Devcon Group Limited v Timsales Limited [2016] KECA 711 (KLR)
The bottom line
#Kenya's Court of Appeal confirmed that ignoring a notice to admit documents can amount to admitting the other side's evidence, costing Devcon over Kshs.18 million.
What this practically means
#Executive summary
#Key legal issues
#Production of documents
The respondent's documents were properly produced; the appellant, having been served with a notice to admit documents and not responding, was deemed to have admitted their contents and authenticity.
The respondent served a notice to admit documents including delivery notes, invoices, dishonoured cheques and correspondence. The appellant never responded. The court applied its earlier decision in Simon Muchemi Atako, holding that in the absence of objection, the documents were deemed admitted. The court also noted the respondent's witness did in fact produce the documents at trial, contradicting the appellant's submission.
Existence and terms of the contract
A valid contract existed between the parties, partly oral and partly written, with terms contained in delivery notes and invoices, including interest at 3% per month on overdue accounts.
The court applied the trite elements of a valid contract (offer, acceptance and consideration) and found the respondent's evidence of an oral agreement corroborated by delivery notes and invoices. The trial court's finding that the contract was partly oral and partly written was concurred with. The appellant's contention that the contract was conditional on its contract with the University of Nairobi was found unsupported by evidence.
Indebtedness
The appellant was indebted to the respondent for goods delivered worth Kshs.8,598,696.11, as evidenced by its admission through dishonoured cheques and a letter dated 5th June 2006 proposing monthly payments.
The respondent's evidence that it delivered products worth Kshs.8,598,696.11 was unchallenged, the appellant having closed its case without calling any witness. The court found admissions of indebtedness in the issuance of three dishonoured cheques totalling Kshs.3,387,200 and in the appellant's letter proposing monthly payments of Kshs.200,000, applying the principle that admissions need not be in pleadings but may be in correspondence or documents.
Interest on outstanding amounts
The contractual interest of 3% per month on overdue accounts was binding, and the trial court's discretionary award of 16% per annum from 1st March 2007 until payment in full was not disturbed.
The court found that the 3% interest term appeared in the delivery notes and invoices and was agreed by the parties; interfering with it would amount to re-writing the contract, contrary to National Bank of Kenya v Pipe Plastic Samkolit. On the post-1st March 2007 interest, the court applied Salim v Kikava, holding that although a court has wide discretion under section 26 of the Civil Procedure Act, it must be exercised judicially, and saw no reason to interfere with the 16% per annum award.
Legal principles established
#- On a first appeal, the Court of Appeal must re-evaluate the evidence and draw its own conclusions, while making allowance for not having seen or heard the witnesses.
- A party served with a notice to admit documents who fails to respond is deemed to have admitted the contents and authenticity of those documents.
- A court cannot re-write a contract between the parties; parties are bound by the terms of their contract unless coercion, fraud or undue influence are pleaded and proved.
Court orders
#- 1.The appeal is dismissed with costs to the respondent
- On appeal from
- High Court of Kenya at Milimani, Nairobi
- H.C.C.C. No. 165 of 2007
- Jurisdiction invoked
- First appeal to the Court of Appeal under the Court of Appeal's appellate jurisdiction (the judgment does not cite a specific enabling provision)
Key timeline
#Practical implications
#Frequently asked questions
#Cite this brief
#Cite this brief
Caselaw, "Devcon Group Limited v Timsales Limited [2016] KECA 711 (KLR)", Case Analysis (2016). Civil Appeal No. 93 of 2009. Source: https://new.kenyalaw.org/akn/ke/judgment/keca/2016/711/eng@2016-03-11
Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.