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Court of AppealPartially AllowedCivil Appeal 119 of 1995· [1996] KECA 30 (KLR)

Ryce Motors Limited Coast Agency v Elias Muroki

Court of Appeal of Kenya
26 January 1996
JGJ. E. GicheruROR. S. C. OmoloASA. B. Shah
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The bottom line

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Kenya's Court of Appeal threw out a Kshs 2.8 million lost-profits award because the claimant couldn't prove the figures with proper records.

What this practically means

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Executive summary

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This Court of Appeal at Mombasa appeal concerned special damages for loss of profits awarded by the High Court (Mbogholi, J) to Elias Muroki, whose matatu was written off in an accident while in the custody of Ryce Motors Limited. Liability had been resolved by consent judgment of Shs. 552,537, leaving loss of profits for determination by the trial judge, who awarded Kshs. 2,830,500 at Kshs. 4,500 per day from 27 October 1992 to 16 December 1994. The Court of Appeal held that the plaintiff's evidence - figures jotted on pieces of paper and an unsupported assertion of daily profits - failed the settled requirement that special damages be specifically pleaded and strictly proved, and set aside the award in its entirety. The Court then addressed counsel's challenge to the earlier decision in Peter Njuguna Joseph v Ann Moraa, which had suggested an owner of a write-off vehicle is entitled to loss of user until paid the pre-accident value. Relying on Liesbosch Dredger v S.S. Edison and related English authorities, the Court held that statement too wide and incorrect: a plaintiff must mitigate by taking reasonable steps to replace a destroyed profit-earning chattel, with damages limited to the period reasonably required for replacement, and no distinction exists between damaged and destroyed articles for mitigation purposes. The appeal was allowed, the decree on special damages set aside, costs of the appeal to the appellants, and the respondent's costs in the superior court based on the consented judgment.

Key legal issues

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01

Proof of special damages for loss of profits

Holding

The award of Kshs. 2,830,500 for loss of profits was set aside because the plaintiff's evidence (figures jotted on pieces of paper) did not meet the standard of strict proof required for special damages

Reasoning

Special damages must be specifically pleaded and strictly proved. The exhibits consisted of informal jottings that could not be accepted as correct accounting practice, did not show whether the figures related to the matatu, the plaintiff's two matatus, or his shop business, and the plaintiff's bare assertion of daily profits of Shs. 4,500 was unsupported by acceptable evidence.

p. 2
02

Correct measure of damages for destruction of a profit-earning chattel

Holding

The statement in Ann Moraa that a plaintiff is entitled to loss of user until receipt of pre-accident value does not reflect the correct legal position; the plaintiff must mitigate by taking reasonable steps to replace the lost article

Reasoning

Following Liesbosch Dredger v S.S. Edison and related English authorities, where a profit-earning chattel is destroyed the plaintiff is entitled to loss of profits only during the period reasonably required to replace the lost article in the market; the cost of a reasonably hired substitute may provide the measure. There is no distinction between damaged and destroyed articles for mitigation purposes.

p. 3

Legal principles established

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  • Special damages must be specifically pleaded and strictly proved with acceptable evidence
  • An owner of a destroyed profit-earning chattel must take reasonable steps to mitigate loss, including replacing the article, and is not entitled to loss of user indefinitely until paid the pre-accident value

Court orders

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  1. 1.Appeal allowed
  2. 2.Award of special damages for loss of profits of Kshs. 2,830,500 set aside in its entirety
  3. 3.Costs of the appeal awarded to the appellants
  4. 4.Respondent's costs in the superior court to be based on the consented judgment

Authorities

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Cases cited (5)

  • Peter Njuguna Joseph & Another vs. Ann Moraa
    Civil Appeal No. 23 of 1991 (unreported)
  • Liesbosch, Dredger v. S. S. Edison
    [1933] A.C. 449
  • The Aprad
    [1934] All E.R. Rep. 326
  • Pramppery & Another v. James A. Cuthlertson Ltd.
    [1951] SLT 191
  • Jones v. Port of London Authority
    [1954] Lloyd's Rep. 489
On appeal from
High Court of Kenya at Mombasa
H.C.C.C. No. 26 of 1993
Jurisdiction invoked
First appeal to the Court of Appeal from the High Court (statutory appellate jurisdiction)

Key timeline

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Practical implications

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Frequently asked questions

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Later judgments citing this (9)

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Judgments in the corpus that rely on this one. Where the Court said how it treated the authority, that is shown.

Cite this brief

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Cite this brief

Caselaw, "Ryce Motors Limited Coast Agency v Elias Muroki", Case Analysis (1996). Civil Appeal 119 of 1995. Source:

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