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Case Brief · caselaw.co.ke
Court of AppealPartially AllowedCivil Appeal No. 129 of 2018

Migori County Government & another v Josiah Onyango Okello t/a Cargo Secured Services [2019] KECA 431 (KLR)

Court of Appeal of Kenya
31 July 2019
8,712 words in judgment
View original judgmentRead on Kenya Law Watch case
AI-assisted case brief
·~35 min to read original · ~4 min brief

The bottom line

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Migori County was found liable for wrongfully seizing trucks, but the damages award was slashed from about Ksh. 46 million to under Ksh. 1 million because the losses weren't properly proven.

What this practically means

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Executive summary

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The Court of Appeal at Kisumu (Asike-Makhandia, Kiage and Otieno-Odek, JJA) heard a first appeal against a High Court judgment awarding the respondent, a transport operator, Ksh. 46,226,000/= in special damages and Ksh. 500,000/= in general damages after Migori County Government officers impounded his prime mover and trailer for 49 days over alleged illegal mineral trade, leading to his financier repossessing and auctioning the vehicles. Affirming liability, the Court found the letter of 29th September 2015 from the County's legal advisor an unambiguous admission of impoundment, and held the seizure wrongful because the respondent was not in actual possession of mineral ore, leaving the County without justification to demand cess or royalties. On quantum, the Court set aside in entirety the Ksh. 34,826,000/= award for loss of the Star Brilliant EPZ transportation contract, finding no privity of contract, no particularised proof of net profit, gross revenue wrongly used as the measure, and no causal link since two other vehicles could have serviced the contract. It also set aside the Ksh. 11,400,000/= award for the auctioned vehicles: the respondent was already in loan arrears at impoundment, and the financier's overriding security interest meant full-value recovery would be unjust enrichment. Lost income was recalculated at Ksh. 408,330/= over the proven 49 days. The general damages of Ksh. 500,000/= stood, there being no cross-appeal, notwithstanding the trial judge's wrongly framed defamation-like justification. The appeal was partially allowed, the trial judgment varied, and each party ordered to bear its own costs. Total damages: Ksh. 908,330/=.

Questions the Court framed

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The issues the Court set itself to decide, in its own words.

  1. 1.Whether the appellants are liable in damages to the respondent from the proven facts in this matter
  2. 2.Whether the respondent is entitled to any special and general damages as pleaded and the quantum thereof
  3. 3.Whether the learned judge properly evaluated the evidence on record and applied the correct principles of law in arriving at his conclusions and determination

Key legal issues

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01

Whether the vehicles were impounded by the County Government and whether the impoundment was lawful

Holding

The appellants did impound the vehicles, and the impoundment was wrongful because the respondent was not in actual possession of any mineral ore, depriving the appellants of any justification to demand proof of cess or royalties.

Reasoning

The letter of 29th September 2015 from the County's legal advisor, conditioning release of the vehicles on declaration of mineral ore and payment of royalties, was an unambiguous admission of impoundment. The evidence showed no mineral ore was on board when the vehicles were seized, and the appellants tendered no proof of prospecting or mining. Liability for the unlawful impoundment was therefore affirmed.

p. 5
02

Recoverability of special damages for loss of the Star Brilliant transportation contract

Holding

The award of Ksh. 34,826,000/= was set aside: there was no privity of contract between the appellants and Star Brilliant, no proof of net profit with particularity, and no causal link between impoundment and the contract's termination.

Reasoning

Special damages for lost future profits require a causal link flowing from the breach and must be proved with certainty. The respondent never earned the pleaded Ksh. 1,583,000/= monthly; the figure was gross, inclusive of expenses and VAT; and other vehicles were available to service the contract, breaking causation. The judge cited no legal principle for awarding 22 months of gross revenue to a non-contracting party.

p. 7
03

Recoverability of the value of vehicles repossessed and auctioned by the financier

Holding

The award of Ksh. 11,400,000/= was set aside: the respondent was already in arrears at impoundment, so there was no causal link; his interest was subject to the financier's overriding security interest, and full-value recovery would be unjust enrichment.

Reasoning

A demand letter from Housing Finance Company predating impoundment showed the loan default pre-existed the seizure. The respondent was a co-owner whose possessory rights were extinguished when the financier exercised its security; under Bloxam v Hubbard he could recover only according to his interest, and auction proceeds must have been credited to his loan account. The judge erred in making the appellants effectively redeem the vehicles.

p. 8
04

Quantum of lost income and general damages

Holding

Lost income was recalculated at Ksh. 408,330/= (Ksh. 250,000/= per month over 49 days), replacing the erroneous 53-day computation; the general damages award of Ksh. 500,000/= was affirmed absent a cross-appeal despite being wrongly justified on defamation-like grounds.

