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Court of AppealPartially AllowedCivil Appeal No. 189 of 2014· [2016] KECA 56 (KLR)

Capital Fish Kenya Limited v The Kenya Power & Lighting Company Limited [2016] KECA 56 (KLR)

Court of Appeal
4 November 2016
4,767 words in judgment
View original judgmentRead on Kenya Law Watch case
AI-assisted case brief
·~19 min to read original · ~4 min brief

The bottom line

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Proving a claim in Kenya means little without solid evidence: Capital Fish lost its Kshs.47 million claim because it couldn't strictly prove its special damages.

What this practically means

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Executive summary

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This is a judgment of the Court of Appeal at Nairobi (Makhandia, Ouko and M'inoti, JJ.A) in the appellant's appeal and the respondent's cross-appeal from a High Court judgment of 23rd January 2012 (Mwera, J, delivered by Waweru, J). Capital Fish Kenya Limited sued Kenya Power for breach of an electricity supply contract, alleging under-voltage caused by inadequate transformers damaged its fish processing machinery and business. The trial court found the respondent liable for breach of statutory duty but dismissed the claim because the pleaded special damages were not proved and general damages are not available for breach of contract, while awarding the appellant costs. The Court of Appeal, as a first appellate court re-evaluating the evidence, dismissed the appeal: it held that special damages must be strictly proved and that each of the six heads of loss (about Kshs.47 million) failed for want of credible evidence, with figures merely thrown at the court. It reaffirmed that general damages are not awardable for breach of contract absent proof of oppressive, high-handed, outrageous, insolent or vindictive conduct, which was not established. On the cross-appeal, the Court held the trial judge erred in extending rule 29 of the Electric Power Rules, which concerns wiring faults and leakages, to cover overloading, but breach of contract was nevertheless proved by the respondent's admissions and its installation of a 1000 KVA transformer. The Court, however, intervened on costs, holding the trial court's unreasoned award of costs was not judicious, and ordered that each party bear its own costs. The judgment binds lower courts on the strict proof of special damages and the limits of general damages in contract.

Key legal issues

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01

Proof of special damages

Holding

The trial court correctly found the special damages specifically pleaded but not proved; each head of claim failed for want of credible evidence.

Reasoning

The Court examined each of the six heads of loss: damaged equipment, fuel costs, diminished productivity, condemned fish exports, stabilizers and loss of business. For each, it found the evidence absent, tenuous or attributable to other causes such as rats damaging wires or damage in transit. Statements of accounts produced without more do not constitute proof; the colossal sums claimed demanded strict proof with credible documentary and oral evidence.

p. 7
02

General damages for breach of contract

Holding

The general rule that damages are not awardable for breach of contract stands; the exceptions require proof of oppressive, high-handed, outrageous, insolent or vindictive conduct, which was not established.

Reasoning

The appellant conceded the general rule and relied on a Nigerian authority to invoke exceptions. The Court held that writing letters and receiving promises of investigation, with a blame game between the parties, does not amount to oppressive or vindictive conduct; the appellant bore the burden of leading evidence to bring its case within the exceptions and failed to do so.

p. 7
03

Cross-appeal on liability under rule 29 of the Electric Power Rules

Holding

The trial court erred in extending rule 29, which deals with wiring faults and leakages, to cover overloading; nevertheless, breach of contract was proved by the respondent's admissions and conduct.

Reasoning

Rule 29(1) of the Electric Power Rules contemplates faults, fittings and leakages in the supply line warranting notice of discontinuance, not overloading or under-loading. However, the respondent's correspondence admitted under-voltage complaints and promised remedial action, and its eventual installation of a 1000 KVA transformer was an admission of wrongdoing. The liability finding was therefore sustained on the contract, not on the statute.

p. 7
04

Costs

Holding

The trial court's award of costs to the appellant despite its claim failing was an afterthought without reasons; since both parties partially succeeded, each party should bear its own costs.

Reasoning

Costs follow the event but are discretionary. The trial court found liability but awarded no damages, yet still gave the appellant costs without explaining its reasoning. In the absence of reasons the appellate court cannot tell whether the discretion was exercised judicially and must intervene. Given partial success on both sides, the just order was that each party bear its own costs.

p. 8

Legal principles established

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  • Special damages must not only be specifically pleaded but must also be strictly proved with as much particularity as the circumstances permit; a claimant who merely throws figures at the court without credible evidence is not entitled to an award.
  • General damages are not awardable for breach of contract, save where the defaulting party's conduct is oppressive, high-handed, outrageous, insolent or vindictive, which must be proved by evidence.
  • An appellate court should not interfere with a trial court's exercise of discretion on costs unless it is demonstrated that the discretion was not exercised judicially; where no reasons are given, the appellate court must intervene.

Court orders

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  1. 1.The appeal is dismissed with no order as to costs
  2. 2.The cross-appeal succeeds only to the extent of setting aside the trial court's order on costs
  3. 3.Each party to bear its own costs of the suit

Authorities

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Legislation

  • Electric Power Act (now repealed)section 29
  • Electric Power Rulesrule 29 (1)
  • 1953 By-laws

Cases cited (9)

  • Selle & Another v. Associated Motor Boat Company Ltd & Others
    (1968) EA 123
  • Jivanji vs Sanyo Electrical Company Ltd
    (2003) KLR 425
  • National Social Security Fund Board of Trustees vs Sifa International Limited
    (2016) eKLR
  • Macharia & Waiguru vs Muranga Municipal Council & Another
    (2014) eKLR
  • Provincial Insurance Co. EA Ltd vs Mordekai Mwanga Nandwa
    KSM CACA 179 of 1995 (ur)
  • Mitchell Cotts (K) Ltd vs Musa Freighters
    (2011) eKLR
  • Ryce Motors Ltd & Another vs Muchoki
    (1995-98) 2 EA 363 (CAK)
  • Marine Management Association & Another vs National Maritime Authority
    (2012) 18 NWLR 504
  • Joseph Ungadi Kodera vs Ebby Kangisha Kavai
    KSM C. A. No. 239 of 1997 (ur)
On appeal from
High Court of Kenya at Nairobi
H.C.C.C. No. 369 of 1998
Jurisdiction invoked
First appellate jurisdiction under the Civil Procedure Act/applicable appellate provisions (not stated expressly 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 (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, "Capital Fish Kenya Limited v The Kenya Power & Lighting Company Limited [2016] KECA 56 (KLR)", Case Analysis (2016). Civil Appeal No. 189 of 2014. Source: https://new.kenyalaw.org/akn/ke/judgment/keca/2016/56/eng@2016-11-04

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