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Court of AppealPartially AllowedCivil Appeal No. 277 of 2000· [2007] KECA 485 (KLR)

Mumias Sugar Company Ltd v Wanalo (Civil Appeal 91 of 2003) [2007] KECA 485 (KLR)

Court of Appeal
31 July 2007
SBS. E. O. BosireEOE. O. O'KubasuEGE. M. Githinji
2,976 words in judgment
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The bottom line

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Kenya's Court of Appeal confirmed employers fully liable for workplace crane injuries, but cut damages for reduced earning capacity from Shs.2 million to Shs.500,000.

What this practically means

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Executive summary

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The respondent, an apprentice in general fitting and mechanical engineering attached to the appellant's factory, was injured on 4th July 1998 when an acting supervisor, Adriano Otanga, operated an overhead crane while the respondent was still on it, crushing his fingers and thigh. The High Court (Gacheche J) found the appellant wholly liable and awarded general damages of Shs.200,000/=, special damages of Shs.1,500/= and loss of earning capacity of Shs.2,016,000/=, computed on a multiplicand of Shs.7,000/= per month and a multiplier of 24. The appellant appealed on liability and quantum. On re-appraisal of the uncontroverted evidence - including the appellant's own internal investigation report blaming Otanga - the Court of Appeal affirmed liability in full. On quantum, the Court synthesised English authority (Fairley, Moeliker, Clark) and its own decision in Butler v Butler to hold that loss of earning capacity is a compensable head whether or not the plaintiff is employed at trial, may be awarded as part of general damages or separately, and admits of no formula. Because the respondent's permanent incapacity was only 10-15% of one hand's function, assessing the head on the multiplier/multiplicand basis was an error of principle and the award was grossly excessive. The appeal was allowed only to the extent that the Shs.2,016,000/= award was set aside and substituted with Shs.500,000/=. The award for pain, suffering and loss of amenities was untouched, and each party bore its own costs of the appeal.

Key legal issues

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01

First appeal against findings of fact on liability and contributory negligence

Holding

The trial judge's finding that the appellant was wholly liable and the respondent not contributorily negligent was correct and was affirmed on re-appraisal.

Reasoning

The respondent's uncontroverted evidence, the appellant's failure to call any witness, and the appellant's own internal investigation report blaming its supervisor Adriano Otanga for operating the crane while the respondent was still on it, all supported the trial finding. The report, produced without objection, exonerated the respondent from contributory negligence.

p. 2
02

Whether loss of earning capacity may be awarded as a separate head alongside general damages for pain and suffering

Holding

Yes - loss of earning capacity may be claimed and awarded either as part of general damages or as a separate head, and may be awarded even where the plaintiff is employed or unemployed at trial.

Reasoning

Following Fairley v John Thompson, Moeliker v Reyrolle and this Court's decision in Butler v Butler, the court synthesised the principles: the award compensates the risk of losing employment or diminished re-employment chances where employed, and the risk of future unsuitability for employment where not employed. What matters is substance, not the label under which damages are claimed.

p. 5
03

Whether the multiplier/multiplicand method is appropriate for loss of earning capacity

Holding

No - where the risk to employment is minimal, assessment on the multiplier/multiplicand basis is an error of principle; the head is compensatory of a risk, not a provable loss.

Reasoning

Loss of future earnings is assessed on multiplier/multiplicand for real assessable loss proved by evidence, while loss of earning capacity compensates diminution of chances and admits of no mathematical calculation. With incapacity of only 10-15% of one hand's function, the risk of not finding employment was minimal, so a Shs.2,016,000 award computed on multiplicand of Shs.7,000 and multiplier of 24 was in reality an award for loss of future earnings and grossly excessive.

p. 5

Legal principles established

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  • On a first appeal the court is not bound by the trial court's findings of fact and the appeal is in the nature of a retrial, but an appellate court should be slow to interfere with findings of fact by a trial court.
  • Loss of earning capacity can be claimed and awarded whether or not the plaintiff is in employment at the date of trial, and may be awarded as part of general damages or as a separate head of damages.
  • Loss of earning capacity must not be assessed on the multiplier/multiplicand basis used for provable loss of future earnings; it is a general-damages head with no fixed formula, and the award depends on the risk of job loss or diminished re-employment chances, which may justify a token, modest or substantial award.
  • An appellate court will interfere with an award of damages where the trial judge erred in principle or the award is so high or low as to be an entirely erroneous estimate.

Court orders

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  1. 1.Appeal allowed to the extent that the award of Shs.2,016,000/= for loss of earning capacity is set aside and substituted with an award of Shs.500,000/=
  2. 2.Award of Shs.200,000/= for pain, suffering and loss of amenities left undisturbed
  3. 3.No orders as to costs - each party to bear own costs of the appeal

Authorities

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Cases cited (10)

  • Selle v Associated Motor Boat Co Ltd
    [1968] EA 123
  • Mariera v Kenya Bus Services (MBS) Ltd
    [1987] KLR 440
  • Peters v Sunday Post Ltd
    [1958] EA 474
  • Hahn v Singh
    [1985] KLR 716
  • Kitavi v Coastal Bottlers Ltd
    [1985] KLR 470
  • Kemfro v A M Lubia & Olive Lubia
    [1982-88] 1 KAR 727
  • Fairley v John Thompson Ltd
    [1973] 2 Lloyd's Rep 40
  • Moeliker v Reyrolle & Co Ltd
    [1977] 1 WLR 132
  • Clark v Rotax Aircraft Equipment Ltd
    [1975] 1 WLR 1570
  • Butler v Butler
    [1984] KLR 225
On appeal from
High Court of Kenya
Jurisdiction invoked
First appeal to the Court of Appeal under the Court of Appeal's appellate jurisdiction (statutory first appeal on facts and law)

Key timeline

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Practical implications

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Frequently asked questions

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Later judgments citing this (5)

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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, "Mumias Sugar Company Ltd v Wanalo (Civil Appeal 91 of 2003) [2007] KECA 485 (KLR)", Case Analysis (2007). Civil Appeal No. 277 of 2000. Source: https://new.kenyalaw.org/akn/ke/judgment/keca/2007/485/eng@2007-07-31

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