Court Orders Former Java CEO to Pay Businessman Ksh 9.5M Over Failed Deal

Former Java Restaurants Chief Executive Officer (CEO) Derrick Cornelius Van Houten, has been ordered by the High Court to pay a businessman Ksh 9.5 million in special damages due to the loss of a business opportunity.

Sitting in the High Court at Milimani Commercial Division, Justice Josephine Mongare delivered the judgment in favour of the plaintiff,  stating that “The Plaintiff produced receipts as exhibits which I have perused and the same indicate that Van Houten was paid Ksh 9,465,000.”

The Judge also indicated that the same amount is entitled to interest at the court’s rate from the date of the judgment.

The Plaintiff, Abdirhaman Abdulle, filed a suit against the former Java boss claiming Ksh 40.4 million for special damages, loss of business opportunities and interest.

The matter originated in May 2021 when Java, the first party, approached the plaintiff, who owns a petrol station in Narok, about opening a coffee shop on his premises.

Van Houten confirmed that interest and Java’s Head of Property approved the project, and the Plaintiff agreed to fund renovations to meet their specifications.

According to the Plaintiff, they signed a six-year agreement on December 6, 2021, with a monthly rent of Ksh 350,000.

The complainant claims to have spent Ksh 23,467,609 on contractors for demolition, renovation and rebranding of his premises to suit the defendant’s requirements.

He also averred that despite the lease and those expenditures, Java never paid any rent. On October 19, 2022, he received a notice terminating the lease, citing the project as not commercially viable.

Houten, according to the Plaintiff, agreed to refund Ksh 6,350,000 but never materialised, and the equipment and coffee paid for were never supplied. It was at that point that he realised he had been conned by the defendant and concluded that he had no intention from the outset to set up their restaurant on his premises.

The Plaintiff claims to be defrauded because the defendants failed to pay rent for over 10 months, terminating the lease without three months in lieu, obtaining money for equipment and coffee that was not supplied, making false representations to start a business and causing him to incur massive renovation expenses with no genuine intent to operate.

As such, he (Plaintiff) was seeking relief from the court against the Third parties, Java and KUKITO and the defendants, Van Houten and Kiss Cosmetics, including expenses of Ksh 40.4 million, special damages and general damages of Ksh 30 million for loss of business opportunity.

During the course of the proceedings, the complainant withdrew his case against Java and KUKITO, maintaining the case against Van Houten and Kiss Cosmetics.

In defence, Van Houten denied introducing himself as an agent or making promises about the restaurant but admitted visiting the property in Narok.

He impliedly admitted to receiving money into his personal account but the money was for personal ventures, gifts, charity and was not for Java contractors, renovations or equipment.

He denied any fraud, citing that terminating a lease for commercial viability is normal, not a con and denied causing any loss. He stated that renovations were done on the plaintiff’s own property, citing that he did not suffer any loss. He urged the court to dismiss the suit entirely.

In determination, Justice Mongare noted that the Plaintiff was seeking from the defendant special damages of Ksh 23,467,000 being monies spent on construction and renovation, Ksh 13,495,000 paid to Van Houten and Ksh 3,450,000 paid to Kiss Cosmetics.

Citing KECA 822 (KLR) Total Kenya Limited Formerly Caltex Oil K Ltd V Janevams Limited 2015, the judge stated that, “a party claiming special damages must demonstrate that actually they made the payments before compensation is permitted.”

She noted that the plaintiff produced receipts paid to Houten of Ksh 6,840,000, the money proven paid for construction, renovation and payments to him, plus  Ksh 2,625,000 paid to Kiss Cosmetics.

“Therefore, the Plaintiff’s suit in respect of the pleaded sums succeeds but only to the extent of Ksh 9,465,000 and interest at the court’s rate from the date of this judgment,” the judge ordered.

Justice Mongare dismissed other claims, citing that they were not proven.