Small Enterprises Finance Company Ltd v Thomas Adongo Onuko t/a Kisumu Expert Tailoring House [2014] KECA 821 (KLR)
The bottom line
#Kenya's Court of Appeal confirmed a lender must pay Kshs. 1.08 million to a tailor whose sewing machines were unlawfully kept for two years after he fully repaid his loan.
What this practically means
#Executive summary
#Questions the Court framed
#The issues the Court set itself to decide, in its own words.
- 1.Whether the respondent proved the loss of user of the seized sewing machines to justify the awards of Kshs. 600,000 and Kshs. 480,000
- 2.Whether an award of damages founded on unaudited trade accounts could stand
- 3.Whether the respondent failed in his duty to mitigate his loss
- 4.Whether the Court of Appeal should interfere with the trial judge's assessment of damages
Key legal issues
#Whether the trial judge erred in awarding damages for loss of user based on trade accounts that were not independently audited
The trade accounts were prepared and audited by an accountant (PW3) who testified, and the respondent testified that he met his tax obligations; the judge was entitled to rely on them.
The respondent produced trade accounts for 1991, 1992 and 1993 showing business performance, prepared and audited by PW3, an accountant who testified and was not challenged in cross-examination on this. The respondent also testified he paid tax for the relevant period. The appellant called no evidence in rebuttal, so the facts were unchallenged. Unlike Allan Njuguna, there was no proof the accounts were fraudulent or prepared to mislead tax authorities.
Whether the respondent failed to mitigate his loss
The duty to mitigate was discharged; the respondent demanded return of the chattels and the appellant was negligent in not ensuring compliance with its own release instructions.
The respondent wrote various letters demanding return of the attached chattels, and the appellant had itself instructed its agent to release the machines. The delay of about two years was attributable to the appellant's negligence in not ensuring its orders to its agent were complied with. Timsales was distinguished because there the damages were computed for an excessive period without demand; here the appellant assured return but failed to effect it.
Whether the Court of Appeal should interfere with the quantum of damages
The awards were neither inordinately high nor inordinately low and did not represent an entirely erroneous estimate warranting interference.
Citing Bhutt v Khan and Gicheru v Morton, the court reiterated that it should be slow to disturb awards of damages unless they are so inordinately high or low as to represent an entirely erroneous estimate, or the trial judge proceeded on wrong principles or misapprehended the evidence materially. The respondent proved seizure, non-return for about two years after full repayment, and non-return of one machine altogether.
Legal principles established
#- An appellate court will not disturb an award of damages unless it is so inordinately high or low as to represent an entirely erroneous estimate, or the judge proceeded on wrong principles or misapprehended the evidence in a material respect.
- On a first appeal, the Court of Appeal must re-examine and re-evaluate the whole evidence and reach its own conclusions, while making due allowance for not having seen or heard the witnesses.
- A principal is liable for damages where, after repayment of a loan in full, it fails to ensure that its agent returns the seized mortgaged chattels to the owner; negligence of the agent is vicariously borne by the principal.
Court orders
#- 1.The appeal is dismissed with costs to the respondent
- 2.The judgment of the High Court (B. K. Tanui, J) dated 4th June 2004, including the awards of Kshs. 600,000 and Kshs. 480,000, is upheld
The bench
#One judgment of the whole court — no separate or dissenting opinions.
- On appeal from
- High Court of Kenya at Kisumu
- Kisumu HCCC No. 110 of 1996
- Jurisdiction invoked
- First appeal to the Court of Appeal under the applicable appellate statutory framework; not expressly stated in the judgment
Relief refused
#Setting aside or reduction of the damages awarded for loss of user
The awards were neither inordinately high nor inordinately low and the trial judge was entitled to make them on the evidence adduced
Costs
The appeal has no merit and is accordingly dismissed with costs.
Quotable passages
#Verbatim from the judgment, each located to the page it appears on in the official PDF — so these can be cited and checked directly.
The appeal has no merit and is accordingly dismissed with costs.
On the evidence adduced the learned judge was entitled to make the awards which he made which were neither inordinately high nor inordinately low as to call for our interference.
The respondent proved that his sewing machines were seized and were not returned even after repayment of the loan. The same were held unlawfully for a period of about two years while one machine was not returned at all.
An appellate court will not disturb an award of damages unless it is so inordinately high or low as to represent an entirely erroneous estimate
Key timeline
#Practical implications
#Frequently asked questions
#Cite this brief
#Cite this brief
Caselaw, "Small Enterprises Finance Company Ltd v Thomas Adongo Onuko t/a Kisumu Expert Tailoring House [2014] KECA 821 (KLR)", Case Analysis (2014). Civil Appeal No. 280 of 2008. Source: https://new.kenyalaw.org/akn/ke/judgment/keca/2014/821/eng@2014-02-21
Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.