Skip to content
AI-generated case briefs sourced from Kenya Law · Not legal advice
AI-generated case brief
Case Brief · caselaw.co.ke
Court of AppealDismissedCivil Appeal No. 114 of 2009· [2016] KECA 306 (KLR)

Attorney General v Halal Meat Products Limited [2016] KECA 306 (KLR)

Court of Appeal of Kenya
29 July 2016
4,422 words in judgment
View original judgmentRead on Kenya Law Watch case
AI-assisted case brief
·~18 min to read original · ~4 min brief

The bottom line

#

Kenya's Court of Appeal confirmed that the Government must fully compensate a company whose property it took and occupied, awarding over Kshs.1.8 billion.

What this practically means

#

Executive summary

#
The Court of Appeal (Visram, Karanja and J. Mohammed, JJ.A) dismissed the Attorney General's appeal against a High Court judgment awarding Halal Meat Products Limited Kshs.1,807,772,000/= plus professional fees and costs, with a set-off of Kshs.27,701,127/= on the Government's counter-claim. The respondent's abattoir at Bul Bul, Ngong was taken over on 1st July 1984 under a presidential directive during a severe drought and managed by the Kenya Meat Commission. The court held that the Government's possession, taken without the respondent's willing agreement and pursuant to a directive, amounted to compulsory acquisition under section 75 of the former Constitution, which required prompt payment of full compensation. Both parties had executed terms of reference on 5th December 1991 for separate valuations to determine compensation; the court held these bound both the trial court and itself, applying the principle that courts cannot rewrite contracts. The court agreed the appellant had conceded mesne profits under clause 6, and endorsed the trial Judge's adoption of the respondent's valuation and rejection of the Government's, which failed to follow the terms of reference; it held the respondent's higher proposal was a mere inquiry, not a counter-offer. It upheld the award of professional fees as an issue left to the court at trial despite not being specifically pleaded, and declined to disturb the Judge's discretion on interest and on awarding the respondent the costs of the counter-claim. The appeal was dismissed with costs to the respondent.

Key legal issues

#
01

Nature of the Government's occupation of the abattoir

Holding

The Government's possession pursuant to a presidential directive, without the respondent's willing agreement, amounted to compulsory acquisition under section 75 of the former Constitution.

Reasoning

The court examined correspondence showing possession was taken on the President's directive with an undertaking to pay whatever the valuations showed, and that the respondent gave up possession out of compulsion. Applying the definition of compulsory acquisition, it concurred with the trial court that the taking was compulsory and required prompt compensation under section 75.

p. 4
02

Entitlement to mesne profits

Holding

The appellant, by clause 6 of the terms of reference, conceded that mesne profits were payable; its occupation being unlawful, mesne profits accrued.

Reasoning

Clause 6 of the agreed terms of reference expressly provided that the valuations would calculate mesne profits, binding both courts. Since the Government occupied and used the abattoir without compensation, the occupation was wrongful, and one wrongfully deprived of property is entitled to mesne profits for the period of wrongful occupation.

p. 6
03

Binding effect of the agreed terms of reference

Holding

The terms of reference of 5th December 1991 bound the parties and both the trial and appellate courts in determining compensation.

Reasoning

The parties executed terms of reference fixing the parameters for compensation, including the assessment period and the Government's restoration undertaking. Relying on the principle that courts cannot rewrite contracts, the court held itself bound to give effect to those terms in determining the nature, extent and period of compensation.

p. 5
04

Choice between competing valuation reports

Holding

The trial Judge properly adopted the respondent's valuation because the appellant's valuer ignored the terms of reference, and an appellate court will not interfere with that discretion.

Reasoning

The trial Judge gave cogent reasons for rejecting the Government's valuation, which disregarded the restoration undertaking and the superior nature of the abattoir. Expert evidence may only be rejected on firm grounds; the court found no reason to interfere, and held the respondent's higher proposal was a mere inquiry, not a counter-offer extinguishing the Government's offer.

p. 7
05

Award of professional fees though not specifically pleaded

Holding

The award of professional fees was justified because the issue was left to the court at trial under the Odd Jobs exception.

