court do grant reliefs as sought in his suit as well as costs of this appeal.

10. The respondent filed submissions dated 13/10/2023 where the respondent faulted the competence of the appeal as the filed record of appeal does not have the appellant’s amended memorandum of appeal as part of its record. On this basis, the respondent submitted that the record of appeal is defective and the appeal should be dismissed.

11. The respondent further submitted that this appellate court lacks jurisdiction to determine this appeal; that the issue of jurisdiction can be raised at any point and even suo moto by the court; that any cause of action ought to have been raised before the lapse of 6 years from the date of accrual of the course of action as provided for under Section 4 (1) of the Limitation of Actions Act; that this being Initially Non - contracted cane contract, the famer had already planted the cane; that the cane was harvested 6 months from the date of the contract; that the contract was signed on 14/7/2005; that the plant crop was harvested on 4/12/2005; that if there is any breach which occurred, it was at the failure to harvest the 1st ratoon which was to be harvested after 22 months that is not later that 4/10/2007; that the appellant had to enforce his rights under the contract not later than 4/10/2013; that the suit was filed on 14/6/2016 two years eight months beyond the limitation period without leave of court.

12. On the representation of the appellant, the respondent submitted that the trial court was right in raising the issue of whether PW1 can produce the witness statement on behalf of the plaintiff; that the witness statement could only be produced with the requisite document to wit, a power of attorney. The respondent further submitted that it was not disclosed to the court when the appellant relocated to America, before or after the suit was filed; that there are several scenarios which arise that need to be questioned to determine if indeed the appellant relocated.

13. On the reliefs being sought, the respondent submitted that PW1 testified that the plant crop was not harvested while DW1 testified that the plant crop was harvested and the appellant paid Kshs. 19,983. 35 as final proceeds. The respondent urged that no breach of contract on its part was established. The respondent prayed that the suit and the appeal be dismissed with costs.

14. I have considered the appeal, the submissions by the parties and the trial court’s record. The following are the issues for determination: -i.Whether the appeal as filed is competent.ii.Whether the suit filed in the lower court was statute barred.iii.Whether Richard Aran Obonyo was a competent witness.iv.Whether the appellant was entitled to damages awarded.

15. This being the first appellate court, the court has a duty to re-evaluate and analyse all the evidence tendered in the lower court and arrive at its own conclusions but bearing in mind that it neither saw nor heard the witnesses testify. It has to establish whether the decision of the lower court was well founded. The court is guided by the decision in Selle & Another v Associated Motor Boat Co. Ltd (1968) EA 123.

16. A similar holding was held in the Court of Appeal for East Africa which took the same position in Peters v Sunday Post Limited [1958] EA 424 where Sir Kenneth O’Connor stated as follows: -“It is a strong thing for an appellate court to differ from the finding, on a question of fact, of the judge who tried the case, and who has had the advantage of seeing and hearing the witnesses. An appellate court has, indeed, jurisdiction to review the evidence in order to determine whether the conclusion originally reached upon that evidence should stand. But this is a jurisdiction which should be exercised with caution; it is not enough that the appellate court might itself have come to a different conclusion…”

17. On the competence of the appeal, the respondent submitted that it should be dismissed for the record of appeal lacking the amended memorandum of appeal. While it is true that the amended memorandum of appeal does not form part of the record of appeal dated 5/8/2022, the appellant endeavored to correct the anomaly by filing a supplementary record of appeal dated 5/10/2022 where he attached the amended memorandum of appeal. The appeal is therefore competent before this court.

18. It is not in dispute that the parties entered into a contract which commenced on 14/7/2005. The contract has the initials “INCC” which means Initially Non - Contracted Cane. As explained by the respondent in its submissions, the nature of the contract is that the farmer had already planted the cane on the farm. Richard Aran Obonyo (PW1) confirmed this position in his testimony when he testified that: -“the cane was planted and growing. All Sony was to do is harvest.”

19. The respondent through DW1 adduced evidence alleging that the plant crop was harvested. The job completion certificate (DEX4) and Farmers’ Statement (DEX3) shows that the plant crop was harvested from the appellant’s farm. The appellant’s Counsel did not challenge the evidence by the respondent that the plant crop was harvested and the appellant paid. Therefore, the assertion by the appellant that the plant crop was not harvested, cannot stand.

20. Clause 1 (f) of the contract provided that the maturity of ratoon one was not later than 22 months after harvest of the plant crop. The job completion certificate shows that the harvest of the plant crop was done on 4/12/2005. Therefore, ratoon 1 was to be harvested within 22 months, that is on or before 4/12/2007.

21. The main issue in contention is when can it be said that a breach of contract occurred. The appellant took the position that since this a continuing contract, a breach occurs at the end of the period of the contract and time starts running then. On the other hand, the respondent’s position is that breach occurred when it allegedly failed to harvest the ratoon one.

