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Court of AppealPartially AllowedCivil Appeal 119 of 1995· [1996] KECA 83 (KLR)

RYCE MOTORS LIMITED & another v ELIAS MUROKI [1996] KECA 83 (KLR)

Court of Appeal of Kenya
26 January 1996
JGJ. E. GicheruROR. S. C. OmoloASA. B. Shah
1,195 words in judgment
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The bottom line

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Kenya's Court of Appeal threw out a Kshs 2.8 million loss-of-profits award because the matatu owner couldn't strictly prove it with proper records.

What this practically means

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Executive summary

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This was a first appeal to the Court of Appeal at Mombasa (though the heading erroneously reads 'High Court of Kenya') against the judgment of Justice Mbogholi in H.C.C.C. No. 26 of 1993, delivered on 9 March 1995. Liability for the destruction of the respondent's matatu was settled by consent at Shs. 552,537 with interest; the only contested issue was special damages for loss of profit claimed at Kshs. 4,500 per day from 27 October 1992. The trial judge, following the Court of Appeal's unreported decision in Peter Njuguna Joseph & Another v Ann Moraa, awarded Kshs. 2,830,500 for loss of profits over roughly two years and 35 days. The Court of Appeal set aside that award in its entirety, holding that the respondent's exhibits - figures jotted on pieces of paper - were not acceptable accounting evidence and that special damages must be both specifically pleaded and strictly proved. Counsel for the appellants further attacked the Ann Moraa statement that the owner of a write-off vehicle is entitled to loss of user until he receives 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 in law: damages for loss of profits run only for the period reasonably required to replace the chattel, and the owner must mitigate, with no distinction between a damaged and a destroyed article. 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 confined to the consented judgment.

Key legal issues

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01

Proof of special damages

Holding

The award of Kshs. 2,830,500 for loss of profits was set aside because the claim was not strictly proved; informal jottings on pieces of paper could not found an award.

Reasoning

The plaintiff's exhibits consisted of figures on pieces of paper that did not reflect correct accounting practice, did not show whether they related to the matatu, the plaintiff's two matatus, or his shop business, and the plaintiff gave only bare oral evidence of daily income of Shs. 4,500. The court reaffirmed the settled rule that special damages must be specifically pleaded and strictly proved, and held there was no basis for the award.

p. 2
02

Mitigation of damages for a write-off profit-earning chattel

Holding

The statement in Ann Moraa that a plaintiff is entitled to loss of user until he receives the pre-accident value of a write-off vehicle does not reflect the correct legal position.

Reasoning

Following Liesbosch Dredger v S.S. Edison and subsequent English authorities, damages for loss of profits on a destroyed profit-earning chattel run only for the period reasonably required to replace the article in the market; the cost of a reasonable hired substitute may measure the loss. The owner must mitigate, and there is no distinction between a damaged and a destroyed article for this purpose.

p. 3

Legal principles established

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  • Special damages must not only be specifically pleaded but must be strictly proved.
  • The owner of a destroyed profit-earning chattel is not entitled to loss of user indefinitely until paid the pre-accident value; he must take reasonable steps to mitigate his damages, and no distinction is drawn between a damaged and a destroyed article.

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.Decree of the superior court in respect of special damages for loss of profits set aside
  4. 4.Costs of the appeal awarded to the appellants
  5. 5.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 against the judgment and decree of the High Court (as constituted under the then applicable appellate statutory framework; no specific provision is cited in the judgment)

Key timeline

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Practical implications

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Frequently asked questions

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Later judgments citing this (1)

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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 & another v ELIAS MUROKI [1996] KECA 83 (KLR)", Case Analysis (1996). Civil Appeal 119 of 1995. Source: https://new.kenyalaw.org/akn/ke/judgment/keca/1996/83/eng@1996-01-26

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