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Court of AppealPartially AllowedCivil Appeal No. 206 of 2015· [2018] KECA 158 (KLR)

Farah Awad Gullet v CMC Motors Group Limited [2018] KECA 158 (KLR)

Court of Appeal of Kenya
18 October 2018
RNR. N. NambuyeFSF. SichaleSKS. ole Kantai
5,625 words in judgment
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The bottom line

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Kenya's Court of Appeal confirmed you must prove special damages with real evidence, but awarded the buyer most costs because the seller's breach caused the case.

What this practically means

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Executive summary

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This first appeal arose from the judgment of H.A. Omondi, J of the High Court at Nakuru dated 24th September 2014, which dismissed a buyer's claim for special damages for loss of user of a tractor whose registration items (number plate and logbook) the seller, CMC Motors Group Limited, failed to deliver within a reasonable time, while ordering delivery of the registration items and directing each party to bear its own costs. The Court of Appeal, comprising Nambuye, Sichale and ole Kantai, JJ.A, delivered a single judgment of the court on 18th October 2018. It framed four issues: proof of special damages, mitigation of loss, the timeline for delivery of registration items, and the order on costs. On special damages, the court affirmed the trial Judge, holding that special damages must be specifically pleaded and strictly proved with tangible evidence such as receipts, bank statements or proof of trade usage, and that Article 159(2)(d) of the Constitution cannot uproot crystalized principles of law. On mitigation, the court, while affirming the doctrine as settled law, found the trial Judge should have applied it in the appellant's favour given the respondent's uncontroverted default, and set aside the finding on mitigation. The complaint on the delivery timeline became a non-issue as the respondent had complied on 13th August 2015. On costs, the court interfered with the trial Judge's discretion, holding she failed to consider that the respondent's breach triggered the litigation. The appeal was partially allowed: the mitigation finding set aside, three-quarter costs on appeal and costs below awarded to the appellant, and the dismissal of the special damages claim affirmed.

Key legal issues

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01

Proof of special damages

Holding

The appellant failed to prove the pleaded special damages of Kshs 30,000/= per day loss of user; the trial Judge's rejection of the claim was affirmed.

Reasoning

The court held that a claimant must do more than state a loss and invite the court to award it. He was obligated to prove a trade usage in the Lolgorian area of hiring out tractors at the claimed rate and to call witnesses or produce tangible records such as receipts, bank statements or hire agreements. The evidence fell short of the threshold in Harilal and Hahn v Singh, and Article 159(2)(d) cannot cure failure to prove a crystalized principle.

p. 3
02

Mitigation of loss

Holding

The trial Judge erred in applying the doctrine of mitigation against the appellant on these facts; the finding on mitigation was set aside.

Reasoning

While affirming the settled duty to mitigate, the court found that the uncontroverted factors - the respondent's unreasonable delay, lack of payment or follow-up towards securing the registration items, and the rejected attempt to shift blame to KRA - meant the doctrine should have been applied in the appellant's favour, calling on the respondent to meet the consequences of its default.

p. 4
03

Timeline for delivery of registration items

Holding

The issue became moot because the respondent complied with the trial Judge's directive on 13th August 2015, and the appellant did not controvert that assertion.

Reasoning

The respondent asserted compliance long before the hearing of the appeal. The appellant failed to controvert this assertion, leaving nothing for the court to interrogate or draw conclusions upon. Ground seven of the appeal was therefore spent and of no consequence.

04

Costs

Holding

The trial Judge's withholding of costs from the appellant was interfered with; the appellant was awarded three-quarter costs on appeal and costs below.

Reasoning

Although costs are discretionary and follow the event, the trial Judge failed to consider the factors that triggered the litigation - the respondent's breach and delay - and the respondent's contribution to those factors. Together with the finding that the appellant had mitigated his loss, this amounted to a misjustice justifying appellate interference with the discretion on costs.

p. 6

Legal principles established

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  • Special damages must not only be specifically pleaded but also strictly proved; a mere assertion of loss is insufficient.
  • A party seeking damages for breach of contract or in tort has a duty to mitigate his loss.
  • Costs follow the event but are in the discretion of the court, to be exercised judiciously; costs may be withheld from a successful party only for good cause shown.
  • An appellate court will not interfere with a trial judge's exercise of discretion unless it is shown the discretion was exercised injudiciously or on wrong principles.
  • On a first appeal, the Court of Appeal's mandate is to re-appraise, re-assess and re-analyze the evidence and arrive at its own conclusions.
  • Article 159(2)(d) of the Constitution does not operate to uproot crystalized principles of law such as the threshold for proof of special damages.

Court orders

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  1. 1.Appeal partially allowed
  2. 2.Trial Judge's finding on mitigation of loss set aside and substituted with a finding that the appellant sufficiently mitigated his loss
  3. 3.Order on costs set aside and substituted with an order that the appellant be awarded three-quarter costs on appeal and costs in the court below
  4. 4.Order dismissing the appellant's special damages claim affirmed
On appeal from
High Court of Kenya at Nakuru
Nakuru HCC No. 208 of 2011
Jurisdiction invoked
First appeal to the Court of Appeal under the Court of Appeal Rules (Rule 31 on powers on appeal); appeal from the High Court

Key timeline

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Practical implications

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Frequently asked questions

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Later judgments citing this (10)

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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, "Farah Awad Gullet v CMC Motors Group Limited [2018] KECA 158 (KLR)", Case Analysis (2018). Civil Appeal No. 206 of 2015. Source: https://new.kenyalaw.org/akn/ke/judgment/keca/2018/158/eng@2018-10-18

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