22. Section 4 (1) of the Limitation of Actions Act provides as follows in relation to actions on contracts, tort and certain other actions: -“The following actions may not be brought after the end of six years from the date on which the cause of action accrued -a.actions founded on contract…”

23. As provided by Statute, actions relating to contracts can only be brought to court before the lapse of six years from the time when the cause of action accrued. According to Black’s Law Dictionary (10thEdition) the word “accrue” means “to come into existence as an enforceable claim or right.” Therefore, in interpreting the word accrued as per the Statute, the cause of action on breach of contract can only be brought at the time the actual breach occurred. This is when it can be said that time started running.

24. The Court of Appeal in Maersk Kenya Limited v Murabu Chaka Tsuma (2017) eKLR had an occasion to discuss when a cause of action accrues as follows:-In determining whether the claim filed by the respondent was time barred, it is not in dispute that the cause of action arose on 20th November 2006 when the respondent was dismissed from employment. It is also not in dispute that the cause of action arose prior to the enactment of the Employment Act, 2007, so that in computing whether the suit was time barred, the applicable law was section 4 (1) (a) of the Limitation of Actions Act which provides that actions founded on contract may not be brought after the end of six years from the date on which the cause of action accrued.When six years is computed from when the cause of action arose on 20 th November 2006, there is no question that the suit ought to have been filed latest before 19th November 2012. Instead it was filed four months later on 21st March 2013. ” (emphasis mine)

25. This court, constituted differently, has dealt with this issue. Mrima J in the case of South Nyanza Sugar Company Limited v Diskson Aoro Owuor (2017) eKLR held: -“There is no doubt in this matter that the parties entered into a contract and which contract was allegedly breached. What is for determination is when exactly the cause of action accrued since from that time the limitation period of 6 years starts running. I do not find that issue difficult to decide on. I say so because when a party enters into a contract for a specific period of time, it does so in the understanding and belief that each of the parties to the contract will observe its part thereof until full execution of the contract. It is only when one of the parties happens to be in breach of the contract that a possible cause of action arises as at that date of the alleged breach and not at the end of the contract period.”

26. Later on, the learned Judge departed from his holding in South Nyanza Sugar Company Limited v Diskson Aoro Owuor (supra) and held in several other decisions that the breach occurs after the end of the contractual period that is, 5 years but not when one of the three crops is to be harvested. Refer to the decisions in Sipora Achieng Ayege v South Nyanza Sugar Co. Ltd HCCA No. 105 of 2010, Zadock Danda v South Nyanza Sugar Co. Ltd (2018) eKLR and South Nyanza Sugar Co. Ltd v Ezekiel Oduk (2019) eKLR. The same position was taken by Sitati J in South Nyanza Sugar Co. Ltd v Paul N. Lila (2014) eKLR.

27. In B. Mathayo Obonyo v South Nyanza Sugar Co. Ltd (2019) eKLR Majanja J agreed with the approach taken in the case of South Nyanza Sugar Company Limited v Diskson Aoro Owuor (supra) but differed with position taken by Sitati J in South Nyanza Sugar Co. Ltd v Paul N. Lila (supra) and held as follows: -“In my view, the question under section 4(1) of the LAA is when does the cause of action accrue? I adopt the position taken in South Nyanza Sugar Company Limited v Diskson Aoro Owuor (supra) in determining when the cause of action accrue. According to Black’s Law Dictionary (10thEdition) the word “accrue” means “to come into existence as an enforceable claim or right.” Thus under the outgrowers cane agreement, such as the one subject to the suit, the right to sue for breach of contract arose when one of the parties failed to meet its obligations under the contract. In the case at hand this could only arise when the respondent failed to harvest the plant crop. This is when the cause of action accrued and when, in terms of section 4(1)(a) of the LAA, the time begins to run.”

28. This court has always taken the position that the action accrues and/or a breach occurs when the miller fails to harvest any of the three crop cycles.

29. Taking into account the definition of the word “accrue” and the provisions under Section 4 (1) of the Limitation of Actions Act and the interpretation thereof of when a breach occurs by the Court of Appeal in Maersk Kenya Limited (supra), this court’s view and it hereby reiterates its position that a breach occurs when a miller fails to harvest any of the crop cycles.

30. In this instance, the breach occurred on 4/10/2007 when the respondent failed to harvest the ratoon one crop. Time started running therefrom and the suit ought to have been filed before the lapse of 6 years that is, on or before 4/10/2012. The suit was filed in the lower court on 13/7/2016 a period of about 3 years outside the limitation period. There is no evidence that the appellant sought leave of the court to institute the proceedings out of time.

31. The foregone discussion brings this court to the conclusion that the appeal is devoid of merit. The trial Magistrate’s judgement and decree dated and delivered on 23/1/2019 is hereby upheld. Having found so, the other issues for determination fall by the way.

32. Costs of the appeal and lower court are hereby awarded to the respondent.

DATED, DELIVERED AND SIGNED AT MIGORI THIS 9TH DAY OF NOVEMBER 2023. R. WENDOH..................................JUDGEI certify that this is a true copy of the originallySignedDEPUTY REGISTRARJudgment delivered in the presence of;Mr. Oduk for the Appellant.Mr. Bosire for the Respondent.