Samuel Kamau Macharia t/a S. K. Macharia & Associates v Attorney General
The bottom line
#To claim pre-filing interest, you must prove the specific contractual rate and terms; the court will only award statutory rates from the filing date.
What this practically means
#Executive summary
#Key legal issues
#Whether failure to specifically deny the pleaded interest rate amounted to admission
No - the defence raised a substantial challenge to liability for the contract, and once the parties left interest for the court's determination after mediation, the plaintiff had to prove entitlement
The court read the statement of defence as substantially asserting that the defendant was not liable for a contract entered into by the Chairperson of the defunct Constitution Review Commission because the liability was contrary to law. That was a substantial defence. After mediation settled the principal sum and left interest to the court, the interest issue remained contested and required proof.
Whether the 19% compounded daily interest rate was contractually established
No - the witness statement and the annexed orders, booking sheets and invoices made no mention of the 19% rate; it first appeared in a 2006 demand letter to the Attorney General
The court examined the witness statement of Dr Samuel Kamau Macharia and each annexed order, booking sheet and invoice supporting the principal claim and found no mention of the 19% per annum rate. The first appearance of the rate was in the Notice to the Attorney General dated 27th July 2006. The plaintiff therefore failed to prove the rate as a contractual term.
What interest is awardable under section 26 of the Civil Procedure Act
Interest at court rates from the date of filing suit until payment in full, as compensation for denial of use of money
Section 26(1) empowers the court to award reasonable interest from the date of suit to the date of the decree and further interest on the aggregate sum from the decree to payment. Pre-filing interest falls under substantive law. Since the plaintiff failed to prove the contractual rate, the court awarded interest at court rates from filing suit as compensation.
Legal principles established
#- Under section 26(1) of the Civil Procedure Act, the court's discretion to award interest covers the period from filing suit to judgment and from judgment to payment; interest for the period prior to filing suit is a matter of substantive law under contract or custom and usage and must be pleaded and proved
- A party who settles the principal sum in mediation but leaves interest for the court's determination must prove entitlement to the interest claimed
Court orders
#- 1.Final judgment entered for the plaintiff against the defendant for Kshs. 104,895,667
- 2.Interest on the principal sum at 12% per annum from the date of filing suit (5th February 2019) until payment in full
- 3.Costs of the suit to the plaintiff
- Jurisdiction invoked
- Original civil jurisdiction; claim for payment of money, interest determined under section 26 of the Civil Procedure Act (Chapter 21, Laws of Kenya)
Key timeline
#Practical implications
#Frequently asked questions
#Cite this brief
#Cite this brief
Caselaw, "Samuel Kamau Macharia t/a S. K. Macharia & Associates v Attorney General", Case Analysis (2020). Nairobi HCCC (as per plaint dated 5th February 2019). Source:
Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.