National Social Security Fund Board of Trustees v Sifa International Limited [2016] KECA 550 (KLR)
The bottom line
#Kenya's Court of Appeal struck down Kshs.16.5 million in damages because the tenant couldn't prove its losses with documents, showing Kenyan courts demand strict proof of special damages.
What this practically means
#Executive summary
#Key legal issues
#Whether the award of Kshs.16,000,000/- as special damages for demolished structures was proper
The award was improper as the special damages were not strictly proved; the trial court relied on estimates and concessions without documentation
The Court of Appeal, as a first appeal court, re-evaluated the evidence and found that the quantity surveyor's testimony was based on estimates from sketches, with no receipts or supporting documents, and the director disclaimed knowledge of the claim. The trial court itself had found the claim unproved yet awarded a reduced figure based on 'concessions'. Special damages being non-discretionary, they must be strictly proved, and the award had no legal basis.
Whether the Kshs.500,000/- award for loss of business could stand
The award could not stand; a court may not award special damages on the basis of judicial notice
The trial Judge expressly found the claim of Kshs.67,275,339/- unproved but awarded Kshs.500,000/- by taking judicial notice that 'some loss' must have occurred. The court held that Sections 59 and 60 of the Evidence Act do not permit judicial notice of a claimant's loss of profits, and uncontroverted evidence showed the respondent declared no income and remitted no tax during the relevant period. The award therefore failed in toto.
Whether unpaid rent was an issue before the trial court despite no counter-claim
Although not pleaded by way of counter-claim, the issue of rent became alive during trial and the court was bound to determine it; however the Judge erred in not factoring in the escalation clause
Relying on Vyas Industries v Diocese of Meru and Odd Jobs v Mubia, the court held that a court may base its decision on an unpleaded issue if it was left to the court during trial and the parties participated in it. The parties raised rent in the amended list of issues and through evidence. The proper course was only to order payment or transfer of rent, and computation with due regard to the 15% escalation clause, not to fix a lump sum ignoring the lease.
Whether the appellant breached the lease by advertising the premises for sale without first granting the first option to purchase
No breach was established; mere advertisement did not deny the option where no sale materialised without the option being accorded
The first option clause was silent as to when the option was to be given. The Judge was entitled to view the right to sell as importing a right to advertise, subject to giving the respondent the first option. Since no sale to a third party occurred without first according the option, or at all, breach was not made out. Had the appellant sold to a third party without according the option, there would have been breach.
Whether refusal to renew the lease constituted breach of the lease
The issue was moot as the respondent remained in possession for a second term and acknowledged rent was payable per the lease
Although the appellant refused renewal by its letter of 4th February 2009, the respondent continued in occupation for a second term and did not refute that rent for the second term was calculable per the lease. Refusal to renew could only have become an issue had the appellant taken steps to evict the respondent.
Legal principles established
#- Special damages must be both pleaded with particularity and strictly proved; there is no middle ground, and a court may not award them on judicial notice or estimates
Court orders
#- 1.The award of Kshs.16,000,000/= as special damages for the demolished structures is set aside
- 2.The award of Kshs.500,000/= as loss of business is set aside
- 3.Any rent owing or due to the appellant should be computed by the Deputy Registrar, giving due regard to the escalation clauses in the lease, and then paid or transferred to the appellant
- 4.The cross-appeal is dismissed in its entirety
- 5.Each party bears its own costs both in the Court of Appeal and the High Court
- On appeal from
- Environment and Land Court of Kenya at Mombasa
- E.L.C. C. Suit No. 263 of 2006
- 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 (2)
#Judgments in the corpus that rely on this one. Where the Court said how it treated the authority, that is shown.
- Doric Industries Limited v Aksharap Real Estate Limited (Environment and Land Case 686 of 2017) [2026] KEELC 1427 (KLR)[2026] KEELC 1427 (KLR)12 Mar 2026applied
- National Social Security Fund Board of Trustees v Micro City Computers Limited (Civil Application E045 of 2024) [2025] KECA 1313 (KLR)[2025] KECA 1313 (KLR)18 Jul 2025
Cite this brief
#Cite this brief
Caselaw, "National Social Security Fund Board of Trustees v Sifa International Limited [2016] KECA 550 (KLR)", Case Analysis (2016). Civil Appeal No. 50 of 2015. Source: https://new.kenyalaw.org/akn/ke/judgment/keca/2016/550/eng@2016-05-27
Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.