Automated Summary
Key Facts
The case involved two consolidated civil appeals by schools (B.O.M Elite Girls Bumamu and St. Michael Muluwa Secondary) against Benamos E. Africa for non-payment of stationery and office equipment supplied between 2017-2020. The trial court found an informal contract existed, with partial payments made by the schools. Appellants argued the contract violated procurement laws (Article 227(1) of the Constitution and Public Procurement and Assets Disposal Act 2015) due to lack of competitive tendering. The court dismissed the appeals, ruling the schools' acceptance and use of goods, along with partial payments and promises to pay in installments, constituted an enforceable contract under the doctrine of unjust enrichment. The Appellants were deemed to have unjustly benefited from the supplies.
Transaction Type
Supply Agreement for stationery and office equipment to secondary schools
Issues
- The court assessed whether an informal, oral, or implied contract existed between the parties for the supply of goods, in light of Sections 5(1), 103, and 104 of the Public Procurement and Assets Disposal Act 2015.
- The court reviewed whether the trial court overlooked or improperly dismissed the Appellant's evidence, which could affect the fairness of the judgment.
- The court analyzed if the Respondent, as a supplier, shared equal responsibility with the Appellants (as public entities) to ensure that the procurement and supply of goods complied with all relevant legal requirements.
- The court considered whether the alleged contract between the parties, which may have contravened public procurement laws, is legally valid and enforceable, or if it is void from the beginning due to statutory and public policy violations.
- The court was required to determine if the Respondent's supply of stationery and office equipment to the Appellants adhered to the mandatory procurement procedures outlined in Article 227(1) of the Constitution and Sections 103 and 104 of the Public Procurement and Assets Disposal Act 2015.
- The court evaluated if the trial court erred by not requiring proper certification of public documents, as mandated by the Evidence Act, when they were produced in court.
Holdings
- The court dismissed the appeal, holding that the Appellants cannot evade payment for supplies by citing procurement law violations. The Appellants, as state organs, were found to have benefited from the goods, made partial payments, and cannot now use procedural non-compliance to avoid obligations. The trial court's judgment was upheld.
- The court ruled that the Kshs.10,000 claim for the demand letter is a litigation cost, not part of the principal sum. It must be recovered via a bill of costs post-judgment, not as an initial claim. The trial court's disallowance was affirmed as correct.
Remedies
The court dismissed the appeal with costs, upholding the trial court's judgment in favor of the Respondent.
Monetary Damages
743106.00
Legal Principles
The court relied on the doctrine of unjust enrichment (as articulated in Fibrosa vs Fairbairn) to determine that the Appellants, having received and utilized goods supplied by the Respondent while making partial payments, could not lawfully retain the benefits without compensating the Respondent. The judgment emphasized equity and conscience, holding that allowing the Appellants to keep the goods without full payment would be unconscionable and contrary to public policy.
Precedent Name
Fibrosa vs Fairbairn
Cited Statute
- Constitution of Kenya
- Evidence Act
- Sale of Goods Act
- Public Procurement and Assets Disposal Act 2015
Judge Name
Patrick J O Otieno
Passage Text
- The court finds that it would be contrary to public policy on a state agency like the Appellant to obtain goods or services from a citizen, utilize the same then raise the propriety of the process to the detriment of the supplier and to the benefit of the school.
- The tests in in deciding claims of unjust enrichment proceed from three suppositions; first, that the defendant has been enriched by the receipt of a benefit; secondly, that he has been so enriched at the plaintiff's expense; and thirdly, that it would be unjust to allow him to retain the benefit.
- The court holds that the continued payments by the Appellants following the LPO was a clear indication that the Appellant encouraged the relationship. It is the Appellants, being state organs and as a procuring entity who had the obligation of ensuring compliance with the law in the award of tenders of supply.
Damages / Relief Type
Restitution in the amount of Kshs. 743,106 (Ksh.500,054 and Ksh.243,052 from two consolidated cases)