Kenya Railways Corporation & 1 other v Milly Glass Works Limited

The Court examined section 83(1), which bars suits and mandates negotiation or statutory arbitration 'where any person suffers damage' from the Corporation's exercise of powers under sections 13, 15, 16 and 17. Adopting the reasoning in prior decisions, the Court held that 'damage' denotes physical harm in the realm of tort. A dispute over the legality of a contractual rent increment under clause 2(a) of a lease is not such damage, so the arbitration mechanism was not triggered and the ELC was properly seised of the matter.

Order 2 rule 11(3) requires specific traversal of allegations of fact; a general denial is insufficient and the allegation is deemed admitted. Beyond the tacit admission, the appellants' witness acknowledged the prior rent of Kshs. 146,000 but led no evidence on the date of the increment. In the absence of clear evidence from the 1st appellant, the trial judge was entitled to bind the respondent to its pleading that the increment took effect on 1st January 1994.

The lease was silent on the effect of an early revision. Applying Halsbury's rent-review principles and the principle that contracts yield to business common sense, the Court held that an unconditional early revision not anchored on an express variation left clause 2(a) intact; the review date is computed from the term's commencement. The respondent's acquiescence in and payment of the 1994 rent, without challenge within the six-year limitation period under section 4(1) of the Limitation of Actions Act, barred any belated claim based on that revision.

The plaint sought only declaratory and injunctive relief; the respondent admitted by application that refund was not pleaded. Unquantified pecuniary loss is special damage which must be specifically pleaded and strictly proved. The trial court's order delegating computation to the parties also offended the rule that a judgment must be complete and the determination of quantum is a judicial function. The trial court therefore had no jurisdiction to award the unpleaded, unquantified refund.

Section 88(a) provides that no execution or attachment or process in the nature thereof shall issue against the Corporation, while the Managing Director must pay decretal sums from the Corporation's revenue. Following Hezron Ossorey Jura, Ernest Morara Mokua and Postal Corporation of Kenya v Ndarua, the Court held the Corporation's money in a bank account is its 'property' and cannot be garnished; the statutory remedy is against the Managing Director. The Court acknowledged the access-to-justice concerns but held the mischief's solution lies with the legislature.