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ELRCDismissedELRC Cause (Memorandum of Claim dated 2nd April 2013)· [2024] KEELRC 887 (KLR)

Chabari v Sanlam Life Insurance Limited (Formerly Pan Africa Life Assurance Limited) (Cause 452 of 2013) [2024] KEELRC 887 (KLR)

Employment and Labour Relations Court
24 April 2024
LNLinndolo Ndolo
978 words in judgment
View original judgmentRead on Kenya Law Watch case
AI-assisted case brief
·~4 min to read original · ~4 min brief

The bottom line

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Jubilee Insurance's Kshs 2.5 million fraud counterclaim against a former employee failed because it could not prove the loss with proper documents.

What this practically means

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Executive summary

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The Claimant sued for unfair termination of employment by Memorandum of Claim dated 2nd April 2013; the Respondent filed a Defence and Counterclaim dated 2nd July 2013. By an order of D.K.N. Marete J dated 16th April 2018, the Claimant's claim was dismissed for want of prosecution, leaving only the Respondent's counterclaim for determination. The Respondent, an insurer, alleged that the Claimant, who rose from Clerk to Accounts Assistant with duties including bank reconciliation and maintenance of the stale cheques register, participated in a fraudulent scheme involving fictitious cheque replacement requests and payments to fictitious policy holders, directly initiating 51 fraudulent payments and causing 11 more through Ms Zubeida Yusuf, resulting in a loss of Kshs 2,496,513.80 through 55 successful payments. It acknowledged owing the Claimant Kshs 23,780.40 in leave pay and, invoking Section 19(1)(d) of the Employment Act, counterclaimed Kshs 2,472,733.40 after set-off. The Respondent relied on an investigation report by Hawk Eye Technologies and called two witnesses. The court held that the claim was one in special damages requiring specific pleading and proof, applying Hahn v Singh. On review of the documents, the court found no primary documents showing the payment flow, no signature of the Claimant on the payment vouchers, and no documentation linking him to the fictitious payments. The counterclaim was dismissed with no order for costs.

Key legal issues

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01

Proof of special damages in an employment counterclaim

Holding

The Respondent failed to prove the alleged loss of Kshs 2,496,513.55 to the required standard

Reasoning

The court reviewed the investigation report by Hawk Eye Technologies and its appendices and found the claim unsupported by primary documents. The payment vouchers did not bear the Claimant's signature, some did not disclose their preparer, and no documentation linked the Claimant to the alleged fictitious payments. The claim fell within special damages requiring specific pleading and proof.

p. 3
02

Applicability of the special damages rule to undefended claims

Holding

The requirement of specific pleading and proof of special damages applies even where a claim is undefended

Reasoning

Relying on Hahn v Singh [1985] KLR, the court held that the burden of proving special damages is not relaxed merely because the claim is undefended. The Claimant having not defended the counterclaim, the Respondent still had to prove the quantum of loss with primary documentation, which it failed to do.

p. 3

Legal principles established

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  • Special damages must be specifically pleaded and proved, and this requirement subsists even in an undefended claim

Court orders

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  1. 1.The Respondent's counterclaim is dismissed
  2. 2.No order for costs

Authorities

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Legislation

  • Employment ActSection 19(1)(d)

Cases cited (1)

  • Hahn v Singh
    [1985] KLR
Jurisdiction invoked
Employment and Labour Relations Court jurisdiction under the Employment Act and Labour Relations Act (first-instance employment cause)

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, "Chabari v Sanlam Life Insurance Limited (Formerly Pan Africa Life Assurance Limited) (Cause 452 of 2013) [2024] KEELRC 887 (KLR)", Case Analysis (2024). ELRC Cause (Memorandum of Claim dated 2nd April 2013). Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2024/887/eng@2024-04-24

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