Shiraku v Commercial Bank of Africa [1988] KECA 99 (KLR)

Applying Black's Law Dictionary's definition of a trader as a merchant or retailer buying and selling goods at a profit, the court found no evidence the appellant, an agent paid a fee and expenses, was a merchant or retailer. The cheques he issued were for personal services and rent, not commercial transactions. The submission that he was a trader was rejected as of astonishing breadth.

Following Gibbons v Westminster Bank, substantial damages require pleaded and proved special damage for a non-trader. But the words 'Account closed' on four cheques lowered the appellant's reputation among right-thinking people and injured his commercial credit, so pecuniary loss is inferred. A temperate award of Shs 40,000 was substituted.

Section 27 of the Civil Procedure Act gives the court discretion over costs, but the proviso provides that costs follow the event unless the court for good reason otherwise orders. The trial judge reduced costs to three-quarters without giving any reason, and in the absence of an explanation the appellate court was entitled to interfere and award full costs.

Platt JA traced the doctrine from Marzetti v Williams through Rolin v Steward, Wilson v United Counties Bank and Gibbons, and held there is no real juridical difference between classes of persons whose cheques are dishonoured. Wrongful dishonour injures credit in fact; damages without proof will be modest, substantial damages only where injury is pleaded and proved.