Automated Summary
Key Facts
The case centered on whether a contract existed between Brick & Mortar Holdings Limited (1st plaintiff) and Kenfreight (EA) Limited (defendant) to transport a consignment to Juba, South Sudan. The court found no enforceable contract between the 1st plaintiff and defendant, as the defendant had issued LPOs, delivery notes, and invoices to Aham Transporters (Aham) for the 2018 consignment. The plaintiffs failed to produce evidence of a direct contract with the defendant. A default judgment was entered against Aham for USD 48,098.87 overpayment, but the defendant’s counterclaim against the plaintiffs was dismissed.
Transaction Type
Road Carriage Agreement for transporting consignment to South Sudan
Issues
- The court had to determine whether there was an agreement between the 1st plaintiff and the defendant to transport the consignment in question.
- The final issue concerned whether the counterclaim raised by the defendant should be successful.
- The second issue was whether the defendant was under an obligation to pay the 1st plaintiff under the terms of the contract.
Holdings
- The court dismissed the plaintiffs' suit and the defendant's counterclaim against the plaintiffs with costs. A final judgment was entered for the defendant against Aham for the overpaid amount, including interest from the judgment date until full payment.
- The defendant's counterclaim against the 1st plaintiff was dismissed because there was no contract between them. However, the counterclaim against Aham was upheld as it breached the agreement by subcontracting without consent, leading to overpayment of USD 48,098.87, which the defendant seeks reimbursement for.
- The court found that there was no enforceable contract between the 1st plaintiff and the defendant regarding the transportation of the consignment to Juba, South Sudan. The plaintiffs failed to provide LPOs, Delivery Notes, and Invoices to substantiate their claim, and the defendant was not obligated to pay the 1st plaintiff.
Remedies
- The defendant's counterclaim against the plaintiffs is dismissed with costs.
- Final judgment is entered for the defendant in the counterclaim against Aham Transporters for USD 48,098.87, with interest and costs.
- The plaintiffs' suit against the defendant is dismissed with costs.
Contract Value
74200.00
Monetary Damages
48098.87
Legal Principles
- The court applied costs principles in awarding costs to the defendant for the counterclaim against Aham and dismissing the plaintiffs' suit with costs. The default judgment against Aham for USD 48,098.87 was upheld, with interest and costs awarded to the defendant.
- The court applied the principle of substance over form in finding that the plaintiffs and Aham had a private subcontracting arrangement despite the formal 2018 contract between the defendant and Aham. The email communications and vehicle details in LPOs revealed the true nature of the parties' conduct.
- The court held that the defendant's counterclaim against the plaintiffs could not succeed because the 2018 contract was between the defendant and Aham, not the plaintiffs. Terms of a contract bind only the parties to it, and the plaintiffs were not privy to the agreement containing the subcontracting prohibition.
- The court emphasized that the plaintiffs failed to discharge their burden of proof under sections 107 and 108 of the Evidence Act, as they did not provide LPOs, Delivery Notes, or invoices directly linking the 1st plaintiff to the defendant for the 2018 consignment. The burden of proof in an adversarial system lies with the plaintiff to establish the existence of a contract and performance obligations.
Precedent Name
- Jennifer Nyambura Kamau v Humphrey Mbaka Nandi
- Raila Amolo Odinga & Another v Independent Electoral and Boundaries Commission & 2 others
- Kenya Tourist Development Corporation v Sundowner Lodge Limited
- Securicor Courier (K) Ltd v Benson David Onyango & another
- Dharamshi v Karsan
Key Disputed Contract Clauses
Clause 3 of the 2018 contract between the defendant and Aham prohibited the carrier (Aham) from assigning, transferring, or subcontracting the transport agreement without the defendant's prior written consent. The court found that Aham breached this clause by subcontracting part of the transport to the 1st plaintiff without such consent.
Cited Statute
Evidence Act
Judge Name
EC Mwita
Passage Text
- Terms of a contract can only bind parties thereto and not strangers to the contract. I, therefore, hold that the defendant had no basis in raising the counterclaim against the plaintiffs.
- There was no evidence that the 1st plaintiff had a contract with the defendant to transport the consignment to Juba, South Sudan. The plaintiffs did not also prove that the defendant owed the money claimed to the 1st plaintiff, arising from the alleged contract.
- The only inference that can be drawn from this, is that there was a private arrangement between the plaintiffs and Aham, regarding transportation of the consignment that the two entities wished to keep away from the defendant.
Damages / Relief Type
- Plaintiffs' suit dismissed with costs.
- Monetary judgment against Aham Transporters for USD 48,098.87 plus interest and costs.
- Defendant's counterclaim dismissed with costs.