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Court of AppealDismissedApplication dated 12th October, 2018 (arising from Civil Appeal No. 120 of 2017)

Sundowner Lodge Limited v Kenya Tourist Development Corporation (Civil Application Sup 19 of 2018) [2023] KECA 1131 (KLR)

Court of Appeal
22 September 2023
4,567 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

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Kenya's Court of Appeal refused to let Sundowner Lodge take its contract damages dispute to the Supreme Court, confirming that general damages are rarely recoverable for breach of contract.

What this practically means

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Executive summary

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Sundowner Lodge Limited applied to the Court of Appeal for leave to appeal to the Supreme Court and for certification that the Court's judgment of 28th September 2018 in Civil Appeal No. 120 of 2017 involved a matter of general public importance, invoking Article 163(4)(b) of the Constitution. In the 2018 judgment the Court had set aside the High Court's award of Kshs.30 million general damages for breach of a lending contract, holding that general damages are not recoverable in breach of contract cases, and dismissing the cross-appeal for enhancement. The applicant argued the judgment created confusion and conflicting precedents in the Court of Appeal, High Court and subordinate courts on whether general damages are recoverable for breach of contract. The respondent countered that the judgment merely restated the settled general rule, which admits exceptions, and that the intended appeal would be academic. The Court framed a single issue: whether the applicant demonstrated a matter of general public importance meriting certification. Applying the principles in Town Council of Awendo v Nelson Oduor Onyango and the Steyn formulation, the Court held the burden lay on the applicant and was not discharged. It found the issue well settled - general damages are not awardable for breach of contract except in justified exceptional circumstances - and that certification is not a remedy for rectifying errors; per Malcolm Bell, the Court of Appeal itself can align its decisions. The application was dismissed with costs to the respondent.

Questions the Court framed

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

  1. 1.Whether the applicant has demonstrated that its case involves a matter of general public importance to merit certification by this Court to appeal to the Supreme Court under Article 163(4)(b) of the Constitution

Key legal issues

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01

Whether the intended appeal raises a matter of general public importance warranting certification under Article 163(4)(b)

Holding

The application fails. The issue of recoverability of general damages for breach of contract is settled: it is not recoverable as a general rule except in justified exceptional circumstances, and no confusion or conflicting precedent exists. The applicant did not discharge the burden on it.

Reasoning

The Court reviewed the impugned judgment and found it appreciated the general rule against general damages in contract and set aside the Kshs.30 million award principally because the trial judge awarded it with absolutely no foundation, no authority on quantum, and no comparable. The issue of duplication was never urged in the courts below, and the Supreme Court's certification jurisdiction is not for rectifying errors or determining contested facts. Court of Appeal decisions should be aligned by that Court itself.

p. 8
02

Whether the impugned judgment created confusion and conflicting precedent on damages for breach of contract

Holding

No. The Court held that its prior judgment correctly restated the settled general rule and that the applicant had failed to plead and prove any exception.

Reasoning

The Court re-read its own 2018 judgment and concluded it had differed with the trial judge's wide-discretion approach while appreciating the general rule. Even if general damages were recoverable, the award was whimsical, 'literally plucked out of the air', with no authority cited on quantum, no discussion, no justification and no comparable. The claimed exceptions (oppressive, insolent, highhanded, outrageous or vindictive conduct) were never pleaded or established, nor urged below.

p. 8

Legal principles established

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  • Certification under Article 163(4)(b) is reserved for exceptional cases raising cardinal issues of law or jurisprudential moment; the Supreme Court is not an additional tier for all appeals
  • As a general rule, general damages are not recoverable in cases of breach of contract, save in exceptional circumstances which must be justified
  • The burden of demonstrating a matter of general public importance rests on the applicant seeking certification

Court orders

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  1. 1.The applicant's notice of motion dated 12th October, 2018 is dismissed with costs to the respondent

The bench

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

majority
majority
On appeal from
High Court of Kenya at Nairobi
HCCC No. 481 of 2003
Jurisdiction invoked
Article 163(4)(b) of the Constitution of Kenya

Relief refused

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Leave to appeal to the Supreme Court against the judgment of the Court of Appeal dated 28th September, 2018

The applicant failed to demonstrate a matter of general public importance; the issue of damages for breach of contract is well settled and certification is not for rectifying errors

p. 8

Certification that the impugned decision involves a matter of general public importance

No cardinal issue of law or issue of great jurisprudential moment is at stake; there is no confusion in legal practice

p. 8

Costs

The application is dismissed with costs to the respondent

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.

Accordingly, the applicant's notice of motion dated 12th October, 2018 is hereby dismissed with costs to the respondent.
p. 9Final orders - application for certification dismissed
as a general rule, general damages are not awardable for breach of contract except in exceptional circumstances, which have to be justified. This is an issue that is well settled and beyond contestation.
p. 8Settled rule on general damages in contract
The jurisdiction of the Supreme Court under Article 163(4) (b) is not a jurisdiction to be invoked merely for the purpose of rectifying errors.
p. 8Limits of Supreme Court certification jurisdiction
only exceptional cases, which raise cardinal issues of law or of jurisprudential moment will deserve the attention of the Supreme Court.
p. 5Threshold for certification under Article 163(4)(b)
the learned Judge whimsically and capriciously imposed that figure, literally plucking it out of the air. That cannot be a proper way to arrive at damages because it is a judicial exercise not an oracular pronouncement.
p. 8Judicial approach to quantum of damages (quoting the impugned judgment)
The onus to satisfy the court that such matter or matters of general public importance exist rests on the applicant.
p. 5Burden on certification applicant

Issues in the judgment

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minor

The notice of appeal is dated 30th April, 2019 but the application (dated 12th October, 2018) seeks leave to appeal against the judgment of 28th September, 2018, with leave stated to have been granted on 29th April, 2019; the chronology is internally inconsistent as set out in the judgment.

Key timeline

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Practical implications

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Frequently asked questions

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Later judgments citing this (1)

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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, "Sundowner Lodge Limited v Kenya Tourist Development Corporation (Civil Application Sup 19 of 2018) [2023] KECA 1131 (KLR)", Case Analysis (2023). Application dated 12th October, 2018 (arising from Civil Appeal No. 120 of 2017). Source: https://new.kenyalaw.org/akn/ke/judgment/keca/2023/1131/eng@2023-09-22

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