Compact Freight Systems Limited v Multiserve Oasis Company Limited & another
The bottom line
#Kenya's Court of Appeal confirmed a freight company must pay over USD 214,000 for lost goods, because it never proved its fraud claims.
What this practically means
#Executive summary
#Key legal issues
#Whether the appellant was liable for the loss of the consignment
Yes. The container was discharged at the port, loaded onto a truck driven by a driver authorized by the appellant and destined for the appellant's premises, but diverted; the loss occurred while in the appellant's custody.
The Court re-evaluated the evidence as on a first appeal. DW1's unchallenged witness statement confirmed the container was designated for release to the appellant and exited the port bound for its premises. The appellant's fraud allegation failed because fraud was neither pleaded nor proved, and the burden lay on the appellant.
Whether the trial Judge determined the basis of the appellant's liability (direct or qua indemnification of KPA)
Yes. The Judge expressly addressed the matter, holding the appellant liable in custody and control, and that it was an independent contractor, not an agent of KPA.
Ground 8 of the memorandum complained the Judge failed to determine the basis of liability. The Court found the Judge expressly addressed this in paragraphs 40 to 46 of the judgment, concluding on clauses 7 and 10 of the licence agreement. There being no challenge to the independent-contractor holding, the agency argument was not properly before the Court.
Whether the award of USD 214,803 as special damages was strictly proved
Yes. Based on commercial invoice No. 5874, the 212 bales were valued at USD 297,790.98; the award represented the proportionate value of the 153 bales lost.
Although the trial Judge did not explain how he arrived at the figure, the appellate Court found it evident from the commercial invoice that the award was the proportionate value of the 153 lost bales, the 59 recovered bales being deducted. The other awards (hotel, air ticket) were not challenged on appeal.
Whether the appellant, as agent of a disclosed principal, could not be sued
The contention was not properly taken, as it had no basis in the memorandum of appeal; in any event the appellant was not sued as an agent and was found to be an independent contractor.
The Court acknowledged the common-law principle that where the principal is disclosed the agent is not to be sued, but distinguished the cited authority because there was no plea that the appellant was joined as an agent of KPA, and the 1st respondent pursued the appellant and KPA jointly and severally.
Legal principles established
#- Special damages must be specifically pleaded and strictly proved; they may not be inferred from the act complained of.
- Allegations of fraud must be specifically pleaded, distinctly alleged and distinctly proved, and cannot be inferred from the facts.
- A party may not, without leave, argue on appeal a ground not specified in the memorandum of appeal or notice of cross-appeal.
- In civil cases the standard of proof is on a balance of probability - the court makes a finding based on which party's version is more believable.
Court orders
#- 1.The appeal fails and is dismissed with costs to the respondents
- On appeal from
- High Court of Kenya at Mombasa (Commercial Division)
- High Court Civil Suit No. 252 of 2010
- Jurisdiction invoked
- First appellate jurisdiction under the Court of Appeal's mandate to re-evaluate the evidence and conclusions of the trial court
Key timeline
#Practical implications
#Frequently asked questions
#Cite this brief
#Cite this brief
Caselaw, "Compact Freight Systems Limited v Multiserve Oasis Company Limited & another", Case Analysis (2022). Civil Appeal E001 of 2021. Source: https://new.kenyalaw.org/akn/ke/judgment/keca/2022/1300/eng@2022-12-02
Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.