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Court of AppealDismissedCivil Appeal 35 of 1984

BERNARD GATHIGE NGUAH v AGIP (KENYA) LIMITED [1986] KECA 75 (KLR)

Court of Appeal
4 July 1986
1,374 words in judgment
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The bottom line

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Kenya's Court of Appeal confirmed that a petrol station operator's repeated contract breaches allowed Agip to terminate his agreement without notice.

What this practically means

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Executive summary

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The Court of Appeal at Nairobi (Kneller and Nyarangi, JJ A, and Gachuhi, Ag J A) unanimously dismissed this appeal against the judgment of Porter J in the High Court in Civil Suit 3224 of 1979, whereby Agip (Kenya) Limited succeeded on its claim that the appellant, an operator of the company's service station on Park Road, Nairobi, had breached the Agip Operator Agreement and could be required to give up the service station. The company relied on breaches: failure to obtain and retain a current trading licence, denial of free access to the company's servants and agents (including driving them off or unlawfully detaining one), failure to render records of sales, refusal to permit inspection of those records, and failure to attain the stipulated sales target. Nyarangi JA, in the principal judgment, rehearsed the evidence and held that the trial judge, who had heard and seen the witnesses, misdirected himself neither on fact nor law, applying the East African rehearing authorities Lewin v Neylan and Scarf v Sholan, under which reversal requires a misapprehension of important evidence as a whole. Kneller JA, in a separate concurring judgment, agreed that each of the proved breaches entitled the company to terminate without notice, and, giving the appellant the benefit of the doubt on the sales target for the month in issue, found he had a lawful excuse since he could not sell products he had paid for but never received; that single finding did not, however, assist him. The appeal was dismissed with costs to the respondent, and the appellant's counterclaim for damages for non-delivery thus fell away.

Questions the Court framed

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The issues the Court set itself to decide, in its own words.

  1. 1.Whether the trial judge erred in finding that the appellant breached the Agip Operator Agreement by failing to obtain and retain a current trading licence, denying the company access to the service station, failing to render sales records, and refusing inspection of records
  2. 2.Whether the company was entitled to terminate the agreement without notice
  3. 3.Whether the failure to attain the stipulated sales target was proved, and if so whether the appellant had a lawful excuse attributable to the company's failure to supply products
  4. 4.Whether the trial judge's findings of fact and law could be faulted on appeal

Key legal issues

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01

Standard of intervention by an appellate court on findings of fact

Holding

The appeal being a rehearing, the High Court decision could be reversed only on a misapprehension of important evidence as a whole; the trial judge had heard and seen the witnesses and misdirected himself neither on fact nor law, so his decision stood.

Reasoning

Nyarangi JA undertook his own perusal and study of the evidence within the grounds of appeal and counsel's reply. He applied the East African Court of Appeal authorities Lewin v Neylan and Scarf v Sholan, holding that the sole question was whether, on the evidence, the trial judge's decision was correct. He found the case 'too clear for argument' and the judge 'wholly correct'.

p. 3
02

Termination of the operator agreement without notice for breach

Holding

The proved breaches - failure to keep a current trading licence, obstructing the company's servants and agents, failing to render sales records and refusing inspection - each entitled the company to terminate without notice, vindicating the termination by notice dated May 31, 1977.

Reasoning

The agreement provided for termination on a month's notice, and without notice if the operator was in breach. The trial judge found persistent contraventions proved on the balance of probabilities. Kneller JA agreed that each of these breaches, and all of them, justified termination without notice, so the High Court's conclusion was right in the result.

p. 3
03

Failure to attain the stipulated sales target

Holding

Giving the appellant the benefit of the doubt, the shortfall in the month in question was excused because he could not sell products paid for in advance but never delivered; but this single finding did not profit him on the appeal as a whole.