Reasoning

Although professional fees were not specifically pleaded, the parties had agreed to valuations necessarily involving professional services, and the respondent led evidence of the costs incurred and prayed the appellant meet them. Applying the exception that courts may determine unpleaded issues left to them at trial, the court declined to disturb the award.

p. 7
06

Interest and costs of the counter-claim

Holding

The trial Judge properly exercised her discretion on the interest rate and cap, and on awarding the respondent costs of the counter-claim.

Reasoning

Discretion on interest and costs may be interfered with only in exceptional cases. The Judge exercised discretion judicially on interest, and gave good reasons - that the Government caused the non-payment of the loan - for departing from costs-follow-the-event on the counter-claim, which the appellate court found unimpeachable.

p. 8

Legal principles established

#
  • Where land or an interest in land is taken without the agreement of the owner, it is compulsorily acquired, and prompt payment of full compensation is a constitutional condition for such acquisition.
  • Courts cannot rewrite contracts between parties; parties are bound by the terms of their contract unless coercion, fraud or undue influence are pleaded and proved.
  • Expert evidence must not be rejected by a court except on firm grounds, though the court must form its own independent opinion.
  • An appellate court may interfere with a trial judge's exercise of discretion only where the judge misdirected himself, or the decision is clearly wrong and results in misjustice.
  • Costs follow the event unless the court, for good reasons, orders otherwise.

Court orders

#
  1. 1.The appeal is dismissed with costs to the respondent
  2. 2.The judgment of the High Court awarding the respondent Kshs.1,807,772,000/= (mesne profits up to 31st October 2004 plus restoration costs, with pro rata compensation to the date of judgment), professional fees at 7.5%, interest, and costs of the suit is upheld
  3. 3.Judgment on the counter-claim for Kshs.27,701,127/= with interest at 12% p.a. from 21st August 1989, set off against the award, with the Government bearing the costs of the counter-claim, is upheld

Authorities

#

Legislation

  • Constitution of Kenya (former)section 75
  • Constitution of Kenya, 2010Article 40(3)
  • Civil Procedure Actsection 26

Cases cited (12)

  • Mbogo & Another -vs- Shah
    (1968) EA 95
  • Selle -vs- Associated Motor Boat Co. Ltd
    [1968] EA 123
  • Kirkness -vs- John Hudson & Co. Ltd
    [1955] AC 696
  • Priest -vs- Secretary of State
    [1982] 81 LGR 193
  • Commissioner of Lands & Another -vs- Coastal Aquaculture Ltd.
    KLR (E&L) 1 264
  • Commissioner of Lands -vs- Essaji Jiwaji & Public Trustee
    [1978] eKLR
  • National Bank of Kenya Ltd -vs- Pipe Plastic Samkolit (K) Ltd & Another
    (2001) KLR 112
  • Juliet Karisa -v- Joseph Barawa & Another
    Civil Appeal No. 108 of 1988 (Unreported)
  • Nairobi City Council -vs- Thabiti Enterprises Limited
    (1997) eKLR
  • Odd Jobs -vs- Mubia
    (1974) EA 476
  • Salim & Another -vs- Kikava
    (1989) KLR 534
  • Jasbir Singh Rai & 3 Others -vs- Tarlochan Singh Rai & Others
    (2014) eKLR
On appeal from
High Court of Kenya at Nairobi
H.C.C.C. 1655 of 1986
Jurisdiction invoked
First appeal to the Court of Appeal under the Court of Appeal's appellate jurisdiction

Key timeline

#

Practical implications

#

Frequently asked questions

#

Later judgments citing this (5)

#

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

Cite this brief

#

Cite this brief

Caselaw, "Attorney General v Halal Meat Products Limited [2016] KECA 306 (KLR)", Case Analysis (2016). Civil Appeal No. 114 of 2009. Source: https://new.kenyalaw.org/akn/ke/judgment/keca/2016/306/eng@2016-07-29

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