Reasoning

The evidence proved impoundment for 49 days only, so 53 days was an unfounded multiplicand, and the Ksh. 250,000/= was a gross monthly payment, not daily earnings. General damages were nonetheless due for the high-handed, capricious conduct of the officers; the amount stood because the respondent filed no cross-appeal.

p. 7

Legal principles established

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  • In a first appeal, the Court of Appeal is obliged to reconsider and reassess the evidence and make its own conclusions, making due allowance for not having seen or heard the witnesses.
  • A claimant who relies on a right to possession of a chattel can recover damages only according to the amount of his interest in it; damages above his interest are held for the other person.
  • Damages for breach of contract are subject to the principles of remoteness, causation and mitigation; special damages must be specifically pleaded and proved with certainty and particularity.
  • 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.

Court orders

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  1. 1.Appeal allowed on quantum, dismissed on liability; appeal partially allowed
  2. 2.Liability of the appellants to the respondent affirmed
  3. 3.Special damages of Ksh. 46,226,000/= awarded by the trial court set aside in entirety
  4. 4.Substituted award of damages for lost income of Ksh. 408,330/=
  5. 5.General damages of Ksh. 500,000/= affirmed
  6. 6.Nil awards substituted for loss of the two vehicles and trailer, loss of the Star Brilliant EPZ (K) Limited contract, and loss of contract with the four drivers
  7. 7.Total damages awarded to the respondent: Ksh. 908,330/=
  8. 8.Each party to bear its/his own costs in the appeal

The bench

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One judgment of the whole court — no separate or dissenting opinions.

majority
majority
majority
On appeal from
High Court of Kenya at Migori
Migori HCCC No. 1 of 2017
Jurisdiction invoked
First appeal to the Court of Appeal under the Court of Appeal's appellate jurisdiction (the judgment proceeds as 'a first appeal'); no specific constitutional provision invoked.

Relief refused

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Special damages of Ksh. 34,826,000/= for loss of the Star Brilliant EPZ (K) Limited contract

No privity of contract between the appellants and Star Brilliant; no proof of net profit with particularity; no causal link between impoundment and termination; gross revenue wrongly used

p. 7

Special damages of Ksh. 13,250,000/= for loss of business and income (full amount refused, reduced to Ksh. 408,330/=)

No evidence of daily earnings of Ksh. 250,000/=; wrong multiplicand of 53 days used instead of 49 days of impoundment

p. 7

Special damages of Ksh. 11,400,000/= for loss of the two vehicles sold at auction

Respondent was already in loan arrears at impoundment; no causal link; financier's overriding security interest; full-value award would be unjust enrichment

p. 8

Special damages for loss of contract with four drivers

No evidence of employment of the drivers or of loss; employment disputes outside the judge's jurisdiction

p. 6

Costs

Each party shall bear its/his own costs in this appeal.

Quotable passages

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Verbatim from the judgment, each located to the page it appears on in the official PDF — so these can be cited and checked directly.

It is hereby partially allowed. The judgment of the trial court be and is hereby varied as follows.
p. 9disposition - appeal partially allowed, judgment varied
We set aside in entirety the special damages of Ksh. 46,226,000/= as awarded by the trial court. We substitute in its place an award of damages for lost income in the sum of Ksh. 408,330/=.
p. 9final orders - substitution of quantum
The total sum of damages awarded in favour of the respondent is thus Ksh. 908,330/= only (Ksh. 500,000/= plus Ksh. 408,330/=).
p. 9final orders - total award
Each party shall bear its/his own costs in this appeal.
p. 9costs
we are satisfied the appellants wrongfully and without any justifiable cause impounded the vehicles.
p. 5liability for unlawful impoundment
Vague, speculative, or uncertain damages are not recoverable. However, lost future profits are recoverable if there is a causal link and it arises and flow from the breach of contract.
p. 6special damages - lost profits
A party cannot rely on “self-induced frustration” due to his own conduct to allege that a breach of contract by the other party or a third party has occurred.
p. 8self-induced breach
The appellants’ officers conduct was high-handed, reprehensible, capricious and borders on abuse of power.
p. 9conduct of public officers - general damages

Issues in the judgment

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minor

The judgment refers inconsistently to the governing statute: Section 11 of the 'Minerals Act' at one point, and Section 12(5) of the 'Mining Act' (Chapter 306) elsewhere.

minor

Registration number of the collateral vehicle is inconsistently stated as KBK 294C in the plaint and KBK 284C/KBK 285C in the discussion of the award.

Key timeline

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Practical implications

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Frequently asked questions

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Cite this brief

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Cite this brief

Caselaw, "Migori County Government & another v Josiah Onyango Okello t/a Cargo Secured Services [2019] KECA 431 (KLR)", Case Analysis (2019). Civil Appeal No. 129 of 2018. Source: https://new.kenyalaw.org/akn/ke/judgment/keca/2019/431/eng@2019-07-31

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