Reasoning

Kneller JA analysed the order, delivery note and cash receipt, which did not tally, and found the appellant had a reasonable (lawful) excuse for not meeting the target in that month. However, the High Court's contrary finding was at most one finding and did not alter the outcome given the appellant's recurrent breaches. The point was also not pressed below as an issue.

p. 2

Legal principles established

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  • On an appeal conducted as a rehearing, an appellate court will reverse a trial judge's decision only where the judge came to a wrong conclusion due to a misapprehension of the important evidence as a whole.
  • A breach by an operator of clauses requiring a current trading licence, access to the service station, rendering of sales records and permitting inspection entitled the company to terminate the agreement without notice.

Court orders

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  1. 1.Appeal dismissed
  2. 2.Appellant to pay the respondent's costs of the appeal

The bench

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One judgment of the whole court — no separate or dissenting opinions.

majority

Wrote the judgment

Wrote the principal judgment. Reviewed the evidence and the findings of Porter J on the operator agreement breaches (trading licence, access to the service station, records of sales, inspection, and sales target) and found no misdirection. Cited East African authorities on the appellate rehearing standard and dismissed the appeal with costs.

I remain unpersuaded that the trial judge’s findings and conclusions can be faulted. The trial judge heard and saw all the witnesses. He held that the company had proved its case as required.p. 3
concurring

Wrote the judgment

Wrote a short separate concurring judgment. Agreed the appeal should be dismissed with costs; held that each of the proved breaches entitled the respondent to terminate the agreement without notice, and that the single adverse finding on the sales target did not avail the appellant.

Any of these breaches, and of course, all of them, entitled the respondent to terminate the agreement without notice.p. 2
GA
GachuhiAg JA
majority
On appeal from
High Court of Kenya at Nairobi
Civil Suit 3224 of 1979
Jurisdiction invoked
First appellate jurisdiction of the High Court decision under the applicable appellate statute (appeal as of right to the Court of Appeal); no specific constitutional or statutory article is quoted in the judgment.

Relief refused

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The appellant's appeal against the High Court judgment and the associated counterclaim for general and special damages of Kshs 2,602,000.00 for alleged breach of clause 2(d) (failure to supply products)

The trial judge's findings on the breaches and on termination could not be faulted; any shortfall in supply in the one month in question gave the appellant a lawful excuse, but that single finding did not assist him overall.

p. 2

Costs

Appeal dismissed with costs to the respondent.

Quotable passages

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Verbatim from the judgment, each located to the page it appears on in the official PDF — so these can be cited and checked directly.

The consequence is that this court now dismisses this appeal with costs.
p. 2Disposition
It is axiomatic that this appeal is in the nature of a rehearing and that if it is clear that if the trial judge came to a wrong conclusion due to a misapprehension of important evidence as a whole, the decision of the High Court could be reversed
p. 3Appellate standard of review on facts
Any of these breaches, and of course, all of them, entitled the respondent to terminate the agreement without notice.
p. 2Termination for breach of operator agreement
In my opinion the case is too clear for argument. The judge was wholly correct. It follows that I would dismiss the appeal with costs.
p. 3Affirmance of trial judgment

Issues in the judgment

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minor

The judgment gives inconsistent dates for the High Court decision under appeal: the coram/endorsement states the judgment of Porter J was dated June 17, 1983, while Nyarangi JA's judgment states it was given on June 17, 1984.

minor

The respondent's name appears in variant spellings in the judgment: the coram/endorsement spells the appellant's surname 'NGUAH' while Nyarangi JA's judgment uses 'Njuah'.

Key timeline

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Practical implications

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Frequently asked questions

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Cite this brief

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Cite this brief

Caselaw, "BERNARD GATHIGE NGUAH v AGIP (KENYA) LIMITED [1986] KECA 75 (KLR)", Case Analysis (1986). Civil Appeal 35 of 1984. Source: https://new.kenyalaw.org/akn/ke/judgment/keca/1986/75/eng@1986-04-07

